Supply and demand in a nutshell by Alfonso Moreno | Page 25 | Forex Factory

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Supply and demand in a nutshell by Alfonso Moreno

  • #481
  • Jul 13, 2013 8:09am Jul 13, 2013 8:09am
Thank you Alfonso.

Looking forward on your 2nd webinar.

Quoting panoramia
Yes, Isko, we'll be covering all that as well. I will try to make the webinar shorter than first one (3 hours). I will try and record a video before the webinar that will cover those 6 odds enhancers in detail, or I the webinar will be too long and we will not cover any live setups. Alfonso {quote}
SMT, IPDA, Market Structure
  • #482
  • Jul 13, 2013 8:27am Jul 13, 2013 8:27am
Quoting panoramia
Next week, I will be organizing the second webinar (Wednesday 17th at 1 PM GMT, right at NY Open). Those interested in attending, please send me a private message with your email. Those who have already sent me their emails for the first webinar need not to send me their emails again, they are already in the mailing list, thus invited automatically. On this second webinar we'll be covering: Assess how good a level is based on the main odds enhancers Live trading analysis on the pairs that you suggestIf you have any suggestions, please let me know...
hi Alfonso, I have pm u my email.
thanks for your efforts!
  • #483
  • Jul 14, 2013 12:26am Jul 14, 2013 12:26am
hello,

anybody can tell me the last S/D Zones parameters for EU and NU, please ?

thanks in advance

  • #484
  • Jul 15, 2013 6:33am Jul 15, 2013 6:33am
Here is a H4 setup on GBP/AUD I have .. Trade now at break even
Attached Image (click to enlarge)
Click to Enlarge Name: 2013-07-15 37_38 gbpaud_2.png Size: 65 KB
If you act surprised, then you probably missed something
  • #485
  • Jul 15, 2013 6:44am Jul 15, 2013 6:44am
Quoting outapips
Here is a H4 setup on GBP/AUD I have .. Trade now at break even {image}
Looks good, what do you mean with "Trade now at break even", on the chart it looks like your pending order has not been hit yet?

Regards,
Peter
  • #486
  • Jul 15, 2013 6:50am Jul 15, 2013 6:50am
Quoting Forex Lion
{quote} Looks good, what do you mean with "Trade now at break even", on the chart it looks like your pending order has not been hit yet? Regards, Peter
Chart shows the setup prior to entry .. I set pending order and now price has come down and taken my order and moved up nicely so I could set stop to breakeven.
If you act surprised, then you probably missed something
  • #487
  • Jul 15, 2013 6:54am Jul 15, 2013 6:54am
Quoting outapips
{quote} Chart shows the setup prior to entry .. I set pending order and now price has come down and taken my order and moved up nicely so I could set stop to breakeven.
ok..wish you a good trade
  • #488
  • Jul 15, 2013 7:49am Jul 15, 2013 7:49am
Quoting outapips
Here is a H4 setup on GBP/AUD I have .. Trade now at break even {image}
Nice trade Outapips, but beware we are inside a daily supply which is in control.
Attached Image (click to enlarge)
Click to Enlarge Name: gbpauddaily.png Size: 44 KB
Trade Smart
  • #489
  • Edited 11:49am Jul 15, 2013 10:45am | Edited 11:49am
Hi Peter,

Just a reminder on your GBPAUD long trade.. Remember where you are on the higher timeframes. You are right at the WK supply area. So that long, even though it was valid, it was a bit aggressive, too high in the curve. I just wanted to check if you had that WK supply area marked on your charts, it was a WK supply speedbump. The D1 supply was absorbed by a fews pips, but that's something that the pound cross pairs normally do, overshot a higher timeframe by a few pairs and then go in the opposite direction once it's found liquidity and hit all stop losses sitting above.

Are you high or low in the WK curve?
You want to buy or to sell in that altitude?

Since it's high in the curve for me, as per my definitions, then I am looking to sell and not to buy. You can buy where you bought but it's a bit aggressive. Can it work? It definetely can, in fact you got nice pips out of it. But I am trying to be as rule-based as possible and do always the same thing. I am not right always, I don't want to be right always... trying to follow the buy low and sell high higher timeframe SD rules.

