Method · Zonetta Trading · last reviewed 7 September 2026
Demand zone vs order block vs FVG, explained
They usually mark the same candles. An order block names the candle the move left from, a fair value gap names the imbalance the move left behind, and a demand zone names the pause the move began at. What genuinely differs is where you put the edge, and which price proves you wrong.
01 / The short answer
Mostly the same object, described by three vocabularies
If you put three traders in front of the same fifteen-minute Nasdaq-100 chart and ask them to mark where a move started, the one who trades order blocks, the one who trades fair value gaps and the one who draws supply and demand zones will point at roughly the same place. They will then draw three different rectangles around it, and defend the difference with three different explanations.
The explanations are worth less than people think. The rectangles are worth more, because the rectangle is what you actually trade — its top edge decides where price first touches you, and its far edge decides the price at which you were wrong. Those two numbers are different under each convention, they are measurable in ticks, and almost nobody writes them down. Section 06 does.
The three terms, side by side
| Term | What it names | Where the vocabulary comes from | Defined by |
|---|---|---|---|
| Order blockOB | The last opposite-direction candle before a strong move | Smart money concepts | One candle, chosen by a rule |
| Fair value gapFVG · imbalance | The price range the move skipped over | Smart money concepts | Three candles, compared mechanically |
| Supply or demand zoneS&D | The pause the move departed from | Supply and demand, off the exchange floor | The base, however many candles it took |
This page does not re-teach what a zone is or how to draw one. That is the method page, and it is worth reading first if the words base, proximal and distal are new. Here I am only comparing conventions.
02 / Definitions
What each camp actually says
Stated the way each camp states it, without the editorialising. If you already know all three, skip to section 03.
- Order block
- The last down candle before a strong move up is a bullish order block; the last up candle before a strong move down is a bearish order block. The reasoning is that a large participant absorbed the other side there, and the candle that got absorbed marks the price they did it at. The rectangle is drawn on that one candle — some mark only the body, some include the wick. The move away is required to be violent; the usual word for that is displacement.
- Fair value gap
- Read three candles in sequence. If the high of the first is below the low of the third, the price range between them is a gap the middle candle jumped straight over — a range where trade happened in one direction only. That range is the fair value gap. It is drawn as a rectangle between those two prices, and it is described as unfinished business that price will often revisit. Note that this definition needs no judgement at all: it is three numbers and one comparison.
- Supply or demand zone
- Price paused, and then left the pause in a straight line. The pause is the base, and the band drawn around the base is the zone. The claim is that supply and demand were furthest out of balance at the pause, and that some of what caused the imbalance may still be there when price returns. The band has a near edge, the proximal line, and a far edge, the distal line, and both are decided before price comes back.
Read them together and the family resemblance is obvious. All three are answering the same question — where did this move come from, and is anything still sitting there — and all three answer it by drawing a rectangle at the origin of a move rather than at the place price happened to turn.
03 / Overlap
The same candles, marked twice
Below is one sequence, drawn twice. Same candles in both figures, same coordinates, nothing moved. The first marks it the way an order block and fair value gap trader would. The second marks it the way I would. This is the honest part of the comparison, and it is the part the vendor explainers skip: the disagreement is small and it is entirely about edges.
Schematic · 1 of 2 · marked as order block and fair value gap · not a recorded session
Diagram only · no instrument, no price, no outcome claimed
Schematic · 2 of 2 · the identical candles marked as a demand zone · not a recorded session
Diagram only · no instrument, no price, no outcome claimed
Put the two figures on top of each other and the whole argument is visible. Three conventions, one origin, and no two of them agreeing on both at what price does this become live and at what price is it over — the zone shares its near edge with the body-only block and its far edge with the wick-inclusive one, and agrees with neither on both. Everything else — the story about who was absorbing whom, the language about institutional footprints — is narrative around the same rectangle.
I am not saying the narrative is worthless. A reason you believe makes you hold a plan you would otherwise abandon at the first uncomfortable candle. I am saying the narrative is not what differs between these three, so it cannot be what decides between them.
