The Supply and Demand forex indicator displays important zones of supply and demand for any currency pair and timeframe.
Zones of supply and demand can be used to trade either market breakouts or to trade possible trend reversals.
In trending markets, look for market breakouts.
For example, in an uptrending market, watch for a possible break of the demand zone and go long.
Conversely, in a downtrending market, watch for a possible break of the supply zone and go short.
It is also an interesting indicator to trade “buy on dips” in an uptrend or “sell on rallies” in a downtrend.
In an uptrending market, look for a pullback towards the supply zone (support area).
In a downtrending market, look for a rally towards the demand zone (resistance area).
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Indicator Chart (USD/JPY M15)
The USD/JPY M15 chart below displays the Supply and Demand forex indicator in action.
Basic Trading Signals
Read the description above to learn more on how to use this indicator.
Supply and Demand MT4 and Lucky Reversal MT4 Forex Strategy
Introduction
This MT4 strategy combines key zone analysis from the Supply and Demand Metatrader 4 Forex Indicator with trend reversal signals from the Lucky Reversal Indicator MT4.
The Supply and Demand indicator highlights important support and resistance areas using green blocks for demand zones and red blocks for supply zones.
The Lucky Reversal Indicator shows blue arrows for bullish reversals and red arrows for bearish reversals.
Combining these tools allows traders to enter trades at high-probability reversal points near key supply or demand zones.
This strategy is designed for day trading on M5, M15, and H1 charts.
It is particularly useful for traders who want to capture intraday price swings by entering trades when the market reaches significant supply or demand areas and confirms a reversal with the Lucky Reversal signal.
Buy Entry Rules
- Price must reach a green demand zone highlighted by the Supply and Demand indicator.
- A blue arrow must appear on the Lucky Reversal indicator confirming a bullish reversal.
- Enter a buy trade at the close of the candle showing the blue arrow.
- Place the stop loss slightly below the demand zone to protect against false breakouts.
- Set take profit near the next red supply zone or a predefined target of 20–30 pips depending on the timeframe.
- Close the trade early if a red arrow appears or price falls below the demand zone.
Sell Entry Rules
- Price must reach a red supply zone highlighted by the Supply and Demand indicator.
- A red arrow must appear on the Lucky Reversal indicator confirming a bearish reversal.
- Enter a sell trade at the close of the candle showing the red arrow.
- Place the stop loss slightly above the supply zone to protect against false breakouts.
- Set take profit near the next green demand zone or a predefined target of 20–30 pips depending on the timeframe.
- Close the trade early if a blue arrow appears or price rises above the supply zone.
Advantages
- Combining supply and demand zones with reversal signals increases the accuracy of trade entries.
- Visual representation of zones and arrows makes spotting trades intuitive and fast.
- Works on multiple timeframes, allowing flexibility for scalping or longer intraday trades.
- Helps traders enter trades near key market turning points, reducing the risk of chasing price moves.
- A simple, rule-based approach is suitable for both beginner and advanced traders.
- Supports trading across a variety of currency pairs, providing frequent opportunities.
Drawbacks
- Requires constant attention on lower timeframes to act on quick reversal signals.
- Profit targets can be affected by spreads and slippage, especially in fast-moving pairs.
- Effectiveness may vary for exotic pairs with lower liquidity and wider spreads.
Case Study 1
On EURUSD M5 during the London session, price reached a green demand zone and the Lucky Reversal indicator displayed a blue arrow.
A buy trade was entered and closed for 18 pips when price approached the next red supply zone, successfully capturing the intraday bullish swing.
Case Study 2
On GBPCAD M15 during the New York session, price reached a red supply zone and the Lucky Reversal indicator displayed a red arrow.
A sell trade was initiated and concluded for 54 pips as price moved down toward the next green demand zone, effectively following the intraday bearish momentum.
Strategy Tips
- Only take trades when the reversal arrow aligns with the supply or demand zone for stronger confirmation.
- Use lower timeframes like M5 for quicker intraday entries and M15 or H1 for more stable setups.
- Avoid trading around major news events to reduce the likelihood of stop-loss triggers.
- Adjust stop losses slightly beyond the zone boundaries to allow room for minor price fluctuations.
- Partial profit-taking near key levels can help secure gains while letting trends continue.
- Be patient and wait for both zone touch and reversal arrow confirmation before entering a trade.
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Download the “supply-and-demand.mq4” Metatrader 4 indicator
MT4 Indicator Characteristics
Currency pairs: Any
Platform: Metatrader 4
Type: chart pattern
Customization options: Variable (Backlimit, zones) Colors, width & Style.
Time frames: 1-Minute, 5-Minutes, 15-Minutes, 30-Minutes, 1-Hour, 4-Hours, 1-Day, 1-Week, 1-Month
Type: support | resistance
