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Supply and Demand Trading for Deriv: How to Draw Zones and Trade Them Carefully

Updated 2026-10-18 · H-BOT Africa team

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Quick answer: A demand zone is a small, quiet area (a "base") just before price rallied strongly; a supply zone is a base just before price dropped strongly. Traders expect a reaction when price returns to the zone, because that is where buyers or sellers acted before. Zones are areas, not exact lines, and they fail often, so always use a stop.
Supply and demand zones detected on real Volatility 75 candles
Zones found automatically on real V75 5-minute candles: a quiet base followed by a strong move away.

How to Draw a Zone Step by Step

  1. Find a strong move: several big candles in one direction.
  2. Look just before it for the base: one to three small candles.
  3. Draw a box from the base’s lowest low to its highest high (or body), extended to the right.
  4. Rally from the base = demand zone; drop from the base = supply zone.
  5. Prefer fresh zones that price has not returned to yet.

Supply and Demand vs Support and Resistance

Supply / demandSupport / resistance
Drawn fromThe base before a strong moveRepeated turning points
ShapeA zone (box)Usually a line
StrengthFresh zones count mostMore touches = more watched

See support and resistance for the line-based method.

A Careful Zone Plan

  1. Trade zones in the direction of the bigger trend.
  2. Wait for price to reach the zone and show a reaction candle (for example a hammer at demand).
  3. Stop just beyond the far side of the zone, plus a little room (see {L("atr-indicator-deriv", "ATR")}).
  4. Target the next opposite zone or 2× the risk.
  5. Skip zones that price has already tested several times.
Reality check: on random synthetic indices zones are a way to organise entries and stops, not a prediction. Test 50 trades on demo before risking money.

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Risk warning: Trading Deriv products such as digit options, multipliers and synthetic indices is high-risk. You can lose all the money you deposit, quickly. No bot, signal or strategy can guarantee profit, and past results do not predict future results. Practise on a demo account first, only trade money you can afford to lose, and check that Deriv is allowed where you live. This guide is education, not financial advice.
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Frequently Asked Questions

What is a demand zone?

The base area just before price rallied strongly, where buyers were active.

What is a supply zone?

The base area just before price dropped strongly, where sellers were active.

How do I draw supply and demand zones?

Find a strong move, mark the small candles just before it, and box their range.

Is supply and demand better than support and resistance?

They are related; zones mark areas, S/R marks repeated turning lines. Neither predicts the future.

Does supply and demand work on synthetic indices?

It helps structure trades, but random prices break zones often, so stops are essential.

What timeframe is best for zones?

Higher timeframes (5-minute and above) give cleaner zones than 1-minute charts.

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