---
title: 'The Only Supply and Demand Guide You''ll Ever Need'
source: 'https://youtube.com/watch?v=1z382y4v39Y'
video_id: '1z382y4v39Y'
date: 2026-08-19
duration_sec: 548
channel: 'TradingLab'
---

# The Only Supply and Demand Guide You'll Ever Need

> Source: [The Only Supply and Demand Guide You'll Ever Need](https://youtube.com/watch?v=1z382y4v39Y)

## Summary

This tutorial explains how to find high-probability supply and demand zones by reading sharp price moves and understanding who is on the other side of every trade. It also walks through a trained trader's mindset, the Costco analogy for retail buyers, and a practical step-by-step entry plan with stop-loss and take-profit placement.

### Key Points

- **Why markets actually move** [00:00] — A chart moves up only when buying pressure is stronger than selling pressure, and it moves down only when selling pressure overwhelms buyers. Indicators are only a reflection of that underlying imbalance.
- **No reversal until the balance shifts** [01:12] — When price drops, more buyers enter and cause pullbacks, but an uptrend or reversal only happens when a large majority of buyers take control. Strong moves need strong participation.
- **Always question the other side of the trade** [02:57] — A hedge fund manager emphasized asking who is on the other side of every trade. If you buy, someone else confidently sells. A good trader would rather enter against a bad trader than take a trade against professional money.
- **Sharp closedowns show when sellers are in control** [03:46] — The only reliable way to define control is a sharp price move. A fast downward move marks an area of supply; a fast upward move marks an area of demand.
- **The Costco analogy of trading** [04:29] — Institutional-style traders buy cheap from sellers who need to get out, then sell higher to retail traders who are willing to overpay. Retail should think about where price is gladly — demand zones — not chase breakouts into supply.
- **Two questions that make a profitable trader** [05:39] — First, find where drastically more buyers and sellers are present. Second, identify where bad or inconsistent traders are buying and selling. Answer both correctly and you know where the zone is set.
- **Enter at the request and exit at supply** [06:44] — When price slowly returns to the demand zone, enter long. Put a stop-loss below the demand area and take profit at the supply area. This is the same setup from beginning to end.
- **Fair value gaps make zones stronger** [08:14] — A demand zone connected to a fair value gap often shows that buyers were clearly in control. The same applies to a supply zone with an accompanying gap, giving extra confirmation that the zone matters.

### Conclusion

The real insight is to treat price chart as a conflict between experienced and less experienced traders, with meaningful strength that marks the boundaries between activity and retail risk.

