SUPPLY AND DEMAND ZONES INDICATOR
The indicator automatically plots supply and demand zones on the chart. Trading activity of Forex market participants is above these levels. This allows you to identify potentially profitable points for trading.
- You most likely know that behind all price movements in the Forex market there is an ever-changing ratio of buyers and sellers. By default, the MT5 terminal does not have an indicator capable of highlighting the zones in which key changes in this ratio occur.
That’s why we suggest you check out this free Shved Supply & Demand indicator developed to detect and draw this kind of levels automatically.
Description Shved Supply & Demand Indicator
- Supply and demand zones are levels near which one could observe increased activity in the Forex market earlier.
- These values are of interest to us because the repeated interaction of the price with them allows us to determine potentially profitable points for entering trades.
The levels are built on the basis of those zones of supply and demand, from which a sufficiently strong purposeful movement has already occurred.
- The height of the zones depends on the price activity near them. If the levels repeatedly aroused interest among traders, and after the reaction to them the price went up/down, visually the height will be higher.
For convenience, all figures on the chart have a short text description, so you will not have problems understanding what the highlighted level means.
Like most Forex market indicators, Shved Supply and Demand gives more reliable signals on higher timeframes. This is due to the fact that there is a fair amount of market noise on the lower timeframes.
- You should also keep in mind that the more often the price has tested supply and demand zones, the more actual they can be.
- What kind of zones does the Shved Supply & Demand plot?
This indicator highlights a total of 5 types of the levels:
- Weak zone – weak zone. There is no excess demand or supply close to these values. Accordingly, you should either avoid trading around them or do it carefully.
- Untested zone – not yet tested zone. They include those supply and demand zones, from which the price has once made a strong and targeted move.
- Verified zone – already tested (verified) level. These are the values where new interest in trading has been sparked 2 or more times. The indicator displays the number of retesting such formations on the chart. The higher the number of retests, the stronger the zone.
- Proven zone – repeatedly tested (proven) pattern. As a rule, trading activity almost always resumes from these values even to the point when a level is broken out and the trend changes.
- Turncoat zone – so-called “mirror” levels. Initially, such zones act as resistance/support. However, due to changes in supply and demand, the levels are broken out and used to trade in the opposite direction.
Although the indicator highlights areas that are of interest to Forex market participants, the indicator’s signals can be more effective when using additional trading tools.
By using the Shved Supply&Demand indicator along with other indicators or with non-indicator trading systems (Price Action and Candlestick Patterns), you will increase your chances of making profitable trades in the Forex market.
No matter what trading approach you end up with, the Shved Supply&Demand indicator can be a useful addition. The fact is that the chances of resuming the movement from those levels of trading activity that the indicator shows will increase significantly.
