Traders use technical analysis to read price movements with potential underlying behavior in making trading decisions. Traders may already be familiar with the terms support and resistance, which are basic issues in forex trading but are important to understand.
Other terms that have a similar concept but are approached differently are Demand and Supply. If support and resistance are more emphasized in the price zone, demand and supply are more emphasized in the price zone. It might be a bit complicated, but actually, this theory is easy to understand.
The demand and supply price zones reflect the history of asset prices that have experienced significant movements, either up or down. The demand zone usually occurs when prices stop falling and then jump upwards. The Supply zone is found when the price stops rising and then jumps down.
The demand zone reflects that traders consider this area to be quite interesting to enter the market by buying, preferably when the price enters the supply zone, traders consider this to be the best area to enter the market by selling.
The key to understanding the demand and supply trading theory is accumulation and distribution which are influenced by large market players such as institutions and the smart money concept which prepares potential price movements. This analysis model is quite interesting because it is a reliable analysis method.
If you are curious about how to do market analysis with Demand and Supply, you can visit the FXOpen blog in the article entitled "Supply and Demand Trading Patterns and Strategies"
Disclaimer: This analysis represents my own opinion only. It is not to be construed as an opinion, offer, solicitation, recommendation, or financial advice of the Companies operating under the FXOpen brand.
Other terms that have a similar concept but are approached differently are Demand and Supply. If support and resistance are more emphasized in the price zone, demand and supply are more emphasized in the price zone. It might be a bit complicated, but actually, this theory is easy to understand.
The demand and supply price zones reflect the history of asset prices that have experienced significant movements, either up or down. The demand zone usually occurs when prices stop falling and then jump upwards. The Supply zone is found when the price stops rising and then jumps down.
The demand zone reflects that traders consider this area to be quite interesting to enter the market by buying, preferably when the price enters the supply zone, traders consider this to be the best area to enter the market by selling.
The key to understanding the demand and supply trading theory is accumulation and distribution which are influenced by large market players such as institutions and the smart money concept which prepares potential price movements. This analysis model is quite interesting because it is a reliable analysis method.
If you are curious about how to do market analysis with Demand and Supply, you can visit the FXOpen blog in the article entitled "Supply and Demand Trading Patterns and Strategies"
Disclaimer: This analysis represents my own opinion only. It is not to be construed as an opinion, offer, solicitation, recommendation, or financial advice of the Companies operating under the FXOpen brand.
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