The dark background of the supply and demand zones in crypto trading

When I entered the world of crypto, everyone talked about technical analysis as if it were the panacea. The famous "supply and demand zones" seemed to me just another trick to make newbies believe they could predict the market. But there they are, those consolidation areas that appear before significant movements, tempting you with promises of easy gains.

The "experts" tell you that these zones indicate reversals or trend continuations, and we, like sheep, follow them hoping to get rich. What a trap! In reality, the market is manipulated by whales and large institutions that create these artificial patterns.

The harsh reality of supply and demand

In our little world, supply is the number of desperate sellers looking to get rid of their coins, while demand represents eager buyers who fear missing out on the next rise. Simple, right? We buy when prices are in the basement (excess sellers) and sell when they are through the roof (crazy buyers).

But let's be honest, identifying these zones is a subjective art. We all see green and red candles, but interpreting them correctly is another story. How many times have I thought I saw a "perfect demand zone" only to see my investment plummet minutes later!

Impulse waves are death traps

The so-called "impulse waves" with their enormous green or red candles have made me lose more money than I would like to admit. These waves supposedly indicate an imbalance between buyers and sellers, but in my experience, they are often just maneuvers by big players who want to liquidate small traders like me.

I have seen too many times how those beautiful green ascending candles turn into brutal collapses as soon as I enter the market. Coincidence? I don't think so.

Patterns that only work in hindsight

Analysts talk about reversal and continuation patterns as if they were exact science. "Descending base rally", "Base rally drop"... Pompous names for something that, honestly, is only clear once it has already happened.

How many times have I identified a "perfect pattern" only for the market to do exactly the opposite? Too many. And no one talks about this in the trading courses that are so heavily promoted.

The brutal truth about finding these zones

Imbalances are supposed to create identifiable zones. Large candles, long bodies, short wicks... But in real life, the market is chaotic and rarely follows these neatly ordered patterns.

And just when you finally think you understand it, an unexpected news story or a tweet from some eccentric billionaire appears, and all your technical analysis goes down the drain. What good is it to identify supply and demand zones if any external event can destroy your strategy in seconds?

The risks that no one mentions

False breakouts have ruined more than one of my trades. The price breaks a zone, you enter confidently, and suddenly it changes direction as if it had seen you enter. It's almost personal.

And let's not even talk about how news can obliterate any technical analysis. You can have the most perfect demand zone in the world, but if some country decides to ban cryptos, get ready to see your investment evaporate.

My advice to avoid ending up broke

If you are going to get into this dangerous game, never, ever rely solely on supply and demand zones. Combine different strategies, use strict stops, and above all, do not invest what you cannot afford to lose.

I have seen too many colleagues fall victim to strategies based solely on these zones, believing they had discovered the Holy Grail of trading.

Crypto trading is not for the faint of heart. You enter thinking you're going to get rich quickly, and you end up learning painful lessons about risk management. Those nice colored zones on the charts look so clear... until you put your money on the line.