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Market Mechanics Ep 7: Institutional Supply & Demand Zones — Transcript

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0:00Most traders think that supply and
0:01demand is just drawing random boxes on
0:04the chart. So, they mark up every little
0:07zone they see, wait for price to pull
0:10back, and then they get destroyed when
0:12the level fails.
0:14But, real institutional supply and
0:16demand is not about drawing more zones.
0:20The market leave clues, and some of the
0:22most important clues are the zones where
0:25the price exploded from with real
0:27intent.
0:29Not random support and resistance
0:30levels, not random retail supply and
0:33demand zones, not weekly or pullbacks
0:35just like this. I'm talking about the
0:37areas where imbalance entered the market
0:41so aggressively that price had no choice
0:44but to move.
0:45That is the real logic behind
0:48institutional supply and demand.
0:50And once you understand that, you stop
0:53marking noise and useless support and
0:55resistance levels and zones that don't
0:57matter, and start focusing on the levels
1:00that price will actually respect. So,
1:02with that being said, welcome to episode
1:05five or four. I I kind of lose track of
1:07like which episode this is. I just know
1:10that it's a freaking awesome episode.
1:12And it's time for us to talk about one
1:14of the most important concepts in
1:16trading, and that is institutional
1:18supply and demand zones. This is the
1:21location piece of the puzzle. I
1:24fundamentally believe that success in
1:26trading requires you to get the right
1:29trade ideal at the right place at the
1:32right time.
1:34And this
1:35fits into the right place. This is the
1:38location piece of the puzzle. Right? So,
1:40today we're going to talk about
1:41institutional supply and demand zones.
1:44We talked about market structure last
1:45lesson, and market structure tells you
1:47who is in control of price, supply or
1:49demand, buyers or sellers. Supply and
1:52demand zones helps you
1:54tells you like where price is most
1:56likely going to react.
1:58Where price is most likely going to
2:00reverse from or cause where price is
2:03most likely going to pull back. Right?
2:04So, if you can combine market structure
2:06with supply and demand, you can make
2:09sense of the complexity of the market
2:12itself.
2:13So, with that being said, let's go
2:14through theory first and then later we
2:16go to the charts and try to apply this.
2:19So, what is a supply and demand zone?
2:22A demand zone is basically an area where
2:25buying pressure entered aggressively
2:27enough to push price higher.
2:30Okay, so that's pretty much the
2:31definition of a demand zone.
2:33Put it in simple English, it's basically
2:36a point of interest, it's basically a
2:38zone where there's a lot of
2:41buying volume, right? That caused price
2:43to break out of this consolidation to
2:45the upside.
2:46Okay, so this is the price point where
2:48institutions entered for a large amount
2:51of buy orders.
2:52And then for the supply zone is the
2:54opposite. A supply zone is an area where
2:56selling pressure entered aggressively
2:58enough to push price lower.
3:01So, basically it's the zone, it's the
3:03origin point when institutions entered
3:06for a large amount of sell order,
3:08creating a lot of selling pressure and
3:10momentum, causing price to break out of
3:12this consolidation to the downside.
3:15This zone represents areas of imbalance
3:18where one side clearly overwhelmed the
3:20other.
3:21That is why we call them demand zone and
3:23supply zone, right? Demand zone
3:24basically tell us that buyers have
3:27overwhelmed the sellers and there was so
3:29many buying volume that it caused price
3:30to push to the upside. And then supply
3:33zone is basically telling us that
3:34there's so many selling pressure and
3:36volume and momentum that caused price to
3:38break out to the downside.
3:41Now, the reason why these institution
3:43zones matter is because these are the
3:45areas where price is gravitating toward.
3:49Price does not move randomly. You must
3:51understand that whenever you go into the
3:52chart and you see strong move where the
3:54market move down very aggressively or up
3:57very aggressively, they usually have an
4:00origin point.
4:01And those origin points
4:04are where price is going to move towards
4:06next.
4:07Okay, so when price returns, it will
4:10most likely react to the origin point
4:12again and then continue moving down even
4:14lower.
