Supply and demand in a nutshell by Alfonso Moreno | Page 55 | Forex Factory

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Supply and demand in a nutshell by Alfonso Moreno

  • #1,081
  • Aug 15, 2013 12:03pm Aug 15, 2013 12:03pm
Quoting Nametaker
{quote} 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.
Attached Image (click to enlarge)
Click to Enlarge Name: Screenshot1.png Size: 55 KB


My aplogies,this is gbpusd weekly
actally was lil confused as I was using only rectangle reader n trying to spot sup zone as in the left chart i hav uploaded then again wtih sup dmnd indi it pointed as in the rightside of my uploaded chrt... so my intial confusion is which level to consider as the sup zone...as now Alfonso explained only fresh lvl to consideand if we go by that then the chart with blue supzone on right chart should b considered right(?)but it was reaction frm previous speedbump which is shown in left of the uploaded chrt so how can it b fresh zone?
  • #1,082
  • Edited 12:22pm Aug 15, 2013 12:05pm | Edited 12:22pm
Quoting panoramia
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 {quote} {image}
Yes i know. I thought you said that original levels couldnt be speedbumps. I must of had it wrong. So can a speedbump be used to counter trend?

UPDATE: If the speedbump is fresh of course. I thought it was a continuation pattern originally so i would only use when trend is established.
Keep your blades sharp!
  • #1,083
  • Aug 15, 2013 12:06pm Aug 15, 2013 12:06pm
Quoting panoramia
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 {quote}
Thankyou Alfonso
  • #1,084
  • Aug 15, 2013 12:50pm Aug 15, 2013 12:50pm
An original level is that, an original level. It can be a swing (peak or valley) or a speedbump, it does not matter. What matters when assessing if a level is original or not, is if that level is a reaction to a previous level or not.

In the case of your WK supply level on GBPUSD, that speedbump is original but not fresh because it was already tested once.

TRADING WEEKLY LEVELS
If you wanted to trade based on the WK chart on a position trade, would you trade it? No, we would not trade it set & forget on the weekly chart because it's not fresh, you need to wait for confirmation. Since it's the WK supply, we need confirmation on a H4 supply to confirm the area.

MN SD level --> D1 confirmation
WK SD level --> H4 confirmation
D1 SD level --> H1 confirmation

Those are the correlations.

You can set and forget on H4 without waiting for confirmation on original H4 supply levels as well, but wait for the extremes instead. Remember also that the GBP and GBP pairs as well as other cross pairs love overshooting levels and then going in your direction.

By the way, I missed a long entry on H4 speedbump demand on the pound by 1 pip, I just realized! I knew it's on WK supply (it's more aggressive), but I know that WK is non-fresh and making higher highs, with room to the WK extreme. Since I'm on holidays I just had the H4 automatic level, I would have drawn it a bit wider on that consolidation, but well, that's life Pity, it rallied 100+ pips!
Alfonso

Quoting Nametaker
{quote} Yes i know. I thought you said that original levels couldnt be speedbumps. I must of had it wrong. So can a speedbump be used to counter trend? UPDATE: If the speedbump is fresh of course. I thought it was a continuation pattern originally so i would only use when trend is established.
Attached Image (click to enlarge)
Click to Enlarge Name: Screenshot1.png Size: 91 KB
Set and Forget supply and demand trading community
  • #1,085
  • Aug 15, 2013 1:07pm Aug 15, 2013 1:07pm
Quoting panoramia
An original level is that, an original level. It can be a swing (peak or valley) or a speedbump, it does not matter. What matters when assessing if a level is original or not, is if that level is a reaction to a previous level or not. In the case of your WK supply level on GBPUSD, that speedbump is original but not fresh because it was already tested once. TRADING WEEKLY LEVELS If you wanted to trade based on the WK chart on a position trade, would you trade it? No, we would not trade it set & forget on the weekly chart because it's not fresh, you...
My gbp/usd got triggered. I closed it when i was up +15 pips because some of my levels wern't drawn correctly. Thanks alfonso for explaining that to me. I've re-done half of the s/d that were wrong i will do the other half tommorow.

