 Hi, my name is Leon Rowe, Covency Trader and Trading Coach at Trading180.com and in this video I'm going to be talking about why we draw demand zones and supply zones by focusing on demand zones in the way that we do and what I mean by that is there are some traders out there, a lot of them and the majority of traders that would draw demand zones from the wick high, from this wick high to this wick low and I was asked by a trader why I draw my demand zone from the candle wick open to the wick low and first of all I just want to start off by saying that there is no right or wrong way, you do what makes sense to you and both will have their pros and cons. Now I have a philosophy and my philosophy is when it comes to supply and demand is looking at understanding value and prices and what's a bargain price and what isn't. So again many traders will tend to draw their demand zones from the last bearish candles high price and high wick price to the low price and this is where the demand zone will be. Now in comparison I will draw mine at the candle wick open price to the low so why is that and it's for this sentence here the open price is cheaper than the high price, the open price is always cheaper than the high price and when we're talking about cheapness. If we look at this side here and we then go to and try to understand that in the overall range from what would be considered this high and this low right here this high would be considered an expensive area why do we know that because buyers are no longer willing to push prices higher so this is an expensive area we know this to be a cheap area or bargain price and why do we know that is because buyers came in at this price and pushed prices higher this was an absolute bargain for the buyers so now if we look at the actual zone and where we want to buy in the zone the higher the candle compared to the open of the candle which price would you say and this is obviously you know if you're looking at a price chart this would be price and this would be time across the horizontal axis so this would be price if we were looking at the high price of the high wick price or the candle wick price what price would you want to buy at or what would you say was cheaper you would have to say that the open price is cheaper there's a cheaper price so for me while prices may come down to an area and you may draw your demand zone here and prices may work was it the best price was it the cheapest price you could have got in at the cheapest price is obviously going to be at the absolute low and this is proof of values proven to be an absolute bargain area up here isn't necessarily the best price it's a cheap price compared to if you're looking at what is expensive but if you're looking at this candle from the high price to the low price the open price where I want to buy is cheaper and a more bargain price yet than the actual high price again there are pros and cons to both there is no right or wrong way what I would suggest is that if you want you can always go to your price chart and you can plot out either method and see which one works for you but if you're understanding supply and demand and you want to buy at bargains and value cheap prices yeah and understand you know my way of trading in the philosophy and it's still a reason why I do then this is the main reason why I will draw my demand bearish candles open price to low because I like to buy bargain prices prices may come down here and go in their merry way that's good for other traders that's just not my trading opportunity my trading opportunity starts from the open price to the high price and also as well I can get a better risk reward the lower price comes down as well to the open price you're buying here then you have to have a bigger risk reward when it comes to where to place your stop loss whereas my stop loss is going to be a lot smaller in terms of pips but I use of obviously obviously but if you don't know I use risk percentage so again there are pros and cons to both sometimes you may get an early and this one you may miss a trade I'm not worried about missing trades because I'm not losing any money in a managing risk I'm buying at a cheaper price down here which is better for me some traders may want to try and get in early I'm not too fast so again there's no right or wrong way of trading supply and demand everybody can get you know and profit how they profit I'm not here to you know to to make the comparison but if you feel and you you know you want you want to know why I trade down here or what is the better way to trade then this is just an option and this is the reason why I do and someone who you know trades in balances and supply and demand drop base ready ready base drop I trade proof of value may say to you that this is the area to start to look for you know demand again everyone is entitled to their opinion and you know I wish everybody the best in whatever way they trade so yeah that's it hope that helps and take care