This image illustrates the Strength of a Demand Zone using candlestick patterns. Here's what it means:
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Demand Zone
A demand zone is a price area where buying interest is strong enough to push prices higher.
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Levels of Strength:
1. Weak Demand Zone
Characteristics: Small candles, less bullish momentum after the zone.
Price struggles to move up quickly.
Fewer green candles after bounce.
Interpretation: Avoid trading aggressively; low confidence in strong upward move.
2. Strong Demand Zone
Characteristics: Clear bullish candles after the demand zone.
A mix of red and green, but with a clear uptrend after bounce.
Interpretation: Decent opportunity for a buy; shows buyers stepping in.
3. Stronger Demand Zone
Characteristics: Multiple strong bullish candles immediately after the demand zone.
Very little to no bearish candles after the bounce.
Interpretation: Very high buying pressure; best scenario to buy.
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Trading Tip:
The more aggressive the bounce from a demand zone, the stronger the buyers.
Combine with volume and structure for confirmation.