Trade the Market’s Story with Supply & Demand

Yo guys Dhruv here.
Been around charts for a good few years now – tried… patterns, fibs, harmonics, waves, SMC hype.
But honestly? The one thing that’s given me the most clarity in trading = (Engulfing , SnD , price orderflow) name it anything
I’ve been using it for 3 years straight, and it’s the cleanest way I’ve found to read who’s in control – buyers or sellers.
So in this thread I’m gonna break it down for you step by step:

1. Basics of engulfing (buy/sell)
2. What actually happens on the chart when it forms
3. How it links with SNR, OHLC, and Supply & Demand
4. Later, we’ll dive into advanced stuff like ranges, roadblocks, storyline direction, even mixing it with tools like Bollinger Bands and few more For Confluence

No fluff, no spammy indicators – just price action explained in a way you can see and use.

Materials and Important Posts

1st Video ( Basics Cleared ) :- https://www.forexfactory.com/thread/...0#post15391730
2nd Video ( Types of Engulfing explaination & Examples ) :- https://www.forexfactory.com/thread/...6#post15392656
3rd video ( Direction & Storyline ) :- https://www.forexfactory.com/thread/...6#post15392656
4th video ( Live Chart Examples of Direction and storyline) : https://www.forexfactory.com/thread/...0#post15397700
5th video ( Direction and Structure for Currency pairs ) : https://www.forexfactory.com/thread/...6#post15407176
6th video ( Bollinger band + Engulfing strategy ) : https://www.forexfactory.com/thread/...15418750#reply
7TH VIDEO :- https://www.forexfactory.com/thread/...0#post15482530
8TH VIDEO - https://www.forexfactory.com/thread/...2#post15677752

Basics Of Engulfing

Let’s cut straight into it.
An engulfing is NOT just “big candle eats small candle.” It’s about a shift of control between buyers and sellers.
Here’s the rule

Bearish Engulfing (Sell)

1. You need a prior bullish candle.
2. The low of that bullish candle must be closed below by a bearish candle body.
3. Wick doesn’t count – only body close matters.

Bullish Engulfing (Buy)

1. You need a prior bearish candle.
2. The high of that bearish candle must be closed above by a bullish candle body.
3. Again → body close only, not wick.

Why is this important?
Because when a low gets closed below → it shows buyers that held price are now absorbed and sellers have taken control.
When a high gets closed above → sellers are absorbed and buyers take over.

the core meaning of engulfing. It’s not just candle patterns, it’s orderflow shifting hands.

Engulfing Failed

Sometimes an engulfing doesn’t work out.

1. Price pushes back against the engulfing candle.
2. If it breaks the engulfing candle’s body close in the opposite direction, we call it a failed engulfing.
3. Wick breaks don’t count — only body closure matters.

Example:

1. You have a bullish engulfing forming. Later, price comes back and closes below the engulfing candle’s body → that engulfing failed.
2. You have a bearish engulfing forming. Later, price comes back and closes above the engulfing candle’s body → that engulfing failed.

Why it matters:

1. Failed engulfings show the side that tried to take control lost.
2. On lower timeframes, you can see the push back clearly, and it tells you the market didn’t respect that engulfing.

Key takeaway:

1. Only count body close breaks as failed engulfing.
   Wicks don’t matter.
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What Happens on Lower Timeframes When Engulfing Forms

When you spot a clean engulfing on higher timeframe (HTF) – say Daily or H4 – that candle is not just a random bar. On the lower timeframe (LTF) it’s actually showing:

1. A breakout,
2. Absorption of the opposite side,
3. A shift in orderflow.

Example:

1. Daily bearish engulfing forms → on H1/H4 you’ll usually see bullish attempts failing, their lows getting broken, and sellers stepping in with momentum.
2. Daily bullish engulfing forms → on H1/H4 you’ll see bearish moves getting absorbed, highs being taken out, and buyers taking control.

In simple words:

1. HTF Engulfing = Market Story
2. LTF = The Details of that Story (breakouts, failed attempts)

So next time you mark an engulfing on D1 → zoom into H4 or H1. You’ll often notice:

1. Failed engulfings in the opposite direction,
2. Breakouts of key highs/lows,
3. Clear evidence of buyers/sellers being absorbed.

That’s how you line up the story (HTF) with the entry (LTF).

OHLC, SNR, Supply & Demand – It’s All the Same
Here’s the thing: engulfing isn’t some random candle trick. When you look closer, it’s the same logic as support/resistance or supply & demand zones — just expressed as a candle.

1. A bearish engulfing = like forming a resistance at the prior bullish low.
2. A bullish engulfing = like forming support at the prior bearish high.
3. The shift in order flow that creates the engulfing is the same reason SNR or demand/supply works — the buyers or sellers got absorbed and control shifted.

OHLC perspective:

1. Open, High, Low, Close of engulfing candles shows the story clearly.
2. Example: a bullish engulfing closes above the prior bearish high → the low that previously held price is now broken → buyers are in control.
3. Similarly, a bearish engulfing closes below the prior bullish low → the high that previously pushed price up is now broken → sellers are in control.

