1. Supply & Demand Theory www.goldenzonetrading.com

2. Supply & Demand Theory  Supply & demand theory is known as the “law of the markets”  If we remove all external influences from trading and look at what moves prices, supply and demand is the driving force.  Supply & demand trading is referred to as “price action trading”.  Unlike trading using indicators that are derived from price (lagging) supply and demand acts as leading information and is formed from “order flow @ price levels” identified by pattern recognition.

3. Supply & Demand Theory  When Supply > Demand price decreases because there is more sellers than buyers.  When Demand > Supply price increases because there is more buyers than sellers.

4. Demand Order Flow Buy 100 Sell 100 BuyersSellers Buy 100 Sellers Left Over Buyers Left Over ZERO

5. Supply Order Flow Sell 100 Buy 100 SellersBuyers Sell 100 Buyers Left Over Sellers Left Over ZERO

6. Supply & Demand Trading  Supply & demand trading aims to identify where there is an imbalance in order flow between buyers and sellers.  Price will change direction @ price levels where supply & demand is out of balance.  “Low risk, high reward, high probability” trades occur at price levels where supply & demand imbalances take place.  We use supply & demand zones to time the markets turning points in advance with a high degree of accuracy using a defined amount of risk because we can forecast and project price zones into the future to trade the “Hard Right Edge” of our charts.  This allows us to plan our trades in advance making us proactive not reactive traders.

7. Where do Prices Turn?

8. Who Are You Trading Against?  Professional traders sell at retail and buy at wholesale prices.  Amateur traders buy at retail and sell at wholesale prices “Before every trade you take, ask yourself these 2 important questions” 1.Who is on the other side of my trade? 2.Who is the professional and who is the novice in my trade?