4.1Supply
- ·What a supply area represents
- ·The observable evidence of prior selling pressure
- ·How to mark supply as a zone
Supply represents an area where selling pressure previously became significant. Look for:
- ·strong rejection
- ·impulsive bearish movement
- ·consolidation before expansion
- ·repeated reactions
Mark the area where behaviour changed, not the exact candle.
Price consolidates, then departs sharply lower. The consolidation area is the supply zone — the departure is the evidence.
Examples use historical or illustrative data only. They are not live market signals.
Mark two supply zones on a historical chart and note the evidence for each.
Which observation best supports a supply zone?
Supply zones should be drawn as single exact prices.
- 01Supply marks previously significant selling pressure.
- 02Impulsive departure is the primary evidence.
- 03Draw supply as an area.
Educational content only. Nothing here is financial advice or a recommendation to trade. Trading involves risk of loss, results vary between individuals, and past performance does not indicate future results. Only capital you can afford to lose should be exposed to market risk.