04 / A different question
And how all three differ from support and resistance
This one gets asked in the same breath and it is not the same question, because support and resistance is built from a different kind of evidence.
A support line is drawn where price has already turned, usually more than once. It is a record of an effect. A zone, an order block and a fair value gap are all drawn at the origin of a move, before price returns — they are a claim about a cause. That is the real split, and it is why the three terms on this page belong in one family and support and resistance belongs in another.
There is also a disagreement here that is worth stating plainly, because it is testable and the two camps genuinely land on opposite sides of it. In the usual support and resistance telling, a level that has been touched several times is stronger for having been touched. In the way I was taught, a zone that has been visited is weaker for having been visited, because part of whatever was sitting there has been worked through. Both cannot be right about the same band of price. I hold the second view and I have held it for a long time, but I would rather you knew it was a position than think it was a fact.
The practical consequence is small and specific. A support line gives you one price. A zone gives you two, and the second one is the one that tells you when to stop looking.
05 / The real differences
Where the edge goes, and what kills it
Two questions separate these conventions, and only two. Where does the rectangle start and stop, and what has to happen for it to be finished. Here they are with the hedging removed.
Boundary and invalidation by convention
| Convention | Upper edge | Lower edge | Treated as finished when |
|---|---|---|---|
| Order block, body only | Open of the origin candle | Close of the origin candle | Price closes beyond the body, or the structure that justified it breaks |
| Order block, wick included | High of the origin candle | Low of the origin candle | Price trades beyond the wick |
| Fair value gap | Low of the third candle | High of the first candle | The gap is fully traded through — it stops being a gap |
| Demand or supply zone | Proximal line, at the body edge of the base nearest price | Distal line, at the base’s extreme, wick included | Price trades past the distal line |
Three things fall out of that table and they are the whole of it.
- Only the gap has no discretion in it
- Three candles, one comparison, and every trader who applies the rule gets the identical rectangle. A base is a judgement call — two people looking at the same four candles will disagree about where the pause started — and a “last opposite candle” rule is only mechanical while the base is exactly one candle long. When the pause takes four candles, the order block rule has to pick one of them, and the pick is a judgement wearing a rule’s clothes. I do not have a good answer to this. It is the strongest thing the newer vocabulary brought.
- Body and wick are two claims, not two styles
- Body-only says the meaningful trade is where the candle opened and closed. Wick-inclusive says the meaningful trade is everywhere price actually went. Both are arguable. What is not arguable is that they produce different invalidation prices, and section 06 puts a tick count on the gap between them.
- Two of the four say when you were wrong
- The zone has the distal line and the wick-inclusive order block has the wick. Body-only marking has to import a separate structure rule to answer it, and the fair value gap answers a different question entirely: a filled gap is not a failed idea, it is a completed one.
06 / In ticks
What choosing one actually costs you
NQ tick
0.25 points
GC tick
0.10
This is the part everyone skips, and it is the only part that changes what you do on Monday. Below is one worked example on Nasdaq-100 futures. The prices are illustrative and chosen to be easy to check — this is arithmetic, not a recorded session and not a signal.
Take an origin candle with a high of 20,142.00, a low of 20,118.00, an open of 20,138.50 and a close of 20,124.00. Two candles later the market has run away upward and the low of that third candle is 20,148.00, so there is a gap from 20,142.00 to 20,148.00. One sequence, four conventions, four rectangles — and the demand zone’s is the one that takes an edge from each of the two order block rules, which is the most interesting line in the table.
