Supply and demand in a nutshell by Alfonso Moreno | Page 15 | Forex Factory

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Supply and demand in a nutshell by Alfonso Moreno

  • #281
  • Jun 26, 2013 3:34am Jun 26, 2013 3:34am
Quoting panoramia
Planning a short entry on NZDUSD, H4 supply level. Odds enhancers for the level: - Strong departure, big imbalance - Little time at the level, one candle at the base and dropped like a rock - Fresh and original level - Big profit margin, more than 8:1 till previous demand area - Big picture is with the level, NZDUSD is bearish in higher timeframes For all these reasons, I'm taking this level. This level was created after last week Bernanke's speech On the way up, if 0.7815-ish area is broken solidly, we will be able to buy on fresh H1 demand areas....

wow ! what a nice calculation.
  • #282
  • Jun 26, 2013 3:35am Jun 26, 2013 3:35am
Planning a Long trade on AUDUSD, it's a H1 demand level at the bottom of the consolidation area. It's a fresh demand level.
The long trade has been sitting there since it was created. Price tried to reach it but it didn't, still valid per my rules.

IF 0.9325 area is solidly broken with momentum, THEN I will look for new levels of demand formed on the way up. If that area is formed, the path of least resistance will be up, and there is lot of room for price to rally.
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Set and Forget supply and demand trading community
  • #283
  • Jun 26, 2013 4:27am Jun 26, 2013 4:27am
Planning a Long and a Short trade on AUDJPY. Trading the extremes in such a consolidation on the D1 chart.

LONG:
- Fresh and original D1 demand level WITHIN a Weekly demand area. The D1 level is too wide, 40+ pips, so I drill it down to the H4 and find my long set & forget entry

SHORT:
The H4 supply level is not original, it's a reaction to the previous speedbump supply, but departure and imbalance is SO good. It's also at the D1 distal line. I drilled it down to H1 to see what was going in lower timeframes. See H1 chart

H4 SHORT CHART, drilled down to H1
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H4 LONG CHART
Original H4 demand area, original so that I can set & forget counter trend. If price does not make it there, and creates new H4/H1 demand areas higher up at the D1 demand zone, look for engulf patterns and trade the brand new H1/H4 demand areas.
Attached Image (click to enlarge)
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The D1 chart
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Price could create other areas on the way up or down, these are the closest areas I see now for set & forget on H4.
Set and Forget supply and demand trading community
  • #284
  • Edited 5:48am Jun 26, 2013 4:51am | Edited 5:48am
Planning a Long on CADCHF D1 chart.

It's not normal to see a narrow D1 level, normally they are too wide. This one is only 20 pips wide. We need to add wiggle room + padding and so on, but still it's like 30 pips risk, so good for a D1 demand level that might hold for a nice swing trade.

The same type of analysis applies to lower timeframes areas, since price is fractal.

D1 ENTRY AREA
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D1 DEMAND LEVEL AT THE ORIGIN
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ODDS ENHANCERS:
1. STRENGTH OF DEPARTURE. Really good, no pauses
2. NUMBER OF PULLBACKS. None, it's fresh and original
3. PROFIT MARGIN. 3:1 or more? Yes. More than 10:1
4. BIGGER PICTURE. How high or low are we in the curve? We'll be very low, time for a nice correction
5. TIME AT LEVEL. Too little time at level, the shorter the time at the level, the stronger the supply and demand imbalance is


6. ARRIVAL. In a situation like this, arrival is not important, since all other odds enhancers are really good.

FLIP AREA ZONE
There is a flip area, previous D1 demand is being respected and may act as supply. But there are no H4/H1 levels on the retest of that area. So I will wait for brand new H1/H4 supply levels formed before trying a short.
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This is just how I see the charts, level might not hold, but all odds enhancers and rules I use say to go long at that area for a possible swing trade.
Set and Forget supply and demand trading community
  • #285
  • Edited 7:08am Jun 26, 2013 6:32am | Edited 7:08am
Quoting mosah
Hi all, Here is another trade AUDNZD. The sell limit just triggered. {image}
Hi all,
TP was hit for AUDNZD
Attached Image(s) (click to enlarge)
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  • #286
  • Jun 26, 2013 7:07am Jun 26, 2013 7:07am
Alfonso thanks for share your analisis!
Mosah great trade!!
  • #287
  • Jun 26, 2013 7:26am Jun 26, 2013 7:26am
Hi panoramia I found this. Audchf weekly strong demand but what you say about daily chart ? is this strong demand .
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  • #288
  • Jun 26, 2013 8:16am Jun 26, 2013 8:16am
GREAT MATERIAL ALfonso, keep it coming!!

