 Hello and welcome to this video on how to draw demand zones using Japanese candlestick price chart So let's get into it the HHHL principle which stands for higher high higher low And if you're not too sure on what that means what you need to do is go to my youtube channel and look for a video on Called sorry why supply and demand trading is the genesis of all technical strategies And I pretty much break down why and the higher high higher low principle is really the foundation of all supply and demand strategies, but when it comes to drawing it on a Price chart drawing demand on a price chart What we need to do is follow some simple rules. So first of all we need to For prices to create a high. Yeah, so these New high could be two candles and then what we want is For there to be a swing low and bearish or bullish candle wick lows and so What we're looking for is some sort of bearish candle. Yeah, and potential wick That and then we're looking for a new high so a bullish candle stick wick or close high Yeah, so the next candle Has to either close above the previous candle or it has to create a wick and has to close Bullish. Yeah, so bullish candlestick. So it's close like that. Yeah, and What we're doing is drawing the demand zone from the last bearish candles open price to the swing low so again the demand zone goes from Bet the last bearish candles open price, which is up top here to the swing low Yeah, and that is going to be where we will be drawing demand Right. So this is demand. This whole zone Is demand and why is that demand again? higher highs higher lows if we're looking at this Move up and then we get and move down Like that and then we get a move higher The higher high higher low principle and this can take the form of Many different obviously you're gonna see it on a price chart and I go over it on the pound dollar a live chart we'll go over maybe like a year's worth of data and What you'll see is is is basically Different iterations of this. So let's say for example we have Something like this where you get a candle Couple of candles and let's say for example you get You know two candles one there or one there and then you may get a candle bullish candle that That's something like this or you can get a couple of candles that do something like this And as long as we create a new high Yeah, you have to draw the demand zone from the last bearish candle, which is the last bearish candle Yeah before prices make a new high because again this becomes High a low And then a new high. Yeah higher highs higher lows and Then the demand zone is drawn from the last bearish candle before prices make a New high. Yeah, wherever this wick is so this wick could be for example And that's such all this again So we could be from Around here. So let's say we have a couple of Candles that pull back and let's say for example the wick is here and Then we get So bullish candle that creates a new high And we draw a demand zone From the last bearish candle before prices make a new high. So it's going to be from here to the swing low Yeah, now if for example The swing low was a bullish candle So let's say we had something like this this Move down move down and let's say we had something like this We had candle the bullish candle and this was the Swing low then again the last bearish candle It's from there to there If this swing Let's say for example was there because what you're looking for is High the highest higher highs and higher lows so that here Yeah, and that would be where the lowest The higher lowest I should say and then you've got And we've up here once prices make a new high and remember this this this candlestick here can also look like this So that's Draw this because it can be a wick high as well So let's say we get move down move down and then we get a candlestick Sorry a candlestick should be a green candle Let's say for example something like that That's fine too because it's still creating a new high move up Move down and it's got close bullish Yeah, so a bullish candle that creates a new high whether it's a wick or a close and obviously wherever the Lowest low on this swing would be Yeah, so those are the rules for the mark for for drawing demand zones Yeah, as long as you follow this And keep that in mind then you should be fine into another caveat to this Is going to be hidden demand and hidden demand Is an outside candle so if we are following the rules of the higher high high low principle what we want to do is Understand that an outside candle You might not know what an outside candle is but an outside candle is something like this where let's say for example You have a candlestick where the wick low Goes below the previous candles low price Yeah, so this goes below that Yeah, wait below that. It's a bit wonky, but you know what I mean and then it closes Above now. This is what was known as hidden demand. Why is this hidden demand? Because when this candle is being formed there was a lot of supply in there Yeah, and so let's look at the higher high high low principle again. We've got a move up and then this wick actually represents a Move lower because at some point during this candles life of formation Yeah, this was the swing low and then what you had was A move higher It's here. So this represents higher highs and higher lows So we draw the demand zone from the candles open price From the outside candle open price to the swing low and this whole area here Is what is considered hidden demand Yeah, because previously we were looking for