Supply and demand in a nutshell by Alfonso Moreno | Page 93 | Forex Factory

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Supply and demand in a nutshell by Alfonso Moreno

  • #1,841
  • Sep 2, 2013 8:43pm Sep 2, 2013 8:43pm
Quoting Nametaker
{quote} Do whatever works for you, mate. This is my D1 XAU/USD chart. {image} Nick
WOW, in your D1 chart, that zone is even more clear. It does have a blue candle, which is in line with the rules. Nice chart and very neat.

Your charts look very clean. Nice job!
  • #1,842
  • Sep 3, 2013 12:36am Sep 3, 2013 12:36am
Hi there,

here are my two trades on aud usd.

Fresh daily demand area.
First entry was due to h4 demand area. Price almost hit my sl.
Second entry was at h1 speedbump.
Attached Image(s) (click to enlarge)
Click to Enlarge Name: audusddaily.png Size: 53 KB
Click to Enlarge Name: audusdh4.png Size: 59 KB
Click to Enlarge Name: audusdh1.png Size: 58 KB
  • #1,843
  • Sep 3, 2013 1:04am Sep 3, 2013 1:04am
Quoting sebkor6
Hi there, here are my two trades on aud usd. Fresh daily demand area. First entry was due to h4 demand area. Price almost hit my sl. Second entry was at h1 speedbump. {image} {image} {image}

welldone sekbor but remember alfonso told us not to trade during high impect news its risky .
  • #1,844
  • Sep 3, 2013 1:28am Sep 3, 2013 1:28am
alfonso this is my gbpusd trade. a brand new demand label formed at 1 hour chart with in daily demand area and my entry was first time came back to newly 1hour demand area 1.54615 .Risk reward 1:3.done..
Attached Image(s) (click to enlarge)
Click to Enlarge Name: gbpusddaily.png Size: 52 KB
Click to Enlarge Name: gbpusd1hr.png Size: 105 KB
  • #1,845
  • Sep 3, 2013 1:37am Sep 3, 2013 1:37am
Quoting sebkor6
Hi there, here are my two trades on aud usd. Fresh daily demand area. First entry was due to h4 demand area. Price almost hit my sl. Second entry was at h1 speedbump.
Hey Sebkor, could you tell us how you manage your TP on both of those trades? Where do you put TP if you're away from the screen, do you alter it when you're in front of the chart etc, what's the logic behind it?
  • #1,846
  • Sep 3, 2013 1:45am Sep 3, 2013 1:45am
Quoting sebkor6
Hi there, here are my two trades on aud usd. Fresh daily demand area. First entry was due to h4 demand area. Price almost hit my sl. Second entry was at h1 speedbump. {image} {image} {image}
Hi Sebkor,

Congrats as your trades worked out very well but I have a query in regards to your daily chart and the fresh demand you have marked.
As far as I can see that move up didn't take out any supply so it shouldn't be marked as fresh demand.

What made you mark it as fresh?

Attached Image
If you act surprised, then you probably missed something
  • #1,847
  • Sep 3, 2013 2:31am Sep 3, 2013 2:31am
Quoting outapips
{quote} Hi Sebkor, Congrats as your trades worked out very well but I have a query in regards to your daily chart and the fresh demand you have marked. As far as I can see that move up didn't take out any supply so it shouldn't be marked as fresh demand. What made you mark it as fresh? {image}
I agree with you.


That level did not take out any supply.

It is a reaction to another demand level.

Attached Image (click to enlarge)
Click to Enlarge Name: audusd daily demand.png Size: 35 KB
  • #1,848
  • Sep 3, 2013 2:33am Sep 3, 2013 2:33am
Quoting jsr
{quote} WOW, in your D1 chart, that zone is even more clear. It does have a blue candle, which is in line with the rules. Nice chart and very neat. Your charts look very clean. Nice job!
My template, if you want.
Attached File(s)
File Type: tpl sd template (nt version).tpl   14 KB | 579 downloads


Rectangle colours:
Pale green is supply (FRESH), MediumSeaGreen is supply (UN-FRESH).
LightSkyBlue is demand (FRESH), Cornflower Blue is supply (UN-FRESH).

