Supply and Demand Zones: The Guide You Need to Understand Where the Whales Make Their Money

If you’ve ever wondered why the price bounces off certain levels as if an invisible ping-pong ball is hitting them, the answer lies in supply and demand zones. It’s not magic—it’s simply that the big players (whales) are doing their job.

What’s Really Happening?

Demand zones are areas where too many buyers are waiting, causing the price to bounce upward. Supply zones are the opposite: points where sellers dominate, and the price drops.

The reason they work is simple: an investment fund with $500 million can’t buy everything at once without crashing the market. So they wait. When the price returns to their entry zone, they gradually fill their orders as the price recovers.

7 Ways to Identify Them (That Really Work)

1. Order Block: Looking for Whale “Footprints”

Before each big move, there’s an opposite-colored candle. That candle shows where the giants entered.

• Example: If you see a bearish red candle (followed by a huge rally, that red candle is your demand zone.
• Why it works: When the price returns there, whales finish buying.

) 2. Fair Value Gap ###FVG(: Market Gaps That Everyone Hates An FVG is an empty space on the chart between candles—the market moved so fast it “skipped” prices.

• The magic: The market always wants to “close that gap.” When the price returns, it often jumps again.
• Application: Mark these gaps; they are reliable demand or supply zones.

) 3. Wyckoff: Reading the Accumulation and Distribution Play Wyckoff studies how experts buy ###accumulation( or sell )distribution(.

• Accumulation = demand zone: The sideways price before a pump. Buyers are quiet, waiting.
• Distribution = supply zone: The sideways price before a drop. Sellers quietly prepare.
• Confirmation signal: When it breaks the range—upward = bullish, downward = bearish.

) 4. Market Profile: Where Price Feels Comfortable Shows where the price has spent the most time—where equilibrium exists.

• High activity areas ###Value Area( = zones of agreement
• When the price moves out of these zones, a new demand or supply is formed.

) 5. Footprint Charts: Seeing Money Flow Displays exact volumes at each price level. Peaks reveal where big players are operating.

• Look for: Levels with huge volumes = whale entries.

6. Alternative Charts ###Renko, Ticks(

• Renko: Ignores time, only price. Reveals clean reversals.
• Ticks: Based on transaction count, not time. Perfect for seeing institutional activity.

) 7. Liquidity Analysis: Stop-Loss Traps Whales hunt for novice traders’ stop losses.

• The move: Price rises, hits stops, triggers them, then pulls back. If you see a sharp reversal, they probably liquidated orders.

How to Mark These Zones ###3 Simple Steps(

1. Find strong reversals in the past + check for volume
2. Draw a rectangle:
   • Top: maximum )supply( or minimum )demand(
   • Bottom: significant close or previous level
3. Wait for price to return to that zone

Your Trading Strategy

Phase 1 - Patience: Wait for the price to enter the zone. No rush.

Phase 2 - Confirmation: Look for signals:

• Pin bars or absorption candles
• Volume spikes
• RSI/MACD divergence

Phase 3 - Entry:

• Demand zone + bullish signal = BUY
• Supply zone + bearish signal = SELL

Phase 4 - Protection:

• Stop Loss: just outside the zone
• Take Profit: next resistance )in buys( or support )in sells(

The Critical Factor

Not all zones work equally. Combine methods: if a zone has an Order Block + FVG + high volume, it’s almost guaranteed that the price will react.

The difference between a winning trader and a losing one is simple: understanding where the whales operate and positioning yourself ahead of them.