Supply and demand in a nutshell by Alfonso Moreno | Page 56 | Forex Factory

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Supply and demand in a nutshell by Alfonso Moreno

  • #1,101
  • Aug 16, 2013 5:15am Aug 16, 2013 5:15am
Quoting panoramia
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 What willt the Webinar cover? Quick live analysis based on my SD methodology on at least 10 pairs. You will see how quickly it can be analysed on H4 if 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 I will be answering any queries you may have If you have...
Im going on holiday sunday. Will the webinar be uploaded to youtube?
Keep your blades sharp!
  • #1,102
  • Aug 16, 2013 5:19am Aug 16, 2013 5:19am
Quote
If there is a major Bernanke Speech, FOMC or NFP, I will not 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.

Is this a typo or am i reading it wrong?
Keep your blades sharp!
  • #1,103
  • Aug 16, 2013 5:42am Aug 16, 2013 5:42am
Typo corrected, sorry All webinars are recorded and shared on youtube, so don't worry

Alfonso
Quoting Nametaker
{quote} Is this a typo or am i reading it wrong?
Set and Forget supply and demand trading community
  • #1,104
  • Aug 16, 2013 7:34am Aug 16, 2013 7:34am
Hi traders,
i have a question about basing formations just underneath of Daily Supply levels, as shown on pics.
what should we expect if we see basing just before reaching level or with touching of level and basing there?
u also see 1h supply levels that i draw are not respected well.

copper futures
Attached Image(s) (click to enlarge)
Click to Enlarge Name: copper daily.png Size: 27 KB
Click to Enlarge Name: copper 1h.png Size: 27 KB
  • #1,105
  • Aug 16, 2013 9:38am Aug 16, 2013 9:38am
Hi Caparzo!
I believe you are making a mistake. Not all levels work, you need to make a multiple timeframe analysis and know where your D1 and higher timeframes are located. On your chats I can't see where the entries, a few entries are mixes with levels and lines and no further explanation of why you entered on each one. It's difficult to help sorry. You should go one by one.

On Copper you were bouncing OFF a Weekly demand, so lower timeframe supply zones are likely to be broken. If Weekly demand is in control, don't try to go against it with a mini H1 trendline that tells you to sell. Wait for extremes, or a real new strong supply that absorbs an important demand/support.

Drawing trendlines won't help you much in the middle of the curve... you need a trend and obvious valleys and peaks. If you are not at an extreme, you need to wait for previous demand/supply to be absorbed on H1, or you will have lots of losses.

On your charts it's very difficul to see your entry and for which reason. You should explain one trade in detail so that we can help you. Having a chart with so many information, not knowing where your D1 curves are, makes it very difficult.

It's impotant to know where your D1 levels are as well as the WK, above an below, speedbumps. I don't see it clear because you are using color codes different to the ones I use, you are not using the indicators to extend rectangles and add trendlines, so it makes all more difficult.

It's also important that you use important H4/H1 areas within the higher timeframes that were reaction before, peaks and valleys, in order to wait for confirmation as well, they are higher odds. Speedbumps are not good at the extremes, use the swings (peaks and valleys)

Weekly Chart:
Attached Image (click to enlarge)
Click to Enlarge Name: Screenshot4.png Size: 108 KB


D1 Chart:
Attached Image (click to enlarge)
Click to Enlarge Name: Screenshot1.png Size: 113 KB


Alfonso

Quoting caparzo
Hi traders, i have a question about basing formations just underneath of Daily Supply levels, as shown on pics. what should we expect if we see basing just before reaching level or with touching of level and basing there? u also see 1h supply levels that i draw are not respected well. copper futures {image} {image}
Set and Forget supply and demand trading community
  • #1,106
  • Aug 16, 2013 10:13am Aug 16, 2013 10:13am
Quoting panoramia
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. For me the "biggest" news are: NFP, offcial bank/interest rates, Bernanke/Dragghi speeches and FOMC. Secondary news releases area: PPI/CPI, unemployment rates, etc. The rest I...
Thanks Alfonso, very appreciated.
  • #1,107
  • Aug 16, 2013 11:53am Aug 16, 2013 11:53am
Quoting caparzo
Hi traders, i have a question about basing formations just underneath of Daily Supply levels, as shown on pics. what should we expect if we see basing just before reaching level or with touching of level and basing there? u also see 1h supply levels that i draw are not respected well. copper futures {image} {image}

If I may add to Alfonso's statement:
Not all levels work, you need to make a multiple timeframe analysis and know where your D1 and higher timeframes are located.

