Short answer
How do you identify a strong demand zone?
A strong demand zone is fresh, leaves its base with powerful exciting candles or a gap, and spends only one to three candles in the base. Those three factors make up a 7-point score. A strong zone also has good closing — a leg-out candle closes above the leg-in within one to three candles — coincides with a higher-timeframe demand zone, and departs in a sharp V-shape rather than a slow U-shape.
The wide band is a higher-timeframe demand zone. The narrow execution zone forms inside it, so both sets of pending orders sit in the same price area.
Key takeaways
- The 7-point score combines freshness (3), leg-out strength (2) and time at the base (2).
- One exciting leg-out candle plus a gap scores the same 2 points as two exciting leg-out candles.
- One to three base candles score 2, four or five score 1, and more than five score 0.
- A 6/7 zone that sits fully inside a higher-timeframe zone can be preferred over a 7/7 zone that stands alone.
- A zone needs good closing: a leg-out candle must close above the leg-in within one to three candles, or the zone is only a structure.
- A body-to-wick zone is tested only when a candle body enters it; a second leg-out from the zone also makes it tested.
- V-shaped departures signal urgent buying; long U-shaped bases and messy “garbage areas” signal weak, spread-out demand.
- The score is a comparison tool between candidate zones, not a pass/fail signal or a probability.
What makes a demand zone strong?
A demand zone is strong when it is likely to still hold a large block of unfilled buy orders. Three things on the chart point to that: price has not returned to the zone yet, it left the zone with force, and it spent very little time deciding in the base. Those three are scored. Three further checks — the closing of the leg-out, coincidence with a higher timeframe and the shape of the departure — decide whether the zone qualifies and how it ranks.
| Quality | What to look for | How it is used |
|---|---|---|
| Freshness | No candle body back inside the zone and no second leg-out since formation | Scored, up to 3 points |
| Leg-out strength | Two or more exciting candles, or one plus a gap | Scored, up to 2 points |
| Time at base | One to three base candles | Scored, up to 2 points |
| Coinciding | Zone sits inside a higher-timeframe zone | Can lift a lower score above a higher one |
| Closing | A leg-out candle closes above the leg-in within 1–3 candles | Minimum requirement: without it the zone is only a structure |
| Departure shape | V-shape, not a long U-shaped base | Filter: avoid garbage areas |
How is the 7-point demand zone score calculated?
The score adds three parameters, each judged on the zone's own timeframe. Freshness carries the most weight because a tested zone has already spent part of its orders. Leg-out strength measures how urgently buyers acted, and time at the base measures how quickly they made up their minds. The maximum is 7.
| Parameter | Condition | Points |
|---|---|---|
| Freshness | Fresh (never tested) | 3 |
| Freshness | Tested once | 1.5 |
| Freshness | Tested twice or more | 0 |
| Leg-out strength | Two or more exciting leg-out candles, or one exciting candle plus a gap | 2 |
| Leg-out strength | One exciting leg-out candle, no gap | 1 |
| Time at base | 1 to 3 base candles | 2 |
| Time at base | 4 to 5 base candles | 1 |
| Time at base | More than 5 base candles | 0 |
Why does a gap count as much as a second candle? A gap means buyers were aggressive enough for price to skip levels entirely between sessions — the same urgency a second exciting candle shows. On the base side, a short base suggests large orders were placed quickly and concentrated in a narrow band; a long base suggests orders were spread out and partly filled while price drifted. A base of more than six candles is not treated as a valid zone at all.
What counts as a test depends on how the zone is marked. A body-to-wick zone is tested only when a later candle's body enters it — a wick that pokes in and leaves keeps it fresh. A wick-to-wick zone is tested by a wick touch. A zone is also tested when it produces a second leg-out: price pauses after the first leg-out, dips back towards the zone and a new exciting candle leaves it again. And a sharp spike deep into the zone that snaps back at once is treated as having used up its orders — do not trade that zone again.
How do you score two demand zones side by side?
Scoring is most useful when two or three zones are competing for the same trade. Score each one on its own timeframe, then add the coincidence check before deciding. The example below uses an illustrative stock trading at ₹1,000 with three daily demand zones below it.
| Parameter | Zone A (₹930–₹950) | Zone B (₹880–₹900) | Zone C (₹820–₹845) |
|---|---|---|---|
| Freshness | Fresh → 3 | Fresh → 3 | Tested once → 1.5 |
| Leg-out strength | Two exciting candles → 2 | One exciting candle, no gap → 1 | One exciting candle + gap → 2 |
| Time at base | 2 base candles → 2 | 3 base candles → 2 | 6 base candles → 0 |
| Score | 7/7 | 6/7 | 3.5/7 |
| Higher-timeframe zone? | None | Fully inside a weekly demand zone (₹870–₹910) | None |
Why can a 6/7 coinciding zone beat a 7/7 non-coinciding zone?
A coinciding zone has orders from two timeframes stacked at the same price. Higher-timeframe zones are built by larger, slower participants, so a daily zone sitting inside a weekly or monthly zone has that bigger demand underneath it. A perfect-looking daily zone with nothing behind it relies on daily demand alone, which broad market selling can push straight through.
| Type | Arrangement | Trend requirement |
|---|---|---|
| Fully coinciding | Execution zone lies completely inside the higher-timeframe zone | Can be taken in an uptrend or a sideways trend |
| Partially coinciding | Execution zone overlaps part of the higher-timeframe zone | Some support; trade with lower confidence |
| Non-coinciding | No higher-timeframe zone at that price | Only with the trend clearly in your favour |
| Multi-timeframe | Zones from three or more timeframes overlap | Strongest confluence the framework recognises |
The wide band is a higher-timeframe demand zone. The narrow execution zone forms inside it, so both sets of pending orders sit in the same price area.
