Supply & Demand Pattern Recognition www.goldenzonetrading.com

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Paint Bars (Volume Driven Candles)

Zone Mechanics (Supply/Demand + Volume Profile) There are 2 lines that form an SDV Zone: Stop Line – Farthest from current price Formed using price action pattern recognition Value Line – Closest to current price Formed using VWTPO and value area from volume profile STOP LINE ABOVE CURRENT PRICE SDV SUPPLY ZONE VALUE LINE CURRENT PRICE VALUE LINE SDV DEMAND ZONE BELOW CURRENT PRICE STOP LINE

Zone Mechanics (Stop & Value Lines)

Zone Terminology A “FRESH” zone is when price has not traded into the zone yet. This tells us that buy/sell orders still remain in the zone @ that price level.

Zone Terminology A “TESTED” zone is when price has traded back at least once into the zone. This tells us that some of the buy/sell orders have been used/consumed in the zone @ that price level.

Zone Terminology A “BROKEN” zone is when price has traded back either once or several times to completely violate the zone This tells us that all buy/sell orders in the zone have been completely used up and therefore cannot support price at that level.

Supply & Demand (Orderflow Patterns) There are 2 patterns that form supply & demand zone. Reversal Pattern (RP) RBD (Rally – Base – Drop)/Sell Setup DBR (Drop – Base – Rally)/Buy Setup Continuation Pattern (CP) DBD (Drop – Base – Drop)/Sell Setup RBR (Rally – Base – Rally)/Buy Setup Locating these patterns is the same on all timeframes and charts.

Reversal Pattern Setups DBR (Drop-Base-Rally) BUY SETUP Base Supply Zone (Origin of Imbalance) Drop Rally Demand Zone (Origin of Imbalance) Rally Drop RBD (Rally-Base-Drop) SELL SETUP Base

Continuation Pattern Setups Rally Drop DBD (Drop-Base-Drop) SELL SETUP Base Base Demand Zone (Origin of Imbalance) Supply Zone (Origin of Imbalance) RBR (Rally-Base-Rally) BUY SETUP Rally Drop

Combined Pattern Recognition

Locating Demand Zones

Locating Supply Zones

SDVolumeZones Pattern Summary SETUP TYPE ACTION REVERSAL RBD RALLY/BASE/DROP SUPPLY SELL SHORT DBR DROP/BASE/RALLY DEMAND BUY LONG CONTINUATION DBD DROP/BASE/DROP RBR RALLY/BASE/RALLY