The Trader’s Blueprint: Reading Charts, Market Structure, and Analysis
SURPRISSSSSE, SUPPORT AND RESISTANCE AREN’T ALWAYS GOOD, BUT NOW YOU KNOW WHAT THEY ARE AND WHEN TO USE THEM, SO YOU WON’T FALL INTO TRAPS (YOU’RE WELCOME).
📍 What Are Supply & Demand Zones?
Supply and demand zones are areas where big money—institutions, banks, hedge funds—are placing massive orders. These levels act as magnets, attracting price back to them before the real move happens.
🔹 Supply Zone (Where Sellers Take Over)
A price area where institutions are selling in bulk.
Price rises into the zone, gets absorbed by selling pressure, and drops.
Think of it like wholesale dumping—big players are cashing out while retail traders FOMO in.
🔹 Demand Zone (Where Buyers Step In)
A price area where institutions are buying in bulk.
Price drops into the zone, gets absorbed by buying pressure, and rallies.
Think of it like a wholesale discount—big players are loading up while retail traders panic sell.
1️⃣ Why Smart Money Uses Supply & Demand Zones
🔹 Institutions Can’t Enter in One Click Like Retail Traders
When we buy or sell, we enter with one click—but institutions don’t have that luxury.
They have millions or billions to place, and they do it in zones over time.
This is why price often stalls, consolidates, or retests these levels.
🔹 Zones Provide High Liquidity for Big Players
If you want to buy millions of dollars in EUR/USD, you need sellers to match your orders.
Supply zones provide liquidity for sellers, and demand zones provide liquidity for buyers.
Institutions manipulate price into these zones to fill their orders before the real move happens.
🔹 Price Retests Before the Big Move
Price often taps into these zones multiple times before exploding in one direction.
This is institutions accumulating or distributing—not just a coincidence.
If you’re patient and wait for confirmation, you can catch high-probability trades instead of chasing moves.
2️⃣ How to Identify Strong Supply & Demand Zones
✅ 1. Look for Explosive Moves Away from a Level
Strong zones have a sharp move away—this shows institutional interest.
If price lingered before moving, it’s weak.
✅ 2. The Fewer Retests, the Stronger the Zone
If price hits a zone once and explodes, it’s strong.
If price keeps testing it, liquidity is being absorbed—meaning it could break soon.
✅ 3. Look for Large Candles or Imbalances
Big momentum candles leaving a zone mean institutions were active.
A choppy exit? Probably not a strong zone.
✅ 4. Find Unfilled Gaps (Imbalances)
If price left the zone too fast, it likely didn’t fill all institutional orders.
This means price has a high chance of coming back to fill them before the next move.
3️⃣ Why Retail Traders Keep Getting Faked Out
💀 Retail Trader Mistakes in Supply & Demand Zones:
❌ Drawing lines instead of zones—institutions don’t trade on exact numbers.
❌ Jumping in too early—waiting for confirmation reduces fakeouts.
❌ Thinking price will only touch the zone once—institutions build positions over time.
💡 How to Trade These Zones the Right Way:
✅ Wait for price action confirmation—look for rejection wicks, engulfing patterns, or BOS/CHoCH.
✅ Use stop losses correctly—place them below demand zones (for buys) and above supply zones (for sells).
✅ Combine zones with liquidity concepts—stop hunts often occur before the real move.
4️⃣ Supply & Demand vs. Basic Support & Resistance
🔹 Support & Resistance (Retail Thinking):
Horizontal lines where price bounced before.
Retail traders place orders right on these lines, making them obvious targets for stop hunts.
🔹 Supply & Demand (Institutional Thinking):
Price zones where big orders are filled.
Institutions manipulate price back to these zones to get better entries.
📌 Example:
Imagine a resistance level at 1.2000. Price spikes above it, takes out retail stop losses, then drops hard. That wasn’t just "bad luck"—institutions used liquidity to fill their sell orders.
🔑 Key Takeaway:
Institutions don’t trade on magic lines—they trade where there’s liquidity. If you start thinking in zones instead of levels, you’ll stop getting wrecked by stop hunts and fake breakouts.