4:16So, once again, I want you guys to
4:17understand why are we trading this? I
4:19don't want you to just understand the
4:21theory but just trying to memorize it. I
4:23want you to actually understand the core
4:25principles of supply and demand zones.
4:28Supply and demand zones matter because
4:30they are the footprints of strong
4:33institutional order flow.
4:35It's basically like, you know, big banks
4:37are telling you, "Hey, man, I've entered
4:39at this price point.
4:41But I haven't finished my sell orders
4:43yet, right? I still got a bunch of sell
4:45orders. And then when price comes all
4:46the way down here,
4:48guess what? I don't want to sell right
4:49here, right? I want to wait for price to
4:51come back to my origin point, right?
4:53Which is where I entered for a sell
4:54initially.
4:56And then once it does, then I will dump
4:58another bunch of like billion dollars
4:59worth of sell orders.
5:02So, that is the fundamental principle of
5:04supply zone, right? It allows you to
5:06know where institutions have entered in
5:08the past and is most likely going to
5:10enter again.
5:12Okay, that's the core principle of every
5:15institutional zone which I'm about to
5:17teach you over the next few lessons. Not
5:19just supply and demand zones, but also
5:21flip zones and order blocks and
5:23liquidity zones.
5:24All right, but for now, let's, you know,
5:26just take things one step at a time and
5:28just first understand uh supply and
5:30demand zones.
5:32So,
5:33this is really what we call the order
5:36flow, right? Remember when we talk about
5:38how price have to move from phases of
5:40balance to imbalance to balance to
5:42imbalance. So, applying this same
5:45concept right here, you will know that
5:47after a consolidation just like this,
5:49the market will have to
5:51move out of this consolidation with a
5:52lot of imbalance, right? That's the next
5:54phase of the market. So, as a result, it
5:56break out to the downside, which tell us
5:58that, "Okay, cool. This is the
6:00consolidation that led to this imbalance
6:02move to the downside. This is the origin
6:04point, and this is where we can mark up
6:06our supply zone."
6:07So,
6:09remember, the market needs to come back
6:10to fair value. The market needs to seek
6:12balance again. So, as a result, it's
6:14more likely going to make a pullback,
6:17right? To this same supply zone, which
6:19it just got out of, filling the
6:22remaining sell orders, and then continue
6:26with the prevailing downtrend to the
6:28downside. So, this is where retail
6:30traders, or even institutional traders,
6:33will be looking to short, right? They'll
6:34be waiting for price to mitigate the
6:36supply zone, waiting for price to pull
6:38back to the supply zone, then they enter
6:40for sells.
6:42Later on, I'm going to show you exactly
6:44how to draw and identify supply and
6:45demand zones on a chart. So, just bear
6:47with me a little bit on the theory.
6:49Now,
6:51basically, just understand that it's a
6:54supply zone is basically a zone where
6:57price paused just like this, or
6:59consolidate briefly, sellers step in
7:01very aggressively, and cause price to
7:03expand lower,
7:05and then this is where we can expect
7:07price to pull back to the supply zone,
7:09and once that happens, we can expect the
7:12downtrend to continue, right? Price will
7:14just continue moving downwards just like
7:16this.
7:18So, demand zone is pretty much the same
7:20thing, but you look at it from like
7:23upside down. So, this is where you can
7:25see price consolidate just like this.
7:27Later on, huge amount of buying volume,
7:29huge amount of buy orders step into the
7:31market, causing price to break out to
7:33the upside. And as a result, because the
7:35market is always seeking fair value,
7:37it's going to come back down, make a
7:39pullback, make a retracement to the
7:41demand zone, and this is where
7:43institutions are filling their remaining
7:44buy orders, and this is also where I can
7:46look for longs to trade the continuation
7:49of the move itself.
7:52So, I have put like a little tip right
7:53here for you, and that is to look for
7:55imbalance in price to spot supply and
7:57demand zones.
7:58So, if you're having trouble just
8:00identifying supply and demand zones, use
8:03your naked eyes, scan the charts, and
8:05look for big juicy candlesticks.
