Studying on Supply/Demand

Hello everyone!
Ok, i am giving up to really understand how is Supply/Demands works by myself. So I hope advanced traders will help me (and everyone who interested) to get concepts. The reason why I am into Supply/Demand - I think it works, even rather I would say I see very intersing things at charts.
I flow around some gig threads here about S/D and now i have big mess in my mind.
Some notes and goals:
- firstly understand how to draw S/D with as much as possible strict rules, perfectly if it will be so strict, that it can be coded
- understand how they works
- using one timeframe (yes, higher tf do matter, but sometimes there are all very clear at one tf. So I think the best way to learn at first very very obvious examples with 5 stars)

So here some charts with regularity's, that i noticed. (And once again I do not really understand how it works and why even I am drawing this S/D, it's just some thoughts, that i get after browsing thread's. Much appreciate if someone explain what I am really found here)

And here goes mine indicator. I do really like it, because I see that it's works, but i don't understand sometimes why. Also i think understandig S/D will help me to choose which one S/D zone is tradeable and which one not.
How indi works - very simple : first bar is down and second one is up, that 3 times bigger, than first one. Vise versa for Supply. The reason, why i code it this way - i think in this situatons there are ery big disbalance in S/D.

And some thing about S/R flips. I'll just try to find some examples at random chart place, but again I do see, that they have some influence at market (but again I don't understand why and how)

We all have to start from somewhere, so I'll start from some simple rules. First of all Supply/Demand have to create disbalance or strong movement. I do like use WRB HG for this.
So I have this :
1) WRB HG have to break last swing High/Low (last swing high/low will be found with fractals (3) )
2) I want to see S/R flip as a comfirmation it's true break
3) S/D will be drawn by last few up bars for Supply and down bars for demand (with condition, that WRB have to open in range of this bars)

Ill just watch GJ H1 from 1 June until 1 September. As a result i got 16 Zones. And with quick look, if just trade them with pending orders with R/R = 2, we would got 8 Wins and 8 Loses.

And as a conclusion to this small test. There are some missing S/D, there are some Zones, that's definetly not S/D. Now I have to think about some rules for missing S/D and how to avoid failed.

Hi Lucky, some of my thoughts on your notes.

Some notes and goals:
- firstly understand how to draw S/D with as much as possible strict rules, perfectly if it will be so strict, that it can be coded
1. Can't comment on coding because i'm not a coder but i'll post some charts on how I would draw my s+d boxes.

- understand how they works
2. I first came across S+D through Sam Seiden. One of his videos opened my eyes when he mentioned as a floor trader how he could see where price was going to turn because of where the orders were being placed. What stuck me was he had actually been on the floor and witnessed first had "orders" being placed. So once I understood that I wanted to know how I could identify where these orders are and why they are there.

- using one timeframe (yes, higher tf do matter, but sometimes there are all very clear at one tf. So I think the best way to learn at first very very obvious examples with 5 stars)
3. In price action you will hear people say "this works in all time frames" for example a head and shoulders pattern works on a 1M and 1D. The problem is the stop on the 1D is greater than the 1M but on the flip side the target is bigger on the 1D and your not sat in front of your pc micro managing. So who trades the 1D and the 1M? The bigger the time frame the bigger the player. So I would suggest a top down approach looking for s+r on the weekly dropping right down to the 1m for entry as you want to trade along side the big money. Hope i'm not rambling here just trying to get you to see the bigger picture and the higher the time frame the more history/ information you have on your screen. Past turning points are future turning points. Another example would be Fake Out Zones if they work on all time frames by going up a TF and panning out you may see a bigger target or it may stop you taking a trade you saw on a lower TF. I will post some charts to explain Fake out and un-tested which may explain the importance time frames a little better.

Price shoots out of the red box without a re-test which then compresses up with not much force implying when it reaches supply it's easier to fall straight through.

A is the area you were looking at on the 1H you can see there is much more info on the 4H.

Hi! Thanks for your reply.

