Supply and demand trading reads the chart as a map of unfinished institutional business. The pattern: price coils in a tight base for a few candles, then departs violently. A drop-base-rally or rally-base-rally leaves a demand zone underneath; the mirror image leaves supply overhead. The thesis is that the departure was too fast for large participants to finish filling their orders, so the first return into the zone meets the remainder of those orders and reacts. It is one of the most intuitive frameworks in price action — and one of the most loosely specified.
That looseness is the testing problem: almost every published rule — "small basing candles", "explosive departure", "fresh zone" — is adjectives, not arithmetic. We publish only numbers our own deterministic engine produced on real data, and the engine does not yet ship a basing-plus-departure zone primitive (displacement detection exists; zone construction doesn’t). So the rules below pin one exact, testable definition in advance — candle counts, ATR multiples, zone edges, freshness — and the 12-month BTC and ETH results appear here the moment the primitive lands. Until then, the replay terminal and a rectangle tool will happily build your manual sample.
The exact rules we’ll test
- Base: 1–5 consecutive 15-minute candles whose bodies are each under 0.5×ATR(14) — the sideways pause where positions accumulate.
- Departure: the candle leaving the base has a body over 2×ATR(14). Departing upward creates a demand zone (drop-base-rally or rally-base-rally); departing downward creates supply.
- Zone = the base’s full wick range, from its lowest low to its highest high.
- Fresh zones only: trade the FIRST return into the zone after the departure; a zone is consumed once touched, and a close through its distal edge deletes it.
- Entry on the first candle that touches the zone and closes back outside it, in the zone’s direction; stop beyond the distal edge; target 2R; risk 1% per trade; 0.05% commission per side.
- Missing primitive: the basing-plus-departure zone detector itself — the engine doesn’t ship it yet, so results publish when it lands.
Backtest data: in the queue
We publish only numbers our own deterministic engine produced on real data — no borrowed or estimated stats. This setup needs a detection primitive the engine doesn’t ship yet, so its 12-month results will appear here the moment that lands. The strategies with completed research are on the strategies hub, and you can already practice this setup bar-by-bar in the free replay demo.
How traders draw the zones — and why mechanical definitions diverge
The folk recipe is consistent: find the pause before the explosion, box it, wait for price to come back. The details are not. Some traders box the base’s full wick range; some use only the bodies; some anchor the proximal edge to the departure candle’s open. Some require the departure to break structure, some just want it big. And the freshness doctrine — that a zone works best on its first revisit and decays with every touch — is near-universal in courses yet almost never stated as a hard rule.
Turning those adjectives into arithmetic forces real decisions: how many basing candles qualify, how small is "small" (we pin bodies under 0.5×ATR), how big is "explosive" (a body over 2×ATR), when a zone expires, and what happens when zones overlap. Every published course answers these differently, which is why quoted supply-and-demand win rates aren’t comparable with each other. The rule list above is one exact, defensible pinning — chosen so a machine detects roughly the zones a careful human would box, and so the eventual results mean something.
How to backtest supply and demand zones on Secuora
No zone primitive yet, so this one is a replay-and-drawing-tools exercise — exactly what the terminal is built for.
- Open the free replay demo at /backtest/demo (no sign-up) and pick a trending stretch of a crypto pair on the 15-minute timeframe.
- Replay until you find a base — a few small-bodied candles — followed by a violent departure, and box the base’s full range with the drawing tools.
- Keep stepping forward and wait for the FIRST return into the zone; if price closes through the far edge first, delete the box and move on.
- On the retest, enter with a simulated order in the replay terminal (free account) — stop beyond the distal edge, take-profit at 2R — and let the replay decide.
- Journal every zone, including the ones that never got revisited, with screenshots; your hit rate across 30+ fresh zones is the baseline the engine will eventually formalize at /backtest/ai.
Frequently asked questions
What is a supply and demand zone?
An area where price paused in a tight base and then left violently. A base followed by a strong rally creates a demand zone below price; a base followed by a strong drop creates a supply zone above it. The thesis is that the departure left large orders unfilled around the base, so the first return into the zone tends to react.
How do you draw supply and demand zones?
Find the basing candles before the explosive departure, then box the base — most traders use its full wick range, while some anchor the near edge to the departure candle’s open. Conventions genuinely differ, which is why our rules above pin one exact definition (full wick range, bodies under 0.5×ATR, departure body over 2×ATR) before anything gets tested.
Are supply and demand zones the same as support and resistance?
Related, not identical. Support and resistance are usually levels validated by repeated touches; a supply or demand zone is an area created by a single basing-plus-departure event, and orthodox zone traders only trust it fresh — on the first revisit. Both describe the same underlying behaviour: price reacting where significant orders previously transacted.
Can I backtest supply and demand zones on Secuora today?
Manually, yes — the replay terminal with drawing tools and simulated SL/TP orders is exactly the workflow, and the journal tracks your zone-by-zone hit rate. Mechanically, not yet: the engine has no basing-plus-departure primitive, and this page gets its 12-month results, win or lose, the moment that ships.