B.S. Trading with Kenneth Lee

The daily trend is up. We had a previous touch on 4/2. Price moved through this area begining 4/19. We now have a potential for a swap area. We do have an area around the 6064 on the 1HR & 30M





If we move up the chart we see a second area for longs on the 15M & 30M TF's .. Small double yellow lines.

I'm looking for a touch just below that on the 5M TF 6137.. Drilling down for a tighter stop.

I'm thinking we should see a roll back down into that 6064 if we complete the 6137 touch.

Will see

TSD

30M Potential set up for a short on the AUD @ .0439.




Longer term 4Hr chart showing down trend. Our trade should have some follow through short. Will have a better idea if we see a demand zone set up prior to the short.

TSD

Here is the longer term chart 4HR showing a down trend



Looking to take a short on the 30M @ 82.41 area. Trading with the trend.

Just as a point of reference there is weekly demand area @ 76.74.. Additionally we have seen the move short from the weekly supply area @ 84.25

TSD

Here is a screen short of the weekly area I mentioned in the previous post

TSD

I've been trying to take more swap trades this last week or 2 because up till now I havent really been taking them because I dont fully understand them.

What I would like to know is whether with swap trades the market should pull back quite soon after its broken through and retest the level i.e as part of the initial momentum/push through the level.

I've got an example of a trade here where it didnt happen and didnt retest the swap level until quite a bit later, is it best to avoid these ones and only take trades where you're getting in on the initial momentum?

If not, could anyone let me know any reason this wasnt a good trade?

Took this short late off a supply area of 9866. Again was late on the entry.. Just not paying attention.. Dropped down to the 15M .. Had plenty if rejection at this level which gave me the confidence to take it late. Secondly we had a previous touch of the 9835 demand area and looking at that move up into the range / trash from about the 26 Feb, also gave some confidence to the short.. Lastly, if you look at the preceeding PA on the HR you will see this move rolling over short on what looks more like a pull back.. Just my observation ...

PeterXXIII had adivised to look at how PA has moved back up along its previous trend. Has S/D areas along the way reacted in the manner that we like.. I would suggest yes, then no reason why you should not take the next area with confidence. So I took the short based on these added observationas. Looking at a 5M chart we have a very clear demand area for our target given the time frame we are trading.

Entered short w/ 2 lots






Exited w/ 18 plus pips.. Boy the spread was a little tough @ times too..And as of this writing PA is still headed south.. stalling now at the previous supply @ 9845..Possible swap level

TSD

I am not qualified to respond to this as i don't trade equities . or even watch them . This is a chart of the DAX index i believe.

Plus I can pick charts that show it did happen or didn't all day long.

Price action to me is everything. people are just looking for a way to trade where all thinking is negated. Looking at your chart the swap level did work

at least long enough to get out with little loss or even a small gain.

I am not picking on you personally , But we see this all the time . people talk of failures but have given no thought to PA.

Just keep watching your charts and . look for where price should go based on what is visible. it does get easier.

But there will be failures , But say you took the short off your marked swap level . Just don't get married to any entry. If you see the charts are saying something else. if you bail out and it does go with your initial entry. So be it, better to lean towards the safer side than the riskier.

Cheers ken

And yes your dotted line would have been the price action you would look for a short, a lower high after a lower low. But it is the price action not the fact it should be sooner . it could stall for hours going side ways . but if the swings are intact as your dotted line shows the PA is also still intact.

OK thanks for the reply Kenneth.

I do know exactly what you mean regarding price action but what I would say is that the core strategy as taught by Sam Seiden is relatively set and forget. I met him at a trading course in London last month and spoke to him personally about how he trades the method and all he does is 1-2 hours in the morning analysing the markets and putting his levels in then he leaves it for the day. He doesnt mention too much in the way of price action, his focus is always on getting the right levels.

I find that for me personally watching the price action and trying to trade them live like a scalper doesnt work out, whereas leaving them to hit the target or the stop works excellently. My target is always at least 2 times my stop size and I've been getting a 55-60% strike-rate so far, including quite a few poor trades I've taken. I still have a long way to go with this strategy but the strike-rate above means that even at this stage I have a very clear edge.

