Supply & Demand zones - how do you trade them | Forex Factory

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Supply & Demand zones - how do you trade them

  • #1
  • First Post: Jun 20, 2012 9:36pm Jun 20, 2012 9:36pm
Hi all,
I've just come back to trading after a few months off - reassessing how I go about progressing in this journey.

I've followed Red's 'Price is Everything' thread for quite a while & see some great traders in there. I'm fairly sure my path lies in that type of trading.

My question is, for those of you that trade Supply/Demand ( or Support resistance ) - How do you actually trade them? I.e. do you set a limit order and fade price as soon as it touches the zone? ala Sam Seidens set and forget method.

I tried this and got pretty much slaughtered most of the time.

I'm now thinking of waiting for price to move into the zone, and then using more conventional methods such as waiting for PA to make a 1-2-3 reversal or show some higher highs/higher lows etc ( on a small timeframe ) or use Stochs or CCI to time the 'pull of the trigger'

Just wondering what some of you others use for criteria to pull the trigger when price reaches a zone of interest.

Appreciate any guidance.

Cheers

Seb
- Look to the left, Trade to the right - I am the system
  • #2
  • Jun 21, 2012 1:53am Jun 21, 2012 1:53am
I would say that grasping the whole picture is essential. Not just to see these levels. But really understand what's happening. Key to this is higher timeframes and trend on every timeframe you trade.

Some examples... if uptrend is strong on your main execution timeframe (30min for example) AND price is nowhere near higher timeframe supply (4h, daily), then it makes sense to take pullbacks into demand zones on the 30min.

If you're in a range then you have to trade differently. Sticking to the extremes is usually fine. Using bollinger bands and stoch or CCI is also fine. You can also use them in the trending markets.

Overall... until you really master all this, then using BB + CCI is not the worst choice you can make. But really understanding what is going on is the key. Oh... and profit margins are a huge thing. Don't forget about them.
  • #3
  • Jun 21, 2012 2:06am Jun 21, 2012 2:06am
Set and forget (limit orders), but normally I will pull them if momentum is powerful coming into a zone (neglected to do this on my most recent trade, doh!).
"Don't Panic..."
  • #4
  • Jun 21, 2012 2:08am Jun 21, 2012 2:08am
@sebastiaan76

to trade demand&supply in most effective way you should go through whats going on behind scenes. one of the best topics i've found about it is 'behind price - order flow', here on this forum.
its a long one but definitively a must read.
big numbers are our friends...
  • #5
  • Jun 21, 2012 2:21am Jun 21, 2012 2:21am
Quoting deeZG
@sebastiaan76

to trade demand&supply in most effective way you should go through whats going on behind scenes. one of the best topics i've found about it is 'behind price - order flow', here on this forum.
its a long one but definitively a must read.
Nice one! hadn't come across it. Thanks
- Look to the left, Trade to the right - I am the system
  • #6
  • Edited 11:45am Jun 21, 2012 2:28am | Edited 11:45am
I have reconsidered your question.

Guidance: Don't be a lazy phuc.

There's tonnes of supply and demand stuff on the web and FF. Why don't you spend the time delving into it a bit deeper instead of writing this begging thread.
  • #7
  • Jun 21, 2012 2:32am Jun 21, 2012 2:32am
Quoting Halifax
Set and forget (limit orders), but normally I will pull them if momentum is powerful coming into a zone (neglected to do this on my most recent trade, doh!).
I view strong momentum into a level as positive after a long move in price as its usually traders getting in too late to the move, or pro's pushing price into their waiting orders to be executed pulling in the herd and using their liquidity to hide their larger orders without moving price in the opposite direction too soon, so all their orders can be filled. The key is having the right level and not placing your stop too close to allow for manipulation. The reason why price came back to the level is because orders were left unfilled at that level in the first place. So if its a good level expect a strong move into it (unless strong news causes these orders to be taken off, so understanding fundamentals will increase your odds).
  • #8
  • Jun 21, 2012 2:38am Jun 21, 2012 2:38am
Quoting Porkpie
I view strong momentum into a level as positive after a long move in price as its usually traders getting in too late to the move, or pro's pushing price into their waiting orders to be executed pulling in the herd and using their liquidity to hide their larger orders without moving price in the opposite direction too soon, so all their orders can be filled. The key is having the right level and not placing your stop too close to allow for manipulation.
Yeah I don't mind a price spike into a level, I'm more talking about a long sustained forceful move. One that leaves wick-less bars on the hourly chart, the move up on Tuesday was a good example (but I also picked a crappy level anyway).
"Don't Panic..."
  • #9
  • Last Post: Jun 21, 2012 10:21pm Jun 21, 2012 10:21pm
Quoting Porkpie
I have reconsidered your question.

Guidance: Don't be a lazy phuc.

There's tonnes of supply and demand stuff on the web and FF. Why don't you spend the time delving into it a bit deeper instead of writing this begging thread.
I'm not lazy - far from it. But just wanted to find out how others traded identified S/D levels i.e. other than placing limit orders ( which I've not being succesful with ) - FF is after all a 'discussion' forum, so thought I'd ask the question and/or discuss the specific aspect of how to determine when you pull the trigger once price is in a zone..

Apologies if I came across as lazy. I'm far from it. Thanks for your 'Guidance'
- Look to the left, Trade to the right - I am the system
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