## Transcript

Including this hedge fund manager that explains  exactly how he uses it in an interview. But we   and demand in the first place? To understand that, we have to dive deeper  
into the core concepts of why the market moves Why does the market move in the way that it does?   is more buying pressure than selling pressure. The only way a chart will move down is if there   oh tradinglab that is so obvious. Why are you  wasting our time and even telling us this  
A lot of people will watch a youtube video,  get told to draw some fancy rectangle on their   chart by a random trading guru because  they say it works, but in reality the  
are told it works. But not my viewers!   You guys are smart. You actually want to learn. So look at this picture.  
The red, represents the sellers winning. The green, represents the buyers winning.   When you have a ton of sellers. Like in  this area, price will drop fast and sharp.  
As price starts to go down, more and more  buyers will start to fight against the sellers.   Slowly gaining back control. Now as more and more buyers are entering,  
this can cause little pullbacks on the chart. But  the chart s momentum is still overall bearish.   Price will only fully reverse once there is a  large majority of buyers compared to sellers.   will be fast sharp move to the upside. Then the whole process repeats itself.  
how the market moves. You see, one day I got bored   articles when im bored. I m a nerd. Anyways, I was reading an article that  
interviewed a hedge fund manager  and how he looks at the market.   But before we get to what he  said, let me show you something.   Before sharing it with you guys, I wanted to test  it out for myself to see if it actually worked.  
So I funded my trading account  with $50,000 for testing.   I Found the guy, who seemed to be  pretty good and had a high win rate.   So all I had to do was click this follow and my  account would automatically take all the trades  
this specific trader took automatically. The analyst has taken 5 trades since   So far my account is up $7,646 Not bad for just clicking a follow button.  
But ill proceed to update you guys through out the  weeks to let you know how my account is doing.   you can check it out. Okay back to the video.  
that really stuck out to me. you need to focus on who is on   the other side of the trade Whenever you buy a position.   Which means, there is always someone who  thinks the chart is going to go in the  
opposite direction than what you think. Now this is a very VERY important   from someone who is selling. Would you rather  buy from a good trader or a bad trader?   someone who is inconsistently profitable. If you start thinking like this when trading.  
It will change the way you take trades. if you don t know where these profitable   traders are selling, you might just be one  of those bad traders they are selling to.   Going back to this chart. The only way we know a large  
group of sellers or buyers are in complete  control is if there is a sharp move.   So take this chart for instance. When I look at this chart. I m not   trying to predict the future. I m just looking  at where the majority of buyers and sellers are.  
Here, the chart had a sharp downwards move from  this point. Meaning there were way more sellers,   than buyers from this point on. In other words, an area of supply.   If there wasn t drastically more sellers  at this point. Price would just continue  
moves sharp to the downside. Here the opposite is true.   than sellers. Or an area of demand. Another way to look at this is like this:  
You can buy anything from there. But what is costco s business plan?   Them what do they do? They sell it to a retail  
money is if they sell to a quote on quote  bad buyer or someone who is willing to   pay more than what they did for the product. You should look at trading the exact same way.  
Obviously at a low price. Where are you selling to   the retail buyer? At a high price. Now remember that statement I made before?   In order to be a winning trader, you  have to sell to a losing trader.  
be buying most likely? A lot of retail traders   will buy in this area, maybe because they see  some momentum building up, an indicator tells   them to enter, or whatever the reasoning is. But they are missing a very important key point.  
Supply exceeds demand in this area. Meaning there are drastically more   buy when there are more sellers. So when looking at this chart you should   there are drastically more buyers and sellers. And where are the bad traders buying and selling.  
If you answer these two questions  correctly, you will be a profitable trader.   So where are the majority of buyers and sellers? Well we can see from this point on,   drastically more buyers then sellers. So we mark the beginning of this move.  
Where are there more sellers than buyers? Here we have a sharp downwards move.   So we mark the begging of this move. I want to make this very very clear.   If the chart looks something like this. We don t have a clear area of supply and  
demand because there are no sharp movements. Sure, the chart moves down from this   area. But that just shows there are  slightly more sellers than buyers.   drastically more sellers than buyers. Which we can only tell, if there  
because its very important. Then we have to ask the final question.   A bad trader is going to sell when  there are more buyers than sellers.  
So we have our supply and demand areas. Wait for price to come to our demand.   Set our stop loss below the area of demand. Set our take profit at the area of supply.  
And we sell to the inconsistently  profitable trader who buys up here.   video. Here s two extra tips to make your  supply and demand zones even stronger.  
So heres a final recap of the  perfect supply and demand trade  
Here we have a strong move to the upside starting  from this candle so we mark our demand zone.   Notice how there is also a fair value  gap connect to this demand zone.   Giving us insight there are  buyers than sellers in this area.  
We wait for price to see what it does next. A similar thing happens up here.   This is our area of supply. This move also has a fair   value gap connected to it as well. Which is showing there are a lot more sellers  
Next we want price to slowly come  down to our area of demand.   Slowly being the key word. Once it hits our zone. We enter.   Set our stop loss below the area of demand and  set our take profit at the area of supply.  
And just like that, you got a winning trade. Start looking for areas where bad traders are   buying and selling and it will change  the way you trade forever.