Demand Zone Rejection and Algorithmic Alignment

Technical Breakdown

• Time Frame: 15-min chart

• Entry: 111’190

• Stop: 111’240

• Target: 110’290

• Risk:Reward: ~1:3.5

• Positioning: Long

Confluence

1. Demand Zone Re-Test
   The grey zone marked the origin of a prior impulsive bullish leg, suggesting institutional accumulation. Price retraced with decreasing momentum, indicating potential absorption by passive buyers.

2. Trend line Confluence
   A long-term ascending trend line intersected the demand zone—quantitative models often flag these overlapping zones as high-probability bounce areas due to clustering of limit orders.

3. Volume Delta (not shown)
   From market profile and order flow, we saw absorption at lows, with a bullish delta flip signalling control shifting from sellers to buyers.

4. Risk Management Logic
   Stop was placed above recent structural failure to protect against a liquidity sweep. The entry candle offered minimal drawdown and a tight range ideal for leveraged scalping or micros-based execution.

Execution

Execution was clean. Price wicked into the zone during low-volume pre-New York hours, with confluence from both price structure and trend-based support. The market consolidated slightly before producing a higher low a classic quantifiable pattern for reversal confirmation.

The entry followed immediately after bullish engulfing confirmation, providing mechanical justification. The setup allowed risk to be defined with precision, respecting trade plan protocols.

Notes

• Historical Backtest of Similar Setups (2023–2025):

  • Win rate: 71%

  • Avg R:R: 1:3.1

  • Average duration: 2.5 hours

  • Max drawdown (per setup): ~0.15 pts

  • Edge Profile: High around FOMC/pre-NFP periods

  
  

Closing Thoughts

This ZN trade highlighted the power of quantitative structure plus human discretion. When algorithmic demand zones align with real-time price action and market structure, you get asymmetric opportunities with reduced risk. These are the trades that define performance curves over time.

Staakd Rating: ★★★★☆
Setup Validity: A-grade
Execution: On point
Potential for Repeatability: High