Have you ever placed a trade and in less than few minutes, you are seeing your deal go against you like the market was waiting for you to just push that order button and then start punishing you? You start wondering is this a trap or what?
Well, you know what? You have to be smart when trading the Forex market, you have to know demand and supply zones so as to not fall in such traps. Most times traders execute trades at the end of trends which could be disastrous. Yes we all know the trend is our friend, but if you don’t join the trend at the right time, the trend will become your enemy, your worst nightmare.
‘Demand’ and ‘Supply’ zones are tools that are useful in various ways. They can be used for taking profits when riding a trend, provided you got in early enough when the trend started. Another important useful way is by using them to spot trend reversals using pin-bars, hammers, shooting stars or any other reversal candle stick pattern formations.
Occasionally these zones can be penetrated by price due to high impact news releases and other factors but over-all you will find these zones useful 80% of the time if applied in your trading arsenal, no matter the trading strategy you use them with.
The green colored regions represents Demand zones and the red colored regions represents Supply zones. Please change the default value for the parameters in the indicator. Download indicator below!
Zig.zag .ExtDepth = 12
Zig.zag.ExtDeviation = 5
Zig.zag.ExtBackstep = 3