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Identifying areas of supply and demand is one of the most delicate aspects of trading based on price trends. Many traders start out believing that this is a simple task, only to realise that, without clear rules, these areas change from one analysis to another. This inconsistency makes it impossible to build a reliable process: verifiability, operational consistency and the ability to convert analysis into a real strategy are compromised.
One of the main sources of error comes from the typical material available online. Many charts show boxes drawn retrospectively, often accompanied by generic instructions such as “buy here” or “sell here”. What is almost always missing are the criteria used to define that zone, the conditions that make it valid and the reasons why nearby alternatives were excluded. Without objective rules, these examples cannot be replicated and cannot serve as the basis for a method.
Discretion exacerbates the problem. Only a small group of experienced traders achieve consistent results using their own interpretative judgement. Their decisions are based on skills acquired over time that are difficult to transfer. Attempting to replicate these processes usually leads to inconsistent choices and a distorted idea of what a demand or supply zone actually is.
A structured, rule-based framework is therefore essential. A methodology based on verifiable criteria allows us to determine when a zone forms, how it remains valid and what makes it operational. The goal is to reduce discretion and make the identification process clear, repeatable and suitable for building verifiable strategies.
It is also important to emphasise that the concepts presented in this article are not tied to any specific proprietary platform, indicator or tool. The methodology has been designed to be studied and replicated using freely available resources. All relevant information is derived directly from price, allowing any trader to apply the concepts without relying on external dependencies.
A unified space for all resources, a single framework for every trader.