Supply/Demand Break (SD Break)
Instead of tracking every swing point break, track when price breaks through an actual supply or demand zone — proving the breaking side has genuine institutional conviction
A supply/demand break is a more refined version of a break of structure. Instead of asking "did price break a swing high or low?", ask "did price break through an actual supply or demand zone?" For true demand to be in the market, it should break supply — overcoming real institutional selling interest. For true supply, it should break demand. This filter eliminates minor structural breaks (price accessing liquidity, mitigating zones) that look like directional signals but are actually normal market mechanics. When price breaks a swing point without breaking a supply or demand zone, it's a "temporary" or "minor" break — not tradeable. When price breaks through an actual zone, the side that caused the break has proven institutional conviction. The demand or supply that originated the break-through move becomes a high-quality entry level.
✓How to Recognize
- •Track supply and demand zones, not just swing points — when price breaks through a zone, that is the real signal
- •For longs: demand proves itself when it breaks supply. For shorts: supply proves itself when it breaks demand
- •Minor "structural breaks" that don't break any zone are the market accessing levels, not changing direction
- •The candle that caused the SD break (often found in the wick) is your entry level
⚡How to Avoid
- →Trading every swing point break as if it is a genuine signal — most are noise
- →Flipping bias on minor structural breaks that don't break supply or demand
- →Setting limits at demand levels when supply is clearly in control (breaking demands)
- →Confusing the market reaching for a zone (temporary break) with a genuine directional shift