How to identify demand Zone on chart?

[Ali]

To find the demand zone on the candlestick chart, you need to understand two price patterns that represents the formation of demand zone on the chart.

• Rally base rally

• Drop base rally

When these two patterns form on the candlestick chart, then it means that buyers want to buy from the demand zone to continue the trend.

Rally base rally
A simple rally base rally pattern consists of a big bullish candlestick, a base or doji candlestick and another big bullish candlestick.
An advances rally base rally pattern consists of a big bullish candlestick, more than one base or doji candlesticks, and another big bullish candlestick.

RBR Demand zone
The distance between the high and low price of base candlesticks represents the demand zone. This region shows the presence of buy orders of institutional traders and big banks. From this region, they will fill their buy orders to continue the bullish trend.

Example

Drop base rally
A simple drop base rally pattern consists of a big bearish candlestick, a base or doji candlestick and a big bullish candlestick.
However an advanced pattern has one big bearish candlestick, more than one doji candlesticks and a big bullish candlestick.

DBR Demand zone
The difference between the high and low price of doji candlesticks shows the area for demand zone. From this demand zone we will have to open buy trades.

Example