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Supply and Demand Zones 48 replies

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Attachments: Supply and demand in a nutshell by Alfonso Moreno
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Supply and demand in a nutshell by Alfonso Moreno

Quoting panoramia
{quote} Thanks for interevening and telling Nitsan that he shouldn't have posted links to his thread in this community. I never would do that in another trader's thread, in fact, I believe I posted only on a couple of other threads in my life. Thanks again for your support! All the best! Have a great Friday and weekend Cheers, Alfonso
My best to you and keep up the good work!
Using the FIA, traders need only "Sell the Highs" & "Buy the Lows".
Quoting panoramia
{quote} An zone is never removed until it's overshot and it's no longer valid. You have to keep the valid ones to see which ones are in control and when they will stop being in control, that is, when they are taken out, since they will many times act as flip zones, previous supply becoming demand with CPs created at those flip zones. Cheers, Alfonso
Sorry but I did not understand your answer Alfonso. If daily CP was touched and price retraces to last daily demand can we take long at nested 4H demand?I would take it in that example as 4H demand sits on the distal line of daily demand. I wold take full daily level if 4H demand would sit on proximal line of daily demand. Do you agree?Also I would like to know if it is higher success probbability to trade daily SD levels on 30 pairs or 4H levels on 5 pairs getting the same number of trades per month?
Hi Alfonso! Thanks for your answer. Please comment what was wrong with my last trade (loss ).
MN trend is consolidation, high in the curve.
WK trend is down, high in the curve.
D trend was consolidation, price was reacting to WK SZ.
H4 SZ was good quality with good base and strong departure. But it was a loss
Thanks in advance!
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Quoting John.
Hi Alfonso! Thanks for your answer. Please comment what was wrong with my last trade (loss ). MN trend is consolidation, high in the curve. WK trend is down, high in the curve. D trend was consolidation, price was reacting to WK SZ. H4 SZ was good quality with good base and strong departure. But it was a loss Thanks in advance! {image} {image} {image} {image}
John, rules say that if a level is nested within 1 timeframe higher level that is not confirmed, all nested levels are negated.

That being said, H4 supply zone was nested within a "pontential" D1 bearish engulf that neither made a 2:1 imbalance or consolidaed away, thus, all lowet timeframes than the D1, H4...etc, are negated for shorts.

Secondly, 2 x D1 supply zones were taken out, and D1 20 EMA in control. Taking a H4 SZ with such a trend is lower odds, D1 wins over lower timeframes.

Hope it makes sense John.
Cheers,
Alfonso

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Set and Forget supply and demand trading community
Quoting digitalko
{quote} Sorry but I did not understand your answer Alfonso. If daily CP was touched and price retraces to last daily demand can we take long at nested 4H demand?I would take it in that example as 4H demand sits on the distal line of daily demand. I wold take full daily level if 4H demand would sit on proximal line of daily demand. Do you agree?Also I would like to know if it is higher success probbability to trade daily SD levels on 30 pairs or 4H levels on 5 pairs getting the same number of trades per month?
Now it's me who didn't understand your question sorry Can you ask that question with charts please?

Regarding odds for SD levels, the lower timeframe you use the more trades you will have. Trading more pairs require more experience and could be a handicap, you could have many more losses. Focusing on a bunch of good pairs, with not too much correlation would be good for H4 zones. More pairs if you trade D1 zones.

Odds are very similar I'd say, the problem is that the lower the timeframe you use for your entry, the more trades you will have and the more potential losses you will also have, thus affecting your emotions and how you look at the next potential trade.

