Identification of Demand and Supply

Steps in Identifying Demand Zone –

1. Start with the current market price on the price chart

2. Look left and down until find an origin of strong move in the price
3. Look for leg out followed by the base and legin candle
Note: - do not cut candles while finding demand zones
Rules for marking zones =
Demand:-Proximal line – highest body of the base
Distal Line – Lowest Wick of the base

Patterns Leg-In Base Leg-Out

Drop-Base-Rally Red Any Green
Rally-Base-Rally Green Any Green

Steps in Identifying Supply Zone –

1. Start with current market price on the price chart

2. Look left and up until find an origin of strong move down in the price
3. Look for leg out followed by the base and legin
Note: - do not cut candles while finding Supply zones

Rules for marking zones =

Supply:- Proximal line – Lowest body of the base
Distal Line – highest Wick of the base

Patterns Leg-In Base Leg-Out

Rally-Base-Drop Green Any Red
Drop-Base-Drop Red Any Red
Exception rules for marking zone:--

1. In case of Drop-Base-Rally and Rally-Base-Drop proximal line is going to be

at highest body of the incase of demand and lowest body of the base in
case of supply.

Distal line :- At highest wick of all three elements in case of supply

Lowest wick of all three elements in case of demand.

2. In case of Rally-Base-Rally and Drop-Base-Drop proximal line is going to be

at lowest body of the base in case of supply and highest body of the base in
case of demand

Distal line: - at highest wick between base and leg out in case of supply
at Lowest wick between base and leg out in case of Demand