Traditional traffic signal timing theory default the number of vehicles through the stop line per unit time as traffic demand. The traditional traffic demand definition obviously cannot respond the real traffic demand when the intersection is oversaturated. The main objective of this paper includes the following contents: (1) to analyze the defects of the traditional traffic demand definition; (2) to strictly define the concept of traffic demand. To achieve the research objective, researchers propose the “traffic demand in cycle” definition: the summation of the standard vehicles queuing during the red light time and the standard vehicles reaching the effective demand region during the non-red light time. The new definition introduces the concept of “effective demand areas”, referring to the areas follow-up vehicles slow down affected by the vehicles that haven’t pass the stop line. The new definition developed in the study can be directly used by traffic engineers and managers to signal timing.