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Key Fetures of the Indicator :
- Automatically Identifies Demand & Supply Zones based on Price Action and Plot them on chart.
- Automatically Indicates Tested Zones.
- Indicates Trend in Intermediate Timeframe(ITF) by plotting vertical and horizontal line over 50ma.
- Automatically Calculate ATR multiplier Stoploss and Target in Minor Time Frame, ATR multiplied value and Target Ratio can be changed, You have to consider this Stoploss & Target only when the candle retest the zone.
- Draws Demand and Supply zones of Overnight Gaps .
- Indicates Entry Price of Proximal & Distal Line of zones, can be turn off for Tested Zones.
- Basing Candles Does not mess in other timeframe except choosen Cashflow type.
- Cash flow type, Trend in ITF and Entry Decisions indicated in Information table on Right side of Chart.
How to use Demand & Supply Zone Indicator ?
• It was difficult for retail traders to recognise the accurate Demand and Supply Zones, because it is not easy to detect zones correctly all the time. Drawing supply and demand zones tends to be more of an art than a science and some of the best-known modern supply / demand traders and mentors using this theory with the help of Indicator.
• Putting this theory into practise, the idea is to find the place on the chart where demand & supply zone forms. Now there is no need to draw the Demand & Supply Zones manually , all the Strategy works Automatically by Indicator.
• The indicator does not provide buy/sell signals, the indicator helps in identifying Demand Supply Zones on the chart.
• Steps to be followed after getting Access-
- STEP 1: Select the (AUTO Demand & Supply Strategy – By Atropine ) From Invite Only Script Section.
- STEP 2: Choose the Type of Cashflow from Indicator Setting, which you wanted to Trade.
- STEP 3: Switch the Greater Timeframe First(GTF)i.e. indicated in Information table at right Corner, Then Indicator Will Automatically Plots the Strong Demand & Supply Zones Only.
- STEP 4: Identify The Location Of Price, i.e. Price Curve Analysis.
- STEP 5: Trend and Entry Decision is indicated in right sided decision box in Intermediate Timeframe(ITF).
- STEP 6: Now choose Lower Timeframe (LTF) to Entry, At every zone Proximal line of the zone is Entry Price.
- STEP 7: Get Entry at entry price, when candle touches the zone, it Automatically Calculate ATR multiplier Stoploss and Target according to selected Ratio of target, no need to Calculate it manually.
- STEP 8: It must be note that, Only Consider the ATR SL & Target at the time of retest of zone.
~ Check out the image below to get a better picture of the situation.
• Higher Timeframe Chart-(Automatically Draws Strong Zones)
• Intermediate Timeframe Chart-(Automatically Indicates Trend)
• Lower Timeframe Chart-(Automatically Draws Zones and Indicates ATR Multiplier Stoploss and Target.)
What are Demand and Supply zones?
The zones are actually the sideways price action that come before an explosive moves, Demand zone forms before an uptrend and supply zone forms before a downtrend. In this strategy entry and exit depends upon price returning or testing to these zones.
Why this Demand and Supply zone Forms?
The Big players can’t just put their whole order into the market at once because they are accumulating so much that it would move the price. So instead, they buy within a specified price range. This causes what we see on the chart as a ‘demand zone’. Equally, when they are selling their position, it can’t be all done at once because the selling pressure would send the price sharply lower and reduce their profits. So again they sell over a period of time to minimise the market impact of their trades, which creates the ‘supply zone’.
How this Demand & Supply Zones Forms?
Every Zone is formed by Explosive candle + Base candle + Explosive candle.
Types of Demand and Supply Zone patterns-
There are two types of pattern, which are Reversal patterns and Continuation patterns.
The Drop-Base-Rally- a bullish reversal pattern.
The Rally-Base-Drop- a bearish reversal pattern
The Rally-Base-Rally- a bullish continuation pattern.
The Drop-Base-Rally- a bearish continuation pattern
• Like in any form of technical analysis or trading strategy, there are strong signals and weak signals. To get the best trading results, we need to ignore the weak signals and take the strong ones.
• The perfect Demand or Supply trade setup will have all of these features:
- Less than 3 Base candles- The demand or supply zone should ideally contains 1 to 3 base candles. Accumulation and distribution can take a while, but too long zone may get exhausted before the re-test later.
- Strong Price move- The demand or supply zone should ideally contains more than 2 explosive candles. This shows a strong price move that has significance.
- Fresh / Untested Zones- The best zones are when the price has not revisited it since the breakout. Just like support and resistance, the more times supply zones and demand zones are test, the more likely they are to fail.