Supply & Demand Trading

Trade From the Source of Price Movement

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Introduction: What Is Supply & Demand Trading?

Every price movement in every market begins at a single point: the moment when the balance between buyers and sellers becomes overwhelmingly unequal. Supply and Demand trading is the discipline of identifying those exact price levels where institutional participants - banks, hedge funds, pension funds, and central banks - placed orders so massive that they could not be filled in a single pass. When price returns to these levels, the remaining unfilled orders activate, and price reacts again.

This methodology was popularized by Sam Seiden, a former floor trader at the Chicago Mercantile Exchange. Seiden observed firsthand how institutional order flow moved markets. He watched as billion-dollar orders from banks and funds were placed at specific price levels, and he saw what happened when price returned to those levels days, weeks, or even months later: the unfilled portions of those orders would trigger, pushing price in the same direction as the original move.

The core principle is deceptively simple: price moves away from a level because of an imbalance between buyers and sellers, and when price returns to that level, the same imbalance is likely still present. The orders that caused the original move did not all get filled. They are sitting there, waiting.