Here are full details on these trading terms:
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BOS (Balance of Supply):
A range where the supply and demand forces are balanced, indicating a equilibrium price. It's a consolidation area where buyers and sellers are evenly matched, leading to a pause in the trend.
- Definition: A range where supply and demand forces are balanced, indicating a equilibrium price.
- Identification: A consolidation area on the chart, often marked by a rectangular box.
- Trading Strategy:
Buy: When the price breaks out above the BOS.
Sell: When the price breaks down below the BOS.
OB (Order Block):
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[Image-1: A chart showing a rectangular box with a higher high and lower low]
- Definition: An area where traders place orders, creating a barrier for the price.
- Identification: A range on the chart with a higher high and lower low, marked by a rectangular box.
Trading Strategy:
Buy: When the price breaks out above the OB.
Sell: When the price breaks down below the OB.
CHOCH (Change of Character):
A level where the market's behavior changes, indicating a potential reversal or continuation of the trend. It's a point where the market dynamics shift, and the price action changes its character.
[Image-1: A chart showing an arrow pointing to a specific price level]
- Definition: A level where the market's behavior changes, indicating a potential reversal or continuation of the trend.
- Identification: A point on the chart where the price action changes its character, marked by an arrow.
Trading Strategy:
Buy: When the price breaks out above the CHOCH.
Sell: When the price breaks down below the CHOCH.
FVG (Fair Value Gap):
A price gap that forms when the market price moves away from its fair value, creating an imbalance in supply and demand. FVGs often get filled, as the market tends to revert to its fair value.
[Image-1: A chart showing a dashed line between two price levels]
- Definition: A price gap that forms when the market price moves away from its fair value, creating an imbalance in supply and demand.
- Identification: A gap on the chart between the current price and the fair value, marked by a dashed line.
Trading Strategy:
Buy: When the price fills the FVG.
Sell: When the price fails to fill the FVG.
Supply Zone:
An area where sellers are likely to enter the market, creating resistance. It's a range where the supply exceeds demand, causing the price to bounce back or reverse.
[Image-1: A chart showing a rectangular box with a higher high and lower low]
- Definition: An area where sellers are likely to enter the market, creating resistance.
- Identification: A range on the chart where the supply exceeds demand, marked by a rectangular box.
Trading Strategy:
Sell: When the price enters the Supply Zone.
Take Profit: When the price reaches the bottom of the Supply Zone.
Demand Zone:
An area where buyers are likely to enter the market, creating support. It's a range where demand exceeds supply, causing the price to bounce or continue its upward trend.
[Image-1: A chart showing a rectangular box with a lower low and higher high]
- Definition: An area where buyers are likely to enter the market, creating support.
- Identification: A range on the chart where demand exceeds supply, marked by a rectangular box.
Trading Strategy:
Buy: When the price enters the Demand Zone.
Take Profit: When the price reaches the top of the Demand Zone.
Image Description:
The chart shows a price action of a financial instrument (e.g., stock, forex pair, or cryptocurrency) over a specific time period.
- BOS (Balance of Supply): The rectangular box between 50-55 indicates a balance of supply and demand, representing a consolidation area.
- CHOCH (Change of Character): The arrow at 60 indicates a change in market behavior, potentially signaling a reversal or continuation of the trend.
- FVG (Fair Value Gap): The dashed line between 65-70 represents a price gap where the market price moved away from its fair value, creating an imbalance in supply and demand.
- Supply Zone: The rectangular box between 70-75 indicates an area where sellers are likely to enter the market, creating resistance.
- Demand Zone: The rectangular box between 40-45 indicates an area where buyers are likely to enter the market, creating support.
These concepts help traders identify:
- Areas of support and resistance
- Potential reversal points
- Imbalances in supply and demand
- Opportunities for buying or selling
By understanding BOS, CHOCH, FVG, Supply Zone, and Demand Zone, traders can make more informed decisions and develop effective trading strategies.