Home / Blog / The Difference Between Fresh and Original Levels

The Difference Between Fresh and Original Levels

1257 Views

To trade supply and demand strategy, we look for a few factors to help us determine whether the zone has high probability of success or not. Because we want to stack the odds in our favor, we only trade supply and demand zones that are fresh. Beside the freshness of the zone, there is another type of levels called orginal level.

In this article, I will explain the difference between fresh and original levels in trading supply and demand. I’ll also show you how you can determine these levels following a few steps.

Fresh and original levels

A fresh level is a supply or demand zone that price has not tested yet. When we trade supply and demand strategy, we focus on trading fresh levels. These levels have a high probability of success as more unfilled orders are still waiting for price to retrace back to the zone and fill them.

An original level is a supply or demand zone that is created out of nowhere. If the supply or demand zone is a reaction of a previous opposing supply or demand zone, the zone is not considered original.

An original level can also be fresh. The freshness of a level depends on whether price returns to the level or not. To be an original level, the zone has to appear from nowhere and not be a reaction to a previous zone.

How to determine a fresh level?

Here’s how we can determine whether the supply or demand zone is fresh or not:

  1. we start by identify the supply or demand zone we want to trade,
  2. we look right to see if price has or has not retraced back to the zone,
  3. if price has not retraced back to the proximal line, it’s a fresh level,
  4. if price has retraced back to the proximal line, it’s not a fresh level,

On the chart below, both demand zones are not considered fresh levels because price has retraced back to test the proximal line of each demand zone.

The red circles represent the test as price retraced back to the proximal lines. Therefore, the demand zones are not fresh levels to trade anymore.

fresh and original levels

The next chart shows both fresh and non-fresh levels. When we identify the zone we look right to see if price has touched the proximal line. The supply zones on top are fresh zones because price has not touched the proximal lines yet.

These fresh supply zones have high probability of success if price retraces back up to test them.

The next supply zone in the middle is not fresh anymore as price has returned and touched the proximal line of the supply zone.

The last one is a non-fresh demand zone because price retraced back down and tested it. Once price touches the proximal line, the zone is no longer considered fresh.

fresh and original levels

How to determine an original level?

To find out if the supply or demand zone is original or not:

  1. we start by identifying the supply or demand zone we want to trade,
  2. we look left until we touch a candle; we are not allowed to cut through candles, we stop at the first candle we touch,
  3. if the candle is part of a previous supply or demand zone, the level is not original,
  4. if the candle is not part of a previous zone, the level is original,

The example below shows an original level. We identified the demand zone by drawing the proximal and distal lines around the base. Then we look left to find out whether the zone is original or not. The first candle we touch is not part of a previous supply or demand zone. Therefore, the zone is original.

fresh and original levels

On the next chart, we have an original demand zone. We look left and we stop at the first candle we touch. We don’t cut through candles. The candle we found is also not part of a previous supply or demand zone, therefore, the demand zone is considered original.

fresh and original levels

Notice how the demand zone is original and not fresh. Price has already returned to test the zone and touched the proximal line.

Conclusion

To trade supply and demand strategy, you have to know the difference between fresh and original levels. The fresh level is a level that price has not tested yet. Whereas an original level is created out of the blue and is not a reaction to a previous opposing supply or demand zone.

To assess the freshness of the level, you need to look to the right and see if price has touched the proximal line. If so, the zone is not fresh.

To see if the level is original, you need to look to the left side and stop at the first candle you touch. If the candle is part of a previous supply or demand zone, it’s not original. If the candle is not part of a previous zone, the level is considered original.

  • Facebook
  • Twitter
  • Buffer
  • stumbleupon
  • Reddit

1 Comments

Leave a Comment

This div height required for enabling the sticky sidebar
error: Content is protected !!
We use cookies in order to give you the best possible experience on our website. By continuing to use this site, you agree to our use of cookies.
Accept
Reject