Supply and demand in a nutshell by Alfonso Moreno | Page 98 | Forex Factory

Options

Go to
Permalinks
Print Thread

Similar Threads

Supply and Demand Zones 57 replies

Price movement as a function of Supply and Demand 43 replies

Supply and demand zones and EW principles 1 reply

How Markets Work, in a Nutshell! 32 replies

Demand and Supply 1 reply

Attachments: Supply and demand in a nutshell by Alfonso Moreno
Exit Attachments

Supply and demand in a nutshell by Alfonso Moreno

  • #1,941
  • Edited 8:39am Sep 4, 2013 8:24am | Edited 8:39am
Quoting bobyv87
I put my long order on second speedbump on gold. First dont look like a speedbump in my chart because of brokers difference. Also, h1 trendline wasn't broken yet for me. {image}
I'm planning to go short on next supply. Daily supply still in control and for me at least, TL on 1h is broken.

Actually that supply is not valid until it takes out the demand, so I guess as Alfonso said previously, its resistance, I guess?
  • #1,942
  • Sep 4, 2013 8:31am Sep 4, 2013 8:31am
Hi,
here are some of my trades:
aud usd hits weekly supply, so i closed one of positions. +185 pips. Sl 11 pips. RR ąlmost 1:18
Another position i decided to hold, because we bounced from monthly demand area.

eur nzd sell.
Supply in controll. Took sell on h1 supply area. Now + 205 pips.

eur cad sell.
Supply in controll. For now + 225. Hope that will hit the target.
Attached Image(s) (click to enlarge)
Click to Enlarge Name: audusddaily.png Size: 52 KB
Click to Enlarge Name: eurnzdh1.png Size: 52 KB
Click to Enlarge Name: eurcaddaily.png Size: