This is the part 4 of the supply and demand strategy.
I will show how to define the range of a demand zone in this post.
Remember the first post i shared? These are are the patterns that i look for demand zones.
Below is an example of rally base rally pattern on the $V03 monthly chart:
To define the range of the base, use the last opening price of the red candle just before the rally as the top of the range. And use the lowest price of the base as the bottom of the range.
Below is an example of drop base rally pattern on $UOB(U11.SI) daily chart :
The lower the timeframe, the harder it is to spot these patterns.
So for starters, use the bigger timeframes like monthly chart and above.
Look at the $UOB on the 3 months chart below:
Looks clearer doesn’t it?
Most of the times these patterns are not very obvious in once glance.
So you need to look candle by candle scanning through the chart at structure highs and lows for these patterns. You will need alot of practice to able to spot these quickly.