If you are relying on trading income, good trading strategy is your workhorse for every day. Supply and demand zone concept is widely used among traders for several reasons. It is relatively simple to start with. In addition, it is effective in picking up the profitable moment. In fact, Supply and Demand zone is the extended concept from support and resistance at some points. Its zone concept adds different values to our trading. For example, with zone concept, it is much easier to define our trading scenario and risk management plan than just simple price level from support and resistance. However, there is no perfect trading system in the world (i.e. being profitable and perfect is two different things). Of course, supply and demand zone concept has its own weakness too. For example, many traders still find it difficult to find good supply and demand zone to trade. Another difficulty found is that no books are available with through discussion of this methodology but just too many online articles. It is difficult to find which online article is genuine and profitable one.
In this respect, I am trying to share few unique views from rest about supply and demand trading. I am a trader as well as engineer. I do not like to leave anything vague. Hence, I will discuss some concrete trading strategy to improve your trading performance using supply and demand. I named the strategy as “Angled Supply Demand Trading” or you can also call it as “Angled Supply Demand Breakout Trading”. You will see why the name is called this way from its operation. In addition, I have developed “Ace Supply Demand Trading indicator” for MetaTrader to improve the performance of supply demand trading logic since I could not find any supply and demand indicator to do what I want to do like this one.
Purpose of Angled Supply Demand Trading
The purpose of angled supply demand trading is to find high quality supply and demand zone as mechanically as possible. We will not hurt the original supply and demand zone trading concept but we will be reinforcing the original concept with some smart logic.
What is the difference between Angled Supply Demand Trading and original Supply Demand Trading?
In Angled Supply Demand trading, we use multiple of supply and demand zones in combination to make our final trading decision. Often supply demand zone trader do not concern about the expired supply and demand zone. In Angled Supply Demand Zone trading, we sometimes look for archived supply and demand zones as well as the current fresh or retouched supply and demand zones.
Bearish Reversal Recipe for Angled Supply Demand Trading
To trade on bearish reversal, we will typically target supply zone. Therefore, in our recipes, we need to have one supply zone + two demand zones. In the two demand zones, later demand zone will be higher low of the older demand zone. These two demand zones should not overlap to each other. Hence, we can draw some angled line against the supply zone. We will be aiming to enter after the breakout of the angled line. One thing we need to remember is that our entry should not be deviated too far from typical entry of supply zone. Otherwise, we might have to alter our stop loss size. However, this is possible too if the entry is too good and clean after you have become proficient at this technique. Below screenshot shows how it works in details.
This is what happened after some time. We made an accurate sell entry through the bearish price movement. Our stop loss is the same as the typical stop loss at the top of supply zone. We will decide our take profit according to our preferred reward/Risk ratio.
Here are the main points for bearish reversal trading:
We need one supply zone to target
We need two demand zones to draw angled line against the targeted supply zone
Our entry must be near the supply zone.
Bullish Reversal Recipe for Angled Supply Demand Trading
Bullish Reversal Recipes are exactly opposite to the bearish reversal recipes. Firstly, we need to target one demand zone. Then we need to look for two supply zones. Later supply zone will be lower high of the older supply zone. These two supply zones should not overlap to each other. Hence, we can draw some angled line against the demand zone. We will be aiming to enter after the breakout of the angled line. One thing we need to remember is that our entry should not be deviated too far from typical entry of demand zone. Otherwise, we might have to alter our stop loss size. However, this is possible too if the entry is too good and clean. Below screenshot shows how it works in details.
This is what happened after some time. We made an accurate buy entry through the bullish price movement. Our stop loss is the same as the typical stop loss at the top of demand zone. We will decide our take profit according to our preferred reward/Risk ratio.
Here are the main points for bullish reversal trading:
We need one demand zone to target.
We need two supply zones to draw angled line against the target demand zone.
Our entry must be near the demand zone.
Further Note about Angled Supply Demand Trading
The good news about angled supply demand trading is that it does not alter the original concept of supply demand trading. However, it helps you to find more accurate supply and demand zone to trade. You can take the breakout through the angled line as the double confirmation of the direction of your supply and demand trading. Therefore, any supply and demand zone trader can use Angled supply demand trading on top of their typical trading setup.
When you draw the angled line, you might take some direction from GANN’s FAN or GANN’s angle, but this is not compulsory. Practice as it was shown in this article and then build up your logic gradually.
About Ace Supply Demand Zone Indicator
Ace Supply Demand Zone indicator was built upon non-repainting and non-lagging principle. It is multi-purpose Supply Demand Zone indicator for any level of trader. We especially built this Ace Supply Demand Zone indicator to improve the accuracy of supply and demand zone trading. Products are available through several channels from below links.