Supply and demand in a nutshell by Alfonso Moreno

The MA_CCI indicator is not part of the strategy, I used to have it there to have a quick visual on what all timeframes were doing. There is no EMA used, it's the 100 WMA. There are no rules for that indicator, it's not part of the rules, it was never described in any post or video!

Have a great day!
Alfonso

Thank you. Deleted all Ma's from the charts

The only EMA used in the strategy is the 20 EMA, we use it on the D1, WK and MN charts for confluences. An EMA will not negate an order or give permission to buy, it will be used as another odds enhancer to improve the probabilities of a level.

Alfonso

Yeah only 20ema, sorry I meant I deleted the CCI indicator. Thanks again

Attached a screenshot of usdjpy 1 year forward testing with forex tester 2 . Total 18 trades . Profitable 45% . % gain = 150% . Started with 10,000, ended with 25,000. Found Alfonso's strategy a week ago so I'm still newbie. This is gold

Great job my friend! Keep on testing the rules... but remember you should NOT stop testing after 1 week or 2 weeks, it should be part of your weekly routine, it's like speaking a language, if you stop speaking a language you will soon lose practice and losing vocabulary!

Alfonso

Hello Alfonso,

I am also having good results with the tester. Trying to do a regular session each day as you suggest. Also plodding my way through the thread.
As you say it does take time. It is not possible to "cram" it, just results in overheated brain cells.
I think it is the nuances that you speak of that makes the difference from being profitable or not.

A simple point that is taxing me. Is there a minimum number of candles to form a base. Must there be at least one basing (50%) candle to qualify it,
or is more than one required. It can be difficult to distinguish between a swing high or low and a basing area without a way to define it.

Thanks,
Jim

Hi Jim , min number of candles is 6 in any timeframe and one basing is enough ( dont trade the doji ) . I'm having the most out of my losses from the CP ( pattern ) , you need to distinguish the 'good' setups from not so good and pass them. The most difficult part for me is when the daily trendline is solidly broken because it tend to continue with the current trend but don't have statistics for it. cheers bro

Hi Jim,

As Phil mentioned in the next post, 6 candles at the base is the maximum number of candles, no matter which TF you look at, 6 candles maximum. 6 x H4 = 24 hours. 6 x D1 = more or less a week.

Alfonso

Hi Alfonso,

Do currency swaps (longs/shorts) influence your decision to trade swing/position ? Thanks

No, the only things that influence my trading decisions are rules in post #1
Alfonso

Hello fellow trader!

This is just a reminder that tomorrow Wednesday 9th April there will be a new free live webinar

If you are already part of the mailing list, check your inbox because the link should be there already, else fill in this form to join if you haven't previously done it.

1. DATE: Wednesday 9th April 2014
2. TIME: 1 PM to 3 PM Central European Time | 7 AM to 8:30 AM EST. Right 1 hour before NY Market Open
3. LINK TO JOIN: you need to fill in this form to join if you haven't previously done it http://www.set-and-forget.com/free_webinars

You can join now, you will automatically notified 1 day and 1 hour before it's held

WHAT WILL THIS WEBINAR COVER?

1. How to validate supply and demand levels
2. How to draw a trendline to validate a trend
3. When to negate a trendline and filter out supply and demand levels
4. What questions to ask yourself and the charts

This is part of the basics, the basics have to be REPEATED OVER AND OVER again. You may think that you know the basics but it takes a long time to gain confidence in them, much more than we think of. We all think we know the basics but most of the time we forget to ask the right questions to ourselves and to the charts. You will get the right answers if you know which questions you have to ask.

See you at the webinar.
Alfonso

Hello Alfonso,

I am aware of the 6 candles maximum for a base. I was asking about the minimum (smallest amount) necessary.
Must there be at least one basing (50%) candle to qualify it, or is more than one required.
Thanks for your time.

Jim

The rule is 1 minimum , 6 maximum . Make sure that the base candle has some meat and not a doji or long wicks. I'm sure Alfonso will respond and clear some questions in tomorrow's webinar. Hope I gave you a helping hand. We are fresh and original , that's why we need to read rules many times, watch youtube alfonso's channel several times and test and test.

Ah, that clarifies it for me. Thank you for your help.

Hi,

I try to correctly install all the environment for using the rectanglereader indicator but I have an error with set_and_forget_installer.exe and I cannot get rid of it ! I have tried all as describe in the previous post about this error but I am stuck ( Windows 7 ) ... I have found a previous zip with all the indicators and template but I don't have the last version 3.2.1 of rectanglereader. Could you please post me the last RectangleReader.ex4
I have 3.2
Regards
Greg

Hello Greg!

