What is Supply & Demand Zone?

Price areas where a sharp move began — zones of unfilled institutional orders that often produce a reaction on return.

A demand zone is an area where price previously launched a strong rally, and a supply zone is an area where price previously launched a strong decline. The reasoning: a move that sharp means buying or selling interest at that price overwhelmed the other side, and large participants rarely fill their entire position in one visit. The unfilled remainder of those orders is assumed to still rest in the zone, so when price returns to it, the market often reacts there again.

Quality matters far more than quantity when marking zones. The strongest zones produce an explosive departure that breaks structure, are relatively fresh (each retest consumes the resting orders, so a zone touched three times is nearly spent), and required little time to form. Zones are close cousins of order blocks — the order block is typically the final opposing candle inside the broader supply or demand area. Either way, the professional habit is identical: the zone is where you look for a trade, and confirmation on a lower timeframe is what lets you take it.