Supply and Demand

The only reason why price moves in any and all markets is due to an imbalance in supply and demand.

Price will rise when there is greater demand than supply and price will fall when there is greater supply than demand. Our job as traders is to identify these levels on a price chart and trade from them. We trade long from demand and short from supply.

There are numerous different levels on a price chart but we are only interested in high quality levels.

Demand

We look to trade long only from high quality demand levels.

sd demand image 1

 

Supply

We look to trade short only from high quality supply levels.

sd supply image 2