What is Supply & Demand?

Supply & Demand
Supply & Demand

Supply demand Also known as the theory of supply and demand. Those are the price areas where there is a dispute between the buying and selling factions. Causing the price to increase or decrease sharply in the near future.

Supply area Also known as the supply zone, where the bears (sellers) dominate more than the bulls (buyers), causing the price to go down.

Demand . Region Also known as the demand zone, where the buying pressure is very strong, the price is pushed up.

Resistance – What is Support?

Resistance and support are price areas at which investors expect the price to reverse.

Resistance and Support
Resistance and Support

Nature:

  • When meeting the resistance area, there is a possibility of reversing from uptrend to downtrend.
  • When meeting the support area, there is a possibility of reversing from downtrend to uptrend.
  • Resistance and support on larger timeframes are stronger, harder value than smaller timeframes.
  • Resistance and support convert to each other: a resistance area after being broken can become a support zone and vice versa.
  • Any support resistance can be broken. Resistance and support are born to test the psychology and expectations of investors in the present about the future. So the resistance and support can be broken or not depends on the psychology and supply and demand of the market.

Common types of support resistance:

Static support resistance (forming at fixed price zones)

  • Formed by old highs and lows.
  • Formed by significant price zones.
  • Formed by the ink Fibonacci important.

Dynamic support resistance (varies with time and market price)

  • Formed by trend lines (Trendlines)
  • Formed by technical analysis tools such as MA line, Ichimoku cloud, Bollinger band…

Videos Supply & Demand Zones Supply & Demand

To effectively use the supply and demand zone as well as support and resistance, we should use it in combination with Japanese candlestick patterns to increase accuracy.

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