When price returns to the buy zone indicated on the chart look to go long. Price will return here at some point to address unfilled orders at the demand area. Look at the green bar at the left of the demand zone represented by the blue arrow. Notice how the green bar left the demand area. A good upsurge in price. Price rises like that because of unfilled orders. You will see this set up often on charts. When price returns to the buy zone and breaks through, that will also present a buying opportunity at some point. If price does not break through the buy zone that will be a possible opportunity to go long. You judge and plan your trade accordingly.
I think I kinda see what you're saying. Correct me if I'm wrong, you think price will fall back because of the lack of demand when the price gets higher due to all buyers having bought and the number of buyers depleted. However that's only true if the demand does not continually build. The price will fall due to the demand running out (correction) but the demand zone will increase from what it is initially to a higher point. Demand zone will not be where you indicated but will almost be certainly at a much higher point.
oe123
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@Sparkinflint, Hi and thank you for your comment. This kind of analysis is based on filled and unfilled orders by big money. So the demand zone where the blue arrow is represents the big orders that did not get filled therefor price will rise quickly and sharply out of the demand zone. You see these set ups by big money all the time when you know what to look for. It's always there. It's a very simple analysis and straight forward. What you have just prior to the green bar marked by the blue arrow is something called and in this case a drop-base-rise. Count 4 bars back preceding the green bar marked by the blue arrow. See those 4 bars base and just behind that you see several red bars where prices drop. So the red bars are the drop part then you see prices basing(these are orders getting filled until they don't when you see price rise sharply(the green bar marked by the blue arrow. This represents the orders that could not be filled at the basing prices therefor price rises. At some point in this kind of analysis, price ALWAYS returns to the unfilled orders demand zone. The only other dynamic in this is, will price fall through and in this case continue downward or will price hold(meaning again that not all orders were filled a second time thereby allowing long positions to take hold. This is where your own analysis comes in. Your view of the market. This is not the demand and supply theory as you know it but as it is used here where supply and demand are the filled and unfilled orders of big money meaning banks and institutions. I'de like to mention that when price returns, price will often return the way it left meaning the green bar again marked by the blue arrow and notice it's length. So look for a red bar about the same length or longer to return o the demand zone. The red bar returning to the demand zone are traders selling into demand and making this mistake gives way for buyers to take hold if price does not break though. Eventually price will break with each subsequent return of price meaning that the unfilled orders did eventually get filled. Usually after three subsequent returns of price, prices break through.