Worked example · Nasdaq-100 futures · illustrative prices, not a recorded session
| Convention | First price touched | Price that ends it | Height of the rectangle |
|---|---|---|---|
| Fair value gap | 20,148.00index points | 20,142.00gap filled | 6.00 points= 24 ticks |
| Order block, wick included | 20,142.00index points | 20,118.00below the wick | 24.00 points= 96 ticks |
| Order block, body only | 20,138.50index points | 20,124.00below the body | 14.50 points= 58 ticks |
| Demand zone, body edge to extreme | 20,138.50proximal · the body edge | 20,118.00distal · the low, wick included | 20.50 points= 82 ticks |
No two of those four rows are the same, and the demand zone is the reason. It takes its near edge from the body — the same 20,138.50 as the body-only order block — and its far edge from the wick — the same 20,118.00 as the wick-inclusive one. That is not a blend of the two conventions; it is the rule on the method page, proximal at the body edge and distal at the extreme, applied to a base that happens to be one candle long. Let the pause take three or four candles instead and the difference from both order block rules grows: the zone takes the highest body edge and the lowest wick across the whole pause, while the order block rule has to pick one candle out of it. Section 05 is the reason I keep coming back to that — the pick is a judgement wearing a rule’s clothes, and this worked example is deliberately the one arrangement in which it is not.
Read the first column down. The four conventions have you engaged at 20,148.00, 20,142.00, 20,138.50 and 20,138.50. Top to bottom that is 9.50 index points, which on Nasdaq-100 futures is 38 ticks. That is not a rounding difference. It is the whole reason two traders watching the same chart can tell you one of them was filled and the other was never touched, and both be telling the truth.
Now read the second column. The price at which the idea is over is 20,142.00, 20,118.00, 20,124.00 and 20,118.00. From the highest of those to the lowest is 24.00 index points, which is 96 ticks. If you size a position from the distance to your invalidation — and you should be sizing it from something — then the convention you picked has already changed how big that position is, before you have formed a single opinion about the market.
The same arithmetic on gold futures gives a different set of numbers for the identical drawing, because gold moves in ticks of 0.10 per troy ounce rather than 0.25 index points. A rectangle 24.00 points tall is 96 ticks on Nasdaq-100 futures and 240 ticks on gold futures. Any rule of thumb about how tall an order block or a zone should be, carried between instruments without conversion, is measuring nothing at all. This is also why you will not find the retail foreign exchange slang for a minimum increment anywhere on this site.
None of these numbers is an argument that one convention performs better than another. They are the cost of the choice, stated in the unit the contract trades in. Knowing what your convention costs you is a separate thing from knowing whether it works, and only the first one is knowable from a diagram.
07 / My position
What I do, and the honest case for it
I have been drawing these since 2013, in the supply and demand lineage that came off the exchange floor. I want to be exact about what that entitles me to say, because “I have done this a long time” is the weakest argument in trading and I do not want to lean on it. It does not make me right. What it means is that I was marking bases and drawing both of their edges before I had ever heard the words order block or fair value gap — so when those words arrived, I could see clearly which parts were new and which parts were the thing I already did, renamed.
Most of it was the thing I already did, renamed. Some of it was not, and that part is better than what I had.
What the newer vocabulary got right
- The fair value gap is objective
- Three candles and one comparison, no discretion anywhere in it. My base is a judgement, and every judgement is a place where I can talk myself into something. That is a real advantage and I am not going to pretend otherwise.
- Displacement is a gate, not a grade
- Order block practice refuses to mark anything unless the move away was violent. I ask the same question — how did price leave — but I ask it as one input among several. Making it a hard filter throws away good setups and it also throws away a great many bad ones, and I can see the case.
- A body-only mark defines risk tightly
- If you are sizing from the distance to invalidation, 58 ticks and 96 ticks are not the same trade. A body-only mark puts invalidation 58 ticks from the near edge where a wick-inclusive mark puts it 96, and the zone, at 82, sits between them, so the same risk budget produces a different position size. That is arithmetic rather than taste — and it is a cost you are choosing, not evidence that either convention performs better. The tighter rectangle is also the one price is more often through.
Where I still do it differently
- I mark the pause, not a candle
- The claim behind all of this is that supply and demand were out of balance somewhere. The pause is that somewhere. “The last opposite-direction candle” is a proxy for it — a good proxy when the pause happens to be one candle long, and an arbitrary one when the pause took four. I would rather draw the thing than the proxy, and accept the discretion that costs me.
