Method · Zonetta Trading · last reviewed 7 September 2026
Supply and demand zones on NQ and gold futures
A zone is the place a move began, marked before price gets back there. This page is how I draw one, what its two edges are called, and why two zones on the same chart are never the same decision.
01 / Definition
What a zone actually is
A supply or demand zone is not a line drawn afterwards to explain a move you already missed. It is a band of price where an order imbalance was large enough that the market could not stay there — it paused, and then it left in a hurry. That pause is the base. The band you draw around the base is the zone, and the reason you draw it is that the imbalance which emptied the level once may still be sitting there when price returns.
Everything else on this page follows from that one sentence. A zone is marked at the origin of a move, before price comes back, with both of its edges decided in advance. If you are drawing it while price is inside it, you are not marking a zone — you are justifying an entry.
If you arrived here from the smart money vocabulary: the two objects it draws around the same candles are marking nearly the same place by a different rule, and the disagreement is about where the edge goes rather than about the idea. That comparison has its own page, worked through in ticks, and it is the only place on this site where those names are taught.
Schematic · anatomy of a demand zone · not a recorded session
Diagram only · no instrument, no price, no outcome claimed
- Base
- The pause between two moves. One or a few candles that go sideways while the market works through what is sitting there.
- Origin of imbalance
- The base is where supply and demand were furthest out of balance. That is the whole claim behind the zone, and it is why the band is drawn around the pause rather than around the move.
- Proximal line
- The edge of the band nearest to current price, drawn at the edge of the base’s candle bodies, never at a wick. It is the first edge price touches on the way back, and it is where the decision has to already exist.
- Distal line
- The far edge of the band, drawn at the base’s extreme, wick included. It is the edge that answers the question “at what point was I simply wrong about this zone”, which is a different and more useful question than “where do I get out”.
02 / Origin
Where a zone comes from
Every zone is a base sitting between two moves, and there are only four ways that can happen. Two of them leave supply above price; two of them leave demand below it. The names are the shape, read left to right.
- Rally · base · drop
- Supply, above price. Price rises, pauses, and then falls away from the pause.
- Drop · base · drop
- Supply, above price. Price falls, pauses, and then keeps falling. The pause is a continuation, not a bottom.
- Drop · base · rally
- Demand, below price. Price falls, pauses, and then rises away from the pause.
- Rally · base · rally
- Demand, below price. Price rises, pauses, and then keeps rising.
Finding one is a search backwards, not forwards. You start at current price, you look left — down and left for demand, up and left for supply — and you keep going until you find a move that left in a straight line. Then you mark the pause it left from. You do not cut through candles on the way, and you do not stop at the first thing that looks convenient.
Doing it in that order matters more than it sounds. Searching from the left forward means you already know how the story ended, and a zone chosen with the answer visible is not a zone.
03 / Timeframe
Which chart: the 15-minute for the zone, the 5-minute for the entry
A zone is drawn on one timeframe and traded on another, and the two jobs do not swap. On Nasdaq-100 futures I find and draw the zone on the 15-minute chart, and I take the entry on the 5-minute. The 15-minute is where the base and the move away from it are readable as one event; the 5-minute is where the return to the proximal line is readable candle by candle. Draw on the 5-minute alone and you get a smaller, noisier object that fails more often for reasons that have nothing to do with the method. Enter on the 15-minute alone and you are paying a 15-minute candle’s width of uncertainty for an entry that could have been priced to the tick.
The edges do not move when the timeframe does. A demand zone drawn from a 15-minute base has a proximal line at one price and a distal line at another, and those two prices are the same on the 5-minute chart, on the 1-minute chart and on a tick chart. What the lower timeframe adds is resolution on the way in, and its own, smaller zones inside the larger one — the course calls that the zone inside the zone — but nothing the 5-minute draws moves the two prices of the 15-minute zone it sits in. Each zone is graded on the chart it was drawn on, before price gets back, and the 15-minute grade does not get revised because the 5-minute candles look nervous.
Before the New York open the 15-minute zones are already on the chart, with the morning’s option-pressure levels beside them for context. From the open, the only chart that matters is the 5-minute, and the only question left is whether price reaches a line that was drawn hours earlier. The indicator, in its 5-minute and 15-minute edition, exists to hold that pairing on one chart — both timeframes’ zones, each with its own grade — so the higher timeframe’s zone and the lower timeframe’s entry are never on two screens.