8:08Because big juicy candlesticks indicate
8:10to us that there's a lot of imbalance in
8:12price, which indicate to us that there's
8:13a lot of buying or selling pressure, and
8:16all you have to do after you find the
8:18imbalance is to find the origin point of
8:21the imbalance.
8:23Where was the area that led to the
8:26imbalance, and that becomes your supply
8:28and demand zone.
8:30The stronger the move away from the
8:31zone, the more important that zone
8:33usually is, because it just tell us that
8:35there's a lot of institutional volume at
8:36that price point. So, the next time
8:38price comes back up to that price point,
8:40it's most likely going to respect it.
8:45So, the next thing I want to do to you
8:47guys to is to like really just show you
8:49how to draw these supply and demand
8:51zones. Because as you guys know, I like
8:54to just keep things very simple,
8:56mechanical, and repeatable, because
8:58whatever that is simple, mechanical, and
9:00repeatable is scalable, right? So, I'm
9:03going to give you two methods to
9:05identify supply and demand zones. If you
9:07just stick to either one of these two
9:08methods, you'll be fine, right? You
9:10won't have any trouble identifying these
9:12zones.
9:13So, once again, what's the the tip that
9:15I just gave you? The tip was go and
9:17identify imbalance. Go and identify the
9:20big juicy candlesticks, right? So, just
9:23by looking at a blank chart just like
9:24this, I can see so many, right? I can
9:26see one here, one here, some here,
9:29right? It's all over the place. Okay,
9:30this is why when you start learning
9:32about supply and demand zones, you will
9:34be able to identify it anywhere and
9:36everywhere.
9:37But just because you can identify it
9:39doesn't mean that you have to trade it.
9:42So this is something that we're going to
9:43talk about later on, but for now let's
9:45just focus on identifying it. Okay,
9:47let's try to identify the most obvious
9:50supply and demand zone right now on this
9:52chart.
9:53So let me just start from the left hand
9:55side right here. So if I start from the
9:56left hand side, I saw that price was
9:58consolidating around here.
10:00And then what happens was that price
10:01dumped heavily. Okay, huge amount of
10:04imbalance, a lot of selling pressure.
10:06Okay, cool. This is the big move to the
10:08downside. Now I'm asking myself where's
10:10the origin point, right? The origin
10:12point is somewhere around here, right?
10:13Because this is where price was
10:14consolidating a little bit and then
10:16dumped to the downside.
10:18And the first method you can use to draw
10:20your supply and demand zone is the range
10:23method, which means you want to mark up
10:25the entire consolidation
10:27that led to this imbalance move to the
10:30downside or the upside.
10:33So in this case, okay, so this is the
10:35imbalance right here. So what you want
10:37to do is use like a box tool on
10:38TradingView and go and find the highest
10:41point of the consolidation and the
10:43lowest point of the consolidation
10:45itself.
10:46So in this case, this is the highest
10:48point of the consolidation, this is the
10:50lowest point of the consolidation. So
10:51you just put a box right there and then
10:53you just expand it out all the way just
10:56like this.
10:57So right now our expectation is that
10:59since this is a supply zone, price is
11:01most likely going to pull back up to the
11:03supply zone, fill up the remaining sell
11:05orders will continue bearish.
11:08Right? That's our expectation.
11:10But is that what's actually happened?
11:12Not really. Why? Because the structure
11:15is bullish, right? Remember when we talk
11:17about in the market structure lesson
11:19in a uptrend when price is creating
11:22higher highs and higher lows, the highs
11:24are weak, the lows are strong. So in
11:27this case, price pretty much pulled
11:29back, created a new higher low and as a
11:30result just went up there and take out
11:31the last high. Right? So, that's why I
11:34say
11:35just because you can identify a supply
11:37and demand zone, does not necessarily
11:39means that you have to trade it. We only
11:42want to trade the high probability
11:44zones. Once again, this is something
11:46that we're going to cover in the next
11:47few lessons, but for now, like I said,
11:49just focus on learning how to draw and
11:53identify these point of interest.
11:55Now, let's continue to see what price
11:57does. Price came down, and then after it
11:58came down, it re- versed at this area
12:01and started going up very aggressively.
