Supply and demand in a nutshell by Alfonso Moreno | Page 90 | Forex Factory

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Supply and demand in a nutshell by Alfonso Moreno

  • #1,781
  • Sep 1, 2013 3:26pm Sep 1, 2013 3:26pm
Alfonso,

At what point do you consider a zone to be removed? I see if a bar has spiked all the way though the distal line that we can consider the zone as used up but what if we do not close above or below the distal line and we move back down below the proximal? Is this zone still removed?
Today's zone = Tomorrow's opportunity!
  • #1,782
  • Sep 1, 2013 3:31pm Sep 1, 2013 3:31pm
Quoting pres78
Alfonso, At what point do you consider a zone to be removed? I see if a bar has spiked all the way though the distal line that we can consider the zone as used up but what if we do not close above or below the distal line and we move back down below the proximal? Is this zone still removed?
Yes, if the distal line is broken even by a single pip that level is no longer valid.
Keep your blades sharp!
  • #1,783
  • Sep 1, 2013 3:32pm Sep 1, 2013 3:32pm
Quoting Nametaker
{quote} Yes, if the distal line is broken even by a single pip that level is no longer valid.
Nametaker thanks for the reply... so even a fake out is sufficient to wipe out a zone. I guess once the zone is considered used up even if it holds it really is of no use.
Today's zone = Tomorrow's opportunity!
  • #1,784
  • Edited 7:39pm Sep 1, 2013 6:43pm | Edited 7:39pm
Alfonso,

GBPJPY hit our supply zone on the 4H during the weekend gap, and bounced down.

Are you going to count this zone as used up and forget the order, or can I put an order on the second pullback, since it was the weekend gap that hit it?


Attached Image (click to enlarge)
Click to Enlarge Name: GBPJPY gap.png Size: 42 KB



EDIT: I just opened a position and price retraced back to the zone in the same candle.
  • #1,785
  • Sep 1, 2013 8:13pm Sep 1, 2013 8:13pm
Gold Daily Chart

You can see which zones I have as my control zone. The supply zone is a great DBD decision point where we spent no time at this level, it is a fresh level and it appears to me to be original also. The distal line is below the bodies of the RBD base above so... The demand zone is the base from the RBR which is frsh and original as it hits a supply zone (messy PA) and not demand. I have not marked the base above that as price spent a long time there and we wicked down too much for my liking. I have two green empty rectangles on my chart which are supply zones but the upper one was a range that spent too much time before moving down and the lower one was the high from last week that finished off any remaining supply in the double base area. I don't see either of these as key supply and based on this we are low in the Daily curve. That supply zone off the high of last week has not taken out any demand yet. It took out a lower TF trendline which did give me a nice short last week which was closed out on Friday.

Gold 4hr Chart

I took a long today off that demand zone shown. Yes this was a messy area however the last few 4hr bars did make a nice tight base and had a great departure plus this entry was in line with the Daily trend and low in the Daily curve. My first target is the upper red horizontal line shown next target is the Daily control supply. So far so good but we will see what all of the holidays tommorow brings.
Attached Image(s) (click to enlarge)
Click to Enlarge Name: xauusd.daily.png Size: 64 KB
Click to Enlarge Name: xauusd.h4.png Size: 60 KB
Today's zone = Tomorrow's opportunity!
  • #1,786
  • Sep 1, 2013 9:01pm Sep 1, 2013 9:01pm
Another loss...This is starting to become like a joke....


GBPJPY


Attached Image (click to enlarge)
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  • #1,787
  • Sep 1, 2013 9:09pm Sep 1, 2013 9:09pm
Quoting pres78
Gold Daily Chart You can see which zones I have as my control zone. The supply zone is a great DBD decision point where we spent no time at this level, it is a fresh level and it appears to me to be original also. The distal line is below the bodies of the RBD base above so... The demand zone is the base from the RBR which is frsh and original as it hits a supply zone (messy PA) and not demand. I have not marked the base above that as price spent a long time there and we wicked down too much for my liking. I have two green empty rectangles on my...
What are the slanting (or trend) green lines on the Gold Charts?
  • #1,788
  • Sep 1, 2013 9:18pm Sep 1, 2013 9:18pm
Quoting Axlz
Another loss...This is starting to become like a joke.... GBPJPY {image}
Thin market right now with US Holiday tomorrow. Also the H4 zone is right below a pretty decent D1 zone. Not surprising price is seeking supply further up. I like to see a candle close before I enter a trade in any zone. Looks like your H4 candle sliced right through the zone. Waiting for a candle close will often spare this misery. Just my 2 cents.

