There are lot of information and threads about S/D in FF. However , I find posts by Gilamonster in thread Price Action made simple with Supply and Demand levels easy and clear to understand.
With Gilamonster's permission , I would like to re-post his posts in new thread so everyone can benefit.
My purpose for this thread is very simple. I want to improve my way to trade S/D , so I will prepare charts every day and hopefully can get feedback from other traders.
I'll get all points about S/D from Gilamonster's posts and post here . However it will take time to complete it.
So below are some posts by Gilamonster.
Let me see if I can help:
With Gilamonster's permission , I would like to re-post his posts in new thread so everyone can benefit.
My purpose for this thread is very simple. I want to improve my way to trade S/D , so I will prepare charts every day and hopefully can get feedback from other traders.
I'll get all points about S/D from Gilamonster's posts and post here . However it will take time to complete it.
So below are some posts by Gilamonster.
Fine Tuning Line Placement
- Has to have a Leg-in, Base, Leg-out( a "leg" is a large candle with more than 50% of the whole range [meaning shorter wicks] the "base" is a candle with 50% or less than the range [meaning longer wicks] can have one candle)
- For "demand" or "supply" trades start at current price on your 1hr chart
- Look left and up for fresh supply, or left and down for fresh demand
- Leg candles have to be exciting(explosive especially the leg-out) usually very large candle
- Base candles are going to be boring and have no direction and price is not moving around much
- Once you find these candles, Draw a vertical line straight thorough the leg-in and leg-out
- Make sure leg-out is explosive, BE PICKY!
- Now calculate the range in the base, (Highest candle wick - the Lowest candle wick )
- Then calculate the (Highest Body High - Lowest Body Low)
- Divide the Base by the Range
- Is the body of the base less than or equal to 50% of the range?
- If the body is 50% or less then you have a good strong zone.
- If more than 50% then NO BASE NO ZONE!
- Now Place two horizonal lines to mark this zone
- First line (closest to price) will be placed at the highest high of the Bases body for Long Trade or lowest low of the Bases Body for Short Trade
- Second line will be placed at the bases lowest candle wick for Long Trade or Highest wick for Short Trade
- Have your stop set above your second line for a short trade spread x3
- Have your stop set below your second line for a long trade spread x3
Thats it for fine tuning let me know if there is any confusion. I will do my best to explain more.
Let me see if I can help:
- Legs are "exciting"
- legs need to have a body that is more than 50% of range of the candle.
- Bases are "boring"
- Bases need to have a body that is 50% or less than the range of the candle.
I have included a chart example for you.
Attached Image