Demand and supply trading glossary.

The 1% rule limits the loss on any single trade to 1% of trading capital, with 2% as an absolute ceiling. With ₹1,00,000 capital, a stop-loss hit should cost about ₹1,000, which helps an account survive long losing streaks.

The 50% rule classifies candles by comparing body size with total range. If the body is more than half of the high-to-low range, the candle is exciting; if the wicks are more than half, it is a base candle.

The base is the group of one to six base candles between the leg in and the leg out, where buyers and sellers were roughly balanced. The zone is drawn across the base; more than six base candles invalidates it.

A base candle is a candle whose wicks make up more than 50% of its high-to-low range, so its body is half or less. It shows buyers and sellers roughly balanced. Its colour does not affect the classification.

Body-to-wick marking draws the proximal line at the extreme candle body of the base and the distal line at the extreme wick. It is the default method because it creates a narrower zone, a tighter stop and a better risk-reward ratio.

Break-even win rate is the percentage of winning trades needed to neither gain nor lose before costs. It equals 1 divided by (1 plus the reward multiple): 50% at 1:1, about 33.3% at 1:2 and 25% at 1:3.

The closing concept requires a leg-out candle to close beyond the leg-in within one to three candles: above it for a demand zone, below it for a supply zone. A zone without that closing is only a structure and is not traded.

CMP, or current market price, is the latest traded price of a stock. Zone traders draw a horizontal line at CMP, then look left and down for demand zones or left and up for supply zones, labelling the nearest as zone 1.

A coinciding zone forms when zones from two or more timeframes overlap in the same price area, such as a daily demand zone inside a weekly one. Coincidence can make a lower-scoring zone preferable to a higher-scoring isolated one.

A demand zone is a price area where buyers and sellers were briefly balanced before buyers won and price rallied sharply. Traders mark it because unfilled buy orders may remain there, so price can react when it returns.

The distal line is the zone boundary farthest from current price and the reference for the stop loss. For a demand zone it sits at the lowest wick in the base; for a supply zone, at the highest wick. A break beyond it invalidates the zone.

Drop-Base-Drop is a continuation supply-zone pattern: an exciting red candle drops into a short base, then another exciting red candle drops out, resuming the fall. It is valid but usually ranked below an RBD.

Drop-Base-Rally is a reversal demand-zone pattern: an exciting red candle drops into a base of one to six base candles, then an exciting green candle rallies out. The base becomes the demand zone.

Exceptional marking extends only the distal line to a long wick on the leg-out candle, or on the leg-in candle for RBD supply zones, when that wick reaches beyond the base. The proximal line never changes, and the wider stop must remain manageable.

An exciting candle is a candle whose body is more than 50% of its high-to-low range. It shows that one side clearly dominated the period: green for buyers, red for sellers. Leg-in and leg-out candles must be exciting.

A fresh zone is a demand or supply zone that price has not returned to since it formed. A body-to-wick zone stays fresh until a later candle body enters it; a wick-to-wick zone until a wick touches it. The zone's own leg-out does not count. Fresh zones receive priority.

A garbage area is a messy price range of small, overlapping candles and wicks with no clear direction, often a U-shaped consolidation. It may look like a zone but lacks a clean leg in and conviction, so it is usually skipped.

A GTT (Good Till Triggered) order is a standing instruction offered by many Indian brokers that places an order when price reaches a chosen trigger level. Swing traders often use it to enter at a zone's proximal line without watching screens.

These labels name a trade by its location timeframe: hourly (60 or 75 minutes), daily, weekly, monthly or quarterly. They do not imply income every hour or day. Each sets which trend and execution timeframes are used.

HTF, ITF and LTF are the three layers of multi-timeframe analysis. The higher timeframe shows location near major zones, the intermediate timeframe shows trend, and the lower timeframe gives the exact entry zone, stop and target.

The leg in is the single exciting candle that brings price into the base of a zone. It is red in DBR and DBD patterns and green in RBR and RBD patterns. If it is a base candle, the zone is not valid.

The leg out is the exciting candle, or candles, that leave the base and show which side won. A green leg out confirms a demand zone and a red one a supply zone. A stronger leg out usually means a stronger zone.

An order block, a term from ICT and smart-money-concepts trading, is usually the last opposite-direction candle before an impulsive move that breaks market structure. It overlaps with demand and supply zones but uses different candle and marking rules.

Position sizing decides how many shares to buy so that a stop-loss hit costs a fixed amount. Quantity equals risk per trade divided by the entry-to-stop gap, so the stop distance, not the share price, sets the quantity.

A price alert is a condition you save, such as a stock crossing ₹1,002, that triggers a notification when met. It monitors your own plan and carries no advice. StockNotify delivers price alerts through Telegram and email, not WhatsApp.

The proximal line is the zone boundary nearest current price and acts as the entry trigger. For a demand zone it sits at the highest candle body in the base; for a supply zone, at the lowest body. Freshness is judged against it.

Rally-Base-Drop is a reversal supply-zone pattern: an exciting green candle rallies into a base of one to six base candles, then an exciting red candle drops out. The base becomes the supply zone.

Rally-Base-Rally is a continuation demand-zone pattern: an exciting green candle rallies into a short base, then another exciting green candle rallies out in the same direction. It is valid but usually ranked below a DBR.

Resistance is a price level or area above current price where rising prices have previously paused or reversed, often drawn from swing highs. A supply zone is a stricter idea based on a base pattern and whether it is still fresh.

The risk-reward ratio compares the distance from entry to stop loss with the distance from entry to target. A 1:2 ratio means aiming to make twice the amount risked. This methodology treats 1:2 as the minimum before taking a trade.

A running candle is the current candle whose period has not closed yet, such as this week's candle on a weekly chart. Its body and wicks can still change, so a zone that depends on it is not confirmed until it closes.

A stop loss is the pre-defined price at which you exit a losing trade. In zone trading it sits just beyond the distal line: below it for demand zones and above it for supply zones. It should be honoured, not moved further away.

A supply zone is a price area where a short balance between buyers and sellers ended with sellers winning and price falling sharply. Unfilled sell orders may remain there, so price can react lower when it comes back.

Support is a price level or area below current price where falling prices have previously paused or reversed, often drawn from swing lows. Unlike a demand zone, it is not defined by a leg-in, base and leg-out structure or freshness.

A target is the planned exit price for a winning trade. In this methodology the minimum target is entry plus twice the entry-to-stop gap for buy trades, or entry minus twice the gap for sell trades, giving at least 1:2.

A tested zone is one price has returned to after it formed: a candle body inside a body-to-wick zone, a wick touch on a wick-to-wick zone, or a second leg-out from the same zone. Each test may absorb resting orders, so tested zones score fewer freshness points.

Trade score rates a zone out of 7: freshness up to 3 points, leg-out strength up to 2, and time at the base up to 2. It is a tool for comparing zones on the same timeframe, not a pass-or-fail signal.

A V-shape recovery is a sharp fall into a demand zone followed by an immediate, equally sharp rally, with one or two base candles. It suggests concentrated buying interest and is preferred over a slow U-shaped recovery with a long base.

A watchlist is a saved list of stocks you want to follow. Adding a stock to a watchlist does not create a notification; you still need a separate price alert or trade setup for any level you want monitored.

Wick-to-wick marking draws both zone lines at the extreme wick tips of the base. It produces a wider zone and a larger stop-loss distance than body-to-wick marking, which lowers the quantity you can trade for a fixed rupee risk.