Trading Currency Futures using Sam Seiden Supply & Demand levels

Yes, the CADJPY moving up slow, but there is not "profit margin" for buy. (on H1-H4 charts)

Look at M15.

(sorry about my English)

Hi all, I decided to share the article, which came to my e-mail, I think you will be very helpful.

Great Question


I received an email recently with a question regarding my opinion of indicators and chart patterns. I began to reply to the email and then stopped. I thought, if this reader has this question, perhaps others do as well. Given that many short term traders lose money and most long term investors never come close to achieving their long term financial goals, I felt it was my responsibility to give my honest opinion of conventional chart patterns and indicators from the world of technical analysis.
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Let me first take you back to when I first learned how the trading markets worked and how money is really made and lost in the markets. In short, how to properly speculate in markets. Starting on the floor of the Chicago Mercantile Exchange (CME), I was responsible for facilitating institutional order flow. Each morning I would take buy and sell orders from banks, institutions, money managers, hedge funds, and some retail traders. I would have huge buy (demand) and sell (supply) orders in front of me all day. Each day, price would move from demand to supply and back again… Anyone who made money would be either buying where demand exceeded supply for a long position or selling short at price levels where supply exceeded demand. In other words, anyone I saw who made money trading and investing would be buying at wholesale prices and selling at retail prices, period.
Fast forward to today, nothing has changed, this is and will always be how you make money buying and selling anything. This picture of bank and institution demand and supply is exactly what we teach our students to see on price charts so they can buy at wholesale prices and sell at retail prices. Anyway, this is how I learned to trade and this is exactly what my brain is focused on, really buying low and really selling high.
Months into my career at the CME, I was walking to lunch with a friend of mine from the trading floor. He said, “The markets are going to go higher tomorrow.” I said, “Oh, why?” He replied and told me the Stochastics were doing this and the MACD was doing that and so on. We were on our way to lunch so when he said MACD, my first thought was Mc Donalds because I was hungry. I stopped him mid sentence and told him I didn’t understand what he was talking about. I had never heard of any of that stuff. He said, “Technical Analysis.” I said, “What’s that?” He explained a bit but I didn’t understand and I was more focused on getting lunch… A few days later, he took me into the CME library and showed me a technical analysis book. I flipped though it for the first time and my first thought was how ridiculous the information was. I looked at him and asked, “Who would use these strategies?” My friend said, “Everyone.” To illustrate why I thought that way, take a look at the chart patterns below that are in just about every trading book ever written: The Head and Shoulders, Cup and Handle, Double Top, and Double Bottom. There are many more but I thought I would share the most popular ones in the history of conventional technical analysis.
Conventional Chart Patterns
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When you look at all these, notice the circled areas. The circles represent where the entry points are for these patterns. The big question is this: what do they all have in common? Notice they all have you buying AFTER a big rally in price and selling AFTER a big decline in price! In my world and any one I knew that made money trading, we did exactly the opposite. To me, all the information in the book was a recipe for losses, not gains. Why in the world would you wait for price to rally that much before buying or wait for such a big decline (or any decline at all) before selling? This made absolutely no sense to me. I was conditioned to do the opposite.
During the years that followed, I really began to understand why most active retail traders lose money and why most long term investors never achieve their financial goals. It’s because they are taught completely backwards. In fact, everything in this book had you buying after a rally in price and selling after a decline in price. You would never take that novice action when buying and selling anything else in life and profit and the financial markets are no different. Do you think Goldman Sachs sits around looking for Head and Shoulder patterns. Do you think they make their billions in profits waiting for price to rally and form a Cup and Handle before buying? They laugh at the trading books.
The key is to both think like an institution and act like one when trading and investing. To make an already long story short, I don’t use indicators and oscillators in my trading and we don’t focus on them at Online Trading Academy. They lag price which means that if we add anything to our decision making process that lags price, we are only adding risk and decreasing profit margin.
Hope this was helpful. Have a great day.
Sam Seiden

[quote=Rail;5813745]Hi all, I decided to share the article, which came to my e-mail, I think you will be very helpful.

