B.S. Trading with Kenneth Lee

those were the best least risky trades with the current trend.

except shorts

Here is an analysis of the USD CAD trade taken by zamfir.

First, the cad is very well known to be a wicky pair and blow levels very easily. Avoid levels with wicks because most of the time the supply and demand has been used up.

Second, when trading, you need to use a multiple time frame analysis. It is ok to trade 15 mn levels, but the direction of the market can be found on higher time frame charts.

Please see the pics below.

Thanks Good looking and Samikaze for your analysis.

I have been struggling a bit with MTF analysis. It can be confusing at times.

I get a few trades correct and few of them wrong. So most of time i now break even. But learning a lot.

Also working with live accounts has been more helpful, even though some losses are there. Demo accounts can only help to some extent.

Anyways, will be posting more come monday.

Thanks again for your support and help.

Dear Guru's,

I traded audjpy last week. Attached is the shot of it. one trade was success while other failed.

My assumption is that if there is a consolidation(3 or more candles) and then a drop or rise from that consolidation area, i consider that to be a "fresh" level. Is my assumption correct here?

Now why does some levels work and fail based on this assumption?. I know there is definitely something wrong in my assumption. Can some S/D level guru help me with this?.

please see chart.

Thanks.

Zamfir,

I'm certainly not a guru but have been studying and trading S/D for a while. I must add that it is only very recently that it finally started to click for me. I very rarely look at forums but saw this chart and it reminded me of an almost identical chart that I looked at and asked myself exactly the same questions. Here's my take fwiw.

Firstly, in order to quantify a supply / demand imbalance the key 2 patterns of price to look for are rally base drop and drop base rally. If you look at that chart, of the 3 points you highlight only one of them actually meets this criteria. The other 2 would simply not be of interest to me.

Secondly, the supply / demand zone must be fresh. If you look to the left of my chart you will see where there was a previous imbalance (not tradeable as it was a drop base drop whereas I would have wanted to see a rally base drop) and note how the zone that I have marked 1 is actually higher than that previous supply zone and only has red candles to the left of it - this is imo a fresh level and therefore valid.

Thirdly, on my chart I have marked two points A and B. They represent where sellers and buyers came in. They are the wholesale points of interest for me. To use an analogy, point A could be where a pint of beer cost £5 and point B could be where a pint of beer cost £2. Now, if you were a pub, where would you want to buy and sell your beer? Would you want to sell it at point 2 or buy at point 3? Obviously not if you knew you could sell it for more and / or buy it for less. In other words, when I am looking at zones I am always looking at price extremes.

Combine the fact that neither point 2 or 3 are rally base drops or drop base rallies with the fact that they are in the middle of the curve rather than at extremes and I can't see a justification for trading them.

Regarding the short that actually worked, it is worth noting how close previous demand was to your entry. I don't trade timeframes this small but if I saw this chart on H4 (the timeframe I look at) then I don't think I would have taken that short as the risk / reward to initial target wouldn't have been strong enough but that's just me.

Anyway, I hope that is of help. As an aside I think entry point 3 probably worked as it was a a rally base rally at a swap level (see white line).



All the best
BT

P.S. Just to put my money where my mouth is this is the sort of thing I would look for. That is, IMO, a very nice picture of supply coming in at the Ozzie's all time highs. Depending on how price arrives back at that zone it could set up short. The red line shows a possible H4 level to get in with a tighter entry.



All the best

BT

Number one recommendation is get off the 15 min chart. You are clearly struggling with the level off it. The best way to use faster charts is for entries to levels that are picked off slower charts.

Find levels that are clearer then maybe look for entries on your 15. but until your picks are more positive than losses your not going to get anywhere. it is better to have one great trade a week than to have 20 but still only make as much as you did on that one. Because your confidence will not be built with all the losses.

Cheers Ken

chart

more

So in brief if your a conservative trader. just placing PO's at the highest level would be your trade you will also find those levels are the ones that are sitting on the higher time frame charts. But the group of levels on the faster charts help make them safer trades.

But here is a couple of charts of how to incorporate your different time frames.

Hi Ken

Great posting and summing up.

The part about setting a PO or you may regret it is classic. I have regretted it so many times it is ridiculous. Now if I lay out a level I automatically put in an order before I go on to the next chart. I can always cancel it latter if I find something better. No more thinking "I'll get back to it latter". Procrastination can be the seeds for doubt.


One thing I was thinking about. If I set a pending order and price comes with en a few pips of it but does not trigger. I cancel the order. This happen with an EU position this past week. Missed the order by 7 pips, supply took over and took it south. I canceled. My concern was exhaustion of supply. The NFP news blew through where I had my order so no harm.