When trading basing formations or levels inside the base or the end of then pattern = ( as price is returning to a level ,,e.g: the Rise or the Drop back into a level ) Using multiple Higher TF's, looking for Support and Resistance levels associated with potential Supply or Demand Levels, will increase your odds of finding the correct levels. As I tend to trade more in these areas you definitely need a confluence of price analysis to trade successfully.

The higher TF will help you determine where price is most likely to go to. For example, when price is turning and coming out of a Basing Pattern the higher TF's tend to PULL price back toward the higher TF Supply Demand Levels. One can step down into a smaller TF and trade into these levels.. (My preferred trading method.. not for everyone) Yes the risk is higher. It is a very aggressive way of trading to be sure.

If you are somewhat new to Supply/Demand Trading I would suggest staying with Alfonso's primary method/approach before venturing into this area Supply Demand trading.

Good trading

TSD
  • #1,108
  • Edited Aug 17, 2013 1:20am Aug 16, 2013 5:16pm | Edited Aug 17, 2013 1:20am
I'm posting the message about the Webinar because it's now lost in the previous page!

I've planned 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. Live analysis based on my SD methodology on a few pairs, we'll look for Swing trade setups. You will see how quick a pair can be analysed on H4 ONCE you have the levels already drawn (that takes practice).
  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 have beent automatically invited already, in fact more than 15 people have already joined.

You can also fill this form out on my site http://panoramia.net/visitas_virtual...panoramica_360 and I will get an email. I don't want to share my email publicly, since after 24h messages can't be deleted!

All webinars are recorded and uploaded to YouTube the same day it took place.
Alfonso

Set and Forget supply and demand trading community
  • #1,109
  • Aug 16, 2013 5:32pm Aug 16, 2013 5:32pm
Hello Alfonso Moreno,
I am new to your tread. Just wanted to know your private email so that I can send you my request to receive the invitation for your August 19th Webinar.
Thanks.
  • #1,110
  • Edited Aug 17, 2013 1:18am Aug 16, 2013 6:14pm | Edited Aug 17, 2013 1:18am
Hi there!
Fill this form out on my site http://panoramia.net/visitas_virtual...panoramica_360 and I will get an email. I don't want to share my email publicly, since the messages once posted can never be deleted!

All webinars are recorded and uploaded to YouTube the same day it took place

Looking forward to your email to join you to the webinar's list!
Alfonso


Quoting tradenlearn
Hello Alfonso Moreno, I am new to your tread. Just wanted to know your private email so that I can send you my request to receive the invitation for your August 19th Webinar. Thanks.
Set and Forget supply and demand trading community
  • #1,111
  • Aug 17, 2013 3:05am Aug 17, 2013 3:05am
Here is my template if anyone would like to use it.

Attached File(s)
File Type: tpl sd template (nt version).tpl   21 KB | 547 downloads


Attached Image (click to enlarge)
Click to Enlarge Name: eurusdweekly.png Size: 113 KB


TIP: Look at the top of my chart i only have things i need. Everything else i have deleted. You can then move everything onto one line to take up the least amount of space possible. This gives you a cleaner look and more space to watch PA.

I use the old rectangle indicator at the moment so if you want you can replace that with the new one, add your MA's/ADR's etc and then save the template.

NT

UPDATE: Colours i use are pale green for fresh and medium sea green for un-fresh (supply). And light sky blue for fresh and cornflower blue for un-fresh (demand). I then assess which are strong and which are weak in my head.
Keep your blades sharp!
  • #1,112
  • Aug 17, 2013 12:04pm Aug 17, 2013 12:04pm
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...

Panoramia,

Great thread! I just finished reading through the entire thing. I am used to referring to swings as - higher highs/higher lows, lower highs, lower lows to define "trend". One concept I seem to be having a brain freeze on is your post quoted above. So in order for a new supply area to be marked on the chart, price must make a new higher high and then a new lower low? After that, that new higher high can be marked as supply? I've attached a picture to show what I mean. Let me know if I am incorrect. Also, I know other circumstances must be in confluence as well, but this is assuming we're in a downtrend and still not close to D1 demand, etc.

Attached Image (click to enlarge)
Click to Enlarge Name: New Supply Zones.png Size: 21 KB
  • #1,113
  • Aug 17, 2013 12:26pm Aug 17, 2013 12:26pm
I use TradeStation as my Trading Platform. Just wanted to check if someone has created the rectangle Indicator in TradeStation the same way as Alfonso has created in MT.
Thanks,
tradenlearn
  • #1,114
  • Edited 4:18pm Aug 18, 2013 1:53am | Edited 4:18pm
Hi Jack!
First of all, welcome to the thread Thanks for your post. Let me try to clarify what you asked.

