The ONLY Supply & Demand Trading Strategy You’ll Ever Need

Strategy Overview

The presenter describes supply-and-demand trading as buying at demand zones and selling at supply zones, preferably in the direction of the prevailing trend. He says the approach can be used across markets and prefers trading during the London and New York sessions.

Three-Step Framework

1. Identify supply and demand zones

   • Look for a sharp price impulse that suggests strong buying or selling.
   • Mark the candle immediately before the impulse, using its wick range as the zone.
   • Favor zones with:
     • Fair value gaps or other visible price imbalances.
     • Several large candles showing displacement.
     • A break of market structure, ideally with a candle closing beyond a recent swing high or low.
   • The presenter interprets these moves as evidence of institutional activity.

2. Trade with market structure

   • Identify an uptrend through rising swing highs and lows, or a sequence of upward impulses and pullbacks. Look for demand zones and long setups.
   • Identify a downtrend through falling swings and downward impulses and pullbacks. Look for supply zones and short setups.
   • Prefer stronger zones that align with the trend rather than trading against it.

3. Choose an entry model and manage the trade

   • Standard entry: Wait for price to reach the zone and for a candle to close outside it in the expected direction, then enter.
   • Conservative entry: Wait for a confirming engulfing candle—for example, a bullish engulfing pattern at demand—and enter at its close.
   • Aggressive entry: Place a limit order within the zone, specifically around the middle of the relevant candle’s body. The presenter says this can offer a better entry but involves less confirmation.
   • Place stops beyond the zone or its wick. Target recent price action, and consider taking partial profits at intervening support or resistance. Account for opposing supply or demand zones when setting targets.

Additional Rules and Cautions

• A zone that price closes through is considered invalid; remove it from consideration.
• Favor fresh, untested zones over areas already revisited.
• Avoid trying to catch a “falling knife.” The presenter advises against leaving a limit order in place when a large candle is plunging into a zone; he prefers a slower pullback.
• He says lower demand zones can be stronger when higher zones have failed.
• Level stacking—such as demand aligning with former resistance that may act as support—is presented as added confluence.
• He notes that conservative entries may have a less favorable risk-reward ratio than other entry types.

Markets, Figures, and Performance Claims

• Markets named: Forex, gold, Nasdaq, Bitcoin, oil, and cryptocurrencies. No specific ticker symbols or named ETFs are given.
• The presenter says a gold move of more than $16 in about 40 minutes illustrated aggressive buying.
• He reports a backtest of 115 trades with a 79.13% success rate, while cautioning that backtesting does not replicate live trading.
• He describes a live trade that made more than $6,000 the previous day and says it might have produced more than $10,000 with a higher target. These are presenter-reported results, not independently verified in the subtitles.
• In that example, he cites a 50% Fibonacci retracement as a “discounted” entry area, a stop below the demand zone’s wick, and a target near recent price action. He also describes a separate setup with a 1:3 risk-reward ratio.

Disclosures

The presenter cautions that backtested results may differ from live trading and offers several risk-management rules. The subtitles do not include an explicit “not financial advice” disclaimer.

Presenter/source: Pat, from Trade with Pat.