Supply & Demand Strategy

Here is a supply and demand trading strategy cheat sheet for fluid trades traders:

Supply and Demand Trading Strategy Cheat Sheet

What moves price? Supply and demand.

• Supply is the amount of a security that investors are willing to sell at a given price. When supply is high, prices tend to fall. When supply is low, prices tend to rise.

• Demand is the amount of security that investors are willing to buy at a given price. When demand is high, prices tend to rise. When demand is low, prices tend to fall.

Key supply and demand zones:

• Support - a price level where demand is strong enough to prevent the price from falling further. Buyers tend to emerge around support levels.

• Resistance - a price level where supply is strong enough to prevent the price from rising further. Sellers tend to emerge around resistance levels.

• Breakouts - when price breaks above resistance or below support on increased volume, this signals a potential continuation move.

Entry Strategies:

• Look for price to test and reverse at supply and demand zones

• Buy near or inside demand zones

• Sell near or inside supply zones

Manage risk:

• Start with small position sizes (e.g., 0.5-1% of your account per trade).

• Use stop-loss orders to protect against reversals.

• Take partial profits at resistance or support levels

• Stick to your trading plan and predefined risk parameters

By applying these supply and demand concepts, you can identify potential trade entry and exit points. The SMC Pro will Mark key zones on your charts and be patient for price to reach them.