Although trading crypto during the bear markets is difficult for many traders (even advanced ones), it can also be a challenging time. However, millionaires often emerge from the bear market. If you trade with the right skills, and implement your strategy as best as possible, it is not only risky but could also cost your life.
You can beat large institutions and investors by having the right mindset, patience and trading the best strategies. Many traders and investors seek strategies that maximize their profitability and yield high returns, increasing their potential earning power. Combining technical analysis strategies correctly can lead to great results. Institutions use the supply and demand zones as a strategy to allow them to trade at the most profitable outcome. You will learn how you can combine the supply-demand zone with other trading strategies.
What is Supply and Demand?
Knowing that market cycles are key is essential for traders. Understanding this will help you trade the markets in the most profitable way possible.
Traders should be familiar with four market cycles. These are the uptrend and downtrend as well as accumulation and distribution phases.
It is all about the changes in market structure that occur over time.
The price zone or supply area is where sellers have more power and are willing to sell assets at high prices. This prevents the price from rising.
The demand zone refers to the area of the market where buyers dominate and desire to purchase assets at an attractive price. It prevents prices from dropping.
How to identify supply and demand zones
It is easy to see the chart and identify demand and supply zones. Below is an easy way to determine supply and/or demand zones.
- Check the chart to see if there are any consecutive large, consecutive candles. It is important that the price moves quickly.
- The base is the area where you made the initial quick move.
The Pin Bar Pattern: How to Trade Demand and Supply Zones
The pin bar pattern is one of the most widely used in trading. It can be used for spotting potential price reverses from an uptrend and a downtrend. This pattern is extremely effective because it uses the demand and supply area. The formation of a demand region with pinbar patterns in the chart shows that there is a possibility for a price reverse to the upward trend, as evidenced by price movement up.
Featured image from zipmex. Charts From Tradingview