If you filled out the form to download the indicator and zip file, you got an email with the link to download the setup AND the rectangle indicator individually. So please check your email.
Thanks,
Alfonso

Dear Alfonso! I have a question about timeframes. I've decided to use 4 hour timeframe as an entry timeframe. And you say to use Weekly TF for bigger picture. Could you explain why? Why not daily? I ask this question because I can't understand what to do with daily SD levels and daily trend? OK, we can ignore daily TF by hiding its button from Metatrader but these levels still exist
And also I'm a little bit confused with the fact that we need weeks or even months to reach weekly SD levels for reversal trading or trend change.
You point of view is very important for me.

Hello Ivan,
The reason why is explained in the posts and the videos, you will see dozens of examples. Both the WK and the MN can be used as curve timeframes, also a combination of both in what I call the sequence, but that's a more advance type of analysis not covered in post #1. You sometimes have to wait for weeks for a reversal, but that does not mean you can't trade the opposite, there are rules to trade with the D1 trend or after a trendline break.

But like I have said repeatedly on the forum and on the videos, you have to test the rules over and over and over. If you are waiting for me or anybody else to give you the definite answer, you will never get it. Why? No matter if you have a 100% proven trading plan, if I gave it to you right now, you would not be able to execute it, I am sure about 101%. It's not about having a trading plan, it's all about creating a habit and gaining the confidence in any set of rules. You can't get the confidence in the rules if you don't test the rules for months and months, any rules, be it supply and demand or any other strategy. So if I told you what to do, I am sure you'd lose a lot of trades, because you'd have not created the habit of trading the same setups over and over. You need to gain the experience.

I can't answer your question and doubts, they are in post #1 scattered in the videos and forum. You need to take hundreds of trades in order to learn. The WK is a higher timeframe, the monthly and daily as well. When you combine the Trendlines and the HTF zones, you get the answer. You need to test that, that needs a lot of work, hard work and a lot of patience without giving up. Most readers of this forum will never take the effort to do that, I know that, why? Because it's human nature, we want things done for ourselves written on a piece of paper... and you know what's funny about it? The funny thing is that once you get a list of rules and a piece of paper with rules that work, 99% of traders will try to change and tweak them, and believe they can make it better without EVEN testing the working rules for months and creating a habit. They just add emas, bollinger, lagging indicators, believe that they will have a confirmation for their trades. Confirmation does not exist, it would be way too easy.. The market will never confirm anything, we just have the odds with us or against us

Human nature my friend, human nature! Professionals get the money from retailers because they have flooded us with lots of unnecessary information so our minds are clouded and they get our money. How can you solve that? Test the rules, believe in a set of rules, be it supply or demand, ema crosses, cci, anything. Believe in them, test them, master them. Then you won't need to ask those questions... If you are confused and you don't know what to do, practice, ask but don't believe what I or anybody else says or do unless you do it yourself. By doing it yourself, you will get your brain to create a habit, by listening/reading others, you will never get that habit created.

All in all, watch the videos, read the posts... I believe you haven't done it, otherwise you'd have not asked that question in the first place. Take your time, it takes time to understand it all, not only supply and demand, but any strategy or anything you want to learn in life.

Hope that helps!
Alfonso

Dear Alfonso,
Thank you very much for your answer! I agree with everything you're saying about learning and testing, I understand it very good. I read your post #1 for many times and saw most (not all yet) of your videos. Many things seem to be clear for me now but some are not. Probably it's a "child question" about different timeframes but it's still not clear for me. May be my English is not so good or by any other reason.
What I mean is that I saw in your videos that we should use WK TF to understand how high or how low we are on the WK curve (sell high, buy low, don't sell/buy to HTF Levels). Then we should use Daily TF to identify daily trend and also daily SD levels in order not to sell to low or to buy to high. And to respect daily trend on our entry TF which is 4H.
And on our entry TF which is 4H we define SD levels, validate them and decide according to the rules where (on which valid levels) and how (set and forget or confirm) to trade (entry, stops, profits). Also we define 4H trend (which must be equal to daily trend) to be trend trader.
I thought that it's very logical. WTF - curve; DTF - curve, trend + higher TF levels; and 4H - trend, levels + entries. But when I read your post #1 again I saw that you say to use just 4H + WK combination. What is right for higher odds? Just WK + 4H or WK + Daily + 4H?
I'm sorry for any language mistakes and hope for your answer.
Ivan.