One of the biggest reason most traders lose money is perhaps because they don’t understand how the markets really work especially when it comes to supply and demand. Supply and Demand are the most important concept to understand if you’re a trader actually if you can understand this concept you can be a successful trader by only using one simple indicator and we have that simple but highly effective tool for you today and that's the Supply Demand MT4 Indicator.

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Supply and Demand principles are behind what drives price movements in any market, but it seems that not many traders are really paying too much attention. The law of supply and demand says that if the supply is greater than demand, prices will go down and if demand is greater than supply prices will go up. The market will trade sideways if supply and demand are in equilibrium. Basically, in Forex trading, an area of supply represents a resistance zone and a potential selling opportunity while an area of demand represents a support zone and a potential buying opportunity.

The Supply Demand MT4 Indicator

The supply and demand are not actual levels, but they encompass a zone or a narrow range from where the price can potentially reverse. The chart below illustrates the most basic ways the Supply Demand MT4 indicator plots the most important and price sensitive supply and demand zones.

You can be a scalper or a swing trader or you can trade on shorter time frames or larger time frames and you can still use the Supply Demand MT4 indicator with the same kind of success as it’s a universal indicator for all types of traders. Going forward you’re going to be introduced to the simplest and yet the most effective strategy using the Supply Demand MT4 indicator.

Supply Demand MT4 Indicator Settings

The preferred settings for the Supply Demand MT4 indicator are the default settings however, we can definitely play with the indicator settings if you want to make the best use of it. Without further ado, these are the Supply Demand MT4 indicator setting and what each of them means:

• tf - If chosen zero each time frame will independently plot its own supply and demand zone. If for example you chose the 15 minutes TF then you’ll have the 15-minutes supply and demand zones plotted on every TF;
• narrow.bands – If it’s true, it will plot the supply zone using the high to low range and the demand zone using the low to close range. If it’s false, it will use 2 candles to plot the S/D zones: from the high of the first candle including the low of the second candle for supply zones and from the low of the first candle including the high of the second candle for demand zones;
• retouch – It’s used to show or hide the S/D zones formed off of previous S/D zones;
• TopColor – Supply color;
• BotColor – Demand color;
• Price_Width – It’s used if you want to increase the font size of the price labels;

The Supply Demand MT4 Indicator Strategy and Trading Rules

In order to increase our rate of success, we want to be selective with our supply and demand zones and only trade in the direction of the larger trend. For our strategy, we’ll use the 5-minute time frame and the 200-day moving average to detect the trend direction. In an uptrend, we’re only going to buy demand zones while in a bearish trend, we’re only going to sell supply zones. Without further ado, these are the Supply Demand MT4 Indicator rules:

• Buy Signal – If price is above the 200 EMA and retest a demand zone buy at the market using a protective SL of 10 pips below the demand zone and take profit on the first supply zone;
• Sell Signal - If price is below the 200 EMA and retest a supply zone sell at the market using a protective SL of 10 pips above the supply zone and take profit on the first demand zone;

Trade Examples

In Figure 3 we have the EUR/USD 5-minute chart and a buying trading opportunity presented. Once our trade has been triggered we have little to no drawdown which shows the power of trading with the trend. Once the first area of supply has been reached we close the trade at a profit because in the majority of the cases price will produce a reaction off of this S/D zone.

In the chart below, we have the USD/JPY chart, but this time, we’re using the 1H time frame to show that the same rules can be applied to any time frame. The USD/JPY is trading below the 200 EMA which means we’re going to only sell at supply and two opportunities presented gaining +350 pips and +240 pips respectively on the second trade. The rule of thumb is that the larger the time-frame the bigger the profits that can be made.

Supply Demand MT4 Indicator - Recommended Time Frames

Technically speaking, you can use this MT4 indicator for all time frames. However, the shorter the time frame, you will see more fluctuation and possibly more whipsaw which may cause small losses that can eat up your portfolio quickly. We recommend that you use higher time frames like the 4H for better consistency.

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 Supply Demand MT4 Indicator Download

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