I like to think about it as cans of corn. There was a few more cans left on the shelf but a storm coming or coupon buyers came and quietly ate up the supply. The empty shelf is still there, but no corn.

ah well...off to work

Rufus

Thank you Ken for your analysis..

What is TF you normally look for S/D levels to start off with? H4/D.

I m looking for intraday charts. Hence max i will go upto H4.

But Ken, nice tip on the price approaching HTF.

Am i doing it right? See attached charts

Looking forward to learning more from you ken..

My primary time frame is 30 min, but you always need to know where you stand in the big picture. You could be trying to sell in a demand level on a daily time frame if you don't look, Never any need to fight the current of a big river.

But 30 min gives clear levels and has enough data to establish a current trend I used to trade primarily a 15 min chart but with Supply and Demand there is to much noise on that time frame and false signs. That doesn't mean that every time frame doesn't have it's place last week I posted some 5 min charts as well. But we had been in a tight range for a long period and that was the only way to see anything.

At times just like the examples above scrolling through different time frames can give you a better understanding of what the possibilities are, not that each time frame level wouldn't come into play but you can see the spots that maybe a faster chart will stall your price action before it hits your longer time frame level. That can give you more trading chances or just the information to hold for your main goal.

That is the main thought I try to get across , it is what each person see's that is important. Some may see better on a faster chart others NEED their daily and weekly charts to have the comfort to trade others can spin and twirl with the market as fast as a blink of a eye and love trading the fast minute charts.

In most of Sam's information he recommends picking levels off the 1 hr and 3 0 min chart then finding entries off a fast 2 min chart. He even shows the use BB for what he calls a all star entry, Though he actually stated in one video he didn't use it, Also it is the only thing that has not remained constant in the videos over the years. Plus they only show oversold and over bought. Not hard to spot. And you still need to know the trend so I suggest learning without that one indicator.

A indicator is just taking the place of basic knowledge we should learn, each indicator a person adds is relieving them of a piece of information they should figure out on their own . Plus if your using PO's that indicator never comes into play unless your using a EA. As it only works in a present environment so is mute in a placing orders in the future. Just my 2 cents.

But the key in all trading is your comfort zone, You have to be comfortable and secure in your decision making process to trade profitably. Just like taking profit is a personal choice. But even though it is, we should see what the best choice is in the current price action then learn to hold for those choices. But they need to be our choices.

Don't forget day light savings .. Turn your clocks back a hour.


Cheers Ken

Best advice one can give.

So Ken, do you consider yourself a better trader now, or you feel you still have to learn a lot more?.

Yes and YES , If you stop learning your just as good as dead.. I have never studied anything that wasn't a winning idea , Just some had to much information to process which lets you have choices that aren't always to your favor. Like say a persons plan has many entries which in themselves are good trades. But say each had a 80% win ratio and you just hit each on the bad 20%. If you had 3 different entries and they all failed you could see a possible 60% failure.

If your trading one idea that is simple and to the point and has a better than 80% success. There isn't much chance of that happening. That is why it is important to find your comfort level and stick to it. As jumping time frames is still showing different trades. It isn't the same as seeing major concerns then using your comfort time to find entries.

But all that will come it just takes practice and nothing was learned overnight that is worth learning.

Hope everyone is well and ready for another week. Ken

Funny computer died on friday and since then hasn't made a chirp. Guess it just wanted to show me who is the boss.

Good to hear.

Ken, are you making consist profits after 1-3 years now?

I only have 8 months under my belt, have to go a looooooooong way...

hi kenneth!!
as im prepering myself for the upcoming week im reviewing my trades from last week and i came across some Q's i still haven't resolved and maybe u can help me clear them out.
over all i had a great week and i feel like im getting the hang of supply demand.
i hope it was not luck that made me reacher this week but me understanding this concept better.it just amazes me how simple trading can be.

my q:
1-lets assume we identify a supply level and price turns BEFORE reaching to it.is that a correct of me to assume thats that is a great opportunity to go short once price returns to the zone since the failure of the first attempt indicating that there is a massive amount of sellers?(my answer is defiantly yes but i need ur approval to feel comfortable)

2-wicks in a zone-good or bad?what does it mean if we identify a supply zone and than price returns to it but forming upper wicks.are those wicks representing supply consumption or rejection?is there a way to tell?(in real time not after the fact ..lol...)

