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Southern Fried FX - Supply/Demand Trading

  • #21
  • Jul 2, 2012 9:55am Jul 2, 2012 9:55am
I hope I explain this well. I always start with the weekly time frame and identify the freshest S/D zones. Not support and resistance, this is different. I then move to the daily and do the same...if there are any fresh. I then look at 4H and 1H for the same thing in the direction I believe that particular market is moving based on Higher TF S/D zones.

The EU trade I placed for example recently moved away from the Daily green demand zone, pulled back and based briefly, then continued it's move up, based again and started a pullback. It then went back up to the last base and used up existing supply and dropped back to my pale green 1H demand zone. My 1H trade was counting on the pullback to this area for a buy.

The stop was set below my demand zone (pale green), TP was originally set at the first base near the top of the 1H move up. I have since moved that TP to 1.26211, at the second basing area made during the move down.

With all of that said, at this point I may close this trade soon if price does not move away from the supply area soon....I believe it should if there truly are a significant amount of buyers there. I'll take a small profit or small loss if necessary....This is one of those grey areas I need to sharpen up.
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  • #22
  • Jul 2, 2012 8:57pm Jul 2, 2012 8:57pm
Price is moving poorly here, but it is moving up. Struggling with the BRN so rather than close for a 20 pip profit, I moved stop up to a 10 pip risk. It is worth that risk to see if price will continue up overnight. I have no intentions of checking trades this late on a regular basis!
  • #23
  • Jul 3, 2012 3:59am Jul 3, 2012 3:59am
Price moved to within 6 pips of my TP overnight and almost gave me a nice 43 pip profit before coming right back down to the the demand zone. I closed my trade for 1 pip profit. The demand zone is no longer fresh, on top of the fact it is a holiday week in the US. I will cool it the rest of this week and spend time with family and friends and celebrate the Fourth of July. Happy Fourth!
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  • #24
  • Jul 3, 2012 8:16am Jul 3, 2012 8:16am
It looks like we are at the same place in are trading.
I am a day trader I don't leave trades open overnight.
I have had some success with pullbacks with the trend treading.
But I think Supply/Demand Is what I really what to learn to be be consistently
profitable.
I will be watching your thread and reply when I can.

John
  • #25
  • Jul 5, 2012 7:09am Jul 5, 2012 7:09am
Quote
It looks like we are at the same place in are trading.
I am a day trader I don't leave trades open overnight.
I have had some success with pullbacks with the trend treading.
But I think Supply/Demand Is what I really what to learn to be be consistently
profitable.
I will be watching your thread and reply when I can.

Thanks for dropping by jcgibson and welcome. Feel free to weigh in any time. My challenge is still picking the best levels...I think with more practice and focused observation of how price reacts at these levels I will get there.
  • #26
  • Jul 5, 2012 7:29am Jul 5, 2012 7:29am
Price blew right through my EU D1 demand level...I believe it was a bad level because it really did not go far enough away from the level to be considered a good demand level. Just one of those learning moments. I have taken note and am developing a trade plan using these notes. The vids from Sam Seiden are helping a lot!

I have placed a pending buy limit at the aqua 4H level highlighted on the chart, stops and TP's are visible as well. I am trading very small lots at this time....
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  • #27
  • Jul 5, 2012 7:37am Jul 5, 2012 7:37am
I've sold AU at a 4H supply level. This level is also right under a D1 supply level. TP and stop are in place as well.
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  • #28
  • Jul 5, 2012 5:04pm Jul 5, 2012 5:04pm
Quoting deepsouth
Price blew right through my EU D1 demand level...I believe it was a bad level because it really did not go far enough away from the level to be considered a good demand level. Just one of those learning moments. I have taken note and am developing a trade plan using these notes. The vids from Sam Seiden are helping a lot!

I have placed a pending buy limit at the aqua 4H level highlighted on the chart, stops and TP's are visible as well. I am trading very small lots at this time....
Nice approach - I am only trading on day charts, so I start with month and week - draw in trend lines and S/D boxes and go from there.

I never had any luck with Stochastics, so mostly running on PA with the 10SMA. The RSI9/21 is running as a test.

Good luck with the trading plan.
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"To live with Passion, it takes Courage and Grace to survive"
  • #29
  • Jul 8, 2012 2:37pm Jul 8, 2012 2:37pm
Hi Britpip, thaks for stopping by. I will probably add back tools in due time such as trendlines and possibly fibs. Right now I will stick to pure S/D levels and trying to nail the right ones at the right time with nothing else to distract me.

I do know me pretty well, and having too much to look at will sidetrack me. I need to become an expert in one or two areas before expanding my toolbox. Good luck with your approach. I've read your posts in the past and it looks like you are a very versatile trader.

Regards,
Deep
  • #30
  • Jul 8, 2012 2:58pm Jul 8, 2012 2:58pm
My EU trade stopped out shortly after triggering my pending buy at what looked to be a great 4H demand level. After analyzing the level again to see what I may have overlooked the only thing I can figure is that there was a daily and weekly demand level right below my 4H level.