Cheers,
Alfonso
Set and Forget supply and demand trading community
Quoting panoramia
{quote} John, rules say that if a level is nested within 1 timeframe higher level that is not confirmed, all nested levels are negated. That being said, H4 supply zone was nested within a "pontential" D1 bearish engulf that neither made a 2:1 imbalance or consolidaed away, thus, all lowet timeframes than the D1, H4...etc, are negated for shorts. Secondly, 2 x D1 supply zones were taken out, and D1 20 EMA in control. Taking a H4 SZ with such a trend is lower odds, D1 wins over lower timeframes. Hope it makes sense John. Cheers, Alfonso {image}
I understand you, thank you.
And another question. If a level is not confirmed (it removed opposing level but not 2:1 and not consolidated away with 1 OHLC candle) - can such level be in control?
Quoting panoramia
{quote} Now it's me who didn't understand your question sorry Can you ask that question with charts please? Regarding odds for SD levels, the lower timeframe you use the more trades you will have. Trading more pairs require more experience and could be a handicap, you could have many more losses. Focusing on a bunch of good pairs, with not too much correlation would be good for H4 zones. More pairs if you trade...
Hi I was reffering to Johns post from June 4th. He posted 2 AUDUSD charts. He was asking if he should take 4H demand zone nested in Daily demand if the price touched and now is retracing down from Daily CPIn my opinion if daily trend is up then CP is not fresh and if price retraces down to fresh demand I would take the trade. I would take full Daily demand zone if there will be 4H level sitting at proximal line of Daily demand. But the 4H demand sits on the distal line of the Daily demand so it is valid and if he accepts missing the trade for exchange for better reward to risk scenario then I would take 4H demand.He was asking if the 4H demand is valid and you answered that the level is not removed until it is solidly broken. There is a lot of little details which we need to pay attention to in trading to eliminate as much losses possibly. And I alwais prefer reward to risk over win percentage. And I accept missing the trade rather then risking big.Cheers.
Quoting John.
{quote} I understand you, thank you. And another question. If a level is not confirmed (it removed opposing level but not 2:1 and not consolidated away with 1 OHLC candle) - can such level be in control?
A level is only in control IF price retraced into the level, else it can't be in control.

Cheers,
Alfonso
Set and Forget supply and demand trading community
Quoting digitalko
{quote} Hi I was reffering to Johns post from June 4th. He posted 2 AUDUSD charts. He was asking if he should take 4H demand zone nested in Daily demand if the price touched and now is retracing down from Daily CPIn my opinion if daily trend is up then CP is not fresh and if price retraces down to fresh demand I would take the trade. I would take full Daily demand zone if there will be 4H level sitting at proximal line of Daily demand. But the 4H demand sits on the distal line of the Daily demand so it is valid and if he accepts missing the trade...
The problem with such a long is that AUD/USD bigger picture is clearly down, so odds are higher taking shorts, not longs. Monthly is donw, monthly is creating a Monthly CP supply, if we break lower than the lowest low in that Monthly CP we could have a strong drop in price.

You must decide which direction you take in your trade, with the trend or against the trend. On that chart on the Aussie, D1 supply was in control, H4 demand against it is lower odds.

Cheers,
Alfonso

Attached the screenshot you are referring to

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Set and Forget supply and demand trading community
Alfonso, thank you very much!
Do I identify trends and potential MN SZ as per the rules?
MN - conso
WK - down
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Alfonso please explain how to make analyses in such scenarios?
1. DZ (1) was removed by potential SZ (2).
2. But SZ (2) did not consolidated away and not 2:1.
3. Potential SZ (2) was removed by potential DZ (3).
4. But DZ (3) did not consolidated away and not 2:1.

Questions:
1. If potential SZ is removed by another potential DZ during a downtrend, does it mean that we are in consolidation now?
2. Can a removal of a potential zone confirm opposing zone as a zone?
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USD/JPY pushed higher again extending the bigger picture uptrend yet again. Note the daily demand zone being formed at last month highs (blue beads), and lower at previous last month highs.

Monthly, Weekly and Daily timeframes are up, creating and respecting new demand, taking out opposing supply.

Cheers,
Alfonso

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Set and Forget supply and demand trading community
AUD/USD has a bigger picture monthly downtrend, demand is being taken out and supply is being respected. Price is now within a Weekly demand zone that caused the break of a Weekly descending trendline. Bigger picture is down.

