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Supply and demand zones explained

A demand zone is a base that price left sharply upward; a supply zone is a base price left sharply downward. The sharper the departure and the fewer times price has returned, the more attention traders give the zone.

How to spot it

  1. 1Find a strong move away from a tight base of candles.
  2. 2Mark the base as the zone.
  3. 3Check how many times price has returned (freshness).
  4. 4Prefer zones aligned with the higher-timeframe trend.

Common mistakes

  • ✕Zones that are too wide to define risk.
  • ✕Trading zones that have been tested many times.
  • ✕Ignoring a clear trend that runs through the zone.
In ChartingPilot AI

The Supply & Demand lens grades zone freshness, departure strength and location as separate rules.

Educational content only. Not financial advice. No pattern or concept guarantees any outcome.

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