What is the closing concept and how do you check it?
Buyers winning the fight in the base is not enough. A good demand zone shows that they also finished off the selling that came before it, and the proof is the closing: a leg-out candle must close above the leg-in candle. It does not have to happen in one candle — one candle is very good, two is fine, three is also fine. If none of the first three leg-out candles closes above the leg-in, the zone is only a structure and is not traded. Candle size does not change this: a big leg-out candle that spikes higher but closes back below the leg-in still fails.
- Find the leg-in candle — the exciting candle that brought price into the base.
- Check the closes of the first one to three leg-out candles.
- If one of them closes above the leg-in candle's high, the zone has good closing. For a supply zone, mirror it: a close below the leg-in candle's low.
- If none does, treat the zone as a structure only and skip it, however strong the leg-out looks.
- When two zones both pass, prefer the one whose leg-out also closed above a nearby supply zone or above the whole range where the selling started.
What is the difference between a V-shape and a U-shape recovery?
A V-shape is a sharp drop into one or two base candles followed by a fast, decisive rally — buyers were urgent and their orders were concentrated. A U-shape is a drop followed by a long, overlapping consolidation and a slow climb out — buying was spread across many prices with no urgency. V-shapes tend to leave cleaner, stronger zones; U-shapes usually score poorly on time at base.
V-shape — 1 base candle
U-shape — 7 base candles
Left: one or two base candles and a fast departure. Right: a long, overlapping base with a slow recovery — more base candles lower the zone score.
When the base turns into a garbage area — many small overlapping candles and wicks, no clear exciting leg-in and no obvious direction — the zone is hard to mark and lacks conviction even if it looks like a base at first glance. When in doubt, skip it. A clean zone elsewhere is a better use of the same risk.
What should you check before trading a demand zone?
A good score is one input. Before placing an order, run the zone through a six-point checklist that covers location, context, structure, money and your own experience. If any point fails, the trade waits or is skipped.
- Location: price is near the higher-timeframe zone's proximal line, not already deep inside it.
- Coinciding: the execution zone sits fully or partly inside a higher-timeframe zone (full is best).
- Closing: a leg-out candle within the first three closed above the leg-in (below it for supply).
- Leg-in and leg-out: clear exciting candles, a V-shaped departure, no garbage area.
- Risk: the 1% rule gives a quantity of at least one share; otherwise skip.
- Trade type: suits your level — beginners stick to WIT, MIT and QIT swing setups.
What are common mistakes when rating demand zone strength?
Most rating errors come from scoring the zone you already want to trade instead of scoring every candidate honestly and letting the numbers decide.
- Treating 7/7 as a guarantee. The score ranks zones; it does not predict outcomes.
- Ignoring coincidence and always picking the higher raw score.
- Trading a non-coinciding zone against the trend — the most common beginner trap.
- Counting a gap that is not there, or counting a non-exciting candle as a second leg-out candle.
- Scoring freshness on another timeframe, which inflates or deflates the most important parameter.
- Trading a zone without closing because it is closer to current price — if no leg-out candle closed above the leg-in, it is only a structure.
- Calling a zone fresh after a body entered it, or missing the second leg-out that tested it.
- Forcing a garbage-area zone because it scored acceptably on paper.
Frequently asked questions
What is a good demand zone score?
In the 7-point system, 7/7 is ideal and 6/7 is good. Zones scoring 5 or less are lower priority. The score is meant for comparing zones on the same execution timeframe, so the useful question is which candidate scores best and whether it coincides with a higher-timeframe zone. A high score does not guarantee the zone will hold.
What are coinciding zones in demand and supply trading?
Coinciding zones are zones from two or more timeframes that overlap at the same price — for example, a daily demand zone sitting inside a weekly demand zone. Pending orders from both timeframes share one area, which is why a coinciding zone with a slightly lower score can be preferred over a stronger-looking zone that stands alone.
What is good closing in a demand or supply zone?
Good closing means a leg-out candle closes beyond the leg-in: above the leg-in candle for a demand zone, below it for a supply zone. It can take one, two or three leg-out candles. A zone without that closing is only a structure and is not traded. Among zones that pass, one whose leg-out also closed beyond a nearby opposing zone or the whole earlier range is stronger.
Why is a V-shape recovery better than a U-shape?
A V-shape shows buyers acting quickly, with one or two base candles and a fast departure, so their orders are concentrated in a narrow price band. A U-shape shows slow, spread-out buying over many overlapping candles, which usually means more base candles, a lower score and a messier zone that is harder to mark and trade.
Does a gap make a demand zone stronger?
Yes. In the scoring system, one exciting leg-out candle followed by a gap earns the full 2 leg-out points, the same as two exciting leg-out candles. A gap means buyers were aggressive enough that price skipped levels, which suggests strong unfilled demand was left behind in the base.
How StockNotify applies this
StockNotify rates every zone out of 7: freshness up to 3 points, leg-out strength up to 2 and the number of base candles up to 2. The same StockNotify score appears on the chart Zones overlay, in the free Nifty 100 zone scans and in the free demand zone score calculator, so you can check any zone by hand against the automated reading.
Educational content only. Nothing here is investment advice or a recommendation to buy or sell any security. Chart diagrams use illustrative prices, not market data. Trading involves risk of loss; verify prices independently and apply your own risk process.