Another example of:
1) Drop- Base- Rally
2) Rally-Base-Drop
3) Rally-Base-Rally
4) Drop-Base-Drop
Supply and demand levels work the same in point and figure as they do in other styles of charts. Look for an area where trend reversed strongly. Your typical rally-base-drop or drop-base-rally would do just fine. You should look to buy or sell when you receive...
Price Structure
There are four common structures that are used to identify supply & demand levels on forex charts:
1) Drop- Base- Rally
2) Rally-Base-Drop
3) Rally-Base-Rally
4) Drop-Base-Drop
We now know that supply and demand are fundamental driver of price.
Now lets look it into simple context to better understand how supply exceeds demand.