Supply & Demand view:

1. Rally-Base-Rally = bullish engulfing
2. Drop-Base-Drop = bearish engulfing
3. Drop-Base-Rally or Rally-Base-Drop = forming bullish or bearish engulfing depending on which side gets absorbed.

Key takeaway:

1. Engulfing, SNR, OHLC, supply & demand → all show the same shift in control.
2. The difference is just how you interpret it or execute the trade.
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RBR, RBD, DBD, DBR – How They Tie to Engulfing
These are just ways to describe price swings, and they map perfectly to the engulfing concept:

1. Rally-Base-Rally (RBR) → bullish engulfing forms here.
2. Rally-Base-Drop (RBD) → bearish engulfing forms here.
3. Drop-Base-Drop (DBD) → bearish engulfing forms here.
4. Drop-Base-Rally (DBR) → bullish engulfing forms here.

Basically, the high/low of the base is what gets engulfed, and the new candle shows the shift in control.
HTF nuance:

1. RBR and DBD may look like dominant areas ,hidden bases ( on HTF )
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That’s the breakdown for now — basics of engulfing, failed vs valid, LTF behavior, OHLC/SNR/Supply-Demand, and RBR/RBD/DBD/DBR patterns.
If you want to see all of this in action visually, I made a video explaining everything step by step with real charts.

Check it out here:

I am locked in, I hope I learn more from here cos I have been on this SD journeyj. Lets see how it goes. Many thanks for your time

Glad to have you here! Stick with it and keep practicing — you’ll see it click soon.

All digested, waiting for the next video. may be i would find that one thing that made me disconnect from it along time ago. In summary, your teaching is going on well, I just hope it will be better off many tutorials out there who just mix up SNR , S&D , QMR and EG without carefully linking them up smoothly. Like I said, I hope I find my missing piece in your teachings, .

any future concept I add as confluence will be carefully tied to engulfing, ensuring it doesn’t create conflicting signals

@dhruvchaddha

You put some effort in putting together this material.
well done and thanks for sharing.
definetly will help who ever is interested in this trading style.

Thanks buddy, means a lot Glad you found it useful, I’ll keep putting more out so it’s easier for anyone wanting to learn this style.

like wise gold still doing good

let’s try to keep this thread focused on the topic so it stays useful for everyone. No Random Trades Screenshots please

In the last part, we discussed what a Dominant/Hidden Base is.
Now let’s refine it further: not all dominant areas are equal in strength. Some are much stronger and tend to create sharper reactions.
Type 1: Dominant Area after Engulfing Fail

1. When an engulfing zone fails (gets broken), the base that caused that failure becomes a strong level.
2. Why? Because it had enough momentum to break an important support/resistance area.
3. When price revisits this base, it often reacts more decisively compared to random dominant zones.

Type 2: Double Dominant (Double DOM)

1. This happens when one dominant base breaks another dominant base.
2. In other words: Base A creates a move → then Base B forms and breaks Base A.
3. That Base B is much stronger, often working like a “flip zone” where the market can produce solid reactions.

️ Key Notes:

1. These zones are usually stronger, but it’s not guaranteed price will react from them every single time.
2. Market can sometimes dig deeper into the origin of the move (the true source of supply/demand) before reversing.
3. So, treat these as Points of Interest (POIs), not as fixed “must-trade” levels.

Type 1.

Type 2.

Very educational. A topic often discussed, but always interesting when it's presented well like in this thread. Great job.

Five Types of Engulfing Patterns
1. Classic Engulfing
This is the one everyone knows.
A big candle completely takes over the previous candle — body and wick.
It clearly shows dominance, either bullish or bearish.
2. Blend Engulfing
Sometimes you don’t see just one candle being engulfed.
Instead, two or three smaller candles blend together, and then a bigger candle comes and wipes them out in one go.
That’s why we call it blend — the engulf is over a cluster, not just a single candle.
3. Perfect / Quasimodo Engulfing
Here the engulf is so strong, it full covers previous candle high and low
That’s why we call it perfect, or Quasimodo. It confirms real power shift.
4. Gap Engulfing
This happens when the market opens with a gap.
Right after the gap, the next candle engulfs it completely.
It’s common in indices, stocks, or even crypto weekend gaps — and it shows rejection of that gap direction.
5. Same-Color Engulfing
Most people think engulfing means opposite colors.
But there are also same-color engulfs — for example, two bullish candles in a row, where the second one is engulfs whole previous candle high and low even being same color.

Classic Engulfing
This is the most common type of engulfing that you’ll see on charts.
A single big candle completely covers the previous one — both its body and its wick.
It clearly shows that control has shifted from buyers to sellers, or sellers to buyers.
That’s why it’s called “classic” — it’s the textbook example of what engulfing is supposed to look like

Bearish Engulfing (Sell)

1. You need a prior bullish candle.
2. The low of that bullish candle must be closed below by a bearish candle body.
3. Wick doesn’t count – only body close matters.

Bullish Engulfing (Buy)

1. You need a prior bearish candle.
2. The high of that bearish candle must be closed above by a bullish candle body.
3. Again → body close only, not wick.

Blend Engulfing
Blend engulfing is a little different.
Instead of just one candle getting engulfed, here you see two or three small candles grouped together.