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Demand and Supply Zones — How to See the Market Like Smart Money (With VIV)

Why Zones Matter More Than Lines 

Most traders draw horizontal support and resistance lines on their charts. But markets don’t actually react to a single price — they react to zones. These zones represent where institutional buyers or sellers are active. When demand zones hold, price rallies. When supply zones reject, price falls. Understanding this concept can transform how you trade. But here’s the catch: most traders misidentify these zones — or worse, they ignore volume completely, missing the institutional footprints that make these areas reliable.

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1. What Are Demand and Supply Zones?

  • Demand zones are areas where buyers consistently step in to absorb selling pressure, creating a price floor.
  • Supply zones are areas where sellers consistently unload inventory, capping price rallies.
Think of them as battlegrounds between smart money and retail traders. When price enters these zones, you’re watching a negotiation between professionals adding to positions and amateurs exiting out of fear.

2. Why Retail Traders Miss Them

Many traders rely on single price levels — like “support at ₹500.” But big players don’t place orders at exactly ₹500. They build positions in ranges — say between ₹495 and ₹505.

  • Retail mistake #1: drawing narrow lines instead of wide zones.
  • Retail mistake #2: not checking volume spikes in these areas.
  • Retail mistake #3: assuming every bounce is a “demand zone,” without asking if institutions were really active there.
The result? Traders buy at fake “support” levels, only to watch price fall right through them because no real demand existed.

3. How to Identify Strong Demand and Supply Zones

Here’s what separates real zones from noise:

  1. Look for sharp price moves out of a zone.
    • If price rockets upward after pausing, that area likely held institutional demand.
  2. Check for above-average volume.
    • Strong zones are confirmed by visible footprints — unusual activity from big players.
  3. Focus on fresh zones.
    • The first test of a demand or supply zone is usually the strongest. The more times price touches a zone, the weaker it becomes.
  4. Avoid “crowded” zones.
    • If everyone on Twitter is watching the same level, it’s probably too obvious. Smart money prefers hidden levels.

4. The Cost of Ignoring Zones

When traders fail to recognize real demand and supply:

  • They chase breakouts straight into supply zones, where big players unload.
  • They sell at bottoms, panicking right in the middle of a demand zone where institutions are buying.
  • They misread market structure, thinking price moves are random rather than controlled.
Learning to identify zones correctly puts you on the same side as professionals — instead of fighting them.

How VIV Helps

Manually marking every potential demand and supply zone is exhausting. You have to analyze every candle’s volume, decide which bars are important, and track them across timeframes. One distraction, and you miss a critical footprint. This is where VIV (Very Important Volume) simplifies everything:

  • Highlights candles where volume activity is exceptional — showing where real demand or supply likely stepped in.
  • Draws clear price zones you can monitor — even weeks after they form.
  • Removes chart clutter — no need to guess which bars matter.
Instead of spending hours scanning charts, VIV instantly shows where institutions left their mark, so you can focus on price action instead of endless analysis.

Conclusion

Trade With the Market, Not Against It

Demand and supply zones are the foundation of price movement. When you understand them, you stop feeling like the market is random — and start anticipating where price is likely to turn. Whether you do it manually or use tools like VIV, the goal is clear:

Find where the smart money is active, align with them, and trade with confidence. If you’re tired of chasing trades that reverse or wondering why price rejects at “mystery levels,” it’s probably because you’re not watching the right zones. VIV simply makes those zones obvious.

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By Sunil Sethi
Trading markets since 2016 | Swing & Positional trader | Price Action | Reversals
Building clarity in the chaos of charts — blending tech leadership with market mastery.

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See Where Institutions Act → VIV