Introduction
In the world of trading, most retail traders chase candles and indicators. But the real winners? They track where the money flows in (Demand) and where it flows out (Supply). These are the core of Supply & Demand Zones — the heartbeat of the Smart Money Concept (SMC).
What Is Supply and Demand in SMC?
Demand Zone (Buy Area):
This is where big players (institutions) accumulate assets at low prices before pushing the price up. It typically forms:
After a sharp move upward
With a visible imbalance (Fair Value Gap)
Near an Order Block or a CHoCH (Change of Character)
➡️ Demand Zone = Smart Entry for Buys
Supply Zone (Sell Area):
This is where institutions unload their positions after accumulating lower. It forms:
After a strong price drop
With a Break of Structure (BOS)
Often signals a saturated market
➡️ Supply Zone
= Smart Entry for Sells .
How to Identify High-Probability Supply/Demand Zones
1. Imbalance (Fair Value Gap):
When price moves away aggressively, it often leaves a gap — unfilled orders = institutional footprint.
2. Structure Break (BOS/CHoCH):
A key shift in market structure shows that smart money has flipped direction — the zone that caused it is crucial.
3. Strong Move Away:
A sharp move with minimal pullback indicates heavy institutional interest.
4. Volume Spike:
If volume surges during the breakout, it’s a strong sign of smart money enter
ing or exiting.
Using Supply & Demand Zones in SMC Trading Strategy
Entry:
Place buys at confirmed demand zones, and sells at supply zones after confirmations like mitigation, order blocks, or CHoCH.
Stop Loss:
Set below demand or above supply to avoid invalid zones.
Take Profit:
Target liquidity levels, imbalance zones, or previous highs/lows.
Example: BTC Chart
Bitcoin dropped to the $94,000 zone and created a strong demand zone.
A sharp rally followed to $95,000, with a Break of Structure.
This makes the demand zone a premium SMC entry point.
[Chart attached with zones, imbalance, and CHoCH indicated]
Why Are Supply & Demand Zones So Powerful?
Low Risk, High Reward setups
Predictable institutional reactions
Helps avoid retail fakeouts and
traps.
Conclusion
If you truly want to trade like a professional and follow where the big money moves — master Supply and Demand Zones.
This is where real market movement begins and ends.
Don’t trade in the dark — follow the flow of capital!
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