THX
  • #289
  • Jun 26, 2013 8:18am Jun 26, 2013 8:18am
Quoting chucho
Alfonso thanks for share your analisis! Mosah great trade!!
Thank you Chucho
  • #290
  • Jun 26, 2013 8:22am Jun 26, 2013 8:22am
Hi all,
GBPUSD H1 buy limit was trigered
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  • #291
  • Jun 26, 2013 8:41am Jun 26, 2013 8:41am
Hello Ochin!

I have a slightly different chart to yours.

The D1 demand zone u painted is not fresh, it's a reaction to a previous zone, you can see how I painted it in the screenshot below. We're in a downtrend, so in order to lean on longs we need original levels on lower timeframes, which are located within D1/WK SD levels. If you take that into account, you will see that the D1 demand area u painted is neither original, nor fresh, so if you wanted to do position trading it would not be the best of levels.

See the way I see it, it's just the way I see it according to my rules and robotic way of drawing the levels, not claiming that mine are better or worst than yours or anybody else's.

Difference between both D1 demand levels:
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My D1 levels:
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My WK demand area for AUDCHF differs from your broker's quite a bit. So my WK demand area is a speedbump that was touched on departure. Yours is bigger. So price did not react to my WK area. I could paint my WK demand much wider to match yours as well, but since my charts showed a touch, then I had to make it narrower, I trade we I see on my broker's chart (pity there are differences like this because of the non-regulation aspect of Forex).

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I have planned 2 trades, one short and one long. Explained on this screenshot. All based on the extremes and untested/orginal areas.

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Look at the origing of my H4 demand level where I'm planning a long, where price reacted. Not a reaction to a previous demand area, so it's an original level, valid for a counter-trend long

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Quoting ochinkumar
Hi panoramia I found this. Audchf weekly strong demand but what you say about daily chart ? is this strong demand . {image} {image}
Set and Forget supply and demand trading community
  • #292
  • Jun 26, 2013 9:23am Jun 26, 2013 9:23am
Planning a long on NZDUSD, H1 speedbump demand.

Price broke previous H1 highs (resistance) and created a brand new H1 demand area. Price bounced from a D1 demand area, stayed down there for quite some time and now created some nice and strong bullish H1 candles.
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Set and Forget supply and demand trading community
  • #293
  • Jun 27, 2013 6:58am Jun 27, 2013 6:58am
Hi Alfonso, I like the way you explain thing in details... keep up!

Anyway, could you further explain how do you deal with a new S/D zones that were reactions to previous S/D zones? Do you ignore it or treat it as fresh S/D zones but not original? i am a bit confused about this. Tnx!



Quoting panoramia
Hello Ochin! I have a slightly different chart to yours. The D1 demand zone u painted is not fresh, it's a reaction to a previous zone, you can see how I painted it in the screenshot below. We're in a downtrend, so in order to lean on longs we need original levels on lower timeframes, which are located within D1/WK SD levels. If you take that into account, you will see that the D1 demand area u painted is neither original, nor fresh, so if you wanted to do position trading it would not be the best of levels. See the way I see it, it's just the way...
SMT, IPDA, Market Structure
  • #294
  • Jun 27, 2013 2:06pm Jun 27, 2013 2:06pm
Hi alfonso, had a question about original levels. Sometimes when looking at a chart you see an Original and fresh level on the D1 chart; however, sometimes when you zoom down to the 4h chart or 1h chart you see that the D1 original level is no longer original on the 4h or 1h chart. MY question is how to you treat this type of situation? Would you still treat the D1 original level as original even though on the 4h or 1h it is not an Original.?? Thanks
  • #295
  • Jun 28, 2013 6:09am Jun 28, 2013 6:09am
hi everybody, yesterday i made a trade in eu . the entry was not looking so bad, but i get stopped out.

what was my mistake - or do i interpret something wrong ?? kind regards to all.
Attached Image(s) (click to enlarge)
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  • #296
  • Jun 28, 2013 7:01am Jun 28, 2013 7:01am
Hi Isko,

Glad that you like the way I explain things, thanks for your compliment, I appreciate that.

