How to identify demand Zone on chart?

Post Reply
User avatar
Ali
Expert Trader
Posts: 23
Joined: Mon Nov 27, 2023 1:30 pm
Contact:

How to identify demand Zone on chart?

Post by 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.
rally-base-rally-RBR.jpg
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.
demand-zone-1-2.jpg
Example
rally-base-rally-forex-4.jpg
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.
Drop-base-rally.jpg
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
DBR-trading (1).jpg
Post Reply