Supply and demand in a nutshell by Alfonso Moreno | Page 37 | Forex Factory

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Supply and demand in a nutshell by Alfonso Moreno

  • #721
  • Jul 29, 2013 3:43pm Jul 29, 2013 3:43pm
Quoting Sdprice
{quote} Hi Alfonso, I have been using your spreadsheet, and it works really well with accessing the curve, however i came across one of your levels in the spreadsheet and was confused about a demand level? On the GBP/USD D1 Demand level on your spread sheet you have the Prox(1.4948) Distal (1.4813). This is definitely a Demand level; however, The most recent D1 Demand level which is fresh and original is at (1.5118) Distal(1.5027). On chart below. SO my question is when using the spread sheet. should we put the most recent D1 Demand and Supply levels...
Hi SD

I am sure Alfonso will be getting back to you regarding your question but just so that you are aware.... if you are getting different zones this could be due to using a different broker then what Alfonso uses and your broker may have a different server time which can effect the candle formations. e.g. some brokers use 5 pm est (NY) time to end the day & some may use 12 midnight est. & still some others may use a different time. The currency price will be the same however due to the new day start time the candles may differ a little which can effect how the indicator is plotting the zones for you.

G
Find The Pain Points On Your Chart & Trade Off Those Levels
  • #722
  • Jul 29, 2013 7:38pm Jul 29, 2013 7:38pm
Hi Derek,

The answer is simpler than it seems, I had not updated the SD spreadsheet, so I didn't have that level added. Been busy doing many things and it was not updated
Since the SD levels need to be manually added for now, these things happen

Alfonso


Quoting Sdprice
{quote} Hi Alfonso, I have been using your spreadsheet, and it works really well with accessing the curve, however i came across one of your levels in the spreadsheet and was confused about a demand level? On the GBP/USD D1 Demand level on your spread sheet you have the Prox(1.4948) Distal (1.4813). This is definitely a Demand level; however, The most recent D1 Demand level which is fresh and original is at (1.5118) Distal(1.5027). On chart below. SO my question is when using the spread sheet. should we put the most recent D1 Demand and Supply levels...
Set and Forget supply and demand trading community
  • #723
  • Jul 29, 2013 7:42pm Jul 29, 2013 7:42pm
Hello Nick,

You will feed the spreadsheet with the levels in control, it does not matter if they are touched or not. D1 and WK SD levels are higher timeframes that control price, so add them. If you prefer to go to the extremes and fresh only, you can do that as well, you can do as you prefer. This is where it can become subjective: 1) Drawing the levels 2) Deciding which ones control price

For me, the one that is in control is the one that has not been taken out yet. If the level is a speedbump against the trend, I may decide to use the extreme instead.
Hope that helps!
Alfonso

Quoting Nametaker
{quote} Hi Alfonso, i have been trying to get correct prices to input into the supply/demand spreadsheet. I watched your video on how to use the spreadsheet but i have a question. For the S/D, do we use fresh s/d, original s/d or the s/d that is currently in control? Are the below examples good examples of s/d in control? {image} {image}
Set and Forget supply and demand trading community
  • #724
  • Edited 8:05pm Jul 29, 2013 7:52pm | Edited 8:05pm
Hi Sekbor,
Thank you for attending the webinar, hope that things are getting a bit clearer now.

My short entry on NZDUSD H1 was triggered yesterday right at that yellow vertical line. I was expecting something like that to happen since I had the loss the other day at a lower price on that H4 original supply level.

On H1 it may seem an insignificant level of supply, but it was a distribution pattern right at D1 supply. The automatic SD indicator also drew that level which is now non-fresh. I am at breakeven, so we'll see what happens. We are always looking for great imbalances before we pull the trigger; big imbalances are great of course, but we sometimes forget about LOCATION. Where are we? On a fresh D1 supply zone forming brand new H1 supply areas with price over-extended.

