Support and resistance are lines. Supply and demand are areas. The difference matters because large orders are rarely filled at a single price — they sit in a band where price paused before leaving.
A demand zone is a small range where buyers overwhelmed sellers and price left sharply upward. A supply zone is the mirror: price stalled briefly, then dropped hard. The theory is that unfilled orders remain in that band, so price may react when it returns.
Base: one to three small candles in a tight range. Impulse: a large candle that closes well away from the base, often more than 1.3 times the average candle size (ATR). Draw the zone from the base's low to the top of its bodies for demand, and from the base's high down to the bottom of its bodies for supply.
| State | Meaning |
|---|---|
| Fresh | Price has not returned since the zone formed — strongest |
| Tested | Price has re-entered at least once — weaker each time |
| Broken | A candle closed through the far side — discard it |
A support line is drawn from repeated touches. A demand zone is drawn from one decisive departure. Many traders use both, trusting levels most where a zone and a swing level overlap.
Zone drawing is partly subjective, and any zone can fail. Strong impulses in high-impact news can slice through everything. Always size positions from your stop distance — our position sizing guide shows how.
The Supply & Demand option in the Forextity scanner finds base-and-impulse zones on your chosen timeframe, labels them fresh or tested, and shows the strength of the move in ATR multiples.
See it on a live chart. Choose a strategy, a trading style and a pair — Forextity does the technical analysis for you.
Open the Strategy Scanner →Risk notice: this article is educational and is not financial advice. Trading leveraged products carries a high risk of loss. Read our Risk Disclaimer.
