# Smart Money Concept

Supply and demand trading is based on placing orders in zones where price tends to reverse due to multiple factors. This is somewhat like support and resistance levels, but with a wider range and usually supported by fundamentals.

Typically, price reacts sharply to supply and demand zones, indicating substantial buying or selling interest.

But how do you know when to enter? That's what the chart illustration demonstrates. Look for price action based on rally and pullback patterns or their variations. Price often retests the base zone before surging toward the rally zone.

These zones enable traders to employ favorable risk-to-reward ratios in their trades. You can set a buy limit order before price reaches the base zone, and the chart will execute automatically for you. Note that stop losses should typically be set near the demand zone and below the supply zone.