From what I've seen and heard this is how Sam trades, although his strike-rate is more in the 70%+ region, he also uses pending orders 99% of the time it seems.

All in all don't take this post in a negative way, on the contrary I found your post very helpful and I'm more than willing to consider price action in regards to selecting my levels so those higher lows before the level could and perhaps should have put me off, but I think for my own mindset and psychology watching and trading the price action at the level itself defeats the purpose of the strategy. End of the day got to find what works for each individual because we're all different. I would just say it's not out of laziness but rather its for mindset reasons.

Just noticed a bit on the screenshot that I misread previously where I assume you meant to say you wouldnt trade swap levels with a PO, might be that I need to treat swap levels differently to the standard S/D levels then and focus more on price action in those scenarios.

I think I need to look with much more depth into swap levels as my next progression with this strategy because I'm very comfortable using POs on the standard S/D levels, but it seems swaps could be more open to interpretation.

Yes we are all different , and trade differently, Why I quit posting my trades as others seemed to stop when i did. But the way i use this information can be and is different than others.

I have just incorporated the Supply and Demand levels into my price action trading. Replacing Support and Resistance. seems to give me tighter entries.

I will slowly incorporate more PO trades as i go along I am sure, to me that would be the ultimate trading. But the ability to get a decent percentage gain each week is foremost in my mind as I trade, being able to do that and be out of a trade most the time is nice.

But as you said we all should be able to look at our charts and pick areas of interest and set the trades up and go about our lives. because 99% of the time we are just sitting and waiting for price to close on our areas of interest.

So we can find ourselves brain dead after watching for hours. i tend to look and then estimate how long it might take to get there then do something else. Setting a alarm is another option.

Having a clear head is a must in trading, for me anyway. That is one reason my trades are from all different times of the day and night I look when I have time and am not to tired. Plus i tend to like slower periods better. just a personal preference.

Cheers ken

I trade swaps a good deal as they are nothing more than breakout trades. Price seems to move within blocks or ranges, then when it breaks it settles into the next range of pricing. till something forces it out.

the swap entries are just some of the first swings within this new range or block to me . i was never any good at taking s/r breakouts but the s/d gives a better view of what and where to look for that entry.

hi ken, new here, great pdf, am understanding most of this, however, one of my problems is with ploting the levels on a chart, be it 1hr or 15 min, i never know wether i should be looking to put the levels at the tip of the wicks or at the top, or bottom, of the candle body, or should i just be looking for anavarage, i hope im making sense here,.

hoep to hear back sson

podz

I will agree with you on all points above. This can and will become a very personal way of trading for each of us. Some will follow to the letter others will add to (as you did) to their own personal style. This is why really enjoy this method... Clear and flexible in the same light.

Just as a point regarding personal trading. I tend to trade triangle formations, when they occur, coming out of the bases with my targets always being the next S/D level. Has made for some very good trades. I have chosen not to post these types of trades as that would take away from those trying to nail down this type of trading.

Yes, there are times I still miss the mark because of my lack of knowing the little extra nugget of information or some observation I should be making... But this too will come in time... trading has taught me a great deal of patience... One cannot learn this stuff overnight... Many seem to want to try or think they can. Not very likely and can be spell disaster to ones account.

3 ideas tend to stand out in this method that has helped me greatly

1) Trading with the longer term trend 4HR, Daily... even Weekly (is the confluence in there?.. smaller TF's showing confluence as well..Tighter stops..)
2) Trading between the levels. As you had mentioned to me sometime back...How important this can be when determining direction... Were price is moving... Why price is moving this way or that way...This does take a little time but this eventually falls into place when I am looking at the different TF's
3) Something PeterXXIII mentioned. When price is moving back up or down toward S/D levels. If there is multiple levels ahead of you and price has moved away from levels on behind you ( my issue for some time was which ones to take if they all look good ) .. Answer per Peter... is price id bouncing as expected then we should expect the same as we are moving forward... Good levels are good levels... We should trade accordingly.

Good trading to all

TSD

Just want to clarify , something from my last post. When i say i just use this within my price action trading . It doesn't mean the rules change.