- I keep the far wick inside the rectangle, and the near one out
- A wick is price that traded. If I am asking “at what price was I simply wrong about this”, the answer cannot be a price the market already visited while the base was forming. So the distal line sits at the extreme, wick included. The near edge is a different question — where does this become live — and there a wick poking out toward price is a probe the market already rejected while the base was forming, so the proximal line sits at the edge of the bodies, exactly where the body-only rule puts it. One edge from each, and each for its own reason.
- The far edge is where I was wrong
- Not where I get out. Those are different questions, and collapsing them is how a stop turns into a negotiation. The distal line exists so that the answer to “is this idea dead” is a price rather than a feeling.
- It has to survive changing instruments
- I trade Nasdaq-100 and gold futures. Any rule calibrated to how one contract’s candles happen to look will not transfer, and a great deal of published material on all three of these conventions was written for spot foreign exchange and never converted. Marking the base rather than a candle-shape rule is partly a choice about portability.
- A gap is evidence, not a destination
- A fair value gap in the departure tells me the move left in a hurry, which is information about how out of balance the origin was. So I read it as a fact about the base rather than as a separate place to trade. That is an opinion and I am flagging it as one — plenty of people trade the gap directly and do it well.
And the part that matters more than any of the above: all four of these conventions fail, and they fail often. I have watched a well-marked order block, a clean fair value gap and a properly drawn demand zone all fail on the same candle in the same session, because they were all pointing at the same place and the market went through it. None of this is a system. It is a way of deciding in advance where you will pay attention, which is worth having and is not the same thing as an edge.
So the practical recommendation is smaller than the argument. If you already trade order blocks and it fits how you think, nothing on this page is a reason to switch, and switching conventions mid-stride is how people end up with no convention at all. Pick one, write down its two edges before price arrives, and never widen the rectangle to contain a trade you had already decided to take. That last sentence is the only rule on this page I would defend against anyone.
Get the free Zone Score checklist How I draw a zone →
Two pages. It is the sheet I fill in before I risk anything on a zone.
08 / Straight answers
The questions people actually type
- Are order blocks and supply and demand the same thing?
- Not identical, but closer than either camp usually admits. They mark the same region of the chart for a similar reason. The differences are the boundary rule and the invalidation rule, and both are in section 05.
- Which one should I learn first?
- Whichever one you will apply the same way twice. The consistency is doing more work here than the choice is. If you have no preference at all, the fair value gap is the easiest to apply without fooling yourself, because there is nothing in it to fool yourself with.
- Can I use more than one at once?
- You can, and most of the time they will point at the same candles anyway. What you must not do is switch between them after price arrives — picking whichever rectangle currently contains the trade you want is not confluence, it is three chances to be talked into something.
- Is a demand zone just support with extra steps?
- No, and section 04 is the long version. Support records where price already turned; a zone is marked at the origin of a move before price returns, and it has a second edge that tells you when the idea is finished.
- Why does this page not tell me which one wins?
- Because I would have to show you a result, and there is no result on this site. No win rates, no returns, no account curves — not here, not in a video, not on a thumbnail. What I can give you honestly is the arithmetic of what each convention costs in ticks, and my reasoning, and both are above.
09 / Next
Where to go from here
- If you want the drawing itself
- The method page is the base, the proximal and distal lines, the four origin shapes, and seven ways I have drawn a zone wrong.
- If you want to grade a zone before you take it
- The free checklist is two pages, no upsell. It is what turns “this is a zone” into “this zone is worth the risk”, which is the question none of these three vocabularies answers on its own.
- 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 are starting from nothing
- The free lessons start with candles and structure, which has to be readable before any rectangle you draw means anything.
- If you want the convention taught in order rather than compared
- Zonetta Supply and Demand is my own method end to end — the drawing, the four criteria and the cut-off. It is paid, and it is separate from the tools.