Attached Image (click to enlarge)
Click to Enlarge Name: gbpaud.png Size: 142 KB


I have planned 2 shorts planned.

1. The first short I have, at a H4 supply area with a really nice imbalance and a pin candle. Since level is too wide, I drilled it down to fit my risk.
If this short trade does not work, it will mean that the WK supply area has been solidly broken with momentum, so I will be buying till my next short trade at a D1 supply area.
Attached Image (click to enlarge)
Click to Enlarge Name: gbpaud1.png Size: 138 KB


2. H4 short at the next fresh/original D1 supply level. Right within this D1 supply zone, we have a 50 pips wide H4 fresh/original supply level. Too wide for my risk tolerance so I drilled it down to fit my risk
Attached Image (click to enlarge)
Click to Enlarge Name: gbpaud2.png Size: 143 KB


Can longs work? Yes, of course they can. But I will look for longs only:

1. When we are at a D1 demand area, we have one lower, 100 pips wide
2. When the WK supply area is solidly broken, not a fake breakout as we had (with no momentum). 1.6900 needs to be solidly broken with momentum for me to keep on going long

If the H4 demand area at 1.6500 is broken (it's used up already), it's sell time to the previous D1 demand area.
Attached Image (click to enlarge)
Click to Enlarge Name: gbpaud3.png Size: 138 KB


This is the way I see it, I may be wrong, many times I am But it follows the logic I always apply to my setups based on SD levels and the higher timeframe curve.
Alfonso


Quoting outapips
Here is a H4 setup on GBP/AUD I have .. Trade now at break even {image}
Set and Forget supply and demand trading community
  • #490
  • Jul 15, 2013 10:59am Jul 15, 2013 10:59am
Hy everyone!This is very good thread.I just started trading with SD and is going well.I just have difficult times to find correct profit targets sometimes.Can you give me some advice.Zhanx and have a nice day.
  • #491
  • Jul 15, 2013 11:37am Jul 15, 2013 11:37am
Quoting panoramia
Hi Peter, Just a reminder on your GBPAUD long trade.. Remember where you are on the higher timeframes. You are right at the WK supply area. So that long, even though it was valid, it was a bit aggressive, too high in the curve. I just wanted to check if you had that WK supply area marked on your charts, it was a WK supply speedbump. The D1 supply was absorbed by a fews pips, but that's something that the pound cross pairs normally do, overshot a higher timeframe by a few pairs and then go in the opposite direction once it's found liquidity and hit...
Hi alfonso, I am having trouble drawing my D1 supply level on the NZD/USD. How would you draw a D1 supply level on this chart; it is kinda all cluttered together which makes it harder to see? I would understand picking the high and drawing it from there. How do you draw this D1 supply level because each one is a bounce off of the previous supply level which means we want to draw it from its origin?
Chart #1 is first D1 supply level?
Chart #2 is second D1 supply level?
Chart #3 is the third BIG D1 supply level?
Attached Image(s) (click to enlarge)
Click to Enlarge Name: nzdusd 27.png Size: 106 KB
Click to Enlarge Name: nzdusd 28.png Size: 106 KB
Click to Enlarge Name: nzdusd 29.png Size: 106 KB
  • #492
  • Jul 15, 2013 11:45am Jul 15, 2013 11:45am
Hi Astronaud,
Welcome to the thread! It's good to see another SD trader over here. You are most welcome.

Exits (profit targets) are the most difficult part. My recommendation is to have one of these 2 options:
1. Have a fixed profit target based on your risk (SL)... 3:1, 4:1
2. Set your TP at the next opposite SD area. If you went long on H1, make sure you havea t least 3:1 profit target for your long trade to run, and exit at the next H1 supply area. Opposite for your shorts.

Once you do that for quite some time you will get the feeling of which are the trades that you have to let run, and which ones you should exit at lower take profits. Join the next webinar this Wednesday, if interested, send me a private message.

