Supply and demand in a nutshell by Alfonso Moreno | Page 54 | Forex Factory

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Supply and demand in a nutshell by Alfonso Moreno

  • #1,061
  • Aug 15, 2013 1:13am Aug 15, 2013 1:13am
Quoting wbh
I have sold the pound lets see what happens, charts explain.{image}{image}
Hi wbh,

On your daily chart you annotate that there is a new supply zone formed from 1.55736 to 1.54869.
You have jumped a little too soon as that zone is not valid yet. In order for that zone to be valid it
must take out a previous demand level eg price needs to go lower than 1.5200

Your trade may work out but to me it's risky and not in line with the teaching here.

Alfonso has shared a huge amount of information and it takes a while to get a good grasp of all the
concepts. I would suggest going over the material and videos several times and then periodically revisit them.

It's great that you posted your trade setup as it will help you and others on the forum. Keep it up.

outapips
If you act surprised, then you probably missed something
  • #1,062
  • Aug 15, 2013 2:01am Aug 15, 2013 2:01am
Hi there!

I agree with Peter (outapips). He mentions in another post that your D1 supply is not a supply area, it has not taken out any previous demand. You can base your entry on the imbalance on lower timeframes though, but not basing your rationale on the fact that there is a brand new D1 supply.

In order to validate a zone as supply, it has to take out a previous area of demand. That hasn't happened yet as you can see on the charts. Look at the "wanna be demand" area right underneath, that is not a demand area unless the zone you marked as D1 supply is absorbed. The same principle would apply to your D1 supply zone, any zone and any timeframe.

Hope that's clear!
Alfonso

Quoting wbh
I have sold the pound lets see what happens, charts explain.{image}{image}
Attached Image
Set and Forget supply and demand trading community
  • #1,063
  • Aug 15, 2013 3:01am Aug 15, 2013 3:01am
Hi Alessandro,

That would not be a valid demand zone, previous supply has not been taken out as you mentioned in your post. That H1 demand zone is a reaction to the sort of speedbump on the left side (not valid because of candle formation not having a candle of the opposite color, red).

Hope that's clear!
Alfonso

Quoting alexx90
Hi, this is my analysis to GBPUSD on the weekly the price is a bit higher but there is a nice room between price and supply zone {image} on the daily price is in uptrend {image} this is 1 hour, price makes new demand zones but i have a question. i placed limit order above demand zone, is this a real demand zone because the price violated previous supply zone or price need to violate supply zone in the yellow circle to be a good demand zone? {image} Alessandro
Set and Forget supply and demand trading community
  • #1,064
  • Aug 15, 2013 3:23am Aug 15, 2013 3:23am
Quoting panoramia
Hi there! I agree with Peter (outapips). He mentions in another post that your D1 supply is not a supply area, it has not taken out any previous demand. You can base your entry on the imbalance on lower timeframes though, but not basing your rationale on the fact that there is a brand new D1 supply. In order to validate a zone as supply, it has to take out a previous area of demand. That hasn't happened yet as you can see on the charts. Look at the "wanna be demand" area right underneath, that is not a demand area unless the zone you marked as...
Hi guys, thanks for pointing that out. Thats why i am here posting, i need my analysis corrected where wrong.

Jackub, i used a smaller zone on the H4 because the 4th&5th candles after the high was made came into the larger zone that you pointed out and then dropped so i believe the only supply left is above those 2 candles .
Attached Image
  • #1,065
  • Aug 15, 2013 3:37am Aug 15, 2013 3:37am
GU SL hit, its all good, learning, learning, learning.
  • #1,066
  • Edited 4:01am Aug 15, 2013 3:41am | Edited 4:01am
No problem with that loss my friend! A loss = a lesson.

I'm sure that you now know that a supply area needs to absorb previous demand in order to be a confirmed supply. Opposite for demand. May those levels work without taking out previous zones? Yes, of course. But then we're not talking about supply and demand, it'd be another methodology!

