On this post i am going to present you the difference between Narrow and Wide Supply and Demand Zones.
If you are a Supply and Demand trader it would be much more efficient to trade Narrow Zones instead of Wide Zones. I am going to show you which zones are considered Narrow and then will you explain why you should choose to trade Narrow Zones instead of Wide Zones.
There is no indicator to show you if a zone is wide or narrow. You should check this with your eyes. This is the relative width of a zone comparing to the whole size of the chart.
Below i am going to show you some examples of Narrow and Wide Zones.
When you choose which zones to trade you should always choose Narrow Zones. Placing trades on Narrow Zones is more likely that price will reach your Take Profit target
because your Take Profit target will be tighter comparing to a Wide zone. The distance between Order Price and Take Profit level is much smaller on Narrow Zones than it is on Wide Zones.
Check the examples on the photos below. On the first example is a Buy Limit Order on a Wide Zone and on the second example a Buy Limit Order on a Narrow Zone.
Also when you are trading Narrow Zones you can use more than 1:1 Risk Reward Ratio. On the following examples i am using 2:1 Risk Reward Ratio.
You can see than using 2:1 Risk Reward Ratio on Narrow there is much higher probability for price to boune and reach the Take Profit Level.
Check the photos below.
All of my setups were spoted using “Supply Demand EA Pro” in combination with “Automated Trendlines” indicator.
SUPPLY DEMAND EA PRO : https://www.mql5.com/en/market/product/66734
Automated Trendlines : https://www.mql5.com/en/market/product/34252
In case you have any question send me a Direct Message or an email and i would be more than happy to assist you.