04 / Distance
Proximal and distal: the two edges, and the distance between them
NQ tick
0.25 points
A zone has two edges because it has to answer two separate questions. The proximal line answers “where does this become live”. The distal line answers “at what price is the reason for this zone gone”. Collapse them into one line and you have a support level, which is a much weaker object — it tells you where to look, but it never tells you when to stop looking.
Where each line goes is a rule, not a feel, and it is the rule most drawings on the internet get backwards. The distal line sits at the extreme of the base, wick included — the lowest low of a demand base, the highest high of a supply base — because that is the last price the imbalance defended. The proximal line sits at the edge of the candle bodies — the highest open or close of a demand base, the lowest open or close of a supply base — because the bodies are where the orders actually sat, and a wick poking out toward price is a probe, not a shelf. Drawn that way, the band is narrower than the whole candle and the entry is later by the length of that wick, which is the point: the wick is the part of the base that was already rejected once.
You can check any drawing in one glance. Look at the base candle against the two lines: its wick should cross the proximal line, because the line sits on the body and the wick pokes through it, and it should touch the distal line without passing it, because the line sits on the wick’s own extreme. A band that swallows the whole candle, wicks and all, has its proximal line in the wrong place.
The distance between them is the zone height, and a height is only a real statement once it names the instrument. Nasdaq-100 futures move in ticks of 0.25 index points, so four ticks make one point: a band 12.00 points tall is 48 ticks tall. Gold futures move in ticks of 0.10, so a band the same 12.00 points tall is 120 ticks — two and a half times the number of ticks for the identical drawn height.
That is why nearly every distance quoted in general supply and demand material is useless the moment you put it on a futures contract. Most of that material was written for spot foreign exchange. On this site a distance always arrives as instrument, value, unit and tick size, and never as a bare number.
05 / State
Fresh, tested, traded through
A zone is not a permanent feature of the chart. It has a state, and that state changes the moment price interacts with it. Three words cover all of it.
- Fresh
- Price has not been back since the base was formed. Whatever was sitting there is, as far as the chart can tell you, still sitting there.
- Tested
- Price has returned at least once and traded inside the band. Some of what was there has been worked through. The zone still exists; it is simply not the same object it was before the visit.
- Traded through
- Price has gone past the distal line. The reason for the zone is gone, and I take it off the chart rather than keeping it as a level that used to matter. A zone that has been traded through is finished, and redrawing it is the most common way people talk themselves into a trade.
Schematic · a zone in the tested state · not a recorded session
Diagram only · no instrument, no price, no outcome claimed
06 / The grade
Why two zones are not the same decision
Draw zones properly for a week and you end up with a chart covered in them. That is the point at which most people stop improving, because the method as it is usually taught ends at “here is a zone” — and a chart with eleven zones on it is not more information than a chart with none. The question that actually matters is not is this a zone. It is is this zone worth the risk.
I answer that by grading every zone before I take it, out of seven, and by writing the grade down before the candle forms rather than reconstructing it afterwards. Four criteria feed the grade. Here is what each one asks.
- Strength
- How price left the zone. A move that leaves in a straight line says the level was genuinely out of balance; a move that drifts out says it was not.
- Time
- How long price stayed in the base before it left. A long pause and a short pause are not the same event, even when they produce the same shaped band.
- Freshness
- Whether price has been back since, and how far into the band it got when it did.
- Trend and location
- Where the zone sits in the larger structure, and whether acting on it means going with the dominant direction or against it.
That is the list, and this page goes no further. What each criterion is worth, how the four combine and what disqualifies a zone outright are not printed here and are not in the source of this page either. What the grade describes, what it cannot predict, and two graded zones with their outcomes are on the Zone Score page.
The output looks like this everywhere it appears — on the site, in the videos, on the end card. Filled segments, an unfilled remainder, and a number.
4 / 7
Example output
A grade is a description of a zone, not a prediction about a market. A high one is not a promise that anything will happen, and a low one is not a claim that it will not. What it does is make the decision comparable to the one I made yesterday, which is the only thing that makes a decision reviewable at all.
