Where the candle is standing

Price does not turn around at a line somebody drew afterwards. It turns around where there was more of one side than the other, and the place that happened leaves a specific signature: price arrives, stalls for a few candles, and then leaves in a hurry.

That stall is the base. It is where the imbalance sat. The band you draw around the base is the zone, and the reason you draw it is that whatever emptied that level once may still be sitting there when price comes back.

Two things about that definition are doing all the work. The zone is marked at the origin of a move, not at its destination. And it is marked before price returns, with both edges decided in advance. If you are drawing a zone while price is already inside it, you are not marking a level — you are writing a justification for a trade you have already decided to take.

There are exactly four, and their names are just the sequence read out loud. Two of them sit above price and are called supply; two sit below and are called demand.

A zone has two edges and they do completely different jobs.

The proximal edge is the one nearest to where price is now — the first edge price touches on the way back. On a demand zone that is the top of the base; on a supply zone it is the bottom. It is drawn at the body edge of the basing candles, not at the tips of their wicks.

Which body edge, when the base is more than one candle. Say the pause is four candles, each finishing at a slightly different price. Take the top of each body — the close on a bullish candle, the open on a bearish one — and the proximal line goes at the highest of those on a demand zone, at the lowest on a supply zone. One line for the whole base, at the body that reached furthest towards where price is now. Never the wick. The wick belongs to the other line.

The distal edge is the far one: the extreme the base reached, wicks included. That edge is not where you enter. It is the price at which you were wrong, and that is the whole reason it gets its own name and its own line.

If you have seen the same origin called an order block, or the gap it left behind called a fair value gap, you have not seen a different idea; you have seen a different rule for where the edge goes. Demand zone vs order block vs FVG puts the three side by side on the same candles.

To draw one: start where price is now and look left. For a demand zone, find the origin of a strong rally — the pause it launched from. For a supply zone, look left for the origin of a strong drop. Draw the two lines through the base without cutting through the bodies you are measuring, and extend both forward to the right, into the future, where price has not been yet. Then leave them alone.

The action rule is short. Price retraces back into a demand zone, and that is where a buy is considered. Price retraces back into a supply zone, and that is where a sell is considered. Considered — not taken. What turns considering into taking is lesson four, and it has not changed.

Here is the part that surprised me when it landed, years after I should have seen it.

What is a base made of? Small bodies. Long wicks on both sides. Neither side finishing on top. Candle by candle, a base is a run of the shapes lesson two spent a whole page naming: spinning tops, dojis, the candles that mean nobody won.

Which means the middle of a morning star and the base of a demand zone are the same object at two magnifications. The star's two small candles are a base, one or two candles wide, on a smaller clock. You have been reading the inside of zones since lesson two. Nobody told you that is what you were doing.

That connection also settles a question lesson two raised and left hanging. One spinning top is nothing; four in a row is an engine losing compression. In the zone method the same instinct is a measurement: count the basing candles, and one to three is the best a pause can be, four to six is middling, and more than six is poor. Less time at a level means the imbalance resolved faster, and a level that took a long time to leave was never much of an imbalance.

Lesson three described a bullish engulfing as one candle erasing the sellers' entire previous move, and then some. Read that sentence again with zones in mind and it is a description of price leaving a level in a hurry — the same event, compressed into a single bar.

On the zone side the same idea is called the move out, and it is measured rather than admired: a run of candles closing consecutively in the same direction, from the proximal line to the extreme of the move. The requirement is that the move travels at least twice the height of the zone it came from. Zone is one, move is two or more, and if it is not, the level did not leave hard enough to be worth waiting at.

So the escalation is the teaching point. An engulfing candle is one bar of imbalance. A move out is several bars of it with a ratio attached. Both are the market saying the same thing: at that price the two sides were not merely unequal, they were out of balance enough to leave a mark.

Lesson four told you the market frequently comes back and touches the high or the low of the formation you just traded, that it is a probe, and that your stop has to sit far enough beyond the extreme to let the probe happen without taking you out. That is the whole of the freshness idea already, one candle wide.

Zones grade the same event instead of treating it as a yes or no.

Lesson four gave you two instructions and no way to weigh them. Do not trade formations in consolidation. Trade only in the direction of the trend on the larger timeframe. You either obeyed them or you did not.

In the zone method those two are a single question about location, and it is asked of every zone before price arrives: is acting here going with the dominant direction, sideways to it, or against it? With the trend is the best case. Sideways is middling. Against it scores nothing at all, however good the zone looks in isolation.

That is the difference between a rule and a score, and it is worth naming out loud. A rule is obeyed or broken. A score can be compared. Once location is a number rather than a commandment, two zones on the same chart stop being interchangeable, and choosing between them stops being taste.

This is the end of the course, so here is the method in the order you would actually run it. Nothing in this list needs software, a subscription, or anything else from me.

Two lessons ago, at the end of lesson four, I wrote that this page would be the idea and not a trailer with the ending cut off. You have just read it, so you are the one qualified to say whether I kept that. Nothing above was held back, nothing stops halfway, and the method up there works without me.

Now let me take the obvious objection away from you, because it is a fair one. The definition is not what I am selling and I do not keep it. A zone is the place a move began. Four things about it are worth measuring — how hard price left it, how long the base took to build, whether anyone has been back since, and where it sits in the larger trend. Those four add up to a score out of seven, and below three and a half I do not take the trade. Every word of that is already on this site for nothing, written out properly on the method page and, for the grade itself, on the Zone Score page, and it is on the free checklist as well. If that is all you wanted, you have it, and you can close this page.

What the course teaches is doing it. Marking the zone and grading it by hand, in about ten seconds, on a chart you have never seen before — and building the judgement to throw most of them away, which is the part that actually costs people money to learn. That takes thirty-nine lessons because it is a skill. A definition takes one page, and you have just read the page.

Four minutes of me explaining it, in my own words: