Trading Supply & Demand Zones

Sam Seiden wrote:

"Noted economist Adam Smith suggested hundreds of years ago that when supply exceeds demand at a price level, prices will decline and vice-versa. Noted physicist Isaac Newton suggested in his three laws of motion that an object will remain in motion until it is met with an equal or greater force. These two simple, yet brilliant principles have stood the test of time and are directly responsible for the movement of price in the markets we trade today. There is no doubt in my mind that the two of them would have made excellent traders."

Demand
A price at which someone is willing and able to buy something.
Demand = (Support) = where to buy.

Supply
The price at which someone is willing and able to sell something.
Supply = (Resistance) = where to sell.

Just like any market, the financial markets are a function of supply & demand and good trading opportunities present themselves when this equation is out of balance.

Watch over 25 Sam Seiden webinars devoted to the concept of trading Supply & Demand zones here.



The best thread on Forex Factory to learn from a real Supply & Demand trader who shares his trades is "Price is everything" here: run by RedsWord11

After watching the two videos in post #1 you should have gained an understnding of the trading approach this thread is designed for.

As with any analysis, we should be aware of the higher time frames which includes anything from the monthly and weekly down. But the main focus will be on supply, demand and Bollinger Bands in 4hr charts.

Using 1hr and 30 min charts will also come into play and I'll explain why as we progress. I'll also be making entries off 15 minute and sometimes 5 minute charts.

The purpose of this thread is to identify potential opportunities - some of which will materialise and some will not.

Rob

Here's a GBPUSD 4hr chart which shows a possible reversal if price reaches the previous demand zone and pierces the lower Bollinger Band.

You'll also see the lower band being approached on the daily chart.

Let's see what happens.

Rob

Hi Rob,

Nice to see you, to see you nice! Hopefully I can contribute in a positive way to your thread.

I mainly trade GU and EU, but I also swing trade most other pairs if an opportunity arises. UJ is of interest for a long position, but I am still sitting on my hands for now.

Here is my swing trade view on GU based on h4 which I already posted to the cable thread -



I have marked off my supply and demand zones.

Black zones are confirmation zones only
Green zone will be my long swing opportunity
Red zone will be my short swing opportunity
Orange zones are also swing opportunities
Black dotted line is 50% of 2009 hi/lo
Blue lines are fibs of 2010 lo and recent hi

My last swing short hit my trailing stop on the 8th... oh well... it was my 3rd runner and I did make some nice pips out of the trade. So I have no swing trades open on cable right now. I do have one on EU, last runner which is currently +176.

I have not created an order for the green zone as I want to see how price moves to this area. 50% fib gives the green zone a nice confluence. A slow meander down and I might not pull the trigger. A fast move down to this area and I will be in there like a shot!

Who knows how this lady will play out... anything can happen!

I wish you success with your trading!

I am certainly looking at these areas for my day trades!

Sam is direct to the point! Can't wait to meet him in person on Friday!

Thanks for taking the time to start this thread - I wil pay attention here and contribute if I can do so intelligently.

Rob,

Found a nice trade on GBPAUD on market open with a novice gap into a demand area with a nice BB confluence.

AUDUSD is another possibility but there are some supply levels above it and I will wait for the right opportunity -



Target is 1.6700. Let's see what happens!

For those who want to know the difference between a professional gap and novice gap, please view Sam's following webinar - http://www.fxstreet.com/live/session...2-58e60f5d5814

EDIT: It has been a while since I last looked at this pair and the supply areas are old and need a slight update. I am shattered now, so I will do it in the morning and post the updated chart!

Good luck with the New Thread...

baz

Subscribed!! And will be the regular visitor here

Eric

Thanks Rob.

Eager to sharpen the sword.

Updated the supply zones on h4

T1: 1.6700
T2: 1.6840
T3: Trailing stop

Gotta keep those winners running...

BTW, I use a 3 runner strategy for all of my trades, whereby I split my position into 3. It gives me for flexibility!

Great to see some old faces appearing in the thread.

I want to keep the thread on topic ...i.e. Supply, Demand Zones with the use of Bollinger Bands.

Thanks,
Rob

Let's see whether the piercing of the 1hr BB into previous supply is enough for price to respect. Failing that, we could be looking at the next level up and the BB shown on the 4hr chart below.

I am short at 1.54722.

Rob

Baz!!! - my oldest (not as in age ) mate of FF! - good to see you. It's been a long time.
I hope everything is good your end.

Rob

Brian,

Enjoy meeting Sam on Friday!
Look forward to hearing about it.

Rob

Good to see you here Eric.
I hope that new office is working out well!

Rob

Yes ,going great Guns..... Just get Tony( Bones ) and Jhon here as well..and who knows someday we may see Hussin..
anyway take care and have fun in your new " HOME "

baz

Great to see you starting your own thread, Rob!

Want to show a H4 trade im currently in ( Alpari UK ).

Nice pin @ Supply + 50 fib lvl.

Looking for at least 1:2 / waiting for bullish reaction on Demand zone

Thanks Rob for the starting the thread! Looking forward to learning, Sim