Stochastic with Supply and Demand Zones

And I want to share my trading system. I'm fan of stochastic indicator and supply/demand trading.

Details soon

Edited:

Zone Optimization Algorithm: Overall Architecture

Module and Purpose
Zone Detection: Identify areas where price rapidly moved away
Base Candle Filtering: Filter the candles forming the zone's foundation
Imbalance Scoring: Score liquidity gaps to prioritize zones
Zone Validity Check: Confirm zone’s reliability using trend and timing alignment
Entry Signal Matching: Match price action patterns within zone to trigger trades
Risk/Reward Calibration: Optimize SL/TP based on the zone structure

1. Zone Detection Module

1. Input: OHLC data, timeframe
2. Criteria: Areas of rapid price departure (≥ 2 strong-bodied candles)
3. Output: Candidate supply/demand zones

2. Base Candle Filtering

1. Focus on small-bodied candles in consolidation areas
2. Filter: candle body size < 50% of the average body size

3. Imbalance Scoring System

1. Each zone is scored based on liquidity imbalance:
   1. Speed of price departure
   2. Volume concentration
   3. Number of prior retests

   
   
   
   
   
   
   
   
   

4. Zone Validity Check

1. Is the zone aligned with trend direction?
2. Supported by EMA 50/200 filters for strong moves?
3. Confirmed with Stochastic momentum?

5. Entry Signal Matching

1. Candlestick triggers:
   1. Bullish/Bearish Engulfing
   2. Pin Bar
   3. Doji inside zone

   
   
   
   
   
   
   
   
   

 

1. Entry is activated when a valid pattern aligns with zone parameters

6. Risk/Reward Calibration

1. SL: Just beyond the edge of the zone
2. TP: At next zone or Fair Value Gap (FVG)
3. Target R:R ratio ≥ 2:1 for optimal trade structure

Tip: Avoid trading after 3 consecutive 4H white or black candles. Do not trade against a strong trend.

3 formations for supply and demand zones. Clusters, Uturns and Come'n Goes

Live trade before and after

Projected trade

Hi TheBestMA,
your system is only suitable for 1H timeframe? Or does it work on any other too?

Before and after

No, supply and demand is tradable on every fprex pairs, crypto assets, indices and other markets. Also on every timeframe.

Projected trade

Thanks for the responce.

Projected trade

Really nice trade mate. I once tried do this on strategy hooping phase. hahahah I gave up because i was overtrading on that time.

This is beautiful

Thank you guys. You can contribute to the thread with chart ideas

Projected trade

Projected trade

Before and after

Live trade

before and after