Mastering S&D zones with Profectus.AI
This guide walks you through the basic Supply & Demand zones concept as it is a popular trading strategy element built in Profectus AI.
A Supply or Demand zone is an area on the chart where the price moved away impulsively, indicating a strong imbalance between buyers and sellers. Unlike indicators or lagging signals, Supply & Demand zones are price-based structures that highlight where one side of the market clearly overpowered the other.
From a structural perspective, a Supply or Demand zone forms when price consolidates briefly and then departs with strength. This impulsive move suggests that large market participants were active in that area, leaving behind unfilled orders that the market may later return to.
In the case of a Demand zone, we are looking to identify the area where price paused before an aggressive bullish move occurred.
Supply & Demand zones are significant because they often act as:
Areas of accumulation or distribution
High-probability reaction zones
Structural support or resistance
Step 0: Access the Strategy Concept Template [1 Min]
Click the button to load the trading system directly onto your canvas:
Your canvas should display 8 blocks. Check? Let's continue!
Step 1: Export the Trading System [1 Min]
Before diving into customization, export the trading system with the upper right 'DOWNLOAD' button.
Step 2: Upload to MetaTrader 5 [4 Min]
Don't know how? Refer to our help article How to run your trading system live on your broker account.
Step 3: Understand the Logic [1 Min]
Structurally, a Demand zone is identified by:
A clear impulsive move in 2 candles
Identify the last imbalance candle before the impulsive move
A gap between the high of the imbalance and the impulse candle
To automate the Demand zone, you need mechanical rules for all of the elements. To identify a Demand zone, we implemented the following rules in our EA:
Candle ID 1 (see the screenshot above) needs to close as a bullish candle
The low of Candle ID 1 cannot touch the high of Candle ID 3
Candle ID 1 needs to close above the highs of Candle IDs 3,4, and 5
Candle ID 2 needs to close as a bullish candle
The screenshot below shows the candle ID numbers to help you understand better what these rules actually look like.
These characteristics make this standard iteration of Demand zones objective zones of interest rather than subjective trade entries. However, on lower timeframes, when stacked with other confluences, Demand zones can be used to place trade orders directly.
Step 4: Make It Your Own [10 Min]
You can adjust and experiment:
Add more strategy rules or include the Demand zone component in your own strategies
Backtest it in Profectus and compare the runs.
Add Supply zones to take advantage of selling opportunities as well
Backtest it in Profectus and compare the runs.
Play around with timeframes and assets
Backtest it in Profectus and compare the runs.
Refine the rules to fit your own interpretation of the S&D zones concept
Backtest it in Profectus and compare the runs.
Conclusion
Supply & Demand zones are a popular ICT or Smart Money component: simple rules and universal application. Now it's your turn — backtest it in Profectus, tweak it, and evolve it into your own system.
👉 Try the PRO version today
Templates are for educational purposes only.
Now it's your turn—apply the template, tweak the logic, and make it yours. 🚀