Supply and demand in a nutshell by Alfonso Moreno | Page 87 | Forex Factory

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Supply and demand in a nutshell by Alfonso Moreno

  • #1,721
  • Aug 30, 2013 7:42am Aug 30, 2013 7:42am
Quoting Axlz
I wish I could take this 4H trade with you Alfonso on USDCAD, but since its Friday I don't want to leave any positions open over the weekend. Best of luck. {image}
Thanks Axlz. I read your post after answering to Jason's (pres78) messages. I just realized that I got triggered short on USDCAD. It's Friday yes. I will see to it later. I will possibly close it later since it's Friday and I don't want to leave it open over the weekend either.


Alfonso
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Set and Forget supply and demand trading community
  • #1,722
  • Aug 30, 2013 8:02am Aug 30, 2013 8:02am
Quoting panoramia
{quote} I always look right to see if my SD area is fresh, I always look left to see if my SD area is original or not. I look right and see if my previous level of demand is fresh and with the current timeframe's trend. The rest of the candles do not influence any decision I have to take. Hope this makes sense to you as well. Alfonso
Perfect sense and reading this was a nice AHA moment... I have heard and read posts where you talked on this but for some reason this really clicked and gave me a great view into your thought process.
Today's zone = Tomorrow's opportunity!
  • #1,723
  • Aug 30, 2013 8:42am Aug 30, 2013 8:42am
I will consider a downtrend has ended IF the timeframe I use as direction has broken at least 2 D1 supply zones, that simple. If 2 supply zones have been violated, then I will consider the downtrend has ended and will start looking for longs. Opposite for an uptrend. That's the very simple rule I am following.
* If only 1 supply zone is broken I will not consider the trend has changed, but I will look further up to lean on the previous unbroken supply on my direction timeframe. If my trade fails at that level again, then I will not trade again in that direction (down), and will considered the trend changed and now it's up.

Posting this as much to myself as anyone else so please humor me...

Quoted from the first post and this very item has been a discussion recently. Looking at Alfonso's Daily GOLD chart the break of his 2 fresh daily zones would conicide with the break of his Daily TL so Daily trend change at that point makes complete sense.

A question I do have for the thread (not Alfonso because I promised no more questions) and especially those using the TL's are using GOLD for example we have that lower TL seen on Alfonso's chart but what happens when price starts to move up more vertically away from the TL. If it is still making peaks that can be connected at the HL's would a second TL be placed? I see on Daily that a TL placed on the recent steeper move up (than compared to the lower TL that is much shallower) we are breaking it today. The open was above so I guess not broken, broken but we should see a close below...

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Or I am overthinking things?
Today's zone = Tomorrow's opportunity!
  • #1,724
  • Edited 9:06am Aug 30, 2013 8:52am | Edited 9:06am
Quoting pres78
I will consider a downtrend has ended IF the timeframe I use as direction has broken at least 2 D1 supply zones, that simple. If 2 supply zones have been violated, then I will consider the downtrend has ended and will start looking for longs. Opposite for an uptrend. That's the very simple rule I am following. * If only 1 supply zone is broken I will not consider the trend has changed, but I will look further up to lean on the previous unbroken supply on my direction timeframe. If my trade fails at that level again, then I will not trade again in...
the second TL that u draw is H4 trend my friend, not the Daily.
otherwise we should also have taken the blue line as Daily TL
however, in the 3rd pic, to say Daily trend is down now, we dont need to wait till yellow TL to be broken, we can take shorts after blue line brakes.
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  • #1,725
  • Aug 30, 2013 9:08am Aug 30, 2013 9:08am
Quoting caparzo
{quote} the second TL that u draw is H4 trend my friend, not the Daily. otherwise we should also have taken the blue line as Daily TL however, in the 3rd pic, to say Daily trend is down now, we dont need to wait till yellow TL to be broken, we can take shorts after blue line brakes. {image} {image} {image}
I agree and that's what I am trying to better understand is why would that blue trenline you drew not be the daily TL? What makes us drop it down to be on that next point?

That 3rd picture is the TL that I showed which you said was 4hr so how does the break of this make the Daily trend down if the Daily TL is the yellow one?

I guess I will have to watch the TL video again.

Thanks for taking the time to reply.
Today's zone = Tomorrow's opportunity!
  • #1,726
  • Aug 30, 2013 9:20am Aug 30, 2013 9:20am
here my though on UCAD...
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perfect sell set up on UCAD, price actually visit Weekly + D1 supply area...
H4 supply area..then make Lower high supply fresh area within 1st retest (expect price down, but looklikely will fly up)
i sell short first then cut loss after examine USDX chart..
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Price just break up from previous weekly demand area, Daily supply will be easily absorb....
i just buy short..
  • #1,727
  • Aug 30, 2013 9:23am Aug 30, 2013 9:23am
Quoting panoramia
{quote} Well, there is something I don't do, and that's cutting through candles. I mean, that's the past, that messy area of support does not add anything to my decision process. I always look right to see if my SD area is fresh, I always look left to see if my SD area is original or not. That's all I do, I just want my decision processes to be as simple as the neuron of a mosquito If you look at that messy PA area, you could find a confluence if you want to, and that is that in the past price rallied from there. But again, I am not taking that...

