What are supply & demand zones?

The zones are the periods of sideways price action that come before explosive price moves, and are typically marked out using a rectangle tool in the stocks, forex or CFD trading platform. Supply and Demand trading strategies use price returning to these zones as entry and exit criteria.

How do I make a trading plan when trading with supply and demand zones?

Making a trading plan when trading with supply and demand zones is not an easy task. There are a lot of factors to consider. Firstly, there are different ways to approach trading with supply and demand zones. Some prefer to use price action methods (like myself). Others are incorporating indicators (which I have never find very profitable).

How do you draw a supply zone?

For demand zones, draw from the base to the swing high. For supply zones, draw from the base to the swing low. So, check this out: the current major swing high/low marks where those big players, like banks and institutions, jumped in with their massive positions, causing price to move sharply and forming the zone.

How do you draw a demand zone in think or swim?

Draw the $0.10 area using the rectangle tool in Think Or Swim. For a demand zone, if the price level drawn was 410.05, then $0.10 is added so that the rectangle drawn includes a range from 410.05 to 410.15. You can make the rectangle green to identify the demand zone more quickly since buyers have jumped in to raise the stock price.