First of all let's go through 2 important statements:

  1. A higher high does not necessarily mean a new demand area was created
    A higher high could be "just that", that rally could be the final thrust to hit a strong supply area on higher timeframes.
  2. A lower low does not necessarily mean a new supply area was created
    A lower low could be "just that", that drop could be the final thrust to hit a strong demand area on higher timeframes.

Let me define my idea of a Trend:

Remember it's just my idea of a trend, it makes sense to me so I'm using it. Does it make sense to you? Use it as well then. Since we are primarily working with supply and demand imbalances, making a higher higher or a lower low does not necessarily mean we continue on the existing trend.

  1. UPTREND: demand areas are being respected, supply areas are being violated.
    A higher high SHOULD remove previous supply to validate the demand zone

    You must ask yourself: has the previous supply being removed?
    If previous supply is not taken out, I won't validate the origin of a higher high as demand
  2. DOWNTREND: supply areas are being respected, demand areas are being violated.
    A lower low SHOULD remove previous demand to validate the supply zone

    You must ask yourself: has the previous supply being removed?
    If previous demand is not taken out, I won't validate the origin of a lower low as supply.

Hope that answers your questions Jack!
Alfonso

On the graphic below, I am assuming we are in a downtrend by the way those lines were drawn by Jack. I will assume a D1 supply was hit for example.
This is why we need multple timeframe analysis, we need to know where we are located, before we can make a decision

Attached Image (click to enlarge)
Click to Enlarge Name: Screenshot2.png Size: 240 KB


Quoting jack411
{quote} Panoramia, Great thread! I just finished reading through the entire thing. I am used to referring to swings as - higher highs/higher lows, lower highs, lower lows to define "trend". One concept I seem to be having a brain freeze on is your post quoted above. So in order for a new supply area to be marked on the chart, price must make a new higher high and then a new lower low? After that, that new higher high can be marked as supply? I've attached a picture to show what I mean. Let me know if I am incorrect. Also, I know other circumstances...
Set and Forget supply and demand trading community
  • #1,115
  • Aug 18, 2013 2:14am Aug 18, 2013 2:14am
I've had good results following the thread and applying Supply / Demande Zone to
Brent Crude Oil. Panoramia thank you for sharing and deepening of this system. Tank to all traders
I tried the template Nametaker ( sd template - nt version ) but this is not suitable for Brent, do not form rectangles and lines.
With other currencies is perfect. In recent days I've had good profits on Brent using S / D now I would like to try the template Nametaker.
it is possible to have an explanation to match tpl. in Brent?
  • #1,116
  • Edited 4:02pm Aug 18, 2013 10:53am | Edited 4:02pm
Find attached a screenshot of the latest higher timeframe supply and demand levels from my spreadsheet.

I've reduced the number of pairs I trade on H4 to 15, some of the other ones were highly correlated with others I traded so I removed those. I've added some indexes, Gold, Silver and Brent. In total, I am tracking 21 instruments on H4.

If your pair or instrument is not there, you can add it to the spraedsheet manually as explained on the video I had created.
Have a great Sunday!
Alfonso
Attached Image (click to enlarge)
Click to Enlarge Name: Screenshot1.png Size: 184 KB
Set and Forget supply and demand trading community
  • #1,117
  • Aug 18, 2013 12:33pm Aug 18, 2013 12:33pm
I hope to be able to build this wonderful template. thanks
  • #1,118
  • Aug 18, 2013 4:10pm Aug 18, 2013 4:10pm
Quoting panoramia
Hi Jack! First of all, welcome to the thread Thanks for your post. Let me try to clarify what you asked. First of all let's go through 2 important statements: A higher high does not necessarily mean a new demand area was created A higher high could be "just that", that rally could be the final thrust to hit a strong supply area on higher timeframes. A lower low does not necessarily mean a new supply area was created A lower low could be "just that", that drop could be the final thrust to hit a strong demand area on higher timeframes. Let...
Thanks for the reply! I had previously just been taking any swing point, or anywhere that price stopped its direction and turned and using that as supply/demand zones. Obviously ever swing high or low will not cause a reaction in price. Your way filters the zones to pin point which are more reliable. I'm still trying to unlearn what I had been doing for awhile.

