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Supply & Demand

4 min read

Supply & Demand is the most approachable institutional framework — and it overlaps heavily with SMC order blocks.

The premise: big orders can't fill all at once, so they leave zones of unfilled interest. Price departs a zone sharply (an imbalance), and when it returns, the leftover orders defend it.

The zone types — read as the shape of the departure:

  • RBR (Rally–Base–Rally) and DBR (Drop–Base–Rally) → demand zones (buy).
  • DBD (Drop–Base–Drop) and RBD (Rally–Base–Drop) → supply zones (sell).

What makes a zone worth trading:

  • Fresh / untested — the first return is the highest-probability; each retest weakens it.
  • Strong departure — a sharp, gap-leaving exit from the base signals urgent orders (this is displacement by another name).
  • Aligned with HTF bias — trade zones with the bigger picture, not into a wall.

Who it suits. Traders who want a clean, rule-based version of "buy low, sell high at institutional levels" without the full ICT vocabulary. It's an excellent standalone method — and a superb confluence to layer onto any other lens.

Now grade a setup with it.

Reading it is the easy part. Tick this against the Supply & Demand list before your next entry, log what happened, and find out whether it actually pays for you. Free while TradeFern is in beta.

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