Get the free Zone Score checklist Watch the lessons → The indicator that prints this grade on the chart →
Two pages. Grade a zone with it in about ten seconds.
07 / Failure
When a zone does not hold
Zones fail. Well-drawn ones fail, and well-graded ones fail, and any page about this method that does not say so plainly is selling something. Price arrives at the proximal line, goes straight through the base, goes through the distal line as well, and keeps going. There is no interpretation left to do at that point: the reason for the zone was wrong, or it was right and something larger was happening.
This is the case worth studying hardest, because it is the only one that tells you anything you did not already believe. A zone that works confirms the drawing. A zone that fails tells you which part of the drawing you should not have trusted — and every criterion in the grade exists because of a specific way I have watched zones fail.
Schematic · a zone that did not hold · not a recorded session
Outcome · price traded through the distal line · the zone did not hold
I publish these. Not as a gesture — because a method you only ever see working is indistinguishable from a method that does not work, and the zones that failed are the ones I would want to see if I were reading someone else’s site.
08 / Instruments
The same rules, different units
The rules above do not change between instruments. What changes is the size of the smallest thing the instrument can do, and that changes everything downstream of it — how tall a band looks, how far away a distal line is, how much of a chart a base occupies.
Below is the arithmetic, not a recommendation. Each row is a contract specification, and the worked example is the same drawn height expressed in that instrument’s own units.
Minimum price increment by instrument
| Instrument | One tick | Ticks per unit | Worked example |
|---|---|---|---|
| Nasdaq-100 futuresNQ | 0.25index points | 4per 1.00 point | A band 12.00 points tall= 48 ticks |
| Gold futuresGC | 0.10per troy ounce | 10per 1.00 point | A band 12.00 points tall= 120 ticks |
| Spot EUR/USDfive-decimal feed | 0.00001per unit quoted | 10per 0.00010 | A band 0.00120 tall= 120 ticks |
Read the first two rows together and the trap is obvious. The same drawn band is 48 ticks on Nasdaq-100 futures and 120 ticks on gold. Any rule of thumb about how tall a zone should be, carried between them without conversion, is measuring nothing. It is also why I will not repeat a distance without naming the instrument beside it, and why you will not find the retail foreign exchange slang for a minimum increment anywhere on this site.
09 / Execution
Entry at the proximal, stop beyond the distal: what that costs in ticks on NQ and MNQ
NQ tick
5.00 US dollars
MNQ tick
0.50 US dollars
Everything above is drawing. This is the only part of execution the page will state, because it is arithmetic rather than method: where the two orders go, and what the distance between them is worth on the contract you are on. Where the target goes, and whether a given zone is taken at all, is what the grade and the course are for.
The entry references the proximal line. Whether it is taken as a resting order at the line or on a 5-minute candle that has already reached into the band is a choice the course teaches and this page does not; the price the decision is measured from is the proximal line either way, and it was on the chart before price arrived. The stop sits beyond the distal line — past the far edge by a buffer sized to the instrument in ticks, never at the extreme itself, because the market comes back and touches an extreme before it decides — so that the trade is closed at the price where the reason for the zone is gone and not a tick before. The distance between the two is the zone’s height plus that buffer, and that distance is what one contract costs you if the zone does not hold.
Then name the contract. The E-mini Nasdaq-100 (NQ) moves in ticks of 0.25 index points at 5.00 US dollars a tick, which is 20.00 US dollars per index point. The Micro E-mini (MNQ) moves in the same 0.25-point tick at 0.50 US dollars a tick, 2.00 per point — one tenth of the E-mini, on the same drawing, at the same prices. The zone does not know which one you are trading.
The same demand zone, one contract, on the E-mini and on the Micro
| Distance | In ticks | NQ, one contract | MNQ, one contract |
|---|---|---|---|
| Zone height, proximal to distal12.00 index points | 48ticks | 240.00US dollars | 24.00US dollars |
| Stop buffer beyond the distal1.00 index point, chosen for the example | 4ticks | 20.00US dollars | 2.00US dollars |
| Entry to stopwhat the zone costs if it fails | 52ticks | 260.00US dollars | 26.00US dollars |
Read the last row and the reason the Micro exists is obvious: the same zone, drawn to the same tick, can be practised at a tenth of the size without changing a single line on the chart. Commission is not in the table because it is the broker’s number and not the contract’s; add your round turn per contract to the last row before you call it the cost. If your terminal shows a Nasdaq CFD rather than NQ, none of these dollar figures apply — the platform guide works through what changes.
