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Trading Supply & Demand Zones

  • #121
  • Sep 22, 2010 4:51am Sep 22, 2010 4:51am
Quoting bbakker
We are about to enter the EU twilight zone.... I mean supply zone! Fast entry into the zone on h4 and look at that drop when we were there last time. This one ticks my boxes!

Attachment
Classic example of the higher time frame trend continuation on the euro. If you take levels against the higher time frame trend (I use the Daily for 4h and 1h levels and the weekly levels to judge when this trend might be ending), you need to take quicker profits. Good idea to squeeze down to smaller time frame within the zone to see if you can increase reward over risk. Also helpful is to keep an eye on corresponding SR levels on the dollar index.
  • #122
  • Sep 22, 2010 6:14am Sep 22, 2010 6:14am
Porkpie,
the $ Index is currently below 80.00. i consider that as a key level, looking at the daily to monthly chart.
i believe action around 80.00 will determine if we'll continue with the trend or not. sooner or later, we'll see.
  • #123
  • Sep 22, 2010 6:21am Sep 22, 2010 6:21am
Quoting Porkpie
Classic example of the higher time frame trend continuation on the euro. If you take levels against the higher time frame trend (I use the Daily for 4h and 1h levels and the weekly levels to judge when this trend might be ending), you need to take quicker profits. Good idea to squeeze down to smaller time frame within the zone to see if you can increase reward over risk. Also helpful is to keep an eye on corresponding SR levels on the dollar index.
I check the DIX daily and also mark of the supply and demand zones on it. It is imperative that one keeps an eye on the DIX for overall strength and weakness of the $ and it is the first chart I look at in the mornings as well as checking on it during the day!

I do also drill down sometimes to increase the reward to risk ratio but the downside to that is that one might miss the trade. It is a fine balance, but I am fairly new to this method of trading (3 months) and I am still fine tuning and documenting it all in my trading plan. The key, as you well know, is to risk just a small percentage of your account, 1-2% on each trade and keep it consistent!

I am still trading on a micro account until I have proved to myself that I can consistently generate profit and once I have achieved my targets that I have set out, only then will I add further capital to my account.

Thank you for your response... all input is much appreciated, especially from experienced and respected members of FF
  • #124
  • Edited 11:36am Sep 22, 2010 6:33am | Edited 11:36am
See this bottom upplay whether work out..........

GJ M15

Edit: hehe, pretty hard demand level, got it
2nd Edit: Sorry Rob, shouldnt post this but just want to know whether you guys agree this one is good demand zone, but now is broken...
Attached Image (click to enlarge)
Click to Enlarge Name: 2010-09-22_1931.png Size: 47 KB
  • #125
  • Edited 8:42am Sep 22, 2010 7:18am | Edited 8:42am
Quoting supremeChaos
Porkpie,
the $ Index is currently below 80.00. i consider that as a key level, looking at the daily to monthly chart.
i believe action around 80.00 will determine if we'll continue with the trend or not. sooner or later, we'll see.

Yep, with you on that sup. Good to see you here.

Thanks for the info on the DIX bb, will check it out. Agree with regards missing opportunities and the balance required. As long as the RR is greater than 2:1 the greater the probability of the trade working -seiden refers to it as the elastic band effect - the greater the distance between demand and supply (entry and target), the more likely price will react at the entry. So a good RR will cover losses and bring you out in profit over time as we all know, but it also provides a higher probability trade.

Forgot to mention that Sam stipulates that when directly in between weekly supply and demand (the middle area), you are furthest away from significant longer term buying and selling pressure and the market tends to be a little more choppier at smaller time frame supply/demand. I haven't explored this further but seems to make logical sense. Could be useful to adjust risk % of account per trade depending where you are with weekly demand/supply alongside lower time frame trend.

Just want to add with respect to the above issue. What Seiden refers to as speed bumps, price becomes more sensitive to these if in close proximity to bigger picture supply/demand. For example, if on a ten minute chart you are in a long trade off of demand but heading into bigger picture supply (eg Daily), then a 'speedbump' on the way to your target on the 10 min chart may cause price to reverse. But this is unlikely to happen away from bigger picture supply. Hence the need to be more aggressive with profit taking going into higher TF levels where speedbumps on a lower time frame are likely to cause more than just turbulence.
  • #126
  • Sep 23, 2010 2:38am Sep 23, 2010 2:38am
In amongst the higher time frame supply and demand zones we have smaller TF S&D zones too.

Below is a great example on the 5 min chart of a supply zone providing a wonderful opportunity for a low risk entry this morning.

Rob

p.s. excuse my incorrect spelling of descent!
Attached Image (click to enlarge)
Click to Enlarge Name: GBPUSD 5 Min 23 Sept 2010.jpg Size: 206 KB
  • #127
  • Edited 4:51am Sep 23, 2010 4:13am | Edited 4:51am
The chart below tells the story.
The demand zone where price is currently at has been visited many times.

Of course ...price COULD head up, but that's another story.

Rob
Attached Image (click to enlarge)
Click to Enlarge Name: GBPUSD 1hr 23 Sept 2010.jpg Size: 343 KB
  • #128
  • Sep 23, 2010 2:54pm Sep 23, 2010 2:54pm
Quoting priceaction
The chart below tells the story.
The demand zone where price is currently at has been visited many times.

Of course ...price COULD head up, but that's another story.

Rob
I am waiting for the demand zone around the 1.55 area to go long. This is a nice demand zone that was pointed out by the man himself for a longer term trade to the 1.6 area which is where I will be looking for a swing trade back down again.

