What Is a Last Point of Demand

The last point of demand is a price action concept that represents the last level of demand before it gets violated by sellers pushing price past its low. This in turn creates a change of character, which represents the very first shift from bullish to bearish orderflow in a market.

This is an important thing to mark out on your chart when trading supply and demand because it can help you identify when price is starting to turn over, so you can start looking for trade setups that align with your trading plan in the market. 

The Origin of the Last Point of Demand: Wycoff Distributions 

The idea of last point of demand really originates from Wycoff distributions (bullish to bearish reversals, where you’re essentially waiting for the AR (Automatic Rally/Automatic Reaction), which is simply described as the trading range of the distribution or accumulation), gets violated. 

The only difference here is that we can be a bit more sensitive to the initial ChoCh, or shift in orderflow, and rather than waiting for a break out of the trading range, we can look for those first internal shifts, by identifying the last point of demand in a bullish market, and waiting until it fails.

How To Trade The Last Point of Demand

Attempting to enter a trade every time the last point of demand fails in a bullish market is a recipe for disaster, so again, this is really more of a concept that can be used to identify when orderflow is starting to shift over, but there is no guarantee that shift is going to sustain itself and develop into a full-on reversal.

Using the concept of last point of demand failures to catch reversals should be a component of your larger overarching trade plan with respect to your specific entry models and risk management rules. 

At Phantom Trading we often use this concept, alongside identifying the last point of supply in bearish to bullish reversal scenarios, but within the context of market structure, orderflow, and with liquidity pools taken into consideration. If you’re wondering how to apply these principles of price action within your own trading, and are interested in learning how to trade supply and demand, we suggest enrolling in our forex trading course, and immersing yourself in our trading community!

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Robert Castillo
FX Trader & Analyst
Writer & Editor

Rob is a funded trader from Toronto, Canada, and has been trading currencies, commodities, stocks, and cryptocurrencies for over 7 years. Outside of trading, he enjoys making music, boxing, and riding motorcycles.