ReadtheMarket - Supply and Demand with Price Action

thanks all guys for support

Great thread - simple is best, so much clearer to look at zones rather than indicator-clutter.

Quick question for If... what's your take on inside bars? Seems to me that price often returns to a point of indecision that appears as an inside bar on higher-ish timeframes (M30+, anything less a little too cluttered for my eyes) Do you look at them at all or are they irrelevant?

Thanks in advance - I've been on this 'zones' track for some time after some years of scrabbling in the darkness, losing consistently etc, usual story. But looking at zones has opened my eyes somewhat - your very professional take on it gives me a lot of reassurance!

Hi P

The best advice I can give you is not to read anything into candles themselves.

Simply look for breaks of important zones - they're the only clues you need about future price direction

Thanks If.... but your reply leads me to another question - how do you go about identifying important zones?

For example today on EURUSD - I could see a zone developed at the lows so went long from 12854 and then held ontill 12900. But I saw 12900 as an untested zone, so expected big sells in that area. But momentum took it through 20 odd pips higher (with maybe further to go).

Luckily I didn't today (normally I wold have blindly sold in that 12900 area) but I would have expected that to be the important zone. What makes the important zone higher?

As I write this, I suspect the answer is that price is looking for the base of the pole... but maybe you could clarify the way you see it.

hello,
some nice trading here. ...who could suppose
s/d can change everything about trading , indeed.
here is mine margin today. so far...



the key was a good level and engulf candle on ltf.

/Peace

Hey If man. Take a peep and make sure I'm doing this correctly. Also included are the potential risk to reward for the trade. Correct me if I'm wrong. If thats the case, just a few prime trades such as this is all I need!!

Hey springger,
unfortunately im not If, or even close
but definately it makes sense for me.
whats more i did trade on it on uj m5 =] ofc we were on htf supply also.

/cheers

hi if
this entry point is true

I have no idea, as I can't see what's to the left

All I can see from this is there may be a FL at around 1.8605, which must be broken for price to hit pole base

I know this sounds stupid, but if it's about trading and it's not on a chart, I just either can't understand it or simply zone out completely!

My bad, I know

That's it, in its simplest form!

If, your information has really improved my chart reading; position just hit for target

Here is the 1M chart with the FL more apparent

Oh well, at least you're honest!

As it is, watching how it played out kind of answered my own question anyway.

hi all!

thanks IF ! this thread is what i was looking for to really improve my understanding of supply and demand! first charts already helped me a lot! but if you don't mind i'd have some questions for you.

1. for what i've understood we have an engulf of a supply (demand) when price exceeds previous high (low). but then what is the difference between an engulf (decision to break and go beyond the swing) and a fakeout (so a stop hunt to go in the opposite direction) ?

examples:





2. in the charts below price hits a good demand level and then engulf a suppy --> normally i'd look for a long on a decent demand below this supply. but could be spikes down i marked a sign that price is going to visit the stronger demand level below? could i understand it in other way?

Rangy Day on EU, changed my bias few time, total 4 trades 2 Be, 1 Scalp, 1 LTF Runner = 6% for my daily

nice one gilben!

a few scalps today and this audchf was nice because no drawdown



/btw thanks for vouch gilben =]

had not much time for trading today..
ad hoc eurchf scalp. closed on predefined tp.

ok. i ve had a few minutes now so i made screenshots about last trade. it was just tiny scalp but there were some reasons to do it. i think such information can help beginners.

1. big picture - i usually map my chart by horizontal lines. i use line chart for it, i mean i pay attenion to close price rather than hights and lows of candles. few months ago emene shed some light on this method and i find it quite useful. im not a surgeon in it, just mark some peaks and valleys or s/r flip to know less or more "zones" where price like to reside or where it switch beetween zones. here orange lines, are marked from H4.



2. entry. when i noticed this huge momentum downside and some bouncing after it, i've set limit entry on that gap, but price was to weak and broke consolidation before reach PO...so ive just sold it on ftr. not much to say...



3. target. hmmm....look left =] my target should be lower, but i predefined take profit on rs flip and speed bumper little over real demand. just to be sure bank some money.


/cheers

PS. one more thing
look at style of bouncing after consolidation break.

Can someone explain to me, order flow in reference to supply and demand is what exactly? when you look at the chart and you see price leaves a level, that is market demand coming in? Vice versa for supply when price reaches a high price and sellers come in?

Its not standing orders that cause the drop in price, its market orders, correct?

So why would you want to place a limit order where there was previous demand if it was market orders at the time that caused the price to move in the first place?

I am trying to learn.

When price starts to move up with big bars, that's a liquidity gap? No orders to full fill the demand so price moves higher to a new quote where there are orders to trade against? So how do standing limit orders move price higher or lower? Can someone Pm me and explain or it can be answered here in the thread , maybe it could help another confused soul.