3 CANDLE SUPPLY/DEMAND

How it works

The demand zone signal works by carefully examining three consecutive price candles to detect specific price action patterns. It first checks if the second candle closes below the low of the first candle, creating an initial trigger for potential demand.

Then, the signal confirms the pattern by verifying that the third candle closes above both the highs of the first and second candles. Once these conditions are met, a demand zone is automatically plotted on the chart, spanning from the low of the first candle to the high of the third candle, using a dashed green line for visual clarity.

Why it may be useful

Demand zone signals are crucial for traders because they provide clear visual indicators of potential support levels in the market. By identifying areas where buying pressure might emerge, traders can make more informed decisions about potential entry and exit points.

These signals help traders understand market dynamics by highlighting zones where price has previously shown strength and potential reversal. The visual markers and precise zone plotting make it easier for traders to recognize and act on potential trading opportunities across different timeframes and market conditions.

When to explore it

The demand zone signal is most effective in markets with clear price action and defined trending or ranging conditions. Traders should look to apply this signal in markets that show consistent price movements and where support and resistance levels are important.

It works particularly well in timeframes ranging from intraday to swing trading, allowing flexibility for different trading styles. Traders should combine this signal with other technical analysis tools and confirm signals with additional indicators to increase the probability of successful trades.

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