12:04So, once again, we see a reversal,
12:06right? So, once you see a reversal just
12:07like this, you can also draw a demand
12:10zone somewhere around here by finding
12:12the lowest point of the consolidation
12:14and the highest point of the
12:14consolidation and drawing a box out just
12:17like this.
12:18Okay? So, this becomes the first demand
12:20zone that we have identified.
12:23And then, below that, we have
12:26a good old demand zone.
12:28And then, later on, price went up,
12:31pulls back, and then goes up again.
12:33So, when there's a retracement just like
12:36this, you can also identify a demand
12:38zone. Right? Because this is where we
12:40got a huge imbalance move to the upside,
12:42you know, causing price to break
12:43structure just like this. And this is
12:45where you can once again draw the entire
12:47consolidation just like this.
12:50So, in this case,
12:53the entire consolidation will most
12:55likely be from the high of the pullback
12:58to the low of the pullback itself. Okay?
13:01So, let me just zoom in a little bit for
13:02you guys to see. Okay? So, in this case,
13:04it wasn't really a consolidation, right?
13:06It was just price goes up, pulls back,
13:08and then goes up and breaks structure.
13:11So, if that's the case, since there is
13:13no consolidation, all we can do is to
13:15rely on
13:17marking the high of the pullback to the
13:19low of the pullback, the lowest point of
13:20the pullback will be somewhere around
13:22here, and bam, there we have your demand
13:25zone.
13:25Okay? There we have your demand zone.
13:27And I want you guys to notice what price
13:29does after this demand zone was formed.
13:32After this demand zone was formed, price
13:34actually went all the way up here,
13:36pulled back to this demand zone,
13:39touched it, and then later on then it
13:41moved to the upside. Right? So, once
13:43again, goes to show that there's
13:45buying pressure right here, and this is
13:47what allows price to respect this zone
13:50the next time it actually came back down
13:51here.
13:53So, this tell us that this is the first
13:55time round institutions entered for a
13:57large amount of buy orders, and then
14:00this is the second time round it
14:01actually did just that. Right? Because
14:03once again, institutions they are smart,
14:05right? Big banks they are smart. They
14:06are not going to be buying right here,
14:07right? Because if they buy here, you
14:09know, they might have to like place
14:11their stop loss below these lows, and
14:13they have a wider margin of error. So,
14:15they are much more better off waiting
14:17for price to come to them, waiting for
14:19price to come back to the initial entry
14:22point, and then when it does, then they
14:24enter for longs.
14:26Okay? So, yeah, let me just draw another
14:28supply zone for you guys to see, right?
14:30So, over here, once again, price went up
14:31here, reversed at this price point, and
14:34it head back down.
14:35So, in this case, there was no
14:37consolidation, right? It was just like
14:39one bearish candlestick just like this.
14:42Which brings us to the second method of
14:45identifying
14:46your zones, your supply and demand
14:48zones.
14:50Previously, we talked about the range
14:51method, which is pretty much the entire
14:53consolidation before the breakout,
14:55right? You mark the high and the low of
14:58the entire consolidation.
15:00This time round, the second method is
15:02called the pivot method. Okay? The pivot
15:05method is you want to mark up the pivot
15:07candle that led to the breakout,
15:10that led to the reversal, that led to
15:12the huge imbalance move. So, in this
15:14case, price went up, and it started
15:16reversing right here. So, this over here
15:20is the origin point of the reversal,
15:22right? Because this is where the
15:23imbalance move actually happened to the
15:25downside. And if you trace it, you will
15:27see that okay, this is the candle that
15:29caused the entire reversal to happen.
15:31So, this is where we can actually map
15:33the entire pivot candle up and this
15:35becomes my supply zone.
15:39Okay, so
15:40using this exact same method,
15:43let's try to
15:45refine these supply and demand zones
15:47that we have just drawn earlier.
15:49So, over here, this is where you can,
15:52you know, refine this entire range to
15:54just the pivot candle, which would
15:55potentially be this one right here. And
15:57then for this one, refine the entire
16:00range, right? This entire demand zone.