Does price normally make it back to the Higher time frame levels when they get that close, going right through a lower TF level? Should I overlook the lower TF levels like this when coming close to higher time frame levels, or is it 50/50 that this will occur? Does the fact that this was a holiday and NFP week have anything at all to do with this? These are just some of the questions I have. Time and experience may help answer them, if there really is a good answer. Maybe it is just one of those trades that don't work out and I shouldn't get wrapped around the axle about it. Time will tell.

Charts below are 4H the the Daily. I had to zoom way out to show the origin of the daily and weekly levels since they occured back in June 2010.
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  • #31
  • Jul 8, 2012 3:14pm Jul 8, 2012 3:14pm
AU moved sharply down as did EU, I did not think these pairs were so closely correlated or I may not have taken the EU long....I need to take another look at the correlation tables, maybe I overlooked this fact.

One thing I think this trade has brought to light is that I need to be able to close part of my position when it moves this far in my favor and then reduce risk on the remaining half of the trade. Can I do this on IBFX or will I need to open more than one position to accomplish this? I will check this out today....
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  • #32
  • Jul 8, 2012 3:57pm Jul 8, 2012 3:57pm
I have placed two buy limit orders with identical stops but diffrent TP's so that I can scale out, and reduce risk while still having the opportunity for a larger gain.

My reason for the trade is that we are now just above a Daily and weekly demand level, and when I drop to the 1H chart there is a low risk entry that I like that coincides with the daily demand level from June, 2010.

I analyzed several pairs, but keep coming back to this level. The daily and weekly seem to line up nicely and price hasn't been back there in 2 years.

Deep
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  • #33
  • Jul 8, 2012 4:38pm Jul 8, 2012 4:38pm
Quoting deepsouth
Hi Britpip, thaks for stopping by. I will probably add back tools in due time such as trendlines and possibly fibs. Right now I will stick to pure S/D levels and trying to nail the right ones at the right time with nothing else to distract me.

I do know me pretty well, and having too much to look at will sidetrack me. I need to become an expert in one or two areas before expanding my toolbox. Good luck with your approach. I've read your posts in the past and it looks like you are a very versatile trader.

Regards,
Deep
More refining and fine tuning these days.

watch for eu / gu / au and nzu to correlate - when eu and gu run together, au will eventually follow suit
"To live with Passion, it takes Courage and Grace to survive"
  • #34
  • Jul 9, 2012 7:28am Jul 9, 2012 7:28am
I decided to simplify my charts by using just one color for each time frame. 8 colors is too damn much to keep up with. The color will represent both Supply and Demand levels.

Weekly - Red
Daily - Plum
4H - Green
1H - Pale Green


I have also posted this on the first page.
  • #35
  • Jul 9, 2012 8:40am Jul 9, 2012 8:40am
Quoting deepsouth
I decided to simplify my charts by using just one color for each time frame. 8 colors is too damn much to keep up with. The color will represent both Supply and Demand levels.

Weekly - Red
Daily - Plum
4H - Green
1H - Pale Green

I have also posted this on the first page.
I strongly agree with you. Try to make trading setup and chart clean and simple in order not to mass up oneself trading decision by looking too many signals. Honestly i like this thread because information is clear and simple. And i might get somethings from here, so i will look forward from your thread.
  • #36
  • Jul 9, 2012 1:14pm Jul 9, 2012 1:14pm
I've closed half my position for 77 pip profit, stop is at BE I will let the remainder ride....Price is stalling at the 1H demand level I have marked in Pale Green.
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  • #37
  • Jul 9, 2012 1:33pm Jul 9, 2012 1:33pm
The chart below shows 2 weekly supply areas. If price closes above the zone it is in now I presume that EURUSD currency will trade the inverse of this and remain bearish long term and the next stop will be the next area of supply marked at around 87.50?

Feel free to weigh in, I want to be sure my thoughts are aligned with reality...as much as possible.
Attached Image
  • #38
  • Jul 9, 2012 1:54pm Jul 9, 2012 1:54pm
http://www.forexfactory.com/attachme...1&d=1338142074

Deepsouth, you are on the right path. The Dollar index has been my #1 indicator for years. Here is a Dollar Index chart that I did in May, Rocky...
  • #39
  • Jul 9, 2012 2:09pm Jul 9, 2012 2:09pm
Good stuff, thanks Rocky...Looking like my EU pending longs may be ill timed thenThat is unless the dollar stalls or falls in the next few days against the present supply level. But it looks very much like the dollar will move up beyond the current supply level. I may cancel those orders until things clear up a bit.
  • #40
  • Jul 10, 2012 6:12am Jul 10, 2012 6:12am
This is something that will not occur very often; I have taken a long on the EJ 15M Demand level. It is right at a D1 level, and the price moved away very rapidly on this 15M TF. I was doing my analysis this morning and spotted this long. 18 pip stop and I will manually close half at 18 pips and move to BE. second target is the opposing level at 97.719. We'll see if this was too impulsive on my part or a well placed trade....Problem is I hate having to stare at charts
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