bearish candles the last bearish candle before price made the new high But you don't get it on this one, but in reality, it's making the higher high higher low principle So what we're going to do is we're going to go on to a price chart pound dollar as recommended by somebody who did Watch the last video and asked for any chart suggestions and they suggested that I do the pound dollar So I'm going to look at the pound dollar and go through at least maybe six months to a year's worth of data So what we're going to do is we're going to look at the pound dollar I'm going to go back to January, you know beginning of the year 2017 and start looking for the mon zones and by the way, this isn't Backtesting demand zones because we don't know what was going on fundamentally and sentiment-wise at any given point Supply and demand is driven by the fundamentals and value So there are going to be times where we shouldn't have been buying at demand zones And we should have been selling a supply or vice versa So this is more about just drawing demand zones Don't focus on whether the demand zone worked or not Yeah, so first of all what we need to do is understand and draw higher highs higher lows So demand started from here Yeah, there and then we had a bit of a pullback Yeah, as it's made by this bearish candle and then what we want to see is price break above the high Or a wick above the high so it has to close above that high there or a Buddhist candle wick Right Buddhist candle clothes wick above that for that to qualify as a higher high Yeah So let's go forward and we do so once we get that We draw the demand zone from the last bearish candles open price to wherever the swing low was in the swing low looks like it was this candlestick here because that is the higher high higher low principle and Again, just to start from the high high high low principle This is the last bearish candle Yeah from here so control it from there start to go higher So what we want to do is keep going forward get a pullback and move up So again Just to draw it out pull back Then the move higher So then that becomes lost bearish candle for price making new high right there Then we go forth We start to pull back now until price breaks above The wick above this guy or Closes above this high and a bullish candle wick high or a bullish candle clothes above that level We don't draw any demand zones So we do get a candlestick wick and a bullish candlestick clothes There but the wick goes above it so that qualifies this as a Swing there and then there so what we can do is we can draw a zone around from there Yeah, now is this going to be a strong level of demand is this area going to be a strong level of demand Maybe maybe not but what we need to do is wait for proof of value So we need for price to really kind of start to move a lot higher like this Before this now starts to become a stronger area of demand because we need to wait for proof That buyers are still buying Up at these prices Before coming back down Proving that this was a strong area of demand in the same way that this area looks like to be a strong area of demand depending on obviously the fundamentals and sentiment Now what happens going forward is We get a bit of a spike up bearish candle Move back down Then we get a bit of a reaction To This zone here this one here. Oops, sorry Here we go. Oh, it's not allow me to do it. I'll delete that and delete that into this zone here What we want to see is higher highs higher lows again So we're looking for is move you get pulled back. So you got a bit of a swing move higher pullback And let's see if we get a bullish Move above that or a wick. Nope. We don't we just continue to make This kind of choppy price movement in between where this Move That swing there We're not focused on necessarily lower highs and lower lows looking for higher lows and higher highs Yep so You get a bit of a move here where we have move up Lowest swing is gonna be here and then we get a move up. So then we can start to draw our demand from there To there to do where the lowest swing is I guess before prices start to make New highs, which is gonna be around here So you can see where the swing is there there there so then It's gonna be around here is where you're drawing Where the lowest swing was Let's continue going forward and then we get a break of that So now we're looking for higher highs higher lows Still looking for higher highs higher lows we get a bit of a move up so In this example what we have is a low here and we get a move higher There we go higher high higher low. So we get a spike up move down And then we get a move to the upside We can now start to draw this as Demand And also what we can draw is this Area here as demand because this is the origin of the move Origin of the higher high higher low Let's keep going forward There we are the prices Go higher there get a pullback Here and then we get a move higher. So there Is where we draw our demand zone bit of a move down So in this and the prices start to range like this You get a move like that get a move and now prices are contained between here and here Yeah So as we go forward that makes lower lows you can see it there Yeah, but what we're focusing on focusing on is higher highs and higher lows. So we get a bit of a move Higher that looks decent. There we go. So here's our higher high higher low So we get a move up Pull back In fact, you're zooming a bit. I think this low might have been lower than that I think it was and then get a move