16:02This is how I would draw it if I'm using
16:03the range method, but if I'm using the
16:05pivot method, I'm going to be
16:07identifying the pivot candle, which is
16:09this candle right here. The candle that
16:11caused the reversal. And then in this
16:12case, it's going to be this candle right
16:15here. Yeah, so you can use the pivot
16:18method to have like much more refined
16:21zone.
16:22Okay, so here's a caveat. The more
16:24refined the zone is, the higher your
16:27risk to reward, right? Which means that
16:29okay, if there's a supply zone right
16:31here, we want to enter for sell the
16:33minute price mitigate the zone. Our stop
16:35loss might be above that supply zone.
16:37You can see
16:39once again, that is
16:40it's much more tighter compared to if
16:42you were to mark up like the entire
16:43range just like this, right? Then your
16:45entry would be a little bit worse.
16:47So,
16:48the more refined the zone is, the higher
16:51your risk to reward.
16:53But the downside is there's a greater
16:56chance of you missing the trade entry.
17:00Okay, so in this case itself,
17:03if you actually draw this demand zone
17:05using the pivot candle method, you will
17:07see that
17:09the first time round, price did not
17:10actually mitigate that zone, right? It
17:12It came all the way down here, did not
17:13mitigate that zone and just blew and
17:15just continued going up just like this.
17:17So, if
17:19you were actually using the pivot
17:20method, you would have missed this entry
17:22itself. You wouldn't have been able to
17:24get into this entry because price did
17:26not mitigate your zone. However, if you
17:29were to use the range method, right, to
17:32mark up this entire retracement,
17:35what happens is that price actually
17:36mitigate the zone, right? So, this is
17:38where you could have been tapped into
17:39the trade and the price will go up
17:40there. Happy-go-lucky, merry-go-round,
17:43happy days.
17:45So, that's the downside of using the
17:47pivot method. Yes, you get a much
17:50greater risk to reward, right, which
17:53means you have a smaller downside and a
17:54greater upside. But,
17:57there's also a greater chance of you
18:00missing a trade entry.
18:03So, my advice for majority of you guys
18:04watching this is to find out which one
18:07works best for you based on data.
18:12Try both of these method over the span
18:14of 100 trade. Right, and then based on
18:16that, find out which is the method that
18:18works for you and just stick to that
18:20consistently. So, if you feel like the
18:22range method works better when you mark
18:24up the entire consolidation, then you
18:26want to make sure that you're always
18:27using the range method. If you feel like
18:29the pivot method works better for you,
18:31right, because you are able to get much
18:32more precise entries, you know, it's
18:35much more suitable for you, then you
18:37always want to be using the pivot
18:38method. So, find the method that works
18:41for you and just stick to it
18:42religiously.
18:44Okay, so let me just give you guys more
18:46examples on the charts right here. So, I
18:50want you guys to do this exercise with
18:51me, right? So, right after this video,
18:53if you have the time, go on to a blank
18:55chart and just try mapping this out,
18:57right? Because the more you do this, the
18:59better you get at it.
19:01Okay, so let's see. There's another
19:03Okay, let's look at the most obvious
19:04ones, right? Because there's some minor
19:06ones like this ones right here and also
19:08this ones right here. And I just want
19:11you to focus on the most obvious ones
19:12for now. And then later on as you get
19:14more competent, you can like just get
19:16better at like refining them and just
19:18spotting more of them. So in this case,
19:20price came up, pulled back, consolidated
19:23a little bit, and then goes up. Right?
19:25So once again, we can mark this entire
19:26consolidation right here
19:29as the demand zone. Okay? So this
19:32becomes the entire demand zone. But
19:34since this is a pullback, right?
19:37Remember what we just mentioned?
19:39You can actually mark up the high
19:42of the pullback to the low of the
19:44pullback as the entire demand range.
19:46Right? So this becomes my range demand
19:48zone. It's a fairly wide range. Okay?
19:51Very wide range. Okay, later on price
19:53went up there. Guess what? Price
19:55mitigated demand zone and then continued
19:57going up a little bit right here.
19:59So
20:00just continue mapping out the obvious
20:02demand and supply zone. You can see that
20:04there's potentially
20:06a demand zone right here. And then
20:08there's also a supply zone up here.
