How to Draw Supply and Demand Zones: RBR, DBD, RBD and DBR Patterns
Lesson 2 of 8 · Beginner
What is a base candle?
Before drawing any zone you need to recognize the base. A base is one or more candles with a small body relative to their full range, meaning the market did not make a decisive choice during that time. One common convention is to call a candle a base candle if its body is less than about half of its total length (high to low). That number is not a law of the market; it is a convention that makes your decisions consistent, and you can vary it in your own testing.
By contrast, a leg candle (or momentum candle) has a large body and short wicks, showing one side has taken control. A zone is built from putting these two candle types side by side: move, pause, move.
The number of base candles matters as well. A base of one to a few candles is usually interpreted more cleanly. When the base becomes very long (dozens of candles), you are no longer looking at a brief pause but at a trading range, which has different logic.
The four core patterns: continuation and reversal
Based on the direction of the leg-in and the leg-out there are four combinations. The letters come from Rally (an upward move), Drop (a downward move) and Base:
| Pattern | Structure | Zone type | Pattern type |
| RBR | Rally, base, rally | Demand | Continuation |
| DBR | Drop, base, rally | Demand | Reversal |
| DBD | Drop, base, drop | Supply | Continuation |
| RBD | Rally, base, drop | Supply | Reversal |
A simple rule to remember: the leg-out decides the zone type. If price rose from the base, it is a demand zone; if it fell, a supply zone. The leg-in only tells you whether the pattern continues the trend or reverses it.
Continuation patterns (RBR and DBD) form in the middle of a trend and show the trend resuming after a short rest. Reversal patterns (DBR and RBD) appear at the end of a move and mark a change of direction. Reversals are more attractive because they sit near highs and lows, but since they go against the preceding move, misreading them is also more common.
Proximal and distal lines
Every zone has two boundaries:
- Proximal line: the line closer to current price, the one price reaches first on a return.
- Distal line: the line farther from current price, usually treated as the invalidation boundary of the zone.
For a demand zone, the proximal line is usually the highest body of the base candles, and the distal line is the lowest point (wick) of the base or of the whole pattern. For a supply zone it is the reverse: the proximal line is the lowest body of the base and the distal line is the highest wick.
There are two common drawing methods:
- Body to wick: the proximal line on the bodies, the distal line on the farthest wick. The zone is narrower and more precise.
- Wick to wick: both boundaries on wicks. The zone is wider, so price is less likely to turn before reaching it, but the stop is bigger too.
In reversal patterns (DBR and RBD), the farthest point is usually in the base itself or in the candles around it, so put the distal line on the farthest wick of the whole structure. In continuation patterns, the distal line is usually the farthest wick of the base itself.
A complete gold example
The numbers in this example are hypothetical and for teaching only. Suppose that on the 4-hour XAUUSD chart this happened:
- Price fell in three bearish candles from 4,090 to 4,040 (the drop).
- Two small candles printed: the first with a body between 4,046 and 4,042 and a low of 4,036; the second with a body between 4,044 and 4,047 and a low of 4,039 (the base).
- Then a large bullish candle went to 4,082 and the next to 4,101 (the rally).
This structure is a DBR, so we have a reversal demand zone. With the body-to-wick method, the proximal line is the highest base body, 4,047, and the distal line is the lowest wick, 4,036. The demand zone is therefore 4,036 to 4,047, about eleven dollars wide.
Now ask a control question: was the leg-out really strong? Here price moved away from the base by roughly 55 dollars in two candles and also took out the previous high of 4,090. That is what makes the zone noteworthy. If the rally had only reached 4,060 and turned, the range would not have been worth marking.
Practical drawing tips
- Extend the zone to the right of the chart for as long as price has not returned to it. That way only fresh zones remain on your chart.
- If a zone is very wide relative to the normal volatility of that timeframe, refine it on a lower timeframe (explained in the multi-timeframe lesson).
- For gold, allow for broker spread and price differences between brokers; do not treat boundaries as millimeter-precise.
- Write your drawing rules before testing and do not change them. The biggest risk in this style is drawing zones after seeing the outcome.
Whichever drawing method you choose, consistency matters more than precision. If you draw body to wick one day and wick to wick the next, you can no longer compare results.
Common mistakes
- Determining the zone type from the leg-in; the leg-out decides the type.
- Counting a long ranging area as the base of a zone.
- Switching the drawing method (body or wick) from one trade to the next.
- Drawing a zone where the leg-out is weak and has not even broken a prior high or low.
- Ignoring gold's spread and expecting an exact touch of the proximal line.
What does volume say here?
When you mark the base, the volume profile of that same window can tell you whether any real trading took place there. If the point of control (POC) or a high volume node (HVN) sits inside the base, participants spent time and built positions, which is exactly what the “unfilled orders” logic assumes. If the base is just one or two thin candles with negligible volume and the profile shows a low volume node (LVN) there, you are probably looking at a fleeting pause.
Delta is useful in the leg-out too: a rally accompanied by positive delta and rising volume is a sign of genuine aggressive buying, while a rally on low volume may just be an absence of sellers. A low-volume base can still react well, though, because price moves quickly through an LVN and may come back to the next HVN. The point is that none of these signs is enough alone, and for XAUUSD you should take volume data from GC futures and align it with the basis; CFD volume is tick volume.
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Frequently asked questions
What is the maximum number of base candles?
There is no scientifically fixed number. Many traders prefer short bases, roughly one to six candles, because they signal a fast imbalance. Whatever number you choose, write it down and keep it fixed.
Are continuation zones better than reversal zones?
Neither is inherently better. Continuation zones go with the trend, while reversal zones offer a better entry near highs and lows but carry more error. Only testing your own rules on gold data can decide.
Should I put the distal line exactly on the wick or leave some room?
The distal line of the zone itself sits on the farthest wick. Extra room for spread and volatility belongs to the stop placement, not the zone boundary; that is covered in the entry and stop lesson.
Education only, not a recommendation to buy or sell; we never give signals. Price examples are illustrative. Test any method on a demo account first, with strict risk management.