Supply and demand in a nutshell by Alfonso Moreno | Page 49 | Forex Factory

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Supply and demand in a nutshell by Alfonso Moreno

  • #961
  • Aug 9, 2013 2:38pm Aug 9, 2013 2:38pm
Hi Olarion!

First of all, welcome to the thread.

I do not like dojis on speedbumps, it's one of my rules, I avoid them. Why? I've backtested and forward tested them and results are not good.
On speedbumps we want to have tight bases but not dojis, mainly marubozu candles with none or very small shadows. We want at least one tight base candle in the opposite direction of your trade, if you want to short you want a bullish tight base candle (blue or green), opposite for shorts.

I looked at the level and I do have a similar short on EURAUD as well, taking into account the origin of the move on that EURAUD speedbump supply.

Attached Image


Hope that helps Olarion!
Alfonso



Quoting Olarion1975
I am planning to scale-in with a speedbump entry on the H4 on EURAUD - drilled down to H1 for smaller SL. Would you consider the small doji speedbump before as a valid one, also? {image}
Set and Forget supply and demand trading community
  • #962
  • Aug 9, 2013 2:48pm Aug 9, 2013 2:48pm
Hi Olarion!

Thanks for your comments, I am glad that you like the thread and contributing with your posts and trades, I am sure everybody will appreciate that.

I think I replied to your speedbump comment on a previous mail. We want tight bases on the speedbumps, mainly marubozu candles with at least one candle with the opposite color to the trade direction you want to take. Check the previous post and you will see a further explanation. The same applied to this one!

Alfonso

Quoting Olarion1975
Panoramia, first of all...really great thread with awesome information regarding S&D trading. I also like the webinars and other videos very much. Keep it up. One question: would you consider the blue marked area on the H1 EURAUD chart as a valid speedbump? If no, why not? Thank you... {image}
Set and Forget supply and demand trading community
  • #963
  • Aug 9, 2013 2:50pm Aug 9, 2013 2:50pm
Hi again Olarion!

3rd message in a row to you

If my trade is up quite a few pips, yes, I will hold it over the weekend. Let's say it's 80-100 pips up and at breakeven, and I don't see any forthcoming news for the the first days of next week, I will hold the trade, else I will close all of my trades.

Alfonso

Quoting Olarion1975
Another short question for you, panoramia: Do you hold open positions over the weekend or close them all on Friday?
Set and Forget supply and demand trading community
  • #964
  • Aug 9, 2013 3:04pm Aug 9, 2013 3:04pm
Hi Mfinab!

That H4 supply area on NZDUSD looks good, but not as a set & forget, only as confirmation trade. Why? It's a reaction to a previous level, it's not original. We want to trust on original levels for set & forget when they are at higher timeframes SD areas, fresh only when we're trading with the trend on the timeframe where we've detected the level (demand being respected, supply being violated). That H4 supply would be good for a confirmation trade, which is what I think you are planning to do, aren't you?

Alfonso


Quoting mfinab
Hi Traders, I was looking at NZDUSD and we can see that it is coming to a fresh H4 Supply. But if you zoom out a bit, you'll see that this area is a used Daily Supply. But I still think that this area could be a place to go short. Obviously, with a low risk, for me, it would be around 0.3% of my account. Normally I risk about 0.5 to 0.7% of my equity when I find a nice and fresh zone. Here is some charts of NZDUSD: {image} {image} Now let's look at USDX, price is coming from a new higher high Daily, dont you guys think that buyers wont see that?...
Set and Forget supply and demand trading community
  • #965
  • Aug 9, 2013 3:08pm Aug 9, 2013 3:08pm
Hi Sekbor,

Great trade! It all started on the H4 speedump supply that some of you didn't like much but it was bouncing off a higher timeframe. Look what it did, really nice trade, congratulations!

One thing about the trendlines. Trendlines can be used for evaluating trend but also for assessing if you want to hold an existing trade. In the case of your trendline, it's been solidly broken, what does it mean? That a short on the previous level before the break of the ascending trendlne could be a nice place to short (scale in if you still are holding your trade). You could lock in some profits, move your SL above the new H4 supply area on EURAUD and set another limir sell order on that H4 speedbump supply. That normally works very well. 340 pips profit is also a very good result

Alfonso
Quoting sebkor6
{quote} eur aud hits target. + 340 pips {image}
Set and Forget supply and demand trading community
  • #966
  • Aug 9, 2013 3:36pm Aug 9, 2013 3:36pm
Take a look at this H1 confirmation short trade on EURUSD.

Price was at a non fresh D1 supply zone, departure from that D1 1st pullback was great, but no original level. We then wait for a confirmation trade on H1 or H4, that is, a brand new supply level within that D1 non-fresh supply level (with a great departure), and set the limit sell order a couple of pips below the proximal line.

