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 coincides with a higher-timeframe demand zone, forms in an untouched price area (authentic), 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 that formed only as a bounce from a nearby earlier zone is non-authentic and usually skipped.
- 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 — coincidence with a higher timeframe, authenticity and the shape of the departure — refine the ranking.
| Quality | What to look for | How it is used |
|---|---|---|
| Freshness | No revisit of the proximal line 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 |
| Authenticity | Formed in a fresh price area, not as a bounce | Filter: non-authentic zones are usually skipped |
| 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.
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 zone authenticity and how do you check it?
An authentic zone formed in a fresh price area where no earlier zone was doing the work. A non-authentic zone formed only because price was bouncing off a nearby earlier zone — the base is a by-product of that reaction, not of new buying. Non-authentic zones are generally not traded, because the demand that created them belongs to the older zone.
- Look just below the zone for an earlier demand zone in the same area.
- If none exists, the zone is authentic.
- If one exists and price merely bounced off it to form the new zone, the new zone is non-authentic.
- If price first closed beyond the earlier zone and then formed the new one, the old range is broken and the new zone is authentic.
- For a non-authentic zone, check the leg-out close: a very strong close can make it conditionally tradable; a weak close means skip.
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).
- Authentic: the zone formed in a fresh area, not as a bounce from an earlier zone.
- 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.
- Taking reaction bases (non-authentic zones) because they are closer to current price.
- 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.
How do you know if a supply or demand zone is authentic?
Check what was happening just before the zone formed. If price created the base in a fresh area with no earlier zone nearby, it is authentic. If the base formed only because price was reacting off a nearby earlier zone, it is non-authentic and usually skipped — unless price had first broken that earlier zone or the leg-out close is exceptionally strong.
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.
Put this into practice
Work out the numbers before the market moves, then let an alert bring you back to your own plan.
Educational content only. StockNotify is not a SEBI-registered investment adviser or research analyst, and nothing here is 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.