Let me explain what you are asking..

Take a look at the H4 chart on the eurusd, same applies on H1 and other pairs.

All those are fresh zones on the way up, price hits them and reacts forming a fresh zone on top of old fresh zone (not longer fresh when it pulls back to it).

When trading with the trend, use always fresh zones, it does not need to be original.

What happens on the way down? Those previous demand areas are used-up and absorbed by the spikes into the levels. There are no obstacles for price to go easily through them. It's compressed demand, dominio effect, easily absorbed on the way down.


Quoting isko
Hi Alfonso, I like the way you explain thing in details... keep up! Anyway, could you further explain how do you deal with a new S/D zones that were reactions to previous S/D zones? Do you ignore it or treat it as fresh S/D zones but not original? i am a bit confused about this. Tnx! {quote}
Attached Image (click to enlarge)
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Set and Forget supply and demand trading community
  • #297
  • Jun 28, 2013 7:06am Jun 28, 2013 7:06am
Hello Derek,

How fresh or original a level is, is simpler than what you are trying to say. You are mixing things up.

A level is a level on the timeframe where it's been detected and painted

- IF a level is original on the D1 chart, why should you look at the lower timframes to see if D1 is original or not?

It makes no sense to me, it's not common sense and not logical. By that rule, you could drill that level down to the M1 or the tick chart, you'd always find a reaction to a previous reaction, ad infinitum. Same applies to the freshness of a level.

If you find a good level on the D1 that is original, that means that the D1 level could be a nice level to trade in position mode, but I am not a position trader, but a swing trader. What I will do is find a lower timeframe H4/H1 level within that D1 level and trade it.

Don't make things more complex than they already are
Hope that clarifies your doubt.

Alfonso


Quoting Sdprice
Hi alfonso, had a question about original levels. Sometimes when looking at a chart you see an Original and fresh level on the D1 chart; however, sometimes when you zoom down to the 4h chart or 1h chart you see that the D1 original level is no longer original on the 4h or 1h chart. MY question is how to you treat this type of situation? Would you still treat the D1 original level as original even though on the 4h or 1h it is not an Original.?? Thanks
Set and Forget supply and demand trading community
  • #298
  • Jun 28, 2013 7:13am Jun 28, 2013 7:13am
You sold too low in the curve, there was no level to lean on for short, price was bouncing of a D1 demand zone on the eurusd after a big drop. Selling is not an option where you are at a D1 demand or bouncing from it, it's lower odds.

Look at the charts I attached. Look at my D1 zones... you wanted to buy right in the purple area, that's lower odds for a short, better to look for longs on brand new lower timeframe demand areas.


Quoting astock
hi everybody, yesterday i made a trade in eu . the entry was not looking so bad, but i get stopped out. what was my mistake - or do i interpret something wrong ?? kind regards to all. {image} {image}
Attached Image(s) (click to enlarge)
Click to Enlarge Name: Screenshot1.png Size: 141 KB
Click to Enlarge Name: Screenshot3.png Size: 123 KB
Set and Forget supply and demand trading community
  • #299
  • Jun 28, 2013 7:22am Jun 28, 2013 7:22am
Planning a long on EURAUD.

I had planned this EURAUD long this morning at 1.4052, supply was absorbed and a brand new H1 speedbump demand was created. Price didn't make it to the level, it stopped on a M15 demand level and kept on rallying.

The order this morning was this:
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Since now price is moving higher, that order is no longer valid for me, I've moved it higher to the upper demand zone at 1.4100 ish. See the order now.

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There was an identical level on EURCAD on a 10 pips H1 demand area. Take a look at it,
Set and Forget supply and demand trading community
  • #300
  • Jun 28, 2013 8:40am Jun 28, 2013 8:40am
Well said, Alfonso, thanks again for the detailed explanation.

Really appreciate the time you are giving to help others here in your thread.

Quoting panoramia
Hi Isko, Glad that you like the way I explain things, thanks for your compliment, I appreciate that. Let me explain what you are asking.. Take a look at the H4 chart on the eurusd, same applies on H1 and other pairs. All those are fresh zones on the way up, price hits them and reacts forming a fresh zone on top of old fresh zone (not longer fresh when it pulls back to it). When trading with the trend, use always fresh zones, it does not need to be original. What happens on the way down? Those previous demand areas are used-up and absorbed by the...
SMT, IPDA, Market Structure
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