Alfonso

Quoting astronaud
Hy everyone!This is very good thread.I just started trading with SD and is going well.I just have difficult times to find correct profit targets sometimes.Can you give me some advice.Zhanx and have a nice day.
Set and Forget supply and demand trading community
  • #493
  • Jul 15, 2013 12:10pm Jul 15, 2013 12:10pm
Hi Derek,

Sometimes drawing SD levels is not easy since they are used-up, too wicky or a reaction to a reaction of a reaction.
This will also answer the question by "astock" (he needed levels on nzdusd)

In those cases (reaction of a reaction), they are compressed supply and demand areas that can be easily absorbed by price action. If you want to lean on one of those areas, make sure you have a really nice imbalance with a strong departure and a lot of profit margin (risk reward).

Going back to the NZDUSD D1 SD zones, these are the zones I have. You will see yours reflected on my chart as well as which ones to use.

TIP: if you have several D1 supply zones (level on top of level), try to go always for the furthest away from current price. Also, try to focus on the one that is at least at the next higher timeframe supply zone, in this case since we have a D1 supply, we'd be looking at the top D1 supply zone on the WK supply area.

See this first NZDUSD D1 with my zones:
Most of them are used-up, non-fresh D1 supply zones. So you either have:
1. Original and fresh H1/H4 supply areas within the D1 supply zone
2. Or wait for confirmation trades, that is, brand new H1/H4 supply areas coming out of those zones, engulf patterns absorbing previous lower timeframe demand
Attached Image (click to enlarge)
Click to Enlarge Name: nzdusd1.png Size: 162 KB


Focus on those D1 levels that have the strongest departure AND have absorbed previous D1 demand area after it's creation, skip the others.
(this works on any timeframe by the way, since price is fractal):

Attached Image (click to enlarge)
Click to Enlarge Name: nzdusd2.png Size: 158 KB


Those are the reasons why I have a short on a H4 supply area on the D1 proximal line. Strong departure, little time at the level, nice risk reward, trading with the bigger picture.

Attached Image (click to enlarge)
Click to Enlarge Name: nzdusd3.png Size: 128 KB



Quoting Sdprice
{quote} Hi alfonso, I am having trouble drawing my D1 supply level on the NZD/USD. How would you draw a D1 supply level on this chart; it is kinda all cluttered together which makes it harder to see? I would understand picking the high and drawing it from there. How do you draw this D1 supply level because each one is a bounce off of the previous supply level which means we want to draw it from its origin? Chart #1 is first D1 supply level? Chart #2 is second D1 supply level? Chart #3 is the third BIG D1 supply level? {image} {image} {image}
Set and Forget supply and demand trading community
  • #494
  • Jul 15, 2013 1:33pm Jul 15, 2013 1:33pm
Quoting panoramia
Hi Derek, Sometimes drawing SD levels is not easy since they are used-up, too wicky or a reaction to a reaction of a reaction. This will also answer the question by "astock" (he needed levels on nzdusd) In those cases (reaction of a reaction), they are compressed supply and demand areas that can be easily absorbed by price action. If you want to lean on one of those areas, make sure you have a really nice imbalance with a strong departure and a lot of profit margin (risk reward). Going back to the NZDUSD D1 SD zones, these are the zones I have....
a very good illustrated explanation...
  • #495
  • Jul 15, 2013 4:25pm Jul 15, 2013 4:25pm
Quoting panoramia
Hi Peter, Just a reminder on your GBPAUD long trade.. Remember where you are on the higher timeframes. You are right at the WK supply area. So that long, even though it was valid, it was a bit aggressive, too high in the curve. I just wanted to check if you had that WK supply area marked on your charts, it was a WK supply speedbump. The D1 supply was absorbed by a fews pips, but that's something that the pound cross pairs normally do, overshot a higher timeframe by a few pairs and then go in the opposite direction once it's found liquidity and hit...
Hi Alfonso,

Thanks for the illustration on GBP/AUD. My idea was to trade up to the H4 level that you show on your chart and then look to go short. I guess I didn't think it was that aggressive as that higher level had been tested quite a few times and the current move up looked quite strong. I was going to try and keep the long trade open in case the short failed.