EU and AU are looking good for some swing opportunities. Waiting for demand to form on UC. UJ is looking good to get back down to 83 area for maybe another intervention! Let's see what happens!
  • #129
  • Sep 23, 2010 3:11pm Sep 23, 2010 3:11pm
Quoting bbakker
I am waiting for the demand zone around the 1.55 area to go long. This is a nice demand zone that was pointed out by the man himself for a longer term trade to the 1.6 area which is where I will be looking for a swing trade back down again.

EU and AU are looking good for some swing opportunities. Waiting for demand to form on UC. UJ is looking good to get back down to 83 area for maybe another intervention! Let's see what happens!
Brian, good to know that at least one of my D zones aligns with what Sam Seiden told you recently!

Let's see what happens.

Rob
  • #130
  • Sep 23, 2010 3:37pm Sep 23, 2010 3:37pm
Quoting priceaction
Brian, good to know that at least one of my D zones aligns with what Sam Seiden told you recently!

Let's see what happens.

Rob
Last post for today, I don't think we go under 1.56 it became strong S but let's C
Take a Look on e/u 15 min there is good chance there demand zone soon

(All above just my view and i could b wrong)
Catch u tomorrow
  • #131
  • Sep 24, 2010 2:29am Sep 24, 2010 2:29am
GU is currently sandwiched between the weekly supply zone and lower time frame demand areas that continue to uphold the dominant upward trend. I think the 1.55 area is a good zone to go long as you will not be too close to weekly supply giving yourself room for profit should the trend reverse on the retest of the weekly supply zone. Trends often reverse or make corrections at higher time frame demand /supply areas.
  • #132
  • Sep 24, 2010 3:47am Sep 24, 2010 3:47am
Just gone short on EU.

Entry: 1.3388
SL: 1.3418

Let's see what happens!
  • #133
  • Sep 24, 2010 4:03am Sep 24, 2010 4:03am
Quoting bbakker
Just gone short on EU.

Entry: 1.3388
SL: 1.3418

Let's see what happens!
I presume you are seeing this opportunity Brian?
Attached Image (click to enlarge)
Click to Enlarge Name: EURUSD 15 Min 24 sept 2010.jpg Size: 119 KB
  • #134
  • Sep 24, 2010 4:09am Sep 24, 2010 4:09am
Quoting Porkpie
GU is currently sandwiched between the weekly supply zone and lower time frame demand areas that continue to uphold the dominant upward trend. I think the 1.55 area is a good zone to go long as you will not be too close to weekly supply giving yourself room for profit should the trend reverse on the retest of the weekly supply zone. Trends often reverse or make corrections at higher time frame demand /supply areas.


Thank you Porkpie. I must admit my bigger TF analysis is a weakness that was identified when I took the Tharpe Trader Test and I am putting the weekly curve analysis into my trading plan so that I review this first before I looking at the lower timeframes to put a trade on. Bigger timeframe analysis is key for me!

I have a couple of personal questions for you -

1. How long have you been trading using Sam's methods now?
2. Had you been using different trading methods prior to the supply and demand method?
3. If so, how long did it take to retrain your brain to Sam's way of thinking?

Thank you for taking the time to answer if you feel obliged to do so. I would not be offended if you didn't.
  • #135
  • Sep 24, 2010 4:20am Sep 24, 2010 4:20am
Quoting priceaction
I presume you are seeing this opportunity Brian?
and a nice fast move into the zone. This is more of an intraday swing trade for me, especially since it is a Friday.
  • #136
  • Edited 4:55am Sep 24, 2010 4:41am | Edited 4:55am
Looking at the w1 on EU there is a larger supply zone just above us starting at 1.35! Saying that I am still in the trade... came to 1 pip of hiting my SL... lol

EDIT: Hit my SL!
  • #137
  • Sep 24, 2010 5:19am Sep 24, 2010 5:19am
I just got back and checked MT4 and found that my short order on AU has filled -

Entry: 0.9555
SL: 0.9580
TP1: 0.9475
TP2 and TP3 undecided as yet.

Let's hope I have better luck with this one. It seems every trade that I post on this thread hits my SL, yet the ones I don't post such as my UJ short is going great guns...lol
  • #138
  • Sep 24, 2010 5:26am Sep 24, 2010 5:26am
Looks like the better supply zone on EU was just above the one I went in, so I took another short, albeit 1/2 normal position, after watching price in there! Let's see what happens. I need to be getting on with some work, so see you peeps soon!
  • #139
  • Sep 24, 2010 6:38am Sep 24, 2010 6:38am
Quoting bbakker
Looks like the better supply zone on EU was just above the one I went in, so I took another short, albeit 1/2 normal position, after watching price in there! Let's see what happens. I need to be getting on with some work, so see you peeps soon!
EDIT: With news in less than an hour and price now waiting for the news, I have closed this position at BE. I do not like getting into the market before the news! I will wait to see how the market reacts to the news first and with supply on w1 just above which has a nice 200ma confluence, I will wait for a better entry.

Even if the news moves EU down, I'd rather not take that chance!
  • #140
  • Edited 7:36am Sep 24, 2010 6:47am | Edited 7:36am
Quoting bbakker
EDIT: With news in less than an hour and price now waiting for the news, I have closed this position at BE. I do not like getting into the market before the news! I will wait to see how the market reacts to the news first and with supply on w1 just above which has a nice 200ma confluence, I will wait for a better entry.

Even if the news moves EU down, I'd rather not take that chance!
I have the left-overs of yesterday's GBPUSD short from 1.5730 still in play.
Took some off the table earlier and will leave this remainder on with SL still at 1.5745.

Rob

EDIT: ping!!! - stopped out
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