What are your thoughts on cad/chf. My limit order got triggered. Its up +82 pips.

H4
Attached Image (click to enlarge)
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Daily
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WK
Attached Image (click to enlarge)
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Keep your blades sharp!
  • #1,086
  • Aug 15, 2013 1:54pm Aug 15, 2013 1:54pm
Planning my first short live trade on E-mini S&P 500 Index on a new broker I'm trying, IC Markets. It has some CFDs and indexes which is great, and really nice spreads.

Planning a short H4 speedbump supply, removed previous demand area and now dropping like a rock like the $ index!

I've attached both H4 and D1 charts so that you can see the reasons for entry!
Alfonso
Attached Image(s) (click to enlarge)
Click to Enlarge Name: Screenshot2.png Size: 138 KB
Click to Enlarge Name: Screenshot1.png Size: 128 KB
Set and Forget supply and demand trading community
  • #1,087
  • Aug 15, 2013 2:11pm Aug 15, 2013 2:11pm
Hi Peter!
Still holding that Aussie 200 Index short trade from weekly supply? It's working nicely! Your trade was based on H1 confirmation! Congratulations

As you can see on the H4 chart there was also possibility of a short trade based on H4 as well at 5176.98.

Supply and demand rules! It works on any instruments, since SD governs the world!
Alfonso


Quoting outapips
Here is a current trade I'm in on the Aussie200 Index. Price has reached the weekly proximal line and I've entered on H1 confirmation trade .. will see how it goes {image} {image}
Attached Image (click to enlarge)
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Set and Forget supply and demand trading community
  • #1,088
  • Aug 15, 2013 3:30pm Aug 15, 2013 3:30pm
Hi Alfonso and hi to all,
I am trying to trade supply-damand metadology and have found your thread very informative and i wanna shere also my humble ideas also questions with you.

i am trading Daily as a higher time frame and 1h for entry time frame .
i wanna ask, do we need to wait for the 1h demand level to be absored first or we can sell short the pull back to 1h supply zone in Daily supply immediately.
thanks.
Attached Image(s) (click to enlarge)
Click to Enlarge Name: gbpjpy daily.png Size: 30 KB
Click to Enlarge Name: gbpjpy hourly.png Size: 40 KB
  • #1,089
  • Aug 15, 2013 3:50pm Aug 15, 2013 3:50pm
Quoting panoramia
Hi Peter! Still holding that Aussie 200 Index short trade from weekly supply? It's working nicely! Your trade was based on H1 confirmation! Congratulations As you can see on the H4 chart there was also possibility of a short trade based on H4 as well at 5176.98. Supply and demand rules! It works on any instruments, since SD governs the world! Alfonso {quote} {image}
Hi Alfonso,

The trade is going nicely and still holding .. I have taken partial profit and holding the rest to see if it will run down to daily trend line.
If you act surprised, then you probably missed something
  • #1,090
  • Aug 15, 2013 7:13pm Aug 15, 2013 7:13pm
Hi Caparzo!

Welcome to the thread!

You don't need to wait for previous demand to sell at supply or previous supply to buy at demand IF you are at a higher timeframe SD level (D1 or above). If there previous level is absorbed, the better. You can do that if you want to be more conservative, but you don't need to.

If the higher timeframe (D1 or above) is used-up (non-fresh), then I would wait for previous SD to be taken out, else I won't!
The Trendline is irrelevant once a higher timeframe has been reached. If you are more conservative, you can wait either for the trendline to be solidly broken or previous SD to be absorbed. It's all up to you, I don't do that

