Supply and demand in a nutshell by Alfonso Moreno

Quoting Sdprice

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{quote} Unfortuantly i did not take the trade. I regret it, but it is was on those learning process for me. the trade is currently breaking strong downward. The reason i did not take the trade is i thought the trade was too big of a risk for 23 pips. I don't really have a system for how many pips to risk for each time frame. I don't risk no more than 2% of my account for a trade, however, i have no system for pip risk for each time frame: Wk, D1, 4H, 1h. What do you typically risk for those time frames: Wk, D1, 4H, 1H?? Thanks alfonso,

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Quoting ochinkumar

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NZDUSD chart: i am watching this original demand label (yellow) {image}

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Quoting panoramia

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Hi Ochin, I can't know, you can't know if that level is orignal or not by just looking at that chart, sorry In order to know if a demand level is original you have to draw a horizonal line at the lowest low of the level, and look left and left, no matter how far in time, in the timeframe where you have drawn it. If that horizontal line hits a previous demand level, then it's not original, if it does not hits then it's original, that simple. On your chart, we can't see what there is to the left (without cutting through candles), so I can't tell...

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Quoting ochinkumar

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{quote} ok i draw a horizontal line at the lowest low of the level. {image}

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Quoting panoramia

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What is your conclusion about that level after drawing the horizontal line? Is it original? Is it not? Alfonso {quote}

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Quoting ochinkumar

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{quote} My conclusion , the horizontal line touch this (yellow) fresh label. that means my demand label is not original but fresh. Am i right ? {image}

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Quoting Sdprice

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Hi alfonso, had a 2 questions about the GBP/ USD 1). On the Wk chart the demand level in grey, before price pulled back to that level make it no longer fresh, but before that ever happened was that low a ORIGINAL LEVEL.

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My question is that WK demand level in the green circle (1.48314) distal level; was that a orignal level. What am trying to say is when i am trying to find and original level, do i cut through previous candles till i find or not find a level. Do i cut through candles to see if the level is original? Question

IMPORTANT, VERY IMPORTANT. You will never cut through candles in order to learn if a level is original or fresh, or if it's a level itself. That's not supply and demand, that would be classic support/resistance, historic values that have reacted to that area multiple times in the past. We don't trade S/R, we trade S/D

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2). should we wait now for price to make new fresh supply levels and begin to short those level if price continues to make lower lows and lower highs?

Yes, always fresh levels on the direction your entry timeframe is moving, in this case short

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Question 3) Chart 2 shows a wk supply in green which has already been hit, But before that level was hit was that Wk speedbump supply a original level? to i cut through the candles from the high of that level?

Never cut through candles, same answer as above

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Question 4) before i ever saw the trade make that new lower low and nice set up for a short, I tried looking at a 4h chart for a fresh supply and ORIGINAL level on within the D1. However, i could not find a ORIGINAL level at all, SO IN a case just like this do we wait for what just happened; a fresh and original supply level try to get the pull back?

EXACTLY. You want to go counter-trend, if you go counter-trend then you have to lean on original levels, not fresh or used-up levels. If you don't find any, just be patient and wait for demand to be absorb, which is what I mentioned exactly yesterday on my pound analysis. I couldn't get the short because it's late at night and I don't trade that late, but it's always the same.


There is one thing which is 100% sure about the markets, you don't know what's gonna happen. If you have doubts about an area, don't trade it. You have to see it pretty clear and matching all of your trading plan rules, else don't trade it.

Quoting ochinkumar

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here is my trade, Usdjpy 5minute time frame {image}

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Quoting panoramia

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Nice trade Ochin! But please remember 2 things: - M5 and lower timeframe demand will fail a lot, other rules are needed - On this thread we're doing swing trading, so please only post H1/H4 entries, not lower. We don't want scalp on this thread, sorry! Hope you understand Thanks {quote}

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Quoting astock

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hi alfonso, thanks for the spreadsheet with the s/d levels. i was checking the eu and there is a demand price on the daily near by 1.62. how can this be possible ? kind regards {image}

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Quoting panoramia

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I appreciate your comments, thanks a lot! It takes time, but with patience and a good emotional/trading plan we can all make it. I don't understand your question about original and fresh, so I can't answer that sorry If you show me graphical example/explanations, then I might see what you are trying to put accross. Alfonso {quote}

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Quoting Soundz

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hey alfonso, Just wondering if you were going to do a trade explorer so we can follow your trades? Great job on the thread too, its moving along well. I read it everyday!

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