Supply and demand in a nutshell by Alfonso Moreno | Page 91 | Forex Factory

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Supply and demand in a nutshell by Alfonso Moreno

  • #1,801
  • Sep 2, 2013 6:05am Sep 2, 2013 6:05am
Quoting Forex Lion
{quote} 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
We have to look at H4 levels as well.
  • #1,802
  • Sep 2, 2013 6:06am Sep 2, 2013 6:06am
Quoting bobyv87
{quote} Maybe it is not the best oportunity because of these levels on h4
Price never touched any of the H4 levels.
  • #1,803
  • Sep 2, 2013 6:06am Sep 2, 2013 6:06am
Quoting Forex Lion
{quote} 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

hmm. In this case you will have many losses.
  • #1,804
  • Sep 2, 2013 6:09am Sep 2, 2013 6:09am
Quoting Forex Lion
{quote} 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
I agree with you. I've mentioned it a few times on the thread, and also on the first post. It's not that I say to do this or that, it must sound and be logical and common sense to you. The more timeframes you look at, the more information your brain will have to work with and the more decisions you will have to make.

The more decisions you have to make, the more confusion it will cause. Keep it simple, always do the same thing. D1/H1 or WK/H4. You decide! But if you switch back and forth, the results will not be that good, not because you cannot make it, but because your mind will play the auto-sabotage game! You all know what I mean, but our egos want to take control.

Trading is a mind game above all. If we master our minds and emotions, then we'll be on the right track. Else, we'll be making very silly mistakes over and over and over! But like I said, whatever I say on the thread it's just my opinion, you do what you want to do, it's up to you. I am just telling you my experience, which I believe matches with a very big % of what happens to all traders out there

Alfonso
Set and Forget supply and demand trading community
  • #1,805
  • Sep 2, 2013 6:11am Sep 2, 2013 6:11am
Quoting Axlz
{quote} Price never touched any of the H4 levels.

You're right. First level that i marked is a reaction to previous level. My apologize!
  • #1,806
  • Sep 2, 2013 6:11am Sep 2, 2013 6:11am
Quoting panoramia
{quote} I agree with you. I've mentioned it a few times on the thread, and also on the first post. It's not that I say to do this or that, it must sound and be logical and common sense to you. The more timeframes you look at, the more information your brain will have to work with and the more decisions you will have to make. The more decisions you have to make, the more confusion it will cause. Keep it simple, always do the same thing. D1/H1 or WK/H4. You decide! But if you switch back and forth, the results will not be that good, not because you...
I thought you always told me that even if you're doing H1/D1, you still need to be aware of location on H4?
  • #1,807
  • Sep 2, 2013 6:12am Sep 2, 2013 6:12am
Hello

Gold
For me d1 supply is still valid, according to this spike. Price couldn't close above supply.
Took short on h1 fresh supply. Already at BE so there will be no loss.
Attached Image(s) (click to enlarge)
Click to Enlarge Name: golddaily.png Size: 41 KB
Click to Enlarge Name: goldh1.png Size: 38 KB
  • #1,808
  • Sep 2, 2013 6:23am Sep 2, 2013 6:23am
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?
Quoting sebkor6
Hello Gold For me d1 supply is still valid, according to this spike. Price couldn't close above supply. Took short on h1 fresh supply. Already at BE so there will be no loss. {image} {image}
Alfonso,

Can you comment on this? My question was based on the very same zone that sebkor6 mentions in his post. When do you remove the zones? Close above? Full bar above OHLC or just a spike through the distal?
Today's zone = Tomorrow's opportunity!
  • #1,809
  • Sep 2, 2013 6:30am Sep 2, 2013 6:30am
Quoting Axlz
{quote} I thought you always told me that even if you're doing H1/D1, you still need to be aware of location on H4?
Yes, I told you that. It may sound like a contradiction to you, but it's not. I believe it all comes with the experience. In the beginning it's BETTER to stick to D1/H1 or WK/H4, it all depends on how much time you have for trading and what type of trader you are. Once you gain the experience to respect the rules, not jumping too soon, being patient waiting for the setups, etc... then you can try and switch between H1/H4, but you need to have very strict rules to be able to do that, or the result will be confusion. H1 can tell you to go long, but H4 to go short. What will your mind do? It will short-circuit! Rules are needed for that. So in the beginning it's MUCH better, it's RECOMMENDED, that you just stick to the D1/H1 and WK/H4. Once you are profitable doing that, you can switch. But then, why would you want to switch and add more confusion when you are finally being profitable?