20:11Okay? So this is one of those instances
20:12where price is respecting the same
20:15supply zone multiple times. Right? You
20:17can see price goes up, mitigates a
20:20supply zone,
20:23comes back down. Goes up again,
20:25mitigates a supply zone, comes back
20:27down. Goes up again, mitigates a supply
20:29zone, comes back down. Telling us that
20:31this is a very strong supply zone and
20:33it's most likely going to hold. And
20:35surely enough, it went back up there
20:37multiple times and it always hold. Once
20:40again, this is another sign that tells
20:41us that institutions are
20:44literally dumping a lot of sell orders
20:47at this price point.
20:48So you shouldn't be, you know, trying to
20:51look for longs at this price point,
20:53knowing that there's so much selling
20:54pressure at this area right here.
20:57So once again, your goal is not to draw
20:59these perfect boxes. Your goal is to
21:01just identify the origin of the move
21:03itself. Right? Go and find, you know,
21:05this imbalance move to the downside and
21:07then just go and identify the origin,
21:09right? Like I said, either use the range
21:11method or the pivot method just like
21:12this. And you can see what happens after
21:15price break to the downside, price
21:17mitigate this previous supply zone,
21:19continue going down.
21:20Okay, this is just
21:22how supply and demand zones work. It's a
21:24very simple concept and I really believe
21:26that the more you practice this, the
21:28better you get at spotting it. Which
21:30means that the easier it is for you to
21:32actually make sense on like when to buy
21:35and when to sell.
21:36Okay, so like for example, if you drew
21:38this as a demand zone, then you might
21:40want to enter for longs the price the
21:42minute price mitigate your demand zone.
21:44Or you drew this as a supply zone, then
21:46you might want to look for shorts the
21:47minute price mitigate your supply zones.
21:50We're going to dive deeper into like
21:52when exactly to enter later on
21:55where you will learn about the concept
21:57of entry models which states that once
22:00price enters your supply and demand
22:02zone, you want to look for certain entry
22:04models. Which is entry confirmation,
22:07entry signals, entry confluences that
22:10have to show up in the market before you
22:12can press the buy or sell button.
22:15Once again, that's for a future lesson.
22:17For now, just get really competent at
22:20just identify and trading those zones.
22:23Okay, so yeah.
22:25Now, let's talk about
22:27what counts as a mitigation, right? So,
22:30in this case itself, let me just give
22:32you guys like an example. So, price was
22:35consolidating around here, right? Let's
22:36mark this entire consolidation up from
22:39the high to the low just like this.
22:41Okay, from the low to the high and then
22:45combining market structure, you will saw
22:46that price has broke structure right
22:49here to the downside. Okay, so this is
22:52where you can identify your swing high
22:54and your swing low.
22:56Okay, so in this case, price have pretty
22:59much came down, pulled back and then
23:02goes down.
23:03So, the minute price actually mitigate
23:05this supply zone the first time round,
23:08does this count as a valid mitigation?
23:11Does this mean that
23:13price is not going to come back up here
23:15again since it has already been
23:17mitigated?
23:19Well,
23:20I like to keep things mechanical, like I
23:21said. So, I want to give you like a very
23:23simple rule.
23:25It counts as a mitigation if price has
23:28break out of the consolidation
23:31and it has pulled back
23:34very aggressively into the 50% of this
23:38zone itself. Right? So, this is the
23:39entire zone. If you draw your
23:43retracement tool from the high to the
23:46low of this entire consolidation,
23:48you will see that this is the 50% line,
23:51right? Like this blue color line right
23:52here. Once again, this is settings. You
23:54can just pause the video right now and
23:56just copy the settings if you want. So,
23:58when you have these settings on your fib
24:00retracement tool, you will be able to
24:03find out where is the 50% of the zone
24:05itself.
24:06So, for me, I like to count a valid
24:08mitigation as price reaching the 50%.
24:13Okay, so this means that if price
24:15actually, you know, just pulls back and
24:17touches this zone just like what
24:19happened right here and then continue
24:20going down, I personally do not like to
24:23count that as a valid mitigation, which
24:26means that there's a chance in the
24:28future for price to still come back up
24:30to mitigate the 50% of the level right
24:33here, 50% of the zone, before it
24:35continue going down.
