The beauty of supply and demand is that it works across all instruments and all timeframes.

This is the part 2 of my introduction to supply and demand HERE

It worked 103 years ago and it still works now.

Look below at the chart of $DJI


I always trade the first test of a demand zone because it is “fresh” so the first test is usually is the strongest. The next time it retests again, it would penetrate deeper and deeper.


Higher timeframe supply and demand zones are much more powerful. The higher it is the stronger it is. 12 month timeframe is definitely stronger than 3 months timeframe.


Below is a chart of $STI on a 12 months timeframe.

1st crash in year 2002 it found support in the demand zone that was created from 1997 asian financial crisis.

2nd crash aka GFC in 2008 it also found support in the demand zone that was created from the 1997 asian financial crisis.


Below is 2 more examples of higher timeframe demand zones.

$S63 12 months demand zone

$S51 3 months demand zone


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7 likes 19 comments
inspirez

Just read your article and drew some lines to tryout. I'm a complete novice at charts ( @wellhandy can attest to that lol).

For a longer term investing, when I plot in months, I can see several bases formed. It seems like a demand zone is formed in the region indicated, am I correct or am I looking at this wrongly?

I see a 9 month base in the chart, does that suggest anything? More intense rally/drop?

Also, how would I know if DBR is happening if the 'R' is still not clear?

Additional thought, I wonder how we can make DnS work with 200MA.

cheehow

Just to top-up what I've read be4, smth quite similar:
https://www.colibritrader.com/what-are-sup...

Iamshiwei

Thank you. Can you point me towards more material to better understand how to identify demand and supply zone for buying and selling?

Can I also confirm that you wait for the pull back to confirm if it is a demand zone? Ie the stock will be trading within a range? And what timeframe are you typically working off? a few days? Weeks etc?

traderx

Reply to @zeeq : Sam Seiden is big on supply and demand. Did take the course at OTA?

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MorningStarTrader

How do you determine the range for the base and zones?

zeeq

Reply to @MorningStarTrader : For demand zones, the base can be made of green or red candles.
For green, entry at the close and sl below the lowest point of the candle.
For red, entry at the open and sl below the lowest point of the candle.
You also have to factor in the bid and ask spread.

div1g4in

Which person(s) uses this method 103 years ago? Mind to share some examples? Just curious.

div1g4in

Reply to @zeeq : Can you make a call and let us know based from the supply demand. wanna learn.

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Recommended & Related Posts

The “MAGICAL” demand zone that is holding the $STI(^STI.IN) has been tested for the third time now.

This magical demand was posted here before the 1st test was made on 16/11/17: HERE .


Notice how the price penetrates deeper every time it is being re-tested.


So what makes demand zone so “MAGICAL”?

Look at what this demand zone had removed below:


It removed a strong supply zone that was created in July 2015.

Look at the big drop from that supply base which consisted of multiple gap downs.

Let’s see if this magical demand can create a higher high for $STI.


Personally i’m not buying any stocks that are strongly correlated to STI as it is rejecting the 3 months supply zone (analysis posted:HERE) and this magical demand zone has been tested for the third time (i won’t even bother trading a zone that has been tested once) .

Of course it could still work but the odds are lower based on the statistics gathered through my backtests (not gut feel).


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Major world indices has bounced off key demand areas.
Expect the bulls to be back next few weeks.
3 months ago i posted a potential long on $STI here: https://www.investingnote.com/posts/413563
and $STI has bounced of it again for the 2nd time now!
It was a daily demand zone so it didn't appear on the weekly setup i posted last weekend here :https://www.investingnote.com/posts/531087

$STI(^STI.IN) $DJI(^DJI.IN) $N225(^N225.IN) $HSI(^HSI.IN) $DAX(^GDAXI.IN) $UK100 $CAC40 $KLCI(^KLSE.IN)
#zeroindicators
#notevenvolume
Disclaimer: No FA was used in this analysis just like all of my other analysis that i have posted in IN.

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