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Trading Supply & Demand Zones

  • #201
  • Edited 8:31pm Oct 4, 2010 9:52am | Edited 8:31pm
This is my EU short that opened back on Friday
Reasons...daily and weekly at quantified supply areas as well as four hour

Will look out for the speed bump at 3625.
Target is 3458 although would love to ride to 3100. May leave a part position on a free ride to see if it gets there.
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  • #202
  • Oct 4, 2010 10:28am Oct 4, 2010 10:28am
Quoting ownshook
This is my EU short that opened back on Friday
Reasons...daily and weekly at quantified supply areas as well as four hour

Will look out for the speed bump at 3625.
Target is 3458 although would love to ride to 3100. May leave a part position on a free ride to see if it gets there.
Nice trade! EU was itching for a correction... and there was no better place than here!
  • #203
  • Oct 4, 2010 3:17pm Oct 4, 2010 3:17pm
Quoting bbakker
Nice trade! EU was itching for a correction... and there was no better place than here!
I agree. The EU is at some decent supply levels and the DX is at a demand level so the odds look good for this trade to get some juice. Will see either way.
  • #204
  • Oct 4, 2010 8:23pm Oct 4, 2010 8:23pm
So.....took partial position off at 115 pips @ 3655. Just above the consolidation zone and around the '50 level.
Stop moved to BE and letting the free ride perhaps hit my full target of 3458.
All supply/demand zone trading. Still working out some bugs....
Attached Image
  • #205
  • Oct 5, 2010 1:08am Oct 5, 2010 1:08am
Quoting bbakker
Still in the GBPAUD but scaled out to take a profit and make this a free trade. We are at yearly lows here with a triple bottom on the monthly so October will be crucial for this pair.
Woke up this morning to see this one 300 pips in profit and climbing. The triple bottom paid off on this one. Still trying to work out why the sudden drop in AUD strength.... will get back!
  • #206
  • Oct 5, 2010 1:11am Oct 5, 2010 1:11am
Quoting bbakker
Woke up this morning to see this one 300 pips in profit and climbing. The triple bottom paid off on this one. Still trying to work out why the sudden drop in AUD strength.... will get back!
check aussie rate news
"If The Fool persists in his Folly he will become wise." - William Blake
  • #207
  • Oct 5, 2010 1:16am Oct 5, 2010 1:16am
Quoting ownshook
So.....took partial position off at 115 pips @ 3655. Just above the consolidation zone and around the '50 level.
Stop moved to BE and letting the free ride perhaps hit my full target of 3458.
All supply/demand zone trading. Still working out some bugs....
Stick with it buddy! You know it makes sense and a good way to iron out bugs is to put it in a trading plan and keep a trading journal!
  • #208
  • Oct 5, 2010 1:18am Oct 5, 2010 1:18am
Quoting The Fool
check aussie rate news
Oh yes... hike was priced into the market and it never materialised! We have hit a supply zone and it needs to break 1.6560 if it is going to go any higher!
  • #209
  • Oct 5, 2010 4:16am Oct 5, 2010 4:16am
Quoting bbakker
Rob's status on his profile is as follows -

Since 2007 I have usually been quite active in ForexFactory. I have learned a lot and given back some.

These days I trade for a living. Other than some management consultancy business (which I am fading out of), trading is what pays the bills.

I am increasing my trade size and I need to be 100% focused to ensure I trade according to my plan. So I have cut out emails, TV and Forums during my core trading hours. Whilst all these things can be entertaining, they create noise, which is not what...
Brian,

I'm happy to see someone like you continue on with this thread. Long may it help people understand supply and demand.

All the best with it!

Rob
  • #210
  • Oct 5, 2010 4:55am Oct 5, 2010 4:55am
Quoting priceaction
Brian,

I'm happy to see someone like you continue on with this thread. Long may it help people understand supply and demand.

All the best with it!

Rob
I have changed my twitter account as my old one was for my work and my company follows me on this account. Please use bbakker_fx to see my tweets.