Great Question ....

One word - Great!

Very helpful insight ,thanks for sharing

hey the file seems to be damaged?

thoughts on the pair CADJPY

I am new to this S/D strategy. Am trying to find the rules in drawing S/D lines but could not find. May be someone could help me to inform the link or is the any simple rules how to draw those lines. Thank you

hi, not to easy, maybee this 2 pdfs from ken lee' s in his 1. pos gives you a hint.
http://www.forexfactory.com/showthread.php?t=311095

Sometime It's easy after the fact but from the screen cast you posted, I can see that anytime price hit the level you marked, we would have lost money.
How do you exactly trade those levels ?

Refine the question please, is not an exact translation

CADJPY

Some levels on the Japanese Yen FUTURES.

thank you

I am thinking of programming Sam Seiden S&D indicator for MT4.

The Mt4 indicators currently available at different forums are in my opinion very crude interpretation of the S&D zones and for the most part fail to obey the core rules of the logic (as the modified indicator attached , although indicator fails to use proper rules, it can be a good starting point for the project. I also like the way it draws S&D zones. Modification done to it is just to extend the S&D zones for EA to better read indicator values).

I can also write some MQL, but this project might be too complicated for me to code and currently I have very limited time for programming, so I have decided to commission an experienced programmer from a freelancer site (cost is still open, but will most likely be between $250-750 depending on the project outline). I am willing to pay most or all of the programming fees, but I would need help from a person who has good experience trading manually with Sam Seiden S&D logic to write down the clear cut rules and logic for the indicator, so that the programmer can start the job.

I have also attached some documents that are helpfull in terms of writing the indicator definitions.

!! Lets try keep this good thread clean and tidy, so anyone interested to participate please PM me !!

I disappoint you, but your brain and your eyes no one will tell you the correct levels of supply and demand.

You just have to understand what is happening in the market! If you do not understand, you lose.

I find supdem_II highlights most S&D areas.

Have you tried that?

Yes, I watched the signals are not clear, and where would I put the level, it does not show. For beginners go.

The indicator produces no signals, it merely highlights areas where the conditions in price action indicate supply or demand, it also highlights areas which have been visited more than once.

S&D is subjective so you may see your own levels, from my experience the indicator is solid and rarely misses a level. It saves a lot of time highlighting historical levels and pointing out obvious levels easily missed when staring at a screen for too long.

Hi Rail,

Thanks for your charts & explanations, they were clear & good inputs.
I hope you don't mind if I ask some questions:-
1. Pages 5 post 73, you were mention about 100% movements(BC) & (AB). How accuracy of that? It has been more than a year now(post replied on july 4,2011) LOL .
2. On the statement on page 13 post 176, You didn't put any SL at all? What is your SL strategy?
3. Page 3 post 32 you explained how to scalping on 15 mins chart. Do you scalping on 5 mins chart as well?

I have been studying your charts & explanation, they were great & I will reread again today. Hope to hear from you soon & hope you will get lots & lots of pips.

Thanks.

Hi Rail & friends,

Sorry I forget to tell you guys. Thanks for great & short thread I, just was looking for S/D indicator & accidently found this thread it's fantastic.
One more discussion I would like to make about Sam Seiden Email that you received on page 14 post 202.
The ending of that email(by Sam himself) was
"To make an already long story short, I don’t use indicators and oscillators in my trading and we don’t focus on them at Online Trading Academy. They lag price which means that if we add anything to our decision making process that lags price, we are only adding risk and decreasing profit margin."
MY query is:-
If he does not use any indicators & oscillators in his trading What about bollinger band in his VDO using BB band to conform entry??

So SUPPLY/ DEMAND is a core of this trading strategy then there is no need for XLT course?? LOL
AM I right? or What do you think?