3-again lets assume we are in supply zone.than price revist for the 1st time and than again for the 2nd time only this time price is reaching deeper into the zone(but NOT breaking it) and forming a higher swing than the first visit BUT does provide some candle pattern indicating rejectionreversal.can i still go short?now i know that u gonna say that its not fresh anymore but my Q is about the fact that the 2nd visit went higher that 1st visit.if it didnt i would have a Lower High so i would feel more comfortable with short but now price formed a HIgher HIgh in the zone and thats why im confused.

i hope u dont mind all these Q's.

i wll post here some charts later as i get to my trading computer...(i use 2 different ones)....

have a great one!!
marc

I have 100% confidence in what I show to people how to trade. I overall am profitable . but still have personal issues to overcome, It has never been a failing of a trading system that has held me back but a fear of failure on my own part that has been my biggest adversary.

This is the reason I have been on the search for the simplest trading strategy with the clearest rules. To many types of entries give us to many choices then you can always justify letting it run a bit against you to the next entry or a bad entry period.

So for now I have settled on this Supply and Demand . It is very clear encompassing the complete trade. With easy to understand rules. Now it should be a simple matter to train one's self to follow those rules. If your a new guy don't vary from any of the rules ever, that is the hardest thing to overcome. You do something wrong and it works out and you feel superior but in the end it will cost you big time.

If you can't get this trading idea that is OK too , but whatever you do give each idea time and follow them 100% trouble you see over and over is people jumping from one to the other but they tend to drag ideas along with them which corrupts the newer idea.

I personally have looked at nothing but as clean price action as possible , and now have narrowed it down to this as it is only one type of analysis that can be used on different time frame charts with less parts than anything.

Being less complicated may bother some as most can't believe it should be simple. But over the years, As each person I personally have known has got it that has always been the common statement that trading is easy to the point of boring. Because once you get it, it really is just a matter of glancing at a chart picking your trade levels seeing the profit target the stop and letting it work.

So even if your just learning, do all that every time and you will build the professional habits you need to succeed.

So in short "do as I say not as I do" Ken

my q:
1-lets assume we identify a supply level and price turns BEFORE reaching to it.is that a correct of me to assume thats that is a great opportunity to go short once price returns to the zone since the failure of the first attempt indicating that there is a massive amount of sellers?(my answer is defiantly yes but i need ur approval to feel comfortable)

yes, it normally shows that supply or demand is in great quantity at that level. But the smartest way to trade multiple touches is to wait for the turn then enter. even as far as to wait for it to exit the level going in your favor . So if it allows a short po could be placed below a supply level after price has moved into that level. That is a confirmation entry because price action has confirmed the move. it normally is entered manually but it can be easier to do the right thing if you use a po with all the parameters in place, entry , stop and profit taking.

2-wicks in a zone-good or bad?what does it mean if we identify a supply zone and than price returns to it but forming upper wicks.are those wicks representing supply consumption or rejection?is there a way to tell?(in real time not after the fact ..lol...)

Each time a level is pierced it is adsorbing some of the orders within that level. At some point those orders will be completely filled and the level will collapse. This is OK as it is what is suppose to happen, So many times you see what people will call a failed level. but in reality it only did what is suppose too. Again the way to safely trade them is through confirmation entries after it turns.

This would also be a good time to look at other time frame charts. I posted a pin the other day, Then posted a 1 min chart that showed with int that pin entry was a perfect level on the 1 minute. The 1 min would allow the complete plan to be planned and all parameters to be in place before you take the trade.

That is key you have heard everywhere ,
" Plan The Trade , Trade The Plan "



3-again lets assume we are in supply zone.than price revist for the 1st time and than again for the 2nd time only this time price is reaching deeper into the zone(but NOT breaking it) and forming a higher swing than the first visit BUT does provide some candle pattern ??????? indicating rejectionreversal.can i still go short?now i know that u gonna say that its not fresh anymore but my Q is about the fact that the 2nd visit went higher that 1st visit.if it didnt i would have a Lower High so i would feel more comfortable with short but now price formed a HIgher HIgh in the zone and thats why im confused.

First we don't trade candle patterns. It is a after the fact function . it does show what happened at our level and can show rejection. but at that point it is to late for any good. So now we can look for a confirmation entry or again look at a faster chart to join the trade.

I feel from your questions that your looking for the wrong trades. they all involve second and third touches. We should all look for the best entries and primarily fresh first touches. If you can't find the time and don't feel confident to take PO trades. Then when you find a decent level look for entries on faster charts . That way you will still learn the skill of picking the levels , the rules apply to all time frame charts, but you must filter them better on the fast charts as you will find more levels that aren't very good on them . but your stops should be real tight so less risk .

If your stops aren't tighter than something is wrong.

If you need clarity in any of the above please ask. Ken