Gone long on USDCHF at the extremes -
Entry: 0.9663
SL: 0.9623
TP1: Looking for 3:1, but need to break 0.9700 and 0.9740 to achieve that.

Arrival wasn't great too, but it was at the extremes so I could not pass up on the offer.
  • #211
  • Oct 5, 2010 7:59am Oct 5, 2010 7:59am
Quoting ownshook
So.....took partial position off at 115 pips @ 3655. Just above the consolidation zone and around the '50 level.
Stop moved to BE and letting the free ride perhaps hit my full target of 3458.
All supply/demand zone trading. Still working out some bugs....
Other part of position stopped out @ BE.

For a little post trade review....I was happy with the levels chosen as they fit many of the enhancers for a good level.

On the flip side of that.....
Daily chart has seen this area before as price came back to it in April.
Weekly chart level was not a perfect area (actually, the drop came from the 3300 area, a bit lower than where I had it) and higher up ( 4314 and 4859 areas have better enhancer look to them.

The scale out area fit the criteria for a level to take some action...for me.
In the end, 115 pips of profit and a free trade for 0 pips trading a reversal in an uptrend using S/D areas is a success for me.
Going to stand aside on the EU for now and let it play out at these levels. If price breaks on the weekly to the upside...I will look to buy pullbacks into demand areas on lower charts. Quite frankly, a short again at these levels is an extremely low risk opp.
  • #212
  • Oct 5, 2010 9:06am Oct 5, 2010 9:06am
Quoting bbakker
I have changed my twitter account as my old one was for my work and my company follows me on this account. Please use bbakker_fx to see my tweets.

Gone long on USDCHF at the extremes -
Entry: 0.9663
SL: 0.9623
TP1: Looking for 3:1, but need to break 0.9700 and 0.9740 to achieve that.

Arrival wasn't great too, but it was at the extremes so I could not pass up on the offer.

I agree. Arrival was not very good and price didn't really explode from the original area but the small amount of time that it spent at that level previously is a good sign. Nice find.
  • #213
  • Oct 6, 2010 11:12am Oct 6, 2010 11:12am
Sam Seiden shows how to aggressively enter at supply and demand zones and whilst this technique is used by many traders in FX, Futues, etc, James Dalton warns that one of the biggest mistakes traders make is fading trend days; first you take a financial and emotional hit, and secondly you forego an excellent opportunity.

He writes ...what it takes to succeed on the highest percentage of days—reversion to the mean trades—is exactly what doesn’t work on trend days. While trend days may only occur approximately 15 to 20% of the time, what they have to offer or lose balances out when measured against the greater number of rotational days because of the far greater range on trend days.

When price is auctioning higher, the expected response is for higher price to find those opportunistic sellers and prevent prices from going through the roof. Remember, price is simply an advertising mechanism and is the market’s way to advertise for sellers. Even if prices don’t go through the roof they will often slightly overshoot; these are great opportunities on most days as price then begins to revert to the mean. On these normal auction days in a traditional auction setting (such as a cattle or an art auction), the auctioneer will begin adding “filler” to make the auction continue to feel aggressive and enthusiastic, to draw in any potential remaining buyers that may still be on the sidelines.

The unexpected response—trend days—when prices are auctioning higher, is outside the norm; instead of attracting sellers, higher prices are actually bringing in more bids—buyers. Your greatest risk is when bids are strengthening; your greatest opportunity is also when bids are strengthening.

Read the full article by James Dalton
  • #214
  • Oct 6, 2010 12:54pm Oct 6, 2010 12:54pm
Sam Seiden rules to buy at support and sell at resistance with low risk and high reward is applied in trend trading too:
http://www.tradingacademy.com/lesson...ed_article.htm... He has a few more articles on same subject...
The Market pays you to be disciplined
  • #215
  • Oct 6, 2010 1:37pm Oct 6, 2010 1:37pm
Quoting mima
Sam Seiden rules to buy at support and sell at resistance with low risk and high reward is applied in trend trading too:
http://www.tradingacademy.com/lesson...ed_article.htm... He has a few more articles on same subject...
Everyone has their own rules. What I posted was a reflection of another trader's way. The other trader happens to have the more impressive trading profile but that's besides the point.

