Supply and demand zones as bounded swing maps

A swing as leftover buy and sell interest

The archive describes price as moving when willing buyers and sellers are unequal at a given level. Excess demand lifts price. Excess supply lowers it. After a strong, prolonged departure, the origin of that move is treated as the working support or resistance: a demand zone if buyers absorbed sellers and price left higher, or a supply zone if sellers overwhelmed buyers and price left lower.

TradersWeek editorial reading: those leftover orders can be treated as a map of institutional inventory. A swing is then a planned trip from a later retest of that band toward the next opposing zone, accepted only when the stop at the far side of the band and the target short of the next opposing zone are both written down before entry.

How the bands are marked

A rally-base-rally is used to locate a demand zone: an advance, a sideways pause, then a strong continuation higher, with leftover buy interest expected if price later returns. A rally-base-drop locates a supply zone: an advance, a pause, then a decline, with leftover sell interest expected on a later visit.

The same zone-reading steps are shown on monthly, weekly, daily, and 60-minute charts, and across equity, commodity-linked, and currency-futures examples.

A daily case from band to band

On one daily case, two demand bands were marked at 240.02 to 246.73 and 257.30 to 263.26, with a supply band at 307.28 to 302.58. Later price action is described as traveling from one band toward the opposite band.

After a gap into the marked supply band, that case shows a same-session selloff of almost 6 percent. After a gap to the 263.26 demand band, price probed the band over two sessions and then advanced for about a week.

The same imbalance map on other charts

A December 2016 to February 2017 currency-futures case marks supply-zone pullbacks that were followed by declines, an April 2017 demand-zone retest that was followed by a rally, and a June 2017 supply-zone visit that left with a downward gap.

Weekly and 60-minute examples mark discrete levels to show the same map at different chart scales: 28.38 and 13.81 as supply, and 12.68 and 13.11 as demand.

Check the higher-timeframe tide

The procedure treats the origin of a strong, prolonged departure as the working support or resistance, then checks a higher-timeframe tide: a chart roughly five to seven times larger than the working timeframe. The check is there so a swing is not taken against a larger opposing zone.

Write the stop and the opposing-zone target first

Each additional retest is described as using up unfilled orders in the zone. That zone-retest decay is said to reduce the chance that later tests will hold.

Before entry, the trader is told to state the acceptable loss, keep the stop bound to the zone edge, and pull a target short of the next opposing zone. The opposing-zone target is the next mapped supply or demand band, used so a swing is not held into known opposing pressure.