higher Buddhist candle close, but the wick is higher then this move there Brilliant So now we can go back Let's delete this just for to clear the chart We've not only got there to the swing We've got there To that swing low there Where the lowest swing was there. So higher highs higher low principle, and then we get move higher proof of value Here you go. And as prices start to make That new high there pull back Don't make any kind of new highs until The pullback Got one right there Got a mini one within this, but I would probably say this was this was the swing low sorry This was the swing low here All right, and as prices start to make new highs here even though that is a bit of a pullback, I think This is going to be where the obvious higher high higher lowest because this is really where the market high is Once prices went above that that's where you withdraw your demand zone from the last Bullish candle before prices make a new high It's right there really So let's go forward Now until prices go above There there we are Stop to go above and draw demand Right here go forward So in this situation did prices go above that swing no Didn't go above it really didn't go above it there. So now we're still looking for higher highs and higher lows There we are so that candlestick goes above There I think yeah, there we are so then we can start to draw from there or down to the lows Because this now becomes swing Move up Move down and then move up. So actually it's from Here That's where the new swing is there we go and prices now in a situation like this where you have a Bearish candle close Technically yes prices have made a new high Yeah, that's a new swing but In my rules, I prefer to have a bullish candle close before Accepting this as a new high Yeah prefer The this to be closed bullish if it's bearish for me although it makes a new high I personally don't count that as a new high. I want to see bullish You know price action. I'm gonna see demand here. I want to see demand bullish candle close So until we get a bullish candle close or a bullish candle wick above this area here Then I will consider that to be a new high. So we get Some movement We don't get it We don't get a new new high so we get to pull back a little bit So here we go, right and here is some hidden demand for The eagle eye amongst you guys. So this was an outside candle. Why is that an outside candle because? this Closes above the previous candles high and goes below the previous candles low So if we were looking at this From a higher high higher low perspective what we've got is in fact, you've got to move up Move down and then move higher Yeah, so this now starts to look like Demand there. We still want a bit more proof just to show that there is this is going to be a strong area of demand But I do like this now This isn't necessarily Higher higher higher lowers this went lower than the previous low. So If that being said, this is probably going to be the start of a move and hopefully we can get some more higher highs There we go. So We can now see if it starts from here starts from here. We've got demand It comes up to here Actually comes all the way up to this high here get a bit of a pullback And then we get there but with this Hidden demand right here This is where I'm going to be drawing the demand zone and we can also draw the demand zone From there as well, but we can't discount this whole area as an area of demand to Keep going and then we get a gap. That's fine We're looking for higher highs higher lows So we're going to bullish bearish bullish. Here we go lovely So we've got the last bullish, I mean you get a situation like this where The swing low. Yeah, you've got a large Bearish candlestick here, and then you've got higher lows within that you can actually still draw that whole area right here as Demand as well Because technically that makes sense. Yeah, this is the member the origin of the move started from here There There high highs higher lows. It just so happens that the last bearish candle is quite large And it encompasses this move to the upside. So when you get a situation like this Yeah, the last bearish candle before prices start to make new highs and then you've got another one there You can draw it if it encompasses all of this zone here Keep going to the upside So again until prices make higher highs higher lows Pull back And then we kind of make a lower low There we go So we now make a new high So overall you can start to see if we were Looking at Pull backs and swings Actually looks like this and then we make a new high It's a high high high low principle there you make a new close So now we've got Demand the strongest area of demand is going to be down here. Let's keep going. So now we need price To go above least here So it needs to be a bullish candle Wicked high or close above that area brilliant, so We've got a wick but bearish clothes. So for me, although it's a higher high to draw this I'd only be drawing this because We're looking at this Pull back this actually makes a bit of a higher high within this zone there and there Yeah, but as far as this creating a new high No, I'll be drawing this demand zone because we made higher high and higher low within this zone here So until price is now go above here This I can't draw a demand zone Until prices go if prices go above there and they do And then we can start to draw that there because now this becomes high Pull back Hi like that Yeah, so we had another higher high high low surprising made a