Next one now
Alfonso

Quoting wbh
GU SL hit, its all good, learning, learning, learning.
Set and Forget supply and demand trading community
  • #1,067
  • Aug 15, 2013 4:24am Aug 15, 2013 4:24am
Hi

attached usd chf. Price is in range of daily supply. The supply is non fresh but we had a wery strong reaction to that level.
Price didn't hit weekly demand level at 0.913922 so mayby it want to hit that level.
Problem is , that the price dind't create new low on daily picture and didn't absorb demand area.
I think that we could nevertheless, try to catch some down move according to the fresh supply level on h4
Attached Image(s) (click to enlarge)
Click to Enlarge Name: usd chf daily.PNG Size: 113 KB
Click to Enlarge Name: usd chf h4.PNG Size: 102 KB
  • #1,068
  • Aug 15, 2013 5:36am Aug 15, 2013 5:36am
Hi

i added 2 long positions on eur jpy.
H1 speedbump demand area
Attached Image(s) (click to enlarge)
Click to Enlarge Name: eur jpy d1.PNG Size: 109 KB
Click to Enlarge Name: eur jpy h1.PNG Size: 101 KB
  • #1,069
  • Aug 15, 2013 5:42am Aug 15, 2013 5:42am
Aud usd. We have nice weekly supply area, was waitingo for retest new supply area on h4. Let's see if it works.
Attached Image(s) (click to enlarge)
Click to Enlarge Name: aud usd h4.PNG Size: 105 KB
Click to Enlarge Name: aud usd weekly.PNG Size: 99 KB
  • #1,070
  • Aug 15, 2013 6:52am Aug 15, 2013 6:52am
Is there a possible shorting opportunity on GBP/USD?

I like the look of the 1.56470 level on H4 because it fits my rules.

Weekly
Price has entered a weekly supply zone.
Attached Image (click to enlarge)
Click to Enlarge Name: gbpusd weekly.png Size: 106 KB

Daily
There is a daily supply at the top of the weekly supply zone with a strong drop.
Attached Image (click to enlarge)
Click to Enlarge Name: gbpusd daily.png Size: 103 KB

H4
Zooming in to H4 there are two opportunities in the weekly supply. One qualifies for a set and forget. If it fails i will lean on the supply higher up and wait for confirmation.
Attached Image (click to enlarge)
Click to Enlarge Name: gbpusd h4.png Size: 98 KB
Keep your blades sharp!
  • #1,071
  • Aug 15, 2013 8:01am Aug 15, 2013 8:01am
Quoting sebkor6
Hi attached usd chf. Price is in range of daily supply. The supply is non fresh but we had a wery strong reaction to that level. Price didn't hit weekly demand level at 0.913922 so mayby it want to hit that level. Problem is , that the price dind't create new low on daily picture and didn't absorb demand area. I think that we could nevertheless, try to catch some down move according to the fresh supply level on h4 {image} {image}
Hi,
i'm not sure but i think that there is not a new supply. Why? A is not a demand area because price doesn't violate previous supply area so B it is not a supply area because there is not previous demand area violated.
Attached Image (click to enlarge)
Click to Enlarge Name: usd chf h4.PNG Size: 106 KB


Alessandro
  • #1,072
  • Aug 15, 2013 9:55am Aug 15, 2013 9:55am
Quoting Nametaker
Is there a possible shorting opportunity on GBP/USD? I like the look of the 1.56470 level on H4 because it fits my rules. Weekly Price has entered a weekly supply zone. {image} Daily There is a daily supply at the top of the weekly supply zone with a strong drop. {image} H4 Zooming in to H4 there are two opportunities in the weekly supply. One qualifies for a set and forget. If it fails i will lean on the supply higher up and wait for confirmation. {image}
Fresh supply GBPUSD H1
Attached Image (click to enlarge)
Click to Enlarge Name: gbpusdh1.png Size: 53 KB
  • #1,073
  • Aug 15, 2013 10:35am Aug 15, 2013 10:35am
Quoting pashaa
{quote} Fresh supply GBPUSD H1 {image}
It's fresh but for CT you need original levels.
  • #1,074
  • Aug 15, 2013 10:41am Aug 15, 2013 10:41am
Quoting Nametaker
Is there a possible shorting opportunity on GBP/USD? I like the look of the 1.56470 level on H4 because it fits my rules. Weekly Price has entered a weekly supply zone. {image} Daily There is a daily supply at the top of the weekly supply zone with a strong drop. {image} H4 Zooming in to H4 there are two opportunities in the weekly supply. One qualifies for a set and forget. If it fails i will lean on the supply higher up and wait for confirmation. {image}
Attached Image (click to enlarge)
Click to Enlarge Name: Screenshot1.png Size: 19 KB


hi Nametaker...Im still new to this wonderful forum created by Alfonso... I had this doubt..can this b considered as a reaction frm speed bump made by feb 3rd 2013 candle..so if yes,it won't b considered fresh right? thnku
  • #1,075
  • Aug 15, 2013 11:26am Aug 15, 2013 11:26am
Hi Longpip!