I marked up a couple Euro charts. I don't have access to forex charts, but 6E runs in correlation with USD/EUR pair. I checked out your numbers on the spreadsheet you recently posted and was able to easily identify zones on the Daily, Weekly, and Monthly. It's the lower time frames that I am uncertain about still. Could you take a look at these and let me know how to better identify?

I have a 4 hr chart and a 1 hr chart. The red box is supply, blue is demand, and green ( on the 1 hr chart) are areas that I think may have been valid at some point. I have comments written next to each of those.

thanks again!

Attached Image (click to enlarge)
Click to Enlarge Name: 6E 4 Hr.png Size: 87 KB


Attached Image (click to enlarge)
Click to Enlarge Name: 6E 1Hr.png Size: 65 KB
  • #1,119
  • Aug 18, 2013 4:24pm Aug 18, 2013 4:24pm
Hi Alfonso,
Thanks for the thread. I'm relatively new to S/D trading and luckily stumbled across all this wonderful information you've shared. I've watched all the videos and finally made my way through the thread. I really feel like the proper understanding of S/D is what has kept me from being consistently profitable before now. I've got a few questions I was wondering about... some of them I wrote down a while ago, so I hope they make sense and are what I was actually thinking of at the time I wrote them. haha.

1- Are we not supposed to use a set and forget entry when returning to a larger TF area in control if price is reaching it after bouncing from an existing opposite area of control? See pic here if I can attach properly:
Attached Image (click to enlarge)
Click to Enlarge Name: Untitled.png Size: 31 KB


2- confirmation trades... sort of relating to caparzo's question. You said we don't need to wait for demand to be broken to short against a pullback in the higher TF supply area, unless the higher TF area is no longer fresh? I guess I'm a little confused here, so I'm going to try to type as I think.

Higher TF area is fresh - Set and Forget at existing fresh and original lower TF levels. If price doesn't reach an existing lower TF level, and forms new supply before it, but still in the higher TF area, you can short after a pullback even if price doesn't break a previous demand level? Or does it not count as "new supply" unless it has broken demand anyway? Likewise if existing levels are not fresh, would you wait for demand to be broken, or just a pullback in the same area before shorting? I guess I'm not sure as to what we consider confirmation and when we do or don't need a prior level to be broken first.
See attached here:
Attached Image (click to enlarge)
Click to Enlarge Name: Untitled1.png Size: 24 KB


If higher TF is not fresh, wait for prior S/D to be broken before trading.

3- You talked about measuring the curve from the extremes and not using speedbumps. A speedbump can be in control, but not part of the current curve? "You can have temporary curves taking the speedbumps during an uptrend/downtrend, but when the intermmediate zones start to break, it's better to go and choose extremes for set & forget."
I guess I'm a little confused as to when you would change the curve to include a speedbump vs leaving it at the extreme. If there's an example or two you could find to elaborate a bit, it would be greatly appreciated.

I hope this isn't too much for one post! The start time of the webinar is at New York open: 2:30pm UTC correct?

Thanks so much for your generosity.
D
  • #1,120
  • Aug 18, 2013 4:35pm Aug 18, 2013 4:35pm
You are welcome Jack! Remember this is the way I look at the markets, I will make many mistakes but it's a logical and common sensical way of looking at the trend, very mechanical. It works for me, so I use it over and over.

As far as the charts are related, take a look at the charts I've attached. Both speedbumps no longer valid because continuation patterns (speedbumps) are not good when the trend has been broken in the timeframe where those were located.

Attached Image (click to enlarge)
Click to Enlarge Name: Screenshot1.png Size: 118 KB


The peedbump you drew on the second chart is not at an extreme, not higher probabilities when the ascending trendline has been broken. This is all based on how I use trendlines to filter our SD levels, there is a 2 hours video on trendlines and SD zones on the thread.

Attached Image (click to enlarge)
Click to Enlarge Name: Screenshot2.png Size: 117 KB


Alfonso
Quoting jack411
{quote} Thanks for the reply! I had previously just been taking any swing point, or anywhere that price stopped its direction and turned and using that as supply/demand zones. Obviously ever swing high or low will not cause a reaction in price. Your way filters the zones to pin point which are more reliable. I'm still trying to unlearn what I had been doing for awhile. I marked up a couple Euro charts. I don't have access to forex charts, but 6E runs in correlation with USD/EUR pair. I checked out your numbers on the spreadsheet you recently posted...
Set and Forget supply and demand trading community
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