This is a similar trade to the others taken by some of you on Audusd, Audchf, etc. As you can see, it's the same logic over and over!

Alfonso
Attached Image(s) (click to enlarge)
Click to Enlarge Name: eurusd_h1_short_confirmation.gif Size: 56 KB
Click to Enlarge Name: Screenshot2.png Size: 43 KB
Set and Forget supply and demand trading community
  • #967
  • Edited 4:02pm Aug 9, 2013 3:48pm | Edited 4:02pm
Next week I will be organizing 2 events for which I have no dates yet, but it will be minimum by the middle of the week or on Friday

  1. A Webinar on supply and demand
  2. 5 to 1 questions & answers session. What is this 5 to 1 Q&A about? It will be a 1 hour and a half private session for 5 of you, where I will try to answer all of your questions individually. Only members from this thread from which I have their emails and have contributed to the thread will be able to join this 5:1 Q&A. This session will be great for those who have spent enough time watching the videos and learning my SD trading methodology, it's not open for Newbies, because their questions will be very basic and can be easily addressed by watching the videos and asking questions on the thread. Newbies need to learn about the basics and contribute before they can join a 5:1 Q&A webinar. I know who is progressing and who is not, we all know really. Session time will always be NY Open.

    You will be able to show me your charts, take your mic and describe your doubt!

    There will be more than one 5:1 Q&A session, so don't worry!

- Those who are interested in joining the free Webinar next week, please send me a private message with your email (if you have already done so, you don't need to do it).
- Those members with good knowledge of my thread's content who are interested in a 5:1 Q&A session, please send me a private message. The first 5 to send the message will be the first ones accepted. Remember only members who know about SD and have been following the thread can join this session. These sessions will be recorded and shared with all of you though, like always.

I hope that you like this idea, it will help to answer most of your doubts.
Alfonso

Set and Forget supply and demand trading community
  • #968
  • Edited 6:59pm Aug 9, 2013 4:04pm | Edited 6:59pm
@panoramia:

Brilliant Stuff - Well Done

You truly do understand supply and demand zones

Very well done

Keep Up The Good Work



+1 VOUCH
  • #969
  • Aug 10, 2013 1:00am Aug 10, 2013 1:00am
Morning HDA!
Thanks a lot for your message and your vouch, I really appreciate that. I beleive there are some good and serious traders in the thread now, and hopefully others will become that great if they follow these simples rules on supply and demand as well as those they will come up with with their experience. Hopefully they will contribute to the thread with their trades, as they are doing right now, as well as with their views and understanding of the markets.

Thanks again! Have a great weekend with your friends and family!
Alfonso
Quoting HDA
@panoramia: Brilliant Stuff - Well Done You truly do understand supply and demand zones Very well done Keep Up The Good Work +1 VOUCH
Set and Forget supply and demand trading community
  • #970
  • Aug 10, 2013 2:15am Aug 10, 2013 2:15am
Quoting panoramia
Hi Francis! I have nothing to add to your nice H1 speedbump demand trade on AUDUSD, it's just that way, you followed the methodology step by step and you got 2 trades on that aussie rallie. The short you are planning looks good as well since it's a fresh and original level. Congratulations again on your trades! Great job! Alfonso {quote}

Thanks again Alfonso.

Actually, the long position on the AUDUSD yesterday did a great job. Unfortunately, the short that I have set did not work as expected even if we are seeing good signs based on SD. Maybe because momentum was so strong and the USD index is very weak this week. Well, that's trading win more, loose some.

I have also shorted EURAUD which also gave good trading.
SMT, IPDA, Market Structure
  • #971
  • Aug 10, 2013 2:21am Aug 10, 2013 2:21am
This really a great idea Alfonso. On my side, this will be my first time to interface with other traders live (through AV).

I am currently working here in Saudi Arabia and its very difficult to seek people to interact with specially our business with forex.

Looking forward for the schedule on this 5:1 Q&A.


Quoting panoramia
Next week I will be organizing 2 events for which I have no dates yet, but it will be minimum by the middle of the week or on Friday A Webinar on supply and demand 5 to 1 questions & answers session. What is this 5 to 1 Q&A about? It will be a 1 hour and a half private session for 5 of you, where I will try to answer all of your questions individually. Only members from this thread from which I have their emails and have contributed to the thread will be able to join this 5:1 Q&A. This session will be great for those who have spent enough time watching...
SMT, IPDA, Market Structure
  • #972
  • Aug 10, 2013 8:54am Aug 10, 2013 8:54am
Quoting panoramia
Take a look at this H1 confirmation short trade on EURUSD. Price was at a non fresh D1 supply zone, departure from that D1 1st pullback was great, but no original level. We then wait for a confirmation trade on H1 or H4, that is, a brand new supply level within that D1 non-fresh supply level (with a great departure), and set the limit sell order a couple of pips below the proximal line. This is a similar trade to the others taken by some of you on Audusd, Audchf, etc. As you can see, it's the same logic over and over! Alfonso {image} {image}