Welcome to the thread as well

One quick thing on the speedbump or any other level. The methodology bases all of its entries on FRESH levels only.

The rules is simple:
No matter which timeframe, pair, type of level (be it a swing or a speedbump), if the level is not fresh then it's not an entry.

First pullbacks are highest probabilities!

Alfonso

Quoting longpip
{quote} {image} hi Nametaker...Im still new to this wonderful forum created by Alfonso... I had this doubt..can this b considered as a reaction frm speed bump made by feb 3rd 2013 candle..so if yes,it won't b considered fresh right? thnku
Set and Forget supply and demand trading community
  • #1,076
  • Aug 15, 2013 11:31am Aug 15, 2013 11:31am
Quoting longpip
{quote} {image} hi Nametaker...Im still new to this wonderful forum created by Alfonso... I had this doubt..can this b considered as a reaction frm speed bump made by feb 3rd 2013 candle..so if yes,it won't b considered fresh right? thnku
Could you provide the timeframe and pair you are using. But yes if a level has been touched even by 1 pip it is no longer fresh, the same applies for if a level is broken by 1 pip. So i advise that when drawing your levels zoom in with the + on mt4 and get the rectangle exactly on the proximal and distal line.

Provide me with the Tf and pair you took the screenshot from and i will try to break it down for you.
Keep your blades sharp!
  • #1,077
  • Aug 15, 2013 11:32am Aug 15, 2013 11:32am
Hi Sekbor!
Nice trade on EURJPY, congratulations. I am not very active lately since I'm on holidays, but I do have time from time to time to add some trades and answer messages in the thread.

Congratulations! Great job following the methodology's rules!
Alfonso

Quoting sebkor6
Hi i added 2 long positions on eur jpy. H1 speedbump demand area {image} {image}
Set and Forget supply and demand trading community
  • #1,078
  • Aug 15, 2013 11:35am Aug 15, 2013 11:35am
Quoting panoramia
Hi Sekbor! Nice trade on EURJPY, congratulations. I am not very active lately since I'm on holidays, but I do have time from time to time to add some trades and answer messages in the thread. Congratulations! Great job following the methodology's rules! Alfonso {quote}
Alfonso! Hows your holiday going? Im going to ibiza on sunday.
Keep your blades sharp!
  • #1,079
  • Aug 15, 2013 11:58am Aug 15, 2013 11:58am
Hi Nick!

Take a look at the chart I've attached. Your weekly supply level is not fresh, it's a reaction to a previous WK speedbump supply. I just wanted to point out that fact, because it's key to know if a level is fresh and/or original.

Alfonso

Quoting Nametaker
Is there a possible shorting opportunity on GBP/USD? I like the look of the 1.56470 level on H4 because it fits my rules. Weekly Price has entered a weekly supply zone. {image} Daily There is a daily supply at the top of the weekly supply zone with a strong drop. {image} H4 Zooming in to H4 there are two opportunities in the weekly supply. One qualifies for a set and forget. If it fails i will lean on the supply higher up and wait for confirmation. {image}
Attached Image (click to enlarge)
Click to Enlarge Name: Screenshot1.png Size: 128 KB
Set and Forget supply and demand trading community
  • #1,080
  • Aug 15, 2013 12:02pm Aug 15, 2013 12:02pm
Hi Alexx90

Here is my take;
1. "A" is considered to be a demand zone if price continues to rally and it will be a good re-entry point for long when price returns back to that level. This is called Rally Base Rally (RBR).
*** UNFORTUNATELY, THE LEVEL IS AT D1 SUPPLY ZONE (which we only look for short positions on these levels).

2. "B" can be considered a new supply zone (not original, reaction to previous supply zones), but if you look to the left, there is a previous supply zone (white box) that is not yet absorbed and still being respected. You should be looking on to this level.



Attached Image (click to enlarge)
Click to Enlarge Name: Image1.png Size: 203 KB


francis

Quoting alexx90
{quote} Hi, i'm not sure but i think that there is not a new supply. Why? A is not a demand area because price doesn't violate previous supply area so B it is not a supply area because there is not previous demand area violated. {image} Alessandro
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