Alfonso

Quoting sebkor6
Hi Alfonso, thank's for great webinar. A lesson that i have learnt (correct me if i am wrong). When we have (d1), supply/demand area), that has been tasted before, we can't of course do the "fire and forget" trade. We need to have a lover timeframe confiration like on attach files (NZD USD). It was nice new supply (H1) level, that we could use to sell (minimising the risk). {image} {image}
Attached Image (click to enlarge)
Click to Enlarge Name: Screenshot1.png Size: 93 KB
Set and Forget supply and demand trading community
  • #725
  • Jul 30, 2013 1:33am Jul 30, 2013 1:33am
There was another H1 short entry on NZDUSD on the way down from D1 supply area, I was sleepping so I couldn't scale in on a second entry, but that's the way we should always do if we want to scale in or go short if we missed the first opportunity, unless we're too low in the curve and we should stop looking for shorts and close them.

Why are we allowed to keep on selling?

  1. We are too high in the curve
  2. Lots of room to opposing D1 demand area
  3. Creating brand new supply in the shape of speedbumps (continuation pattern = strength)
  4. No demand areas to stop us

Attached Image (click to enlarge)
Click to Enlarge Name: Screenshot1.png Size: 98 KB


There is H4 speedbump supply that looks like a good place to scale in and short again on the way down.
Attached Image (click to enlarge)
Click to Enlarge Name: Screenshot2.png Size: 86 KB


Take a look at the new chart.
Alfonso

Quoting panoramia
Hi Sekbor, Thank you for attending the webinar, hope that things are getting a bit clearer now. My short entry on NZDUSD H1 was triggered yesterday right at that yellow vertical line. I was expecting something like that to happen since I had the loss the other day at a lower price on that H4 original supply level. On H1 it may seem an insignificant level of supply, but it was a distribution pattern right at D1 supply. The automatic SD indicator also drew that level which is now non-fresh. I am at breakeven, so we'll see what happens. We are always...
Set and Forget supply and demand trading community
  • #726
  • Jul 30, 2013 1:50am Jul 30, 2013 1:50am
I started to analyze the markets this morning, the first thing I made was running Metatrader and my higher timeframe's spreadsheet to see if any D1/WK levels have been violated, where I am in the curve and so on.

What would you do if you see this?
Both AUDCAD and AUDCHF have broken D1 demand areas
EURAUD has broken D1 supply area

Attached Image (click to enlarge)
Click to Enlarge Name: Screenshot2.png Size: 61 KB


This is what we should do:

  1. Switch to those pairs D1 charts
  2. Look for H4/H1 supply areas and set & forget because these entries are high probabilities if there is still room to the opposing D1 demand area
  3. Update the spreadsheet with the new D1 demand areas

That's why the spreadsheet is SO USEFUL. At a glance, you will know what is going on with your pairs
Alfonso

Set and Forget supply and demand trading community
  • #727
  • Jul 30, 2013 2:11am Jul 30, 2013 2:11am
D1 demand area has been broken with momentum on AUDCHF. Now we need to look for shorts as long as we have room to opposing D1 demand area (much lower, and used up).

Why did I planned this short trade first? Becase as you could read in a previous post, the spreadsheet told me the D1 demand area had been broken.
Attached Image (click to enlarge)
Click to Enlarge Name: Screenshot3.png Size: 61 KB


I have planned a short on H4 supply at D1 proximal line, it may not be reached and brand new supply areas on H1 (speedbumps mainly) can be formed, if any, go short on those since we have no way to draw a descending trendline (speedbumps can't be used for that).

Attached Image (click to enlarge)
Click to Enlarge Name: Screenshot1.png Size: 154 KB


A used-up D1 demand was solidly broken.

What do you think we need to do now? Look for demand areas to buy?

No way, we need to look for H4/H1 supply areas to keep on selling. My entry is right at the D1 supply proximal line, but if new areas are formed on the way down on H4 or H1 (speedbumps mainly), I will go short on those.

Attached Image (click to enlarge)
Click to Enlarge Name: Screenshot2.png Size: 144 KB
Set and Forget supply and demand trading community
  • #728
  • Jul 30, 2013 2:26am Jul 30, 2013 2:26am
Hello fellow traders!

Sorry for the delay in uploading yesterday's webinar. I was on the beach till late and I had some tech problems trying to recover the first video after my computer's crash, as well as joining and processing the 2 sessions we had yesterday.

My computer crashed during the first hour, so I had to restart and create a new webinar ID, it would not allow me to log in my own webinar after the crash. So I created a new ID and sent an email to all of you. This will be the procedure I'll follow if this ever happens again, you should check your inbox if this happens again.

This 2 hours video will show you how to use trendlines in order to assess trend in the markets. It's a very useful method to help you trade in the direction of the trend as well as filtering out bad trades.

This is the video:
Inserted Video


Hope things are getting clearer now, I am trying to make it simple!
Have a great day!
Alfonso
Set and Forget supply and demand trading community
  • #729
  • Jul 30, 2013 2:28am Jul 30, 2013 2:28am
Quoting panoramia
Hello Nick, You will feed the spreadsheet with the levels in control, it does not matter if they are touched or not. D1 and WK SD levels are higher timeframes that control price, so add them. If you prefer to go to the extremes and fresh only, you can do that as well, you can do as you prefer. This is where it can become subjective: 1) Drawing the levels 2) Deciding which ones control price For me, the one that is in control is the one that has not been taken out yet. If the level is a speedbump against the trend, I may decide to use the extreme...
Thank you! : )
Keep your blades sharp!
  • #730
  • Jul 30, 2013 4:16am Jul 30, 2013 4:16am
In case you want to compare, these are the updated D1/WK SD levels I have on my SD spreadsheet after going through all the pairs this morning. There were some levels that had been broken, and I updated a couple of D1 levels which I hadn't added.

Remember that each of you can see the levels differently, it will depend if you take the speedbumps into account, non-fresh levels or even your broker's price.
Alfonso
Attached Image (click to enlarge)
Click to Enlarge Name: Screenshot1.png Size: 132 KB
Set and Forget supply and demand trading community
  • #731
  • Jul 30, 2013 4:25am Jul 30, 2013 4:25am
Alfonso, just dropping by to show my appreciation for everything you are doing.
Thanks for your sharing attitude and willingness to help others improve.

Hasta luego,
Michael
The quality of your life is brought about by the quality of your thinking.
  • #732
  • Jul 30, 2013 4:45am Jul 30, 2013 4:45am
Yesterday afternoon, I cancelled the H1 short on EURNZD after the webinar. I've now cancelled H4 supply zone

Reasons:

  1. EURNZD H1 had spent too much time consolidating and the H1 temporal trendline would be broken. Trade would have given some pips though, but not breakeven
  2. NZDUSD was at fresh D1 supply and consolidating, I was short on NZDUSD
  3. NZDUSD is correlated with EURNZD and GBPNZD, so selling on NZDUSD and also selling EURNZD makes no sense
  4. If NZDUSD (mother NZD pair) is at fresh D1 supply and starts rejecting and I am short at it, I don't want to sell on the correlated pairs like EURNZD and GBPNZD
  5. NZDUSD bouncing of D1 supply, GBPNZD bouncing from D1 demand, that's correlation, I don't want to do opposite things

I have also cancelled the H4 short trede at H4 supply for the same reasons, I will wait for confirmation, if anything, to go short.

Remember that this is just my personal view and reasons on how they are reacting, nothing else.