It seems I have some different area's drawn on my chart. I'm quite confused as to your weekly speedbump.

Can you explain why you choose that level?

Here are mine. I'll show two weekly charts, one with my prior weekly level which was a speedbump and then my current weekly level which I've reduced in size as the bottom half of the original zone has been tested a few times.

Previous weekly level
Attached Image (click to enlarge)
Click to Enlarge Name: 2013-07-15 ga wkly pre.png Size: 119 KB





This is current weekly level
Attached Image (click to enlarge)
Click to Enlarge Name: 2013-07-15 ga wkly now.png Size: 117 KB
If you act surprised, then you probably missed something
  • #496
  • Jul 15, 2013 6:18pm Jul 15, 2013 6:18pm
Hi again!

The red rectangle in my new attachment was the whole WK speedbump for me but since price action reached it and penetrated it, i drilled it down to that area. When price penetrates an SD area I will not consider that area fully next time, moreover if it's been overshot. But pound cross pairs do that a lot. For me the WK speedbump was all that area within the red rectangle, the candle on the left as well, since it formed the first close and base.

The WK chart has formed more than 3 candles not closing below the previous highs, and that's a distribution pattern I trade a lot to the sell side, it's also based on SD but it's something I've not mentioned on my thread yet, since it's a more advanced pattern I use, but simple to understand. Will try to cover it in other webinars. As you can see, the WK candles have not managed to close above that consolidation/distrubution area (what they call stage 3), right at an area where WK supply absorbed previous demand that become supply on the retest.

But as far as the WK speebump supply I used, that's the reason why, I made it narrower because current price action penetrated it fully and even overshot it, but it was not broken solidly with momentum forming a distribution pattern to the sell side.

Alfonso

Quoting outapips
{quote} Hi Alfonso, Thanks for the illustration on GBP/AUD. My idea was to trade up to the H4 level that you show on your chart and then look to go short. I guess I didn't think it was that aggressive as that higher level had been tested quite a few times and the current move up looked quite strong. I was going to try and keep the long trade open in case the short failed. It seems I have some different area's drawn on my chart. I'm quite confused as to your weekly speedbump. Can you explain why you choose that level? Here are mine. I'll show two...
Attached Image (click to enlarge)
Click to Enlarge Name: wksup.png Size: 206 KB
Set and Forget supply and demand trading community
  • #497
  • Jul 15, 2013 8:32pm Jul 15, 2013 8:32pm
Thanks Alfonso .. that explains things and clears up my confusion.
If you act surprised, then you probably missed something
  • #498
  • Jul 16, 2013 2:57am Jul 16, 2013 2:57am
Quoting panoramia
Hi Astronaud, Welcome to the thread! It's good to see another SD trader over here. You are most welcome. Exits (profit targets) are the most difficult part. My recommendation is to have one of these 2 options: 1. Have a fixed profit target based on your risk (SL)... 3:1, 4:1 2. Set your TP at the next opposite SD area. If you went long on H1, make sure you havea t least 3:1 profit target for your long trade to run, and exit at the next H1 supply area. Opposite for your shorts. Once you do that for quite some time you will get the feeling of which...
Hi Panoramia and thanx a lot for your kind reply!I am learning from you a lot
  • #499
  • Jul 16, 2013 1:39pm Jul 16, 2013 1:39pm
Planning a short trade on EURAUD H4 supply zone.

Price hit Monthly supply zone (red line), nice H4 supply zone. H4 Trendline uptrend broken with room to a non greedy TP.
Price action absorbed previous H4 demand, permission to go short.
Attached Image(s) (click to enlarge)
Click to Enlarge Name: euraud_h4.png Size: 113 KB
Click to Enlarge Name: euraud_mn.png Size: 104 KB
Set and Forget supply and demand trading community
  • #500
  • Jul 16, 2013 1:58pm Jul 16, 2013 1:58pm
Could you please tell me,which indicator you find in practice to be the most accurate (relaible) for drawing SD zones? SupDem,or II_SubDemMOD_DarkBG_SolidFill?
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