The beauty of Supply and Demand trading is the few and simple rules within it. One of the reasons I was on a quest to find something new was the fact that so many ways of trading had so many variables. This is not a fault or negative comment on any of them .But the more complex or different entries within a system the more reasons for doubt and second guessing.

I enjoy watching price move around on my chart and then trying to understand where it is headed. In the past i have compared trading to tracking how someone can move through the woods and see details most of us have no clue are there. With time we become just like trackers, seeing the nuances of the price action.

The Supply and Demand levels give me a location for price to leave from and head to. So then all I have to do is figure out the CURRENT trend . Which way it is heading. The same as a tracker can see a broken blade of grass and tell by the way it is leaning which way a animal is heading we too can see which way price is going .

Then knowing where a animals burrow is or water source or feeding ground we should be able to move around and position ourselves in a spot to get the perfect picture of our quarry.

The same is true with our trading we now have a perfect way to see where price is coming from and where it is heading. We know it trades between levels.

So we just have to get on the trail and follow it. Until we can move price ( Never). All we can do is learn to track.

Somehow I have got off topic.. Normal for me.

The point being the rules apply for me as well. I don't tweak the trading idea to fit my style of trading . I just use different times of trading and may take profits sooner, But the core remains the same .

The entries are at the levels the stops are bit the other side. the targets are the next opposing levels. only 3 basic things to learn . They are the same on anytime frame chart. They work anytime of day. The trades may get smaller during of hours between sessions but the trades work.

The idea lends itself to absenty trading better than most trading ideas do.
because of the few basic rules. After spending many years , watching others that show and share their trading . I saw that the best trades they were taking were very basic and at times not clearly defined within the ideas they taught.

I don't think that they would say they were trading s/d but i do see for me anyway that these levels give me the spot on entries I saw some achieving. I have always said whatever it takes us to truly SEE no matter what is the goal. So if my idea of Supply and Demand helps me see Great.

But the rules of trading are the same for everyone the entries, the stops and the targets don't really change with a trading strategy, just how your trying to get in the right way does. Most ideas require us to wait for some visual confirmation which can take away from our profits before we ever enter a trade. Waiting for a pin to form or a IB or a cloud cover or head and shoulder . The supply and demand trading lets us get in as these patterns or signals are forming and for me this has been a great benefit.

Hope everyone is having a great weekend. Ken

I don't normally respond to these request as it has been gone over so many times and i am trying to keep the thread manageable and less repetitive.

Plus not everyone draws the levels in the same way . But for me i like to think that while price was forming a base or level. Orders were changing hands and price was pretty equal i look for the exact spot where price leaves the area and doesn't return.

But I also will enter a trad a bit before a level as well. Some will draw their levels to take care of that. To be honest i don't draw on my charts to much just look for where they should be then watch PA as it approaches the level.

Chart

chart

Hi Kenneth

I like your literature and analogies. I like to analogize much myself. I also think that trading setups can be very simple and very effective at the same time.
I like to systems trade as i believe it allows me to stick to the strategy. Also I don't like to tweak my system either I just manipulate my position size based on what I expect to gain with an even initial risk. I personally like to use volatility to my advantage. Trades that are in the money i like to ensure I take profits and trades that go against me I like to give a chance to come back into profitability. By using stops outside the range of the time frame I trade a lot of trades that go against me usually bounce back into the channel before breaking out the range. If a trade breaks out the range and hits my stop no prob it's just the collateral damage of the system. As long as your edge is pure correct money management will ensure your edge.

A simple way of finding a probable system would be to look for a strategy that's break even and use any kind of data to reduce the entries that are less probable. It could be as simple as don't trade the system on sundays and boom there's your edge. Of course in the real world it might not be as simple but a little data on how your system reacts to news,indicators,price action or whatever. This might allow you to see that the systems edge would be profitable by eliminating these entries when this is happening type of thing.

I tend to ramble on as well sorry!

Have a good one!

Hey Kenneth,

I have read through the whole thread, and it is great! As a start up trader I have not has much luck, but I have never traded Supply and Demand, It is such a simple idea! You're a very humble man sharing your knowledge with everyone.

Here is a trade I am in on my Demo account as a PO. It touched perfectly!
(Need to practice before I go live!)