Hi Alfonso,

It's great to see, that i am in the same trade as you are. That's give me confirmation, that each day i see more and more opportunities to trade, and that i understood your strategy .
Attached Image (click to enlarge)
Click to Enlarge Name: eurusdh1.png Size: 44 KB
  • #973
  • Aug 11, 2013 3:27am Aug 11, 2013 3:27am
"EID MUBARAK "all the people of this thread.
  • #974
  • Aug 11, 2013 4:45am Aug 11, 2013 4:45am
Alfonso, if an original level's origin is a speedbump/swap would you mark the level out at the speedbump/swap or the S/D before it?

When i am searching for the origin of the original level alot of the time it is a speedbump or swap level. But i think you said you dont trade swaps/speedbumps for counter trend.
Keep your blades sharp!
  • #975
  • Aug 11, 2013 6:36am Aug 11, 2013 6:36am
hi panoramio, you write that your profit margin must be at least at 3:1, but where do you have your targets? exactly at 3 times the risk? do you only use higher timeframes supply/demand areas to measure if there is enough space? if we use the same tf we nearly never get 3:1 because the next obstacle is the last high/low from the pullback where price often bounces from.
  • #976
  • Aug 11, 2013 7:12am Aug 11, 2013 7:12am
Quoting FXfreak
hi panoramio, you write that your profit margin must be at least at 3:1, but where do you have your targets? exactly at 3 times the risk? do you only use higher timeframes supply/demand areas to measure if there is enough space? if we use the same tf we nearly never get 3:1 because the next obstacle is the last high/low from the pullback where price often bounces from.
Look at the chart below (only inside the green box)
1. You have your fresh demand level picked out (Golden area)
2. Price breaks out from demand and creates supply (Green area)
3. The distance price creates before returning (blue arrow at bottom) is your profit margin.
4. Enter at the golden level.
5. Take profit a bit before the new supply level.
.................................................................................................................................................................
I believe alfonso takes all his trades on H4 and sometimes H1 (if H4 risk is too high). He will probably let the trade run if larger TF S/D allows it.

Attached Image (click to enlarge)
Click to Enlarge Name: usdcad.png Size: 70 KB
Keep your blades sharp!
  • #977
  • Edited 7:51am Aug 11, 2013 7:18am | Edited 7:51am
Hi FxFreak,

My profit margin is MINIMUM 3:1 yes. The targets? It all depends on your trading plan, I mentioned it on the thread a couple of times.

1. TP could be opposing SD area
2. a Fix 3:1, 4:1 or X:1
3. If there is an opposing higher timeframe SD area, a few pips before that area

You mention that "the next obstacle is the last high/low from the pullback where price often bounces from". For me, that is not an obstacle, that gives me an initial profit margin (risk/reward), a minimum of X:1, if the pair is in an uptrend that obstacle would just be another supply. In an uptrend supply is normally violated, demand is respected, so I wouldn't bother much unless previous supply is near or at D1 supply. Price moves in stair steps, the upper step does not necessarily mean it will be an obstacle, it's just the start of previous correction. Maybe that price area was a reaction to a previous supply and that's why price is pulling back to your entry. When reaching your entry, if price reacts and goes back to that "obstacle", it will be a non-fresh area (if that obstacle was the reaction to a previous level), that is, higher odds of being absorbed on its way back.

Alfonso


Quoting FXfreak
hi panoramio, you write that your profit margin must be at least at 3:1, but where do you have your targets? exactly at 3 times the risk? do you only use higher timeframes supply/demand areas to measure if there is enough space? if we use the same tf we nearly never get 3:1 because the next obstacle is the last high/low from the pullback where price often bounces from.
Set and Forget supply and demand trading community
  • #978
  • Aug 11, 2013 7:22am Aug 11, 2013 7:22am
Eid Mubarak Ochin!
Alfonso
Quoting ochinkumar
"EID MUBARAK "all the people of this thread.
Set and Forget supply and demand trading community
  • #979
  • Aug 11, 2013 8:37am Aug 11, 2013 8:37am
hi,
my name is Ruben and i'm new in this forum.
I want to congratulate Alfonso for your great work and attention.
i will work hard in your system to be a good trader.

Ruben
  • #980
  • Aug 11, 2013 1:11pm Aug 11, 2013 1:11pm
Alfonso

If you are bearish on Euro/USD consider GU as well.
We got perfect harmonic number 78.6 confluence of previous resistance although not fresh.I am sure you know this but if Euro falls that will have domino reaction on cable as well however either way I see cable as short opportunity primarily even if it goes 56 or 57.
I build a position in increments.
Attached Image (click to enlarge)
Click to Enlarge Name: gbpusd.daily.png Size: 51 KB
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