These are the only colors i use. I can asses a level at a glance once these basic colours are recognised.

NT
Keep your blades sharp!
  • #1,849
  • Sep 3, 2013 2:33am Sep 3, 2013 2:33am
I think Sebkor has been correct and Alfonso might need to change his rules.


In every example, an area is still valid UNLESS IT HAS BEEN CLOSED ABOVE.

Even if it has been violated completely, if there was no candle close, it is still acting as full supply/demand.

We have seen too many examples of this to ignore it.


here is another I just noticed on AUDUSD:

Attached Image (click to enlarge)
Click to Enlarge Name: audusd daily demand.png Size: 35 KB




I will no longer be counting a supply/demand valid unless it has a full candle close.
  • #1,850
  • Sep 3, 2013 2:53am Sep 3, 2013 2:53am
Here is another example:

AUDNZD:

Attached Image (click to enlarge)
Click to Enlarge Name: another.png Size: 45 KB




The red level is the H4 supply Alfonso has drawn.

The DimGrey level is the reaction that could not be closed above.



Price is easily breaking through Alfonso's zone, and going towards the reaction zone, which is still VALID SUPPLY as it has not been closed above, even though it has been violated.


This could also be why we have such a low win rate of successful trades. Some of the levels we are taking trades on, because we think they are new valid levels, are actually not, and the levels that are still valid in their place, are not fresh. Therefore, we are not taking trades on fresh levels.



If this is not clear, tell me and I will explain more.
  • #1,851
  • Sep 3, 2013 2:54am Sep 3, 2013 2:54am
Quoting Axlz
I think Sebkor has been correct and Alfonso might need to change his rules. In every example, an area is still valid UNLESS IT HAS BEEN CLOSED ABOVE. Even if it has been violated completely, if there was no candle close, it is still acting as full supply/demand. We have seen too many examples of this to ignore it. here is another I just noticed on AUDUSD: {image} I will no longer be counting a supply/demand valid unless it has a full candle close.
What i do is adjust it to the latest valley (The level is now fresh). When price pulls back into it go down to H1 and look for set and forgets or confirmation trades.

Attached Image (click to enlarge)
Click to Enlarge Name: audusd daily.png Size: 103 KB


NT
Keep your blades sharp!
  • #1,852
  • Sep 3, 2013 2:56am Sep 3, 2013 2:56am
Quoting Nametaker
{quote} What i do is adjust it to the latest valley (The level is now fresh). When price pulls back into it go down to H1 and look for set and forgets or confirmation trades. {image} NT
See, you may think it is your new valley acting as a supply/demand zone, but in reality, it is the old level, as price was not able to close above it.


And that level would now not be fresh, since it has technically been touched (and failed to fully close above). So taking a trade on what YOU THINK is a new valid level, is in reality, an old, unfresh level, causing you to have a lower chance at a successful trade.
  • #1,853
  • Sep 3, 2013 3:02am Sep 3, 2013 3:02am
Alfonso, do you realy use Supply_demand_indicator with success? Yesterday i had another loss on AUDUSD. On daily indicator located for me a daily supply, on the h1 indicator located for me a fresh levels. I'm very dissapointed. I dont know how indicator work but i've seen your video about this. I've seen as you said in video that this indicator doesnt mark speedbump. Maybe code of this indicator can help me to understand how it work.
Attached Image(s) (click to enlarge)
Click to Enlarge Name: d1.png Size: 152 KB
Click to Enlarge Name: h1.png Size: 147 KB
  • #1,854
  • Sep 3, 2013 3:03am Sep 3, 2013 3:03am
Quoting bobyv87
Alfonso, do you realy use Supply_demand_indicator with success? Yesterday i had another loss on AUDUSD. On daily indicator located for me a daily supply, on the h1 indicator located for me a fresh levels. I'm very dissapointed. I dont know how indicator work but i've seen your video about this. I've seen that this indicator doesnt mark speedbump. Maybe code of this indicator can help me to understand how it work.
The indicator marks many invalid levels that are yet to be validated. It is a bunch of a code, not a human brain.