10 / Mistakes
Seven ways I have drawn a zone wrong
All seven of these supply and demand zone drawing mistakes are mine. Each one is in the list because I did it long enough for it to become a habit before I noticed.
- Marking the move, not the base
- The impulse is the evidence that a zone exists. The base is the zone. Drawing the band around the run is the single most common error and it puts both edges in the wrong place at once.
- Cutting through candles
- Searching backwards and letting the eye jump over a candle body to reach a nicer-looking base. If the search has to cut through price to get there, the base it lands on is not the origin of anything.
- Drawing it while price is inside it
- A zone marked at the moment you want to trade it is a rationalisation with two lines on it. The whole value of the method is that the decision exists before price arrives.
- Putting the proximal line on the wick
- A wick that pokes out toward price is not where the orders sat; the bodies are. Draw the near edge on the wick and every entry from that zone is early by the length of it. I published diagrams drawn that way for weeks before I caught it in my own videos, which is why the rule is now written down in section 04 and applied by a function in my own tools rather than by eye.
- Widening the band until it contains the entry you wanted
- Both edges are determined by the base. Moving the distal line to make a level feel safer does not make it safer — it just removes the price at which you would have known you were wrong.
- Keeping a zone price has already traded through
- Once the distal line is gone, the zone is finished. Leaving it on the chart as a level that used to work is how a clean chart turns into a wall of lines nobody can act on.
- Carrying a distance across instruments
- A minimum band height learned on spot foreign exchange, or on Nasdaq-100 futures, means nothing on gold until it has been converted. See the table in section 08.
11 / Lineage
Where this came from
I have studied supply and demand since 2013 — the framework that came off the exchange floor and was taught as a set of factors you grade a zone against before you risk anything on it. I studied that material; I hold no certification from it and I claim no endorsement by anyone who teaches it.
What I changed is on this page. The units are calibrated to futures instead of to spot foreign exchange, because I trade Nasdaq-100 and gold and the distances in the original material do not survive the move. And the grade goes on the chart before the trade rather than in a journal afterwards, which turns a feeling into something I can be held to.
12 / Next
Where to go from here
- If you want to know which zone deserves the risk
- The Zone Score is what the grade out of seven describes, what it cannot predict, and two graded zones from August with what happened next.
- If you want to grade your own zone
- Take the two-page checklist. It is the sheet I fill in, it is free, and it is the only place the scorecard itself lives.
- If you use the smart money vocabulary
- Demand zone vs order block vs FVG puts the same candles under all three conventions and works out what each one costs you in ticks, on the near edge and on the invalidation.
- If you want to see this on a live instrument
- Today’s levels carries the morning option-pressure levels for Nasdaq-100 and gold futures, in the units each contract actually trades in.
- If you want to know why those levels exist
- Gamma flip, call wall and put wall for NQ traders is the mechanism: option positioning, the hedge a dealer is forced to place, and why it prints in the futures market. Context for a zone, never a substitute for one.
- If you are starting from nothing
- The free lessons begin with candles and structure, which is what has to be readable before any of this is worth drawing.
- If you want the tooling
- What I have built for TradingView and MetaTrader 5, with the honest state of each one.
- If you are drawing these on Nasdaq-100 futures in MetaTrader 5
- How to trade NQ on MetaTrader 5 is the platform setup underneath all of this: why the chart will not open without an exchange data subscription, how to prove you are on the real CME contract rather than a CFD, and why the New York open lands at 16:30 on the chart.
- If you want to see these rules running, not described
- A virtual account running them, traded by my own automation, has been tracked by Darwinex Zero since June 2026. No figure from it appears on this site; read the record there. Charts open on desktop only.
- If you want the whole method rather than this one page
- The course where this is taught end to end takes the drawing, the four criteria, the cut-off and the drills in order. It is paid, and it is separate from every tool on this site.