HomePerformanceSubscribeSample SignalEducationContactDisclaimer
Foundations
← Back to Education
Supply & Demand Zones, What They Are and Why They Work
HARUNA SALIFU8 MIN READFOUNDATIONS

Every price move in forex begins with an imbalance between buyers and sellers. When a large institution places a massive buy order, price moves up, not because of news or sentiment, but because that order consumed all available supply at those price levels. What's left behind is a demand zone: a cluster of unfilled institutional orders waiting for price to return.

Why Zones Work

Institutions can't fill their entire order in one move. A central bank or hedge fund placing a billion-dollar position has to do it in pieces, across multiple price levels and across time. When price leaves a zone quickly with strong momentum, it signals that not all orders were filled. The institution still has pending orders waiting. When price returns, those orders activate, creating the same reaction.

"Zones are not a technical indicator. They're evidence of where institutions left unfilled orders. We're trading with them, not against them."

Demand Zones

A demand zone is a price level or range where aggressive buying has occurred, usually identifiable by a sharp, impulsive move upward away from the zone. The zone represents where institutional buy orders sit. When price returns to the zone, those orders fill and price moves up again. ARIA uses demand zones for BUY LIMIT signals.

Supply Zones

Supply zones work in reverse, they mark levels where aggressive selling occurred, leaving institutional sell orders waiting for price to return. ARIA uses supply zones for SELL LIMIT signals.

What Makes a Zone High Quality?

  • Strong displacement away from the zone, a sharp, impulsive candle that closes far from where it opened
  • Little consolidation within the zone before the move, clean, decisive departure
  • Zone has not been revisited multiple times, fresh zones react strongest
  • Zone aligns with HTF structure, demand zone in a bullish H4 trend, for example
  • Evidence of inducement before the departure, a sweep of previous lows before the rally

Flip Zones

Flip zones are especially high quality. A flip zone is a former supply zone that has been broken through, now acting as demand. Or a demand zone that has failed, now acting as supply. Flip zones carry double the institutional memory and tend to produce the strongest reactions. ARIA prioritizes these in Phase A signals.

"The best zones are the ones most traders are afraid to buy. That fear is the institutional footprint, and it's exactly where ARIA signals fire."

Next: Kill Zones → All Articles

⚠ Haruna Salifu provides signals and educational insights through ARIA Trading Lab. All forex trading involves substantial risk of loss and is not suitable for all investors. Past performance does not guarantee future results. Subscribers accept full responsibility for all trading decisions. Full Disclaimer →