Hope that helps!
Alfonso

Quoting caparzo
Hi Alfonso and hi to all, I am trying to trade supply-damand metadology and have found your thread very informative and i wanna shere also my humble ideas also questions with you. i am trading Daily as a higher time frame and 1h for entry time frame . i wanna ask, do we need to wait for the 1h demand level to be absored first or we can sell short the pull back to 1h supply zone in Daily supply immediately. thanks. {image} {image}
Set and Forget supply and demand trading community
  • #1,091
  • Aug 16, 2013 1:45am Aug 16, 2013 1:45am
Quoting caparzo
Hi Alfonso and hi to all, I am trying to trade supply-damand metadology and have found your thread very informative and i wanna shere also my humble ideas also questions with you. i am trading Daily as a higher time frame and 1h for entry time frame . i wanna ask, do we need to wait for the 1h demand level to be absored first or we can sell short the pull back to 1h supply zone in Daily supply immediately. thanks. {image} {image}
Hi, I have a question:

shouldn't be the daily supply level drawn like that in this case?
Attached Image (click to enlarge)
Click to Enlarge Name: gbp jpy d1.PNG Size: 103 KB
  • #1,092
  • Aug 16, 2013 1:47am Aug 16, 2013 1:47am
Good morning Alfonso

I see the thread is a great success!

I have a quick question I can't remember seeing answered. I understand your rule is that ahead of a big new release or important speech you cancel orders and stay out of the market. Do you cancel all orders, irrespective of the pair? For instance, it's the day of the US employment figures, so you cancel orders on all USD pairs but would you also pull your orders from the market for a cross such as EUR/AUD or GBP/JPY? And if you're already in a trade, do you close the trade on either a USD pair (I expect so or you move your SL to protect some of the open profit?) and a non-USD cross?

How far in advance of the news release are you pulling orders? Following the new release, how soon will your wait before you (re)place orders again?

And finally, which new releases are you considering to be "big" news in you experience?

Thanks in advance.

Huk
  • #1,093
  • Aug 16, 2013 1:54am Aug 16, 2013 1:54am
Hi Sekbor!

I wouldn't draw that D1 supply level like that, you haven't taken into account the origin of that move on the left.

Originally, the D1 level was like this:
Attached Image (click to enlarge)
Click to Enlarge Name: Screenshot4.png Size: 109 KB


I've retouched it and fine tuned it to match the latest D1 close due to several touches. That D1 supply is used-up as you can see.
Attached Image (click to enlarge)
Click to Enlarge Name: Screenshot3.png Size: 119 KB


Alfonso

Quoting sebkor6
{quote} Hi, I have a question: shouldn't be the daily supply level drawn like that in this case? {image}
Set and Forget supply and demand trading community
  • #1,094
  • Aug 16, 2013 2:13am Aug 16, 2013 2:13am
Quoting panoramia
Hi Sekbor! I wouldn't draw that D1 supply level like that, you haven't taken into account the origin of that move on the left. Originally, the D1 level was like this: {image} I've retouched it and fine tuned it to match the latest D1 close due to several touches. That D1 supply is used-up as you can see. {image} Alfonso {quote}
I have never adjusted my level once its set. Do you adjust it if its been touched once or more than once?
Keep your blades sharp!
  • #1,095
  • Edited 5:41am Aug 16, 2013 2:28am | Edited 5:41am
Morning Huk!

The thread is going great, you are all making it work. Why? I believe it's because the information on the thread makes sense and it's logical. You take trades and you will see that they work as well. Not all trades work, that's normal, but a nice % do and that's what any trader wants, simplicity and a nice % success ratio

As far as the news is concerned.

  1. For me the "biggest" news are: NFP, offcial bank/interest rates, Bernanke/Dragghi speeches and FOMC.
  2. Secondary news releases area: PPI/CPI, unemployment rates, etc. The rest I don't care.

What I will do is that for news related to the Pound, like interest rate decision, ppi or cpi, I will not trade during that morning. I will wait for news to be released and see reaction past some hours. I want the market to either resume or break previous direction, because I want to trade WITH the trend (highest probabilities).