new high Pull back and then made a new wick high bullish Candle close and that would have been the demand zone right there. We come back Now we're just looking for high highs high lows keep going Right, so we get a bit of a move up and we are there we go So hope you guys saw that there So when prices came up like this and they pulled back and until prices went Beyond that move there that bullish candle close there We can draw the demand zone from the last bearish candle open price To the swing low, which is going to be here. We make a new higher high higher low pullback In fact, it's there And this is what we call an outside candle some hidden demand There So you can draw either demand from around here from the last bearish candle or You can draw the demand From there personally Probably encompass that if it's a bearish candle and then a outside candle pretty joy from the last bearish candle But if it's if this is a bullish candle Then draw it from the outside candles open price to the swing low Let me keep going keep going there. We are Demand starts from there to the swing low keep going there. We are So again the outside candle is preceded by a bearish candle So I'm going to be drawing that whole area as Demand if this was a bullish candle, then I would be drawing that from there to there Let's keep going again As you make higher highs higher lows As we pull back Move higher that that was the high we had a pullback Yeah, but we didn't make a Candlestick that closed bullish Yeah, and closed above there or the wick was above there so For now This isn't a new High that I would be drawing after wait for bullish candle Wick to go above that or close above that That's on there. So we get a pullback Interesting. Ah, here we go. So a nice example of hidden demand. So we've got a nice move And then we draw the high highs high lows if the move started from here there Get a pullback because that would have been very Bearish in real time and then we get to close above. So that's higher high higher low That's where the demand is there and that's where the start of the demand is right there So we've got all that going on. Let's go forward. We do have higher highs higher lows here We've got a swing move there pulls back And then we've got another move Fact that was where the candle started with as the lowest swing before price made a new high there So you can still draw On zone there and we end up in fact Breaking through Coming down to its lower demand zone here. So again higher highs higher lows Low high Low high Yep So once you see that if you want to delete all these off, so once we get high highs higher lows We can actually draw it from here And then what we can do is basically draw it down to maybe where that swing is Because otherwise it would encompass all of this So what makes sense is that you draw it from here and then down to this Swing here or even down to where you've got the origin of that demand zone there So this is demand. This is demand. We can just draw that all the way down at the lows Higher high higher low, but again what we understand is that not every single demand zone is Going to be a strong area of demand and not every single supply zone is going to be a strong area of supply This is just how to draw This so now we get Potentially move higher So as prices kind of pulled back We've made a new high So that encompasses this as well That's fine Keep going There we are And as you make a new high there until prices make a new high This doesn't become Demand and it did it's a bit of a strange candle, but we did make a new high so we'd have to draw it from here to here Because there is some demand in there Prices come back up Now until we make a new high again That's the start of the move outside candle with the start of it So we need to make higher highs higher lows in order for that to be considered one of the strongest areas of demand No No, so we can keep drawing it if you want to You can see where it's just literally just kind of just ranging So we get a bit of a pullback move Just above there So we can now start to pull back From here to the swing lows right there. So that's where all that demand is Is that all this would be in that demand zone? There we go As you make a new high that was there as prices made Higher highs and higher lows Into the new year 2018 so Plenty of Food for thought there and going through the demand zones and really how to Understand how to draw demand zones and again, this wasn't an exercise in you know Taking a trade at every single demand zone Yeah, it's about how to draw and understand where you should be placing your demand zones I didn't identify in the higher high high low principle Etc. And in the next video, I'm going to be talking about how to draw supply zones So the lower higher lower low Principle and I'll go over that so guys take care and don't forget to like subscribe and I'll speak to you soon So if what I'm saying resonates with you why not check out trading 180 comm there is a Selection process to trade my supply and demand zone for X strategy I'm only looking to work with Individuals with the right mindset, you know who are hard working as well. So Check that out And access really for less than one pound a day This some of the strategies in here are not for beginners So if you don't know what supply and demand is please check out all of my Supply and demand videos. I have hundreds of videos on YouTube so you can check that out first Guys take care and until the next video. Have a good one