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Understanding and Drawing Demand Zones

A demand zone is a price area where strong buying interest prevents the price from falling further, often leading to a bounce upward. To draw a demand zone, one can use either a conservative method, marking the top at the last bearish candle before a bullish move and the bottom at the low of that candle, or other styles depending on individual preference. The document confirms that the drawn demand zone is valid and provides guidance on its proper identification.

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furkie.-38
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4 views2 pages

Understanding and Drawing Demand Zones

A demand zone is a price area where strong buying interest prevents the price from falling further, often leading to a bounce upward. To draw a demand zone, one can use either a conservative method, marking the top at the last bearish candle before a bullish move and the bottom at the low of that candle, or other styles depending on individual preference. The document confirms that the drawn demand zone is valid and provides guidance on its proper identification.

Uploaded by

furkie.-38
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd

Demand zone:

✅ What Is a Demand Zone?

A demand zone is a price area on the chart where buying interest is


strong enough to stop the price from falling and push it back up.

Think of it like this:

It’s a level where smart money (institutions, big players) likely placed a
lot of buy orders, so when price returns to that zone, it often bounces
upward.

so basically this? and in this case until where do i draw this demand zone?:
Yes — you're exactly on the right track! That grey box you drew is indeed a
valid demand zone.
Where/how do I draw a Demand zone???

📏 How to Draw the Demand Zone Properly:

There are two common methods — both are valid depending on your style:

🔹 Conservative Method (Safer):

 Top of the zone: the last bearish candle before the strong bullish
move.

 Bottom of the zone: the low of that bearish candle (or the lowest
wick before the impulse).

🔸 In your case:
That long-legged wick + the small consolidation range before the breakout
→ this entire area is the zone.

✔️You already shaded it correctly.

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