These are some rules that I use for news:

  1. If there is a major Bernanke Speech, FOMC or NFP, I will take the day off. There are very few cross pairs unaffected by such news. I will take my day off. One day later I will reanalyze and see what happened.
  2. If I have some trades going well and I think they won't be affected, I will protect them by moving SL to lock in some profits, else I will close all of them.
  3. I will not plan new trades before-during-after the news has been released
  4. I will close all my trades if they are not at breakeven a couple of hours prior to the news release
  5. I will not trade during the news release
  6. I may leave some trades if they are original and fresh at the very extremes of the curve

I just want to avoid unnecessary losses, there ara PLENTY of opportunities outside of news events!
Hope that clarifies my position on news trading

Alfonso

Quoting Hukkleberry
Good morning Alfonso I see the thread is a great success! I have a quick question I can't remember seeing answered. I understand your rule is that ahead of a big new release or important speech you cancel orders and stay out of the market. Do you cancel all orders, irrespective of the pair? For instance, it's the day of the US employment figures, so you cancel orders on all USD pairs but would you also pull your orders from the market for a cross such as EUR/AUD or GBP/JPY? And if you're already in a trade, do you close the trade on either a USD...
Set and Forget supply and demand trading community
  • #1,096
  • Aug 16, 2013 2:31am Aug 16, 2013 2:31am
Yes, I do adjust them if they are used up trying to cover only the "blank" area, the untraded area. Why? Because I don't want to see a 250 pips wide D1 supply that has been touched 3 times and penatrated 150 pips. Those initial 150 pips are of no use for me, I want to trade fresh areas only.

I hope it makes sense!
Alfonso


Quoting Nametaker
{quote} I have never adjusted my level once its set. Do you adjust it if its been touched once or more than once?
Set and Forget supply and demand trading community
  • #1,097
  • Aug 16, 2013 2:38am Aug 16, 2013 2:38am
Quoting panoramia
Yes, I do adjust them if they are used up trying to cover only the "blank" area, the untraded area. Why? Because I don't want to see a 250 pips wide D1 supply that has been touched 3 times and penatrated 150 pips. Those initial 150 pips are of no use for me, I want to trade fresh areas only. I hope it makes sense! Alfonso {quote}
Thanks dude
Keep your blades sharp!
  • #1,098
  • Aug 16, 2013 3:17am Aug 16, 2013 3:17am
Hi,

my point of view about gold.

On monthly we have nice reaction from speedbump, i can't see any resistance till 1579.
On weekly price is now near fresh supply level, so we can look to catch some move down, but this should be only correction. I will be looking for confirmation on H4.
Weekly SD - confirmation H4
Daily SD - confirmation H1.
According to, that there is a reaction on monthly picture, so in my opinion bulls are in controll. Every daily supply levels are being absorbed.

So there are two scenarios:
first, if price riches to the weekly supply level, i will try to catch nice down correction, till nearest demand level.
second, if correction will start now, i will be looking to enter long on the nearest demand daily level around 1336.

What do you think?
Attached Image(s) (click to enlarge)
Click to Enlarge Name: gold mn.PNG Size: 95 KB
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  • #1,099
  • Aug 16, 2013 3:52am Aug 16, 2013 3:52am
Hello guys.

Im looking at this EA long setup.
Attached Image (click to enlarge)
Click to Enlarge Name: 16-8-2013 10-49-31.png Size: 33 KB
Thoughts are things
  • #1,100
  • Edited 4:19pm Aug 16, 2013 4:45am | Edited 4:19pm
Hope you are having a great summer holidays!

I'll have broadband connection next Monday so I'll be planning a new webinar right at NY Session Open.

Date: Monday 19th August 2013
Time: Right at New York Session Open 2:00 PM - 4:00 PM CEST

What will the Webinar cover?

  1. Quick live analysis based on my SD methodology on at least 10 pairs. You will see how quickly it can be analysed on H4 ONCE you have the levels already drawn. I mean quick, because you will see that it can be done very quickly and I want to show you
  2. I will be answering any queries you may have
  3. If you have some losing or winning trades, have them ready because we can comment on those as well

If you haven't sent me a private message with your email and you are interested in joining this Webinar, please send me a private message with your email. Those who have done it before will be automatically invited later.

Alfonso

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