I took these trades, already got some profit from some long trades before.
It's a war zone between bull and bear right now, i'll stay with this long positions until it break the zone
Supply and Demand trading with Fibs
- #781
- May 18, 2012 4:11am May 18, 2012 4:11am
Hi Dean,
I know you're probably too busy with your trading but when you have a chance could you please describe how exactly a gap should be treated in terms of SD zones? Sam mentioned that a gap usualy means extreme level of supply or demand. But how exactly can we use it? Where should be a zone marked? Is it relevant to Forex weekend and holiday gaps?
Thank you in advance! Your explanations are awesome and worth thousands of articles
Peer to peer questions and answers helps a lot!
I know you're probably too busy with your trading but when you have a chance could you please describe how exactly a gap should be treated in terms of SD zones? Sam mentioned that a gap usualy means extreme level of supply or demand. But how exactly can we use it? Where should be a zone marked? Is it relevant to Forex weekend and holiday gaps?
Thank you in advance! Your explanations are awesome and worth thousands of articles
Peer to peer questions and answers helps a lot!
- #784
- May 18, 2012 2:33pm May 18, 2012 2:33pm
- Joined Jan 2011 | Status: Senior Member - Pro FX Trader | 2,736 Posts
Hi Dean,
I know you're probably too busy with your trading but when you have a chance could you please describe how exactly a gap should be treated in terms of SD zones? Sam mentioned that a gap usualy means extreme level of supply or demand. But how exactly can we use it? Where should be a zone marked? Is it relevant to Forex weekend and holiday gaps?
Thank you in advance! Your explanations are awesome and worth thousands of articles
- #786
- May 21, 2012 4:46pm May 21, 2012 4:46pm
- Joined Jan 2011 | Status: Senior Member - Pro FX Trader | 2,736 Posts
Hi guys,
Nice thread you have going here. Ive been following it for a few days now read through it watch some of the suggested videos of Sam. I am primarily a hardcore J16er (i mix a small bit of fundy to add more confluence to my trades but not most of the time). Ive been following the J16 thread for about a year now and have gotten pretty good with the technique.
Now James teaches how to identify trouble areas like PPZ (pivot point Zones which consist of Support & resistance levels) amongst other things. Many people on the thread have many...
That lower supply u marked is not so good, not much of a move away, no maturation of move etc, but that upper level is beautiful, and you are right the last time it went through sell orders were all consumed, but u see the first time it went back there, sell orders completely took over and wouldve been a super easy trade, as for targets, try and mark the nearest demand zone in the other direction even if its a iffy looking demand, doesnt matter as its our target and as long as its minimum of 1:1 risk reward then pull the trigger, move SL to be as soon as you are comfortable in the trade, so halfway to target is a position i usually move stops. hope this helps
Dean
- #788
- Edited 2:55pm May 22, 2012 8:34am | Edited 2:55pm
Welcome
That lower supply u marked is not so good, not much of a move away, no maturation of move etc, but that upper level is beautiful, and you are right the last time it went through sell orders were all consumed, but u see the first time it went back there, sell orders completely took over and wouldve been a super easy trade, as for targets, try and mark the nearest demand zone in the other direction even if its a iffy looking demand, doesnt matter as its our target and as long as its minimum of 1:1 risk reward then pull the trigger, move...
Thanks for your response. The reason I mention the rather weak level in the chart was because I made a certain observation. Now lets see if I can choose the right words to put it.
Whenever I open my charts to observe supply and demand I see that wherever there has been even a relatively smallish move up/down (even if its one bar or a couple with no heavy momentum), price will always react to the edge of the bar that lies behind the bar with which the up/down move started when it retraces back to that point. This is ofcourse what you taught in the beginning bits of this thread on how to place the zone i.e. with the previous bar (previous bull bar in down move/previous bear bar in up move).
In fact I have noticed that this coincides with all the trend lines one tends to create. It is always price going back to pick up more orders each time at a lower level which measures up to the previous bar area. And when the orders of that move are finished, then price breaks through and
ignores those zones and goes back in the other direction until it finds more orders from a prior move not yet tested. Given this, one can say with atleast 80 to 90% certainty were price will be reacting. The heavier the previous momentum and the fewer the touches the more it will move in that set direction.
I see one problem with this though. R:R. in most cases, even though price reacts as anticipated, the R:R is not viable to take the trade. i would imagine this would be atleast 1:1 for 50% strike rate to break even in the long run. But then we have running trades. But with 80% strike rate (assuming) if we adjust our R:R to 1:0.125, we should also break even in the long run. If return is anything greater than 0.125 then we should be profitable. Is this something that you have even done considering that your strike rate is obviously much higher than 50:50 which is evident from the live trading posts in the beginning of this thread.
Anyway I have posted the chart below to illustrate what I am trying to say above. Its the same chart I was watching yesterday and posted a question with below. Apart from this I have taken 2 other trades today both successful. minimal draw down for which Ill post the charts later as I am in a rush.. I'm liking this already...
Best,
-H
