WHAT IS SUPPLY AND DEMAND?
Areas of supply and demand are not simply support and resistance levels, they are an area which is composed of a number of pips.
The highest area being the distal line and the lowest being the proximal line.
WHY USE SUPPLY AND DEMAND WITH YOUR FOREX TRADING?
Using supply and demand, along with other indicators, helps to provide you early entry with lower risk and higher reward trading.
SUPPLY VS. DEMAND
The closer you are to the supply zone (upper zone) the better for entering short positions
The closer you are to the demand zone (lower zone) the better for entering long positions
I personally like to use Supply and Demand with my Foltron setup, which consists of multiple indicators, but the overall basic concept is the use of moving averages.
When price reaches a supply or demand zone and the cross of a moving average occurs, the trade is much more likely to go in your favor.
You can set your SL (Stop Loss) below the Demand zone for a long position and above the Supply zone for a short position.