Don't take me wrong, it's not a contradiction. It's what our minds want us to think.

You can perfectly trade D1/H1 without looking at the H4. I do that. You can also trade the WK/H4 combination.

Take a look at the screenshot attached, it's a screenshot of the account where I trade H1/D1 on my VPS.
H4, M30, M15, M5, M1 chart buttons are hidden so that I don't know what is going on. It will not affect my decisions on the H1 chart.

Again, I don't want to create confusion. D1/H1 is a perfect combo as well as WK/H4. It's better to stick to those, H4 areas can be more or less spotted on the H1 chart as well, but just stick to the H1 entries following the trend, using the trendline and being aware how high or low you are in the curve. Like in this USDCAD long example on the attached screenshot: this H1 demand is a valid setup but we're bouncing off the D1 supply, so I am not allowed to go long even if it's a valid setup, too high in the curve after the D1 supply has been hit. A H4 trade I took and closed on Friday before the weekend. Not shown on this chart, because this is my H1 account, not my H4 account.

Alfonso
Attached Image (click to enlarge)
Click to Enlarge Name: Screenshot1.png Size: 146 KB
Set and Forget supply and demand trading community
  • #1,810
  • Sep 2, 2013 6:34am Sep 2, 2013 6:34am
Hi Alfonso. Hope you are having a good Monday. I have a question with regards what would seem to be a Supply area, yet the price moves up beyond this area into "new territory"? For example... looking at the GBP/CAD... on the D1 and W1 tf. Would this once considered Supply area be now a Demand area since price has broken ABOVE previous levels?

Thanks.
  • #1,811
  • Sep 2, 2013 6:44am Sep 2, 2013 6:44am
Quoting pres78
{quote} {quote} Alfonso, Can you comment on this? My question was based on the very same zone that sebkor6 mentions in his post. When do you remove the zones? Close above? Full bar above OHLC or just a spike through the distal?
Hi Jason and the others asking about the same issue!

I've just updated the first post with a few things, will be adding a few more in the next days covering the most common questions.

When do we consider a zone to no longer be valid? When is it considered to be broken and needs to be removed from our charts?

  1. The zone is no longer valid when it's been violated by as little as 1 pip
  2. We don't wait for a close above or below the zone in order to consider a zone as a violation
  3. We don't wait for a full OHLC candle above/below the zone

Sometimes, we'll have zones overshot by a few pips, others by quite a bunch or pips and we'll see it dropping/rallying after that, most likely after our SL has been hit. If that is the case, a brand new level might have formed confirming willing buyers/sellers, which could be good for a trade once it pulls back to retest it by using the confirmation type of entry.

Set & forget is got its pros and cons! Sometimes levels will be overshot by a few pips, this is why having a nice wiggle room added to your SL is key. Market makers are lurking in the dark like hyenas. Others your SL on a short will be hit and then price will drop like a rock. You will not want to short that pair any more because you had a loss the first time, but what will most likely happen then? The second entry was the good one and you didn't take it because the first one was a loss!

Does it ring a bell to all of you? It's happened to me many many times. So we should add more wiggle room to the trades at the extremes, and not be scared to take a second trade if the first one was a loss. That's the logic and idea behind it.

Alfonso

Set and Forget supply and demand trading community
  • #1,812
  • Sep 2, 2013 6:46am Sep 2, 2013 6:46am
XAGUSD missed by 1 pip
Attached Image (click to enlarge)
Click to Enlarge Name: metatrader - pepperstone.png Size: 153 KB
  • #1,813
  • Sep 2, 2013 6:48am Sep 2, 2013 6:48am
Quoting panoramia
{quote} Hi Jason and the others asking about the same issue! I've just updated the first post with a few things, will be adding a few more in the next days covering the most common questions. When do we consider a zone to no longer be valid? When is it considered to be broken and needs to be removed from our charts? The zone is no longer valid when it's been violated by as little as 1 pip We don't wait for a close above or below the zone in order to consider a zone as a violation We don't wait for a full OHLC candle above/below the zoneSometimes,...
Alfonso,

That's great, thanks for taking the time to reply and update post #1. That is wonderful.
Today's zone = Tomorrow's opportunity!
  • #1,814
  • Sep 2, 2013 6:54am Sep 2, 2013 6:54am
Quoting FxMaximus
Hi Alfonso. Hope you are having a good Monday. I have a question with regards what would seem to be a Supply area, yet the price moves up beyond this area into "new territory"? For example... looking at the GBP/CAD... on the D1 and W1 tf. Would this once considered Supply area be now a Demand area since price has broken ABOVE previous levels? Thanks.
Hello there and welcome to the thread!