I'm reading this thread from the beginning and watching the videos. Very nice information and discrete trading methodology.
  • #1,789
  • Sep 1, 2013 9:20pm Sep 1, 2013 9:20pm
Quoting Winston Reed
{quote} Thin market right now with US Holiday tomorrow. Also the H4 zone is right below a pretty decent D1 zone. Not surprising price is seeking supply further up. I like to see a candle close before I enter a trade in any zone. Looks like your H4 candle sliced right through the zone. Waiting for a candle close will often spare this misery. Just my 2 cents. I'm reading this thread from the beginning and watching the videos. Very nice information and discrete trading methodology.

It would but due to the nature of this trading strategy, as you will soon realize after reading the first post, we cannot wait for a candle close.
  • #1,790
  • Sep 1, 2013 9:27pm Sep 1, 2013 9:27pm
Quoting Axlz
{quote} It would but due to the nature of this trading strategy, as you will soon realize after reading the first post, we cannot wait for a candle close.

Understood . One other thing I noticed on your chart is the stacking of H4 zones. It seems price is heading towards the more distal H4 zone located in the D1 zone. Seems your risk was minimal though. Good luck.
  • #1,791
  • Sep 1, 2013 9:40pm Sep 1, 2013 9:40pm
Quoting Winston Reed
{quote} Understood . One other thing I noticed on your chart is the stacking of H4 zones. It seems price is heading towards the more distal H4 zone located in the D1 zone. Seems your risk was minimal though. Good luck.

Thanks.



I only risk 1% per trade, but with a win rate as low as this, the losses add up. Guess I'll just have to keep trusting in the strategy and keep going.
  • #1,792
  • Edited 4:18am Sep 2, 2013 3:31am | Edited 4:18am
Quoting Axlz
Alfonso, GBPJPY hit our supply zone on the 4H during the weekend gap, and bounced down. Are you going to count this zone as used up and forget the order, or can I put an order on the second pullback, since it was the weekend gap that hit it? {image} EDIT: I just opened a position and price retraced back to the zone in the same candle.
As far as SD zone being hit and putting an order on the second pullback, that's not the way the strategy is built. Only fresh levels remember. Once the level is hit, no more trading on the same zone. There will be many times where the 2nd hit, even the 3rd or the 4th will work, but I am not interested in them, only the first pullback. If we miss the first, then we'll look for the next valid fresh level to continue trading that pair or switch to another one.

Quote
Another loss...This is starting to become like a joke....
Sorry about that loss on GBPJPY Axlz! I didn't have my charts loaded when I replied to you during the weekend to see all of my orders, my blackberry is limited on screensize, and that's better otherwise I would use Metatrader and trade on my mobile and I don't want that, I couldn't do a proper analysis with it.

  1. First all all, only trade the first pullback, once the train left the station, you have to wait for the next one
  2. Secondly, I did have some orders on the ones I mentioned but will see now if they are there or not, if they are, they are paused. There was none on the GBPJPY, because it was a H4 speedbump supply, not a peak/valley and it was not a valid D1 supply for a set & forget. I missed pointed that out on my reply, so it's my mistake sorry. Speedbumps are only used trading with the trend, peaks/valleys are the ones to trade when we're within higher timeframe areas. But like I said, my mistake for not having seen that properly and pointint it out to you on my reply
  3. Third, it was the 5th time we hit that D1 supply area. It was marked on my charts but such a used-up D1 does not allow a set & forget. I just saw your H4 chart so I couldn't make a complete analysis, sorry
  4. Maybe the fact that I had the green D1 supply painted on my chart was confusing. I just have it there because I want to know on my spreadsheet when that D1 supply is broken, but it's not tradable since it had 4 pullbacks. The wisest thing maybe should be not having it painted, I believe

Hope that makes sense. I am going to edit first post soon to add more information about this and other matters.

