Areas where price left quickly, implying an imbalance between buyers and sellers. A demand zone sits at the base of a strong rally; a supply zone at the base of a strong drop.
How traders use it: Traders mark the base candles of the move and watch for a first return to the zone.
Common mistake: Treating zones as fresh after several tests, or drawing them so wide that a stop beyond them is unaffordable.
Related: Order block · Displacement · Fair value gap (FVG) / imbalance
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Concepts only. Education only, not financial advice. No pattern on this site has a published win rate.