24:38There's a chance, like I said. Nothing
24:40is ever guaranteed in this market.
24:42There's a chance that it's going to
24:43happen. So, I think like it's very
24:45important to have like a rule just like
24:47this so that you don't have any room for
24:49guesswork whatsoever.
24:52So, yeah. Once again, try this out based
24:54on data. This is just based on my data,
24:58based on my experience, I found that
25:00like a lot of times when price mitigate
25:02the zone just like this, it's not really
25:04a mitigation, it's just more of like
25:06efficient price action where price is
25:08just doing its thing, just pulling back
25:10the little bit of balance before
25:11continuing going down even further.
25:14And surely enough, you can see like
25:15right after this mitigation, price went
25:17all the way up here, very, very near to
25:19the 50% of the zone itself before
25:22continuing going down.
25:25Maybe I can show another example like
25:28right here, right? So, using the pivot
25:30method this time round, I find a pivot
25:32candle, uh and in this case, I can just
25:35draw this long wick right here.
25:37Just like this, and you can see in this
25:39case,
25:40price mitigated this previous supply
25:42zone right here,
25:44and it came up to nearly the 50% of it.
25:49Just like this. Not really like the 50%
25:51of it, but it later on, it went up to
25:53the 50% of it, right? If you just drag
25:55it all the way up here, you'll see that
25:57right now, price has came up to the 50%
25:59of it.
26:00Right? So, you can see when price
26:02mitigate this zone just like this, comes
26:04down,
26:05come up again, mitigate it, comes down,
26:07failed to have enough selling pressure,
26:09come up again, comes down, and then
26:10eventually right now, it has came all
26:12the way up here to the 50%, and if
26:14there's sufficient selling pressure at
26:15this zone, it's going to cause price to
26:17continue going down.
26:20So, that's the concept that I want to
26:22like share with you guys, and that is
26:24the concept of what counts as a
26:26mitigated zone and what counts as a
26:28unmitigated zone. A unmitigated zone,
26:30which is a zone that is haven't been
26:32touched, right? That haven't really
26:34reached the 50% level,
26:36that was asked that at some point of
26:38time in the future, price will come down
26:41to the unmitigated zone, mitigate it,
26:43and then go.
26:45And then when you see a mitigated zone
26:46like just like in this case, there's a
26:48chance that in the future, the next time
26:50price actually come down to this level,
26:52price will just blast right through it.
26:55Because it has already been mitigated.
26:57Because it has already been used.
26:59Remember the logic behind these zones.
27:01Right? This does that institutions has
27:03looked for long orders right here.
27:05And then the next time price came back
27:06down here, they're going to deploy the
27:07remaining buy orders that they actually
27:09wanted to execute.
27:11So, this means that there's not much buy
27:13orders at this price point anymore. So,
27:15the next time price comes down to this
27:17area,
27:18price is most likely going to blast
27:19right through it and just continue going
27:20down, causing this zone to fail.
27:24Once again, not always. Right? Because
27:26there are certain zones like what we
27:27what we've seen just now where price
27:28just respected multiple times. And as a
27:31result, it just continue holding just
27:33like this.
27:36So, that is pretty much
27:39the concept of supply and demand zones.
27:42Right? Like I said, I think what you
27:45guys really need to do now is to just
27:46practice more. Just train your eyes to
27:49identify and spot the supply and demand
27:51zones more.
27:52Because when you do that, what you are
27:54essentially doing is that you're
27:55building new neural pathways in your
27:57brain.
27:58Just like when you first start doing
28:00anything, it's a little bit difficult.
28:02It's a little bit troublesome. But the
28:04more you do something, the more reps you
28:06put in, the better you get at it because
28:09your brain is literally building new
28:12neural circuits of that process itself.