Hi Alphonso,

sorry to be a pain, 'you said you look right' thats confused me,
I understand
1) looking left for fresh levels(set and forget)
2) drawing a trendline on your execution chart to see if trendline has been broken and 2 Sd levels have been taken out , and then finding a fresh level(even a rally base rally) on the same time frame to short/long off the level.

But looking right I thought if you look right all you will see is empty space. Sorry if you could explain this again I would really appreciate it.

what time do you stop trading on friday, do you close all trades or only those that havent moved too far
  • #1,728
  • Aug 30, 2013 10:05am Aug 30, 2013 10:05am
Quoting gembel
here my though on UCAD... {image} perfect sell set up on UCAD, price actually visit Weekly + D1 supply area... H4 supply area..then make Lower high supply fresh area within 1st retest (expect price down, but looklikely will fly up) i sell short first then cut loss after examine USDX chart.. {image} Price just break up from previous weekly demand area, Daily supply will be easily absorb.... i just buy short..
I agree with you on the $index analysis. We talked about that weekly demand area a few times in the last days.

I have closed all trades that I had open, eurnzd, usdcad and another one I had triggered on usdsgd h4 short. It's Friday and I don't want to let them open during the weekend.

Quote
Price just break up from previous weekly demand area, Daily supply will be easily absorb
I believe that this statement you made is not that true. I mean, the Daily supply could be easily absorbed because of the Weekly demand holding on the $index. I used to say, this level will be absorbed, this level will hold and will be a great trade. I changed "will" for "posibly" or "mostly likely". Because I've seen all kind of will situations not being true. I have also learnt that the way you speak to yourself is key to how you view the world around you.

But yes, $index weekly demand holding as we had previously talked on the posts. USDCAD short was a setup that matched the rules but it's correlated with the index, so not that high odds!


Alfonso
Set and Forget supply and demand trading community
  • #1,729
  • Aug 30, 2013 10:11am Aug 30, 2013 10:11am
Quoting ashtrader
{quote} Hi Alphonso, sorry to be a pain, 'you said you look right' thats confused me, I understand 1) looking left for fresh levels(set and forget) 2) drawing a trendline on your execution chart to see if trendline has been broken and 2 Sd levels have been taken out , and then finding a fresh level(even a rally base rally) on the same time frame to short/long off the level. But looking right I thought if you look right all you will see is empty space. Sorry if you could explain this again I would really appreciate it. what time do you stop trading...
Hi Ash!

Yes, you read correctly.

  1. You have to look right if a level is fresh or not
  2. You have to look left to see if a level is original or not
  3. You have to look left and right to see if a level is original AND fresh at the same time
  4. Freshness of a level is known when you look right, you have to see if price has pulled back into the level or not
  5. To know how original a level is you need to look left because you need to look at the origin of the level
  6. For fresh levels you don't need to pay attention to the origin really, but only if price has tested the level or not

If you use the trendline method, you don't need 2 opposite SD levels to be taken out. You are mixing things up. 2 broken levels confirms the change of direction. 1 broken level with a broken trendline confirms you can go in the opposite direction IF you are in the right location in the curve.

Alfonso

Set and Forget supply and demand trading community
  • #1,730
  • Aug 30, 2013 10:20am Aug 30, 2013 10:20am
Hi Alfonso,

I've a question regarding to how price comes back to a level. I've came across Sam ways to trade but he seems to place some attention on how the price return to a level. If there's a consolidation below/above a level like the example I attached below, would you consider cancel your pending order? Or you will just leave it? Since consolidation may consider as indecision and once price break it, it might violate our levels easily if our levels are near to them. (Just like during the news, might have big order in either way and violate our levels)

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  • #1,731
  • Aug 30, 2013 10:24am Aug 30, 2013 10:24am
Hi Alfonso,

I started paper trading, and sometimes questions come up then that you didn't consider before. I was wondering if you scale out of positions and how you decide to do that. Also, when you have exited the supply or demand zone and then retest the zone, do you move your stop loss? Should I ever move my stop loss, or just be a robot and let it run no matter what? Also, do you only trade when all zones are in congruence (ie all demand or all supply) and when all are trending the sam direction? I started reading "Trading in the Zone", and I'm realizing how much my psychology is affecting me. I keep stopping myself from closing my trade while I'm still positive. Hope your week is going well!

