supply and demand zones - still working for you in 2026?
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ive been trading supply/demand zones for 3 years. used to be incredibly reliable on 4H and daily. lately ive noticed:
- zones get tagged and reverse but with much shallower retracements
- 'fresh' zones (untested) seem less reliable than year ago
- HTF zones still respect but LTF (15m, 5m) zones feel almost dead
starting to think algos have learned to fade these zones differently. anyone else seeing the same? or is my edge just getting old?
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yeah LTF zones are nearly worthless now. anything below 1H is just noise. but daily and weekly zones still hold pretty well. and order block style entries (look for the candle that caused the move, enter on retest) are still solid imo.
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shifted my whole strategy from zones-only to 'zones as context for confluence with other factors'. zone alone = no longer enough. zone + diverging momentum + session timing = still has edge.
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classic SR uses prior swing highs/lows. supply/demand zones look at the base before a strong impulse (a consolidation that broke out hard). theory is that level had unfilled orders that may still react when price returns. in practice they overlap heavily and the distinction is less important than the concept of 'price reactive levels'.
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data point: backtested my zone strategy across 2020-2025. annual edge was clearly trending down. 2020: 12% annualized edge above buy-hold. 2025: 4%. strategies decay. the answer isnt to abandon, its to evolve - add filters, add confluence, reduce trade frequency.
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the key is HTF only. anyone trying to scalp 5m zones is fighting machines that already mapped your level. zoom out. patience.