I am going to go through my pairs now and see what's going on, all of my orders are paused during the weekend, I don't trade on Sunday open or Monday morning, so no orders were triggered for me so far.

Just one thing. Don't dispair, I know it's frustrating, but it's key the way to speak to yourself. Emotions take over and it will affect you on the decisions to come.
Alfonso

Attached Image (click to enlarge)
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Set and Forget supply and demand trading community
  • #1,793
  • Sep 2, 2013 4:14am Sep 2, 2013 4:14am
Looking to buy AUDJPY on H1 speedbump demand.

There are similar opportunities on GBPJPY, EURJPY and CADJPY. I have similar expectations on those as well, but only posted the AUDJPY chart.
There could be another H1 speedbump demand being formed right now. If this speebump validates by closing above supply/resistance and has enough imbalance, then I will go for this one.

Alfonso
Attached Image (click to enlarge)
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Set and Forget supply and demand trading community
  • #1,794
  • Sep 2, 2013 4:14am Sep 2, 2013 4:14am
It was nice entry according to the rules, a brand new demand label formed at 1 hour chart (GBPUSD)with in daily demand area and my entry was first time came back to newly 1hour demand area 1.54615 .(i cant post chart bcoz forex factory not allow me to post chart but i dont know why )
  • #1,795
  • Sep 2, 2013 4:59am Sep 2, 2013 4:59am
Quoting panoramia
{quote} As far as SD zone being hit and putting an order on the second pullback, that's not the way the strategy is built. Only fresh levels remember. Once the level is hit, no more trading on the same zone. There will be many times where the 2nd hit, even the 3rd or the 4th will work, but I am not interested in them, only the first pullback. If we miss the first, then we'll look for the next valid fresh level to continue trading that pair or switch to another one. {quote} Sorry about that loss on GBPJPY Axlz! I didn't have my charts loaded when...
I dont understand, You said that is speedbump on h4 and speedbump is allowed on downtrend. So If we have a down trend on h4 we tahe speedbump on h4. D1 is tested but our h4 entry was not a confirmation trade, but a trending This is my trendline on h4.
Attached Image (click to enlarge)
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  • #1,796
  • Sep 2, 2013 5:12am Sep 2, 2013 5:12am
Quoting bobyv87
{quote} I dont understand, You said that is speedbump on h4 and speedbump is allowed on downtrend. So If we have a down trend on h4 we tahe speedbump on h4. D1 is tested but our h4 entry was not a confirmation trade, but a trending This is my trendline on h4. {image}
Boby! You are not doing a multiple timeframe analysis, on your H4 chart you can't see the used-up D1 supply area, you can't take a decision only based on the H4 chart without being aware what is going on on the D1 and above. Take a look at the D1 chart, also at the attachment in my last post and you will see what I mean. You are not allowed to short on a D1 supply that has been touched 4 times! Price is fractal. You are not allowed to short a H4 on the second pullback, you are not allowed to short a D1 supply on the 4th (2 more pullbacks). Those are the rules. But you need to be aware where you are in the higher timeframes. A single trendline painted on the H4 charts does not say anything at all, it's misleading without the proper higher timeframe analysis.

Alfonso
Set and Forget supply and demand trading community
  • #1,797
  • Sep 2, 2013 5:40am Sep 2, 2013 5:40am
Alfonso, what you say about this XagUsd. I put a long on h1 speedbump. This speedbump is closer to d1 demand.
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  • #1,798
  • Sep 2, 2013 5:51am Sep 2, 2013 5:51am
AUDUSD 1H possible entry on retrace to speedbump?

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  • #1,799
  • Sep 2, 2013 5:54am Sep 2, 2013 5:54am
Quoting Axlz
AUDUSD 1H possible entry on retrace to speedbump? {image}

Maybe it is not the best oportunity because of these levels on h4
  • #1,800
  • Sep 2, 2013 6:03am Sep 2, 2013 6:03am
Quoting bobyv87
{quote} Maybe it is not the best oportunity because of these levels on h4
I think we should not look to the H4 level, because Alfredo said, if we choose eg H1, we should use only D1 as the higher timeframe. If we choose to much levels we will end up in confusion.

We should use:

H1 and D
H4 and Weekly

Is this right?

regards,
Peter
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