You need to use the mind of a human to mark these zones, as they are quite subjective at times.

I'm probably going to stop using it soon and just do everything manually.
  • #1,855
  • Sep 3, 2013 3:06am Sep 3, 2013 3:06am
Quoting Axlz
{quote} See, you may think it is your new valley acting as a supply/demand zone, but in reality, it is the old level, as price was not able to close above it. And that level would now not be fresh, since it has technically been touched (and failed to fully close above). So taking a trade on what YOU THINK is a new valid level, is in reality, an old, unfresh level, causing you to have a lower chance at a successful trade.
AUD/USD Example. Demand has been absorbed at that level you showed. Price is reacting to the buy orders at the level below your grey one. It just doesn't make sense to me to draw a level that has been absorbed, because the buy orders no longer exist at that level. But again, do what works for you.

Where the level stopped short of the blue one (on your chart) i would mark that as fresh and take the first pullback. Price seemed to react accordingly in the example.

NT
Keep your blades sharp!
  • #1,856
  • Sep 3, 2013 3:08am Sep 3, 2013 3:08am
Quoting sebkor6
Hi there, here are my two trades on aud usd. Fresh daily demand area. First entry was due to h4 demand area. Price almost hit my sl. Second entry was at h1 speedbump. {image} {image} {image}

Congratulation Sebkor6! I dont understand why daily demand was valid? It not taken out any supply
  • #1,857
  • Sep 3, 2013 3:09am Sep 3, 2013 3:09am
Quoting bobyv87
Alfonso, do you realy use Supply_demand_indicator with success? Yesterday i had another loss on AUDUSD. On daily indicator located for me a daily supply, on the h1 indicator located for me a fresh levels. I'm very dissapointed. I dont know how indicator work but i've seen your video about this. I've seen that this indicator doesnt mark speedbump. Maybe code of this indicator can help me to understand how it work. {image} {image}
I always use the manual rectangle indicator to draw levels. It makes you good at drawing levels fast, rather than relying on something else. I have probably drawn a thoulsand levels and i am only just "getting it" now.
Keep your blades sharp!
  • #1,858
  • Sep 3, 2013 3:10am Sep 3, 2013 3:10am
Quoting Nametaker
{quote} AUD/USD Example. Demand has been absorbed at that level you showed. Price is reacting to the buy orders at the level below your grey one. It just doesn't make sense to me to draw a level that has been absorbed, because the buy orders no longer exist at that level. But again, do what works for you. Where the level stopped short of the blue one (on your chart) i would mark that as fresh and take the first pullback. Price seemed to react accordingly in the example. NT
Yes but remember, price can touch a level and pullback more than once, even if it isn't wise for us to take the second/third/fourth, ect, pullbacks.

Orders may be gone, but who is to say that orders were not initiated AGAIN at that level? Remember, Alfonso commonly says that we are dealing with market makers who use computer programs. What would a computer program have against initiating another order in that location?

And traders commonly wait for close candles to confirm a level has been properly broken, so it is logical to assume that they would place new orders there.
  • #1,859
  • Sep 3, 2013 3:12am Sep 3, 2013 3:12am
And one more thing, can someone post their daily USDJPY chart ?

I want to check the levels against mine for confirmation.

Thanks.
  • #1,860
  • Sep 3, 2013 3:15am Sep 3, 2013 3:15am
I closed my AUDNZD trade.

If I apply this new logical thinking to that zone, it does not have a high chance of success.
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