Yeah, i tried to watch Sam Seiden videos, but have to admit i failed understand language through video. About your charts - I still don't understand how do you draw them. Yes, from visual perpective sometimes some S/D zones are obvious, but as I said - I wanna very strict rules : 1) How to detect S/D ; 2) How to draw (it means High and Low of zone). For example price moves *** pips from swing high/low or whatever.

Hello LuckyMind,

I will just add some very crucial points for you to consider when learning supply and demand.

1. You have to do TOP DOWN analysis before you start mapping the any zones - this will show you what big picture price is trying to do.
2. Not every move up or down is a supply or demand zone. Actually in order a demand to be demand has to do something, it has to remove an opposing supply zone and vice versa for supply.
3. Best way to learn is to watch the charts. We do everything by pattern meaning you will see specific patterns in the market. Don't follow other people and try to understand what they are doing this is a waste of time.

Good luck

I am just passing but I would like to add a simple analogy, please consider the motivations in the zones etc, if price is trending long and rotates generally at what's called a pivot or turn, would, what , and why did it stop and turn , a bull market needs to be stopped by bears with over supply generally but it could be lack of demand it's the same just an imbalance. So consider if the Bears have taken control to protect price at a given value are they prepared to protect it next time it arrives and of course how often, it's just a way of visualising the competion in the market and may help you grasp the situations.
Effective market control in my estimation requires a break in structure. (New structure H,L).
The commitment of either side can be seen in the results of the moves.
Cheers
Photize

Some charts I am studying today. The following charts is drawn with just next rule : clear S/R flip, zone created by last down/up bar.
About last two charts - I just code two fractal indies (the blue one by Close/Open, red one by High/Low) for more easiest way to find S/R flips.

You need the guidance of people experienced in that methodology.
The best advice I can give you is follow this thread on forex factory "trading institutional order flow" by AKT.
There are many education material for free as also on his YouTube channel "storehouse analytic"
To expand further later, if you decide so, you can join his mentorship program.
But first start by all free material on the thread and YouTube and ask many many questions.
I joined his program and my understand of the methodology is far far better.
Regards

supply and demand is not that hard it's very simple and what you drawing not supply and demand to find supply and demand there is simple rules:
1-price moved really strong from the zone.
2- price never touched zone before.
and here i will scan charts for you:

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Quote: i am giving up to really understand how is Supply/Demands works...

Good idea IMHO.

To me, Supply/Demand is only an afterthought. You can see how Supply/Demand was after it effected the price.

There is always huge potential for supply and for demand to become dominant in the market hence the liquidity. It can come across as a chicken/egg problem and those who seek clues in Supply/Demand analysis tend to align themselves with either the chicken or the egg before going forward. Therefore, they are biased from the start.

Supply/Demand takes sides only when other factors in the market direct the sides. For example, bad news out of EU. Once it comes out, the reaction becomes apparent in Supply/Demand. I don't see why it is even a consideration in Forex if at any given moment a trader has ample access to all supply and all demand their account size permits them to have. It is the decision to dole out being on either side of that S/D that gives the levels a hard figure after the event.

The only thing useful that this action produces is the ability for the trader to use patterns and TA to predict the next move. That is like just plain TA then with S/D being only an aspect of the TA analysis. Besides, that trader is going to be looking at the same thing that everyone is looking at.

I could be completely wrong and missing the picture especially in the eyes of those who maybe see the use of S/D but in my opinion, moving onto other means of getting an edge is more beneficial.

Price levels are the most important thing for Big players they dont drow any patterns like us .Keep up the good work.

[quote] What is WRB HG?

[quote=patterncode;11682566] Wide Range Bode Hiddeng Gap - at my chats they are marked by white/black dots on bars. Definition is - body bigger, than bodies of last 3 bars, also low of next bar not touching high of previous bar (for up WRB HG), and high of bar after not touching low of previous bar (for down WRB HG)

Selling at supply and buying at demand zones are only appropriate if one considers the current market sentiment as trading with the trend yields the most potential for profits....would you sell at a resistance in an uptrend or vice versa?