Sam Seiden is just one trader. He is simply used in this thread as he is a good educator, not because his way is the only way.

The observations by Dalton are worth considering, especially by traders attempting to trade at S&D extremes who get stopped out too often in trending markets.
  • #216
  • Edited Oct 7, 2010 3:02pm Oct 6, 2010 3:48pm | Edited Oct 7, 2010 3:02pm
Quoting priceaction
Sam Seiden shows how to aggressively enter at supply and demand zones and whilst this technique is used by many traders in FX, Futues, etc, James Dalton warns that one of the biggest mistakes traders make is fading trend days; first you take a financial and emotional hit, and secondly you forego an excellent opportunity.

He writes ...what it takes to succeed on the highest percentage of days—reversion to the mean trades—is exactly...
I agree to some extent with this. The longer term trend will over power opposing supply or demand levels against it, unless it hits higher time frame supply or demand -which will either act as a reversal of the trend or a speed bump -temporary disruption of the trend. Hence the need to look at supply/demand on multiple time frames. Unfortunately although Dalton talks about the volume of buyers or sellers acting as a force within the trend to make a very valid point -this is too one dimensional when thinking about thw wider mechanics of the market. In this article at least, he does not distinguish between amateaur and professional buyers and sellers - based purely on contract size. It is where the pro's (the larger contract size) have the upper hand and can manipulate the masses into thinking a trend is continuing or ending. Typically the pro's that push price into supply or demand levels have done so to encourage liquidity so that they can off load their own positions and begin to re-position themselves in the opposite direction.- Or, they are pushing price back into their own stack of orders to sell or buy at a better price with or against the larger trend.

Note the current dollar strength. Keep an eye on the dollar index currently at a daily demand level.
  • #217
  • Oct 7, 2010 1:36pm Oct 7, 2010 1:36pm
Does someone know how to draw lines around supply/demand zone like Sam Seiden does? Are there rules for drawing those lines?

Thanks everyone
The Market pays you to be disciplined
  • #218
  • Oct 14, 2010 1:43am Oct 14, 2010 1:43am
Quoting mima
Does someone know how to draw lines around supply/demand zone like Sam Seiden does? Are there rules for drawing those lines?

Thanks everyone
Mima,

The best way to learn how to draw the zones is to watch Sam Seiden's videos. You will learn far more from these than from a static explanation. He has excellent communication skills and is a professional educator.

There is a link at the bottom of post #1 to 23 videos posted. Invest the time, watch them, and you will learn.

Good luck!

Rob
  • #219
  • Oct 14, 2010 2:00pm Oct 14, 2010 2:00pm
Quoting priceaction
Mima,

The best way to learn how to draw the zones is to watch Sam Seiden's videos. You will learn far more from these than from a static explanation. He has excellent communication skills and is a professional educator.

There is a link at the bottom of post #1 to 23 videos posted. Invest the time, watch them, and you will learn.

Good luck!

Rob
Hey Rob, Thanks for reply. I did watch and read letters and I can copy what I saw ...I just wondered what are the rules for drawing lines because he said there are rules for drawing lines but he never mentioned them...( just for XLT students).
The Market pays you to be disciplined
  • #220
  • Edited 1:44am Oct 15, 2010 1:29am | Edited 1:44am
Quoting mima
Does someone know how to draw lines around supply/demand zone like Sam Seiden does? Are there rules for drawing those lines?

Thanks everyone
If you watch the "Live Trading and Analysis" video, he talks about it at around 10 minutes in. In his example, when plotting supply, he used the top of the wicks for the top line and the lower candle bodies for the bottom line. Plotting demand would be the opposite. I haven't seen him get into any more detail than that. Here is one I'm in now. I got in a little late.
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