I don't quite understand your question on GBPCAD. You didn't attach any chart, so it's difficult to give you the answer you are expecting. It all depends on where youd D1 and W1 supply areas are located. Take a look at my attachement. There is a D1 speedbump supply that is holding on GBPCAD. My Weekly supply is further up at 1.726.

Previous month high (resistance) holding from the past, which is also last month high. WK supply broken and those highs holding as well as the D1 speedbump supply. Those highs are drawn by the support_resistance indicator that can be downloaded from the 1st post.

Hope that helps. It all depends on where your hgiher time frame areas are painted after all.
Alfonso
Attached Image(s) (click to enlarge)
Click to Enlarge Name: Screenshot1.png Size: 161 KB
Click to Enlarge Name: Screenshot2.png Size: 157 KB
Set and Forget supply and demand trading community
  • #1,815
  • Sep 2, 2013 6:56am Sep 2, 2013 6:56am
Quoting sebkor6
Hello Gold For me d1 supply is still valid, according to this spike. Price couldn't close above supply. Took short on h1 fresh supply. Already at BE so there will be no loss. {image} {image}

Sebkor, when your h1 fresh level will be available for long?
  • #1,816
  • Sep 2, 2013 7:04am Sep 2, 2013 7:04am
Quoting panoramia
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 {image}
Hey Alfonso, i thought you said you dont like doji speedbumps? Or are they usefull if price rises/falls very rapidly?

NT
Keep your blades sharp!
  • #1,817
  • Sep 2, 2013 7:24am Sep 2, 2013 7:24am
Hi guys,
On GBP/USD D1 we are bouncing from original AND fresh demand level along the way with the trend.
and on H1 chart i have drawn an original speedbumb demand zone.
the only concern i have about this area is the time spent at that level.
what do you think guys?
Attached Image(s) (click to enlarge)
Click to Enlarge Name: gbpusd daily.png Size: 50 KB
Click to Enlarge Name: gbpusd H1.png Size: 44 KB
  • #1,818
  • Sep 2, 2013 7:52am Sep 2, 2013 7:52am
Quoting Nametaker
{quote} Hey Alfonso, i thought you said you dont like doji speedbumps? Or are they usefull if price rises/falls very rapidly? NT
Hi Nick!

Yes, I don't use one single doji speedbumps for entries. That H1 demand area is in purple color because purple colors are levels I don't like but I draw them because I want to pay attention to them and see how price reacts to them. The rectangle indicator does not detect purple colors (configured like that) so that no trendlines are painted on them, I just use the purple color when the level is not good or not good enough at the moment. Price might rally from there, but there is no profit margin on that area yet, there's one single doji in the candle, so not good. Waiting for a bigger pullback since that level is not valid. But yes, I don't use single doji candles as entries. If the doji is part of other non-dojis basing candles, then yes, a doji alone no.

Off for today! Gone through my pairs, set some virtual orders in case my conditions are met. Now off to doing some climbing! Will check the markets possibly tonight, I guess it'll be too slow with the US Holidays today. I guess that the end of the week is going to be volatile with the % bank rates and NFP. I won't be trading on Friday due to NFP news event, so one more day for my outdoor activities.

Alfonso
Set and Forget supply and demand trading community
  • #1,819
  • Edited 8:10am Sep 2, 2013 7:58am | Edited 8:10am
Hi,

I've been quietly reading this thread and it is really useful. Thanks a lot, Alfonso and everyone involved.

I'm "demo trading" this strategy and still need to improve, but so far this is the most detailed explanation that I've found about SD trading, and it is helping me a lot.

I'll try to participate in this thread, but for now I'll keep reading.
  • #1,820
  • Sep 2, 2013 8:51am Sep 2, 2013 8:51am
Quoting caparzo
Hi guys, On GBP/USD D1 we are bouncing from original AND fresh demand level along the way with the trend. and on H1 chart i have drawn an original speedbumb demand zone. the only concern i have about this area is the time spent at that level. what do you think guys? {image} {image}
Too much trading in that zone for me.
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