Quoting panoramia
Planning this swing trade on H4 supply area right at the D1 supply distal line, gap down and aborbed previous demand. H4 level is too wide, so I drilled it down to fit my risk tolerance. H4 ascending trendline is now broken, one more confluence. {image} I've also planned a short on H1 speedbump supply right at D1 proximal line. Good location at a D1 supply, fresh and original, strong departure and good risk/reward. Demand has been taken out, so it's even better. I have to try both shorts. Price is consolidation now, too much trading in the zone,...
Set and Forget supply and demand trading community
  • #733
  • Jul 30, 2013 7:53am Jul 30, 2013 7:53am
what do you think about this? http://www.mql5.com/en/charts/579743...-h4-exness-ltd USDJPY H4 long
  • #734
  • Jul 30, 2013 8:38am Jul 30, 2013 8:38am
Posting your levels has been a big help Alfonso, its let me go back over my spreadsheet to see how close I was. I have to admit I've altered a few already and im sure there will be a few more before I'm done. Great tools and strategy, I had wanted to move to swing trading for a long time as I think it will suit my mentality better. Going through all your stuff is getting me organized and giving me a different way to approach trading. Thanks for all the time and effort.
  • #735
  • Edited 10:14am Jul 30, 2013 8:48am | Edited 10:14am
Quoting panoramia
Hello fellow traders! Sorry for the delay in uploading yesterday's webinar. I was on the beach till late and I had some tech problems trying to recover the first video after my computer's crash, as well as joining and processing the 2 sessions we had yesterday. .................. I am trying to make it simple! Have a great day! Alfonso
Just one question about drawing trendlines, do you look for trendlines of any particular angle, say greater than 45 degrees, because I noticed on the webinar, (around 1hr 42m on USDJPY H4) you didn't connect 2 swing highs making lower highs and the subsequent 3 rd high formed a new supply about 10 pips or so under this trendline. This trendline was flatter, that is why I am asking this question.

I couldn't make it back to the webinar before it finished, I apologise.

- EDIT, I have to say everyone else teaching S&D calls this form of trading an "art", but you have made it into a logical, mathematical & commonsense form. This is what is inspiring people here, you have broken it down into logical steps. Thanks for that.
It never gets easier, you just get better
  • #736
  • Jul 30, 2013 9:56am Jul 30, 2013 9:56am
Thx Alfonso for sharing your levels. this is a great confirmation for me.
  • #737
  • Jul 30, 2013 11:13am Jul 30, 2013 11:13am
Thanks for your kind words Shabs, I appreciate that and I'm sure that others here appreciate it as well.

I won't look for a specific angle, that would make things complex. Combine SD and TL for your trend, that's all. Obvious peaks and valleys, and go for set & forget if the level is original for countertrend, else wait for confirmation with brand new H1/H4 SD levels at higher timeframe SD areas.

It can be simpler. Whatever you add to that equation will make things more complex and add indecision.

Thanks again for being there and ur support!
Alfonso

Quoting Shabs19
{quote} Just one question about drawing trendlines, do you look for trendlines of any particular angle, say greater than 45 degrees, because I noticed on the webinar, (around 1hr 42m on USDJPY H4) you didn't connect 2 swing highs making lower highs and the subsequent 3 rd high formed a new supply about 10 pips or so under this trendline. This trendline was flatter, that is why I am asking this question. I couldn't make it back to the webinar before it finished, I apologise. - EDIT, I have to say everyone else teaching S&D calls this form of trading...
Set and Forget supply and demand trading community
  • #738
  • Jul 30, 2013 11:17am Jul 30, 2013 11:17am
I've created 3 screenshots that will explain in a very simple way rules we should be applying to our SD trading.

They are pretty simple and clearly seen on the slides... They are self-explanatory, so I won't add any further comments, you can find explanations on the videos and posts.

Alfonso
Attached Image(s) (click to enlarge)
Click to Enlarge Name: Screenshot1.png Size: 46 KB
Click to Enlarge Name: Screenshot2.png Size: 51 KB
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Set and Forget supply and demand trading community
  • #739
  • Jul 30, 2013 11:43am Jul 30, 2013 11:43am
Thanks Alfonso for posting those rules.

I'd like to know if you can post the xls spreadsheet of scoring a level please? I didn't find it yet.
I may not ask a lot of questions or post anything yet because I'm building my MT4 like the way you do.

Thanks again for sharing good stuff in here.

Mfinab
  • #740
  • Edited 12:19pm Jul 30, 2013 12:05pm | Edited 12:19pm
Alfonso, with respect to the High or Low in the Curve diagram :

Would you say that a trader could replace the Labels of D1 with W (weekly) H4 with D (daily) and H1 with H4 when trading on a higher time frame?

Or are there any significant differences, that you have experienced, that should be noted ?

This is a great visual. Nice work.
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