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How to Identify a Strong Demand Zone: The 7-Point Score and Beyond

Learn how to identify a strong demand zone with a 7-point score, coinciding zones, leg-out closing and V vs U shapes, so you rank setups before risking money.

Marking & qualityIntermediate11 min readLesson 08 of 17

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.

StockNotify Editorial Team Published Reviewed
A lower-timeframe zone inside a higher-timeframe zoneIllustrative prices
HTF proximalHTF distalHigher-timeframe demandExecution zoneHTF proximalHTF distalHigher-timeframe demandExecution zoneHTF proximalHTF distalHigher-timeframe demandExecution zoneHTF proximalHTF distalHigher-timeframe demandExecution zone

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.

A narrow execution zone forming inside a wider higher-timeframe demand zone — the strongest arrangement in this framework.

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.

The six qualities of a strong demand zone
QualityWhat to look forHow it is used
FreshnessNo candle body back inside the zone and no second leg-out since formationScored, up to 3 points
Leg-out strengthTwo or more exciting candles, or one plus a gapScored, up to 2 points
Time at baseOne to three base candlesScored, up to 2 points
CoincidingZone sits inside a higher-timeframe zoneCan lift a lower score above a higher one
ClosingA leg-out candle closes above the leg-in within 1–3 candlesMinimum requirement: without it the zone is only a structure
Departure shapeV-shape, not a long U-shaped baseFilter: 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.

Demand zone score parameters
ParameterConditionPoints
FreshnessFresh (never tested)3
FreshnessTested once1.5
FreshnessTested twice or more0
Leg-out strengthTwo or more exciting leg-out candles, or one exciting candle plus a gap2
Leg-out strengthOne exciting leg-out candle, no gap1
Time at base1 to 3 base candles2
Time at base4 to 5 base candles1
Time at baseMore than 5 base candles0

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.

Worked scoring: three illustrative daily demand zones
ParameterZone A (₹930–₹950)Zone B (₹880–₹900)Zone C (₹820–₹845)
FreshnessFresh → 3Fresh → 3Tested once → 1.5
Leg-out strengthTwo exciting candles → 2One exciting candle, no gap → 1One exciting candle + gap → 2
Time at base2 base candles → 23 base candles → 26 base candles → 0
Score7/76/73.5/7
Higher-timeframe zone?NoneFully 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.

Degrees of coincidence
TypeArrangementTrend requirement
Fully coincidingExecution zone lies completely inside the higher-timeframe zoneCan be taken in an uptrend or a sideways trend
Partially coincidingExecution zone overlaps part of the higher-timeframe zoneSome support; trade with lower confidence
Non-coincidingNo higher-timeframe zone at that priceOnly with the trend clearly in your favour
Multi-timeframeZones from three or more timeframes overlapStrongest confluence the framework recognises
A lower-timeframe zone inside a higher-timeframe zoneIllustrative prices
HTF proximalHTF distalHigher-timeframe demandExecution zoneHTF proximalHTF distalHigher-timeframe demandExecution zoneHTF proximalHTF distalHigher-timeframe demandExecution zoneHTF proximalHTF distalHigher-timeframe demandExecution zone

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.

The higher-timeframe band (wide) and the execution zone (narrow) share one 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.

  1. Find the leg-in candle — the exciting candle that brought price into the base.
  2. Check the closes of the first one to three leg-out candles.
  3. 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.
  4. If none does, treat the zone as a structure only and skip it, however strong the leg-out looks.
  5. 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-shaped versus U-shaped departure from a zoneIllustrative prices

V-shape — 1 base candle

BaseBaseBaseBase

U-shape — 7 base candles

Long baseLong baseLong baseLong base

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.

Left: a single base candle and a fast departure. Right: seven overlapping base candles and a slow recovery.

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.

  1. Location: price is near the higher-timeframe zone's proximal line, not already deep inside it.
  2. Coinciding: the execution zone sits fully or partly inside a higher-timeframe zone (full is best).
  3. Closing: a leg-out candle within the first three closed above the leg-in (below it for supply).
  4. Leg-in and leg-out: clear exciting candles, a V-shaped departure, no garbage area.
  5. Risk: the 1% rule gives a quantity of at least one share; otherwise skip.
  6. 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.

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