Supply & Demand - The Pulse of the Market
Learn Supply & Demand zones - how to identify institutional buying/selling zones and trade bank levels with GarudaAlgo.
What is Supply & Demand?
Supply and Demand are the fundamental forces that move any market. In trading, we look for zones where institutional players (banks, hedge funds) have placed large orders, leaving behind massive price moves.
Supply Zone
Area of heavy selling (Resistance)
Demand Zone
Area of heavy buying (Support)
Identifying Zone Types
Reversal Patterns
- Rally-Base-Drop: Creates a Supply zone
- Drop-Base-Rally: Creates a Demand zone
Continuation Patterns
- Rally-Base-Rally: Demand zone in uptrend
- Drop-Base-Drop: Supply zone in downtrend
Quality Factors (Odds Enhancers)
- Strength of Moveout: How fast did price leave the zone? (Faster = Stronger)
- Freshness: Has price returned to this zone before? (Fresh = Stronger)
- Time at Base: How long did price stay in the base? (Shorter = Stronger)
How GarudaAlgo Uses S&D
GarudaAlgo Enhancement
GarudaAlgo automatically identifies high-probability Supply and Demand zones by analyzing volume expansion and candle momentum. Our system filters out 'weak' zones and targets only 'Institutional' levels.
S&D Weight in Signal System
Supply & Demand analysis contributes 12% to the overall signal confidence score.
What GarudaAlgo Analyzes
- Aggressive Moveout Detection: Locates institutional footprints
- Base Consolidation Analysis: Measures zone validity
- Freshness Tracking: Only displays active, unfilled order zones
- Multi-Timeframe Zones: Identifies nested H4 zones within Daily zones
Trading Strategies
Strategy 1: Set and Forget
- Identify a 'Fresh' zone with an aggressive moveout
- Place a Limit Order at the proximal line (edge) of the zone
- Place Stop Loss beyond the distal line (far edge) of the zone
- Target the next opposing Supply/Demand zone
Strategy 2: The Confirmation Entry
- Wait for price to enter a Supply or Demand zone
- Move to a lower timeframe (e.g., M15 for H1 zone)
- Wait for a structure break or reversal pattern within the zone
- Provides tighter stop losses and higher R:R ratios
Best Practices
- Freshness is key — The first return to a zone is always the highest probability
- Look for 'Hidden' zones — RBR and DBD patterns often hide institutional orders
- Higher timeframe dominance — Daily and H4 zones are much stronger than M15 zones
- Context matters — Trade Demand zones in uptrends and Supply zones in downtrends