areas of supply and demand are the
number one piece of information you need
to know if you are trading smart money
Concepts so in this video I'm going to
show you everything that you need to
know about supply and demand zones and
the three different types that there are
but this isn't going to be your typical
video where I run over general concepts
and give you the basic information I'm
actually going to give you a sneak peek
of the lecture style education that I do
within the trading floor so that you
guys have a better understanding of how
that is structured as well as to find
out if that is actually your preferred
method of learning things okay so now
that you guys have a clear understanding
of Market structure as well as how the
smart money moves in their order flow I
want to now discuss supply and demand
zones when smart money starts moving
huge amounts of capital around and say
they're selling off the market it's not
all financial institutions all doing the
same thing they're all fighting against
each other they're all trying to make
the most amount of money they're making
making the market move in dramatic ways
so as you can see right here this was
the initiation of it buy order starting
to fill up the price back to where it
was and then the banks get in again sell
off the market and you start getting
these cascading effects down every time
one of these large spikes in these zones
happen these are known as Supply zones
where the supply is high so that the
smart money can sell off their positions
it's the same concept of supply and
demand in everything in life whether you
want to buy a car that's extremely rare
so the supply is very low but the demand
for it is high so the price goes up
anyway anytime these large spikes happen
in the down Direction the bearish
direction these are known as areas of
Supply anytime these spikes happen in
the upwards Direction these are areas of
demand again thinking about multi-time
frame analysis higher time frame levels
of demand hold more significance in the
market and are areas to keep in mind
when looking for rejection zones so
there are three types of supply and
demand zones a range Supply shows the
entire range of that last impulse to the
upside the sweeped liquidity and came
down you can see that depicted here in
these three candles marking this entire
area up as your supply Zone and using
the bottom of this Zone as your entry
you can clearly see will give you a nice
trade but a lower risk to reward because
your stop loss needs to be above the
supply Zone the next way to draw a
supply zone is the pivot Supply it is
simply the last bullish candle before
the bearish candle that showed the Pivot
Point using these types of supplies will
get you a higher risk to reward now a
fractal Supply zone is simply looking at
the top Wick of that bearish movement
and if you use these as your supply Zone
markups your risked reward is extremely
high but the chance of you being tagged
into a trade is much lower so you will
miss some trades with fractal Supply
zones so as you can see here once price
hit this higher time frame demand it
shot up breaking previous Supply zones
once it broke a previous Supply Zone and
came down and rejected up that is now a
new demand zone so the supply zones
pushed the price down into a higher time
frame demand and then lower time frame
demand zones push the price up filling
in all of these Supply zones now I want
to break that down just so you can see a
little bit clearer a range Supply Zone
takes the entire range up before the
price rejected down this zone is where
you want to look for sell orders you can
see as price came in here tapped it and
cascaded down the pivot just takes into
account the last candle it's a little
bit smaller than the range Zone and
gives you a really good risk to reward
ratio getting in here taking the trade
down to here if you're only looking at
fractal Supply zones you're only taking
into account that top Wick right here
here and you can see price did not come
back into this Zone to tap you into your
trade and you missed the movement down
most smart money Concepts Traders choose
pivot supply and demand zones now
continuing on with supply and demand
there are three primary areas of supply
and demand there are three specific
areas of demand zones that are depicted
here we have the stb Wix which is the
sell to buy Wix the inside bar and the
large Wick I'm going to explain each one
of these individually so this is a
higher time frame movement think about
how a candle forms price went up this
was its high point and came down and
closed right here this next candle
opened and price pushed down before
rejecting and going up so if you zoomed
into this on a lower time frame you
would see something similar to this
price came up pushed down and then
continued so these two Wicks tell a huge
story on which direction price wants to
go and this this demand Zone that was
created here so from the top of this
Wick to the bottom of this Wick or sell
to buy Wix demand Zone next up we have
the inside bar an inside bar on a higher
time frame if you zoomed into a lower
time frame would be a short ranging
price before price continued up then we
have the large Wick this large Wick
right here on this higher time frame is
very clear but on a lower time frame you
will see price come down reject retest
and continue up all three of these are
on higher time frames looking for these
and identifying these on higher time
frames is extremely valuable because
then once you zoom into a lower time
frame you will see a clear story of
what's Happening Here and you will be
able to use these demand zones as your
entry prices conversely looking at these
exact same examples to the sell side we
have BTS Wix which are buy to sell Wix
showing a supply I Zone on a lower time
frame the inside bar again showing a
ranging Market on a lower time frame and
large Wicks all the same examples that I
showed you in a bullish Market depicted
here in these bearish movements now
let's discuss institutional supply and
demand zones institutional supply and
demand zones always happen on the higher
time frame because as I said before the
higher time frame Market structure holds
much more significance and relevance to
what direction the bank's financial
institutions and smart money are moving
their money around the more significant
the structure the more significant the
zone is so when you see higher time
frame breaks of structure that is the
most significant when you see price
reject and go up to break a previous
high that is now a confirmed demand Zone
and you will drop this demand Zone wait
for price to come back into it and then
enter your trade here you don't want to
enter the trade here or at the top you
want to wait and be patient and have
price come back into that demand Zone
which is also a discounted Zone if you
think about this price movement up and
the 50 level this is the only half of
this area that you want to get into
conversely on the sell side if price had
a swing that broke previous structure
that is now a valid Supply Zone and you
can mark it up and wait for price to
come in here on the higher time frame
and then look for your laser entries on
the lower time frame so the orders of
significance is a break of structure and
then going down to a medium time frame
internal breaks of structure and then
the lowest time frame is where you're
going to find your change of characters
that's going to happen right here you
will see a small change of character
near this Supply Zone and that's where
you want to look at entering your trades
then flip zones indicate when the smart
money is moving price in the opposite
direction you got to clear down Trend
breaking structure price came up to
break the higher time frame structure
and break through the supply zones now
validating this as a valid demand Zone
wait for price to come back enter in in
this demand Zone and follow the new
trend that has been formed when you're
looking at institutional supply and
demand zones you only want to focus on
zones that lead to breaks of structure
this area led to a break of structure
this is what you want to focus on this
broke structure this is what you want to
focus on now let's put some things
together let's layer on supply and
demand with Market structure as you can
see Market structure making higher highs
and higher lows right here each movement
up broke previous structure so once one
of these movements came up to break
structure it then created a demand zone
so as price comes down into it you buy
at these demand zones which subsequently
are in areas of discount below the 50
percent level then once price starts
reversing and breaks the previous up
structure that is your new protected
high so as price comes down creates new
bearish market structure this move broke
the previous Market structure right here
that is now your new Supply Zone price
came back in into an area of Premium as
well as that area of supply and made a
new lower low once price breaks through
that Supply Zone it will then create a
new demand Zone once it breaks that
structure this is also known as a flip
Zone which will go into more detail
later I really hope you guys enjoyed
that video I hope you learned something
from it if you're interested in seeing
the rest of the course just sign up to
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if you'd like more videos like this on
this channel just let me know in the
comments section thanks so much for
watching and we will see you in the next
one