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Experts at Traders Union explain the concept of supply and demand zones, vital for effective trading. To find these zones on a chart, follow a three-step approach recommended by the experts, involving market imbalance recognition and Extended Range Candles (ERCs). Additionally, discover Trade Ideas, a feature-rich stock scanner utilizing advanced technologies to provide personalized chart interpretations and real-time alerts, making it a valuable tool for traders.
What are supply and demand zones?
To effectively identify supply-demand zones on a price chart, it is crucial to fully understand each concept. TU experts explain the supply zone, which represents a price level where traders typically sell, located above the current price. When the price reaches this level, unfilled sell orders are completed, leading to a potential decrease in price. On the other hand, the demand zone, located below the current price, is where traders usually buy, with a high buying interest and available buying orders at that level.
Finding supply and demand zones on a chart
So how to find supply and demand zones? Traders Union analysts recommend a three-step approach to identifying Supply and Demand Zones, involving the recognition of market imbalances through candle patterns and the use of Extended Range Candles (ERCs) on the price chart.
Step 1: The first step in finding supply and demand zones is identifying market imbalances, which trigger significant price shifts based on supply and demand. Market imbalances are evident in big green candles indicating price rallies when demand exceeds supply, and big red candles indicating price drops when supply exceeds demand.
Step 2: Focus on “Extended Range Candles” (ERCs), which are large candles without significant wicks, as they highlight market imbalances on the chart.
Step 3: To identify supply and demand zones, follow three essential steps: Spot the current price, locate a strong lineup of candles moving up or down, find ERCs with long bodies and minimal wicks, and identify the origin of price movement to form the base of the zone.
What is Trade Ideas?
The Trade Ideas stock scanner, developed in 2003 by financial experts, now owned by Interactive Brokers, utilizes cloud technologies, machine learning, and AI to analyze stock charts and provide users with alerts on abnormal price action. Despite its seemingly high subscription fee, the scanner proves to be highly beneficial, offering clear trading strategies and entry points based on extensive analysis and mathematical predictions. It operates as a fully autonomous resource, eliminating the need for additional sources of information or analytical tools for traders.
Trade Ideas is a feature-rich stock scanner that is more expensive than other similar tools but offers unique features that make it stand out. It uses machine learning and artificial intelligence to process information in the cloud and provide personalized chart interpretations. Notably, it has a PC app available for download, but lacks a mobile version, which is a drawback for some users. Check out a comprehensive Trade Ideas review for 2023 to explore the latest features and updates of this powerful stock scanner. Here are the key features determined by TU analysts:
- Channel Bar: Offers thematic channels with links to market environments for easy navigation.
- Idea Surfing: Automatically displays highlighted stocks in the chart, providing trade entry points and patterns.
- Real-time Alert Streaming: Provides instant alerts reflecting market conditions without delays.
- Favorite Stocks: Allows users to mark and track assets of interest with built-in filters and statistics.
- Profit/Loss: Automatically analyzes charts and estimates optimal buying and selling points.
- Single Stock Window: Provides a list of competitor stocks or similar trading principles for portfolio expansion.
- Stock Races: Compares selected stocks for potential profitability and risk diversification.
Conclusion
Understanding supply and demand zones is crucial for effective trading, and Traders Union experts provide valuable insights on how to identify them on a price chart. Their recommended three-step approach, including recognizing market imbalances and using Extended Range Candles (ERCs), aids in finding these zones. Additionally, the Trade Ideas stock scanner, with its advanced technologies and unique features, proves to be a valuable tool for traders, offering personalized chart interpretations and real-time alerts for informed decision-making.