Best Regards,
Nick
  • #1,732
  • Aug 30, 2013 10:26am Aug 30, 2013 10:26am
Quoting Crocs
Hi Alfonso, I've a question regarding to how price comes back to a level. I've came across Sam ways to trade but he seems to place some attention on how the price return to a level. If there's a consolidation below/above a level like the example I attached below, would you consider cancel your pending order? Or you will just leave it? Since consolidation may consider as indecision and once price break it, it might violate our levels easily if our levels are near to them. (Just like during the news, might have big order in either way and violate...
That's what Sam Seiden calls arrival. I don't pay attention to arrival if the level is good for set & forget and it's well located in the higher timeframe areas. If you get a score of 9 for a level, then arrival is not important. There is a video where we talk extensively about that, it's one of the webinars. In your chart, I can't tell you because in order to make a decision, location is key. It looks like too much basing there. But if that level was at or very near the D1 supply, I'd not cancel it at all, if it's low in the curve, that would mean to me that it's losing steam.

Alfonso
Set and Forget supply and demand trading community
  • #1,733
  • Aug 30, 2013 10:40am Aug 30, 2013 10:40am
Quoting panoramia
{quote} That's what Sam Seiden calls arrival. I don't pay attention to arrival if the level is good for set & forget and it's well located in the higher timeframe areas. If you get a score of 9 for a level, then arrival is not important. There is a video where we talk extensively about that, it's one of the webinars. In your chart, I can't tell you because in order to make a decision, location is key. It looks like too much basing there. But if that level was at or very near the D1 supply, I'd not cancel it at all, if it's low in the curve, that...
Thanks alfonso, that clear up my mind Last question, even though it creates a nice & fresh original DBR demand below our supply (let's say the distance between both levels is 1.5 of the size of our supply level) as long as it's near to a D1 supply, you will just leave it do its thing?
  • #1,734
  • Aug 30, 2013 10:47am Aug 30, 2013 10:47am
Quoting Crocs
{quote} Thanks alfonso, that clear up my mind Last question, even though it creates a nice & fresh original DBR demand below our supply (let's say the distance between both levels is 1.5 of the size of our supply level) as long as it's near to a D1 supply, you will just leave it do its thing?
Yes, if it's high in the curve, I won't touch it, else I want 3:1 profit margin minimum!
Alfonso
Set and Forget supply and demand trading community
  • #1,735
  • Aug 30, 2013 10:51am Aug 30, 2013 10:51am
Quoting panoramia
{quote} I agree with you on the $index analysis. We talked about that weekly demand area a few times in the last days. I have closed all trades that I had open, eurnzd, usdcad and another one I had triggered on usdsgd h4 short. It's Friday and I don't want to let them open during the weekend. {quote} I believe that this statement you made is not that true. I mean, the Daily supply could be easily absorbed because of the Weekly demand holding on the $index. I used to say, this level will be absorbed, this level will hold and will be a great trade....
the for the insight...
well said..
keep good trading
  • #1,736
  • Aug 30, 2013 10:53am Aug 30, 2013 10:53am
Quoting panoramia
{quote} Yes, if it's high in the curve, I won't touch it, else I want 3:1 profit margin minimum! Alfonso
If price creates an original DBR demand below that shrinks our profit margin to 2:1, are you going to cancel your pending order even though it's high in the curve and near a D1 supply?
Thanks a lot
  • #1,737
  • Aug 30, 2013 11:16am Aug 30, 2013 11:16am
Anybody got the AUDCAD short on H4 I posted here on the thread 2 days ago?

It's funny, but maybe some of you did, but I couldn't be triggered myself because the EA I'm building is got some bugs I need to fix, pity! So far it looks like it's working! If you got filled, congratulations!

There is no possibility of drawing a descending trendline because the H4 supply is a speedbump not a peak (swing).

Alfonso
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Set and Forget supply and demand trading community
  • #1,738
  • Aug 30, 2013 11:18am Aug 30, 2013 11:18am
Quoting Crocs
{quote} If price creates an original DBR demand below that shrinks our profit margin to 2:1, are you going to cancel your pending order even though it's high in the curve and near a D1 supply? Thanks a lot
No, like I said, if the level is fresh and/original, if it has a nice departure, score of 9 and high in the curve at the D1 supply, I will not cancel it no matter what the basing looks like

Alfonso
Set and Forget supply and demand trading community
  • #1,739
  • Aug 30, 2013 11:20am Aug 30, 2013 11:20am
Quoting panoramia
{quote} No, like I said, if the level is fresh and/original, if it has a nice departure, score of 9 and high in the curve at the D1 supply, I will not cancel it no matter what the basing looks like Alfonso
Thanks Alfonso! You are really helpful!
  • #1,740
  • Aug 30, 2013 11:50am Aug 30, 2013 11:50am
Alfonso, do you mind posting your GBPJPY daily chart? It seems my daily supply is different to yours.

Thanks.
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