Monthly creating a potential Continuation Pattern of supply. If price breaks below Weekly demand, we could have more aggressive shorts.

Potential Daily supply if Weekly demand is taken out in yellow

Cheers,
Alfonso

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Set and Forget supply and demand trading community
This is an exoctic pair, Dollar versus Turkish Lira, I've taken quite a few longs on this currency pairs while bouncing off Monthly and Weekly demand.

Now USD/TRY broke high above all time highs with a gap up and strong potential Daily demand zone, consolidation away is needed

Long bias at valid Daily demand zones or lower at Weekly demand zones

Cheers,
Alfonso


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Set and Forget supply and demand trading community
Quoting John.
Alfonso, thank you very much! Do I identify trends and potential MN SZ as per the rules? MN - conso WK - down {image} {image}
Monthly supply is there already John. Why? There was a Monthly demand zone taken out already. Can you spot it?

Cheers,
Alfonso
Set and Forget supply and demand trading community
Quoting John.
Alfonso please explain how to make analyses in such scenarios? 1. DZ (1) was removed by potential SZ (2). 2. But SZ (2) did not consolidated away and not 2:1. 3. Potential SZ (2) was removed by potential DZ (3). 4. But DZ (3) did not consolidated away and not 2:1. Questions: 1. If potential SZ is removed by another potential DZ during a downtrend, does it mean that we are in consolidation now? 2. Can a removal of a potential zone confirm opposing zone as a zone? {image}
A potential zone is just that, a potential zone. You can't base your trend analysis on removal of potential zones. A downtrend is defined by new demand created and respected, supply taken out. It says nothing about potential.

Makes sense?
Cheers,
Alfonso
Set and Forget supply and demand trading community
Quoting panoramia
{quote} Monthly supply is there already John. Why? There was a Monthly demand zone taken out already. Can you spot it? Cheers, Alfonso
I'm sorry but I can not find any more supply on the chart. Or you are talking about my potential MN SZ? It removed demand, but that MN potential SZ is not 2:1 yet.... Hope you will help!

Quoting panoramia
{quote} A potential zone is just that, a potential zone. You can't base your trend analysis on removal of potential zones. A downtrend is defined by new demand created and respected, supply taken out. It says nothing about potential. Makes sense? Cheers, Alfonso
Now it is clear! Thanks!
Quoting John.
{quote} I'm sorry but I can not find any more supply on the chart. Or you are talking about my potential MN SZ? It removed demand, but that MN potential SZ is not 2:1 yet.... Hope you will help! {quote} Now it is clear! Thanks!
Yes, I'm referring to monthly supply that took out month demand contuation pattern John.

Cheers,
Alfonso
Set and Forget supply and demand trading community
Quoting panoramia
{quote} Yes, I'm referring to monthly supply that took out month demand contuation pattern John. Cheers, Alfonso
As I understand from your answer, MN SZ is valid supply (because it removed valid demand) but not tradable yet.

If you do not mind I will try explain how I understand the rules about validity and tradability of a zone. Please say if I'm wrong or right, your answer will make everything clear I hope.

VALID ZONE
1. Valid zone - is a zone which removed opposing valid zone or broke a TL but has no 2:1 imbalance and no consolidation with 1 OHLC candle away.

2. We can use such valid zones only to confirm other zones.

3. We do not trade from such zones.

4. Such zones can not be in control.

5. We do not use such zone to define a trend.

6. Lower trends can not realign in such zones.

TRADABLE ZONE
1. Tradable zone is a valid zone which has 2:1 imbalance and 1 OHLC candle consolidated away.

2. We may trade from such zones.

4. Such zones can be in control.

5. We use such zone to define a trend.

6. Lower trends can realign in such zones.
A possible long setup: HKDJPY
MN, Wk and D trends are up.
Daily DZ needs to consolidate away.
Any opinions?
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