28:16And the neurons that fire together, they
28:18wire together. Right? So, what you're
28:20doing when you're practicing is that
28:21you're pretty much reinforcing that
28:23neuron. Right? You're just making that
28:25that wire thicker and thicker and
28:26thicker and thicker. And then 3 months
28:29from now, you're able to like just
28:30identify the supply and demand zones
28:31with with ease. Right? With no trouble
28:34whatsoever.
28:36So, obviously supply and demand zones is
28:38just like one piece of the puzzle.
28:40Right? Like I said, success in trading
28:43is all about identifying the right trade
28:45ideal
28:46the at the right location and executing
28:49at the right time.
28:50This is just one piece of the puzzle,
28:52which is the location. What about the
28:54right trade idea? Right, you still need
28:56to take into account of the market
28:57structure, the liquidity,
29:00you know, you need to take into account
29:01of the order flow, right? You need to
29:04take into account of your daily buyers.
29:07You also need to take into account of
29:08the timing in which you are finding your
29:10entry models at, right? So, there's a
29:12lot of different variables, right? It
29:15Like I said, trading is a masterpiece.
29:16It's an arts. So, what you're doing
29:18right now is that you are just gathering
29:21each piece of the puzzle. Later on,
29:23we're going to walk you through on how
29:25to piece every single piece of the
29:26puzzle together to form a masterpiece.
29:28All right, so right now just treat this
29:29as like you collecting your Infinity
29:32Stones, all right? Like just collect as
29:34many as possible because later on you
29:37will have more weapons in your arsenal
29:38to work with.
29:40So, that's everything, right? I just
29:42want to end off by saying that like I
29:44said, do not just rely on this one
29:47concept alone.
29:48You want to use multiple confluences,
29:51right? So, for example, if we know that
29:53this is a supply zone right here, let me
29:55just erase the chart.
29:58I'm not just going to blindly enter for
30:00a sell when price mitigate a supply
30:01zone. No, I have to look at the
30:03structure. Is price actually bearish?
30:05Because if price is bullish, I do not
30:08want to sell at week highs, right? So,
30:10it doesn't make sense for me to sell.
30:12And then I also need to see, okay,
30:13where's the available liquidity, right?
30:15So, once again, this is something that
30:16we're going to cover later on. I want to
30:17wait for the liquidity to be swept.
30:20And then do I want to sell immediately
30:21when price mitigate a supply zone? No,
30:23maybe I want to wait for my structure to
30:25shift, right? I maybe want to wait for
30:27price to mitigate this supply zone, and
30:29then I want to see the internal
30:31structure start shifting bearish first
30:33to tell me that the pullback is over,
30:36and right now the internal structure,
30:38the lower time frame trend has shifted
30:40up bullish to bearish, then I look for
30:42shorts.
30:44Okay, so that's what we would we would
30:46call a confirmation entry, right? Where
30:48you wait for extra confirmation, then
30:50you enter for your short or long
30:52position.
30:54An aggressive entry might be, "Okay, I
30:56see this is a supply zone. It's the high
30:58of the supply zone. I'm just going to
30:59enter for a sell the minute price
31:01mitigate this zone itself." Right? So,
31:03the minute price comes up here, mitigate
31:04the supply zone, I'll enter for a sell.
31:06As simple as that. So, that's your
31:08aggressive entry, that's your
31:09conservative entry. And once again, over
31:11the next few lessons, I'm going to talk
31:13about when to use which sort of entries.
31:18Now that you guys have understand supply
31:20and demand zones, the next question
31:22becomes, when is a zone actually worth
31:24taking?
31:25Because like I mentioned, not every
31:27demand zone is worth buying and not
31:29every supply zone is worth selling.
31:32This is where the concept of premium and
31:35discount comes in. It will allow you to
31:37know which are the point of interest
31:38that you want to be shorting from
31:41or buying from.
31:42And that's what we're covering in the
31:44next episode. Right? I'm going to show
31:45you how to use that concept and combine
31:48it with the supply and demand zones, so
31:50you can know exactly whether price is
31:52expensive or cheap within a range.
31:55This way you can make the right course
31:57of action. This way you can stop buying
31:59high and selling low.
32:02So, I look forward to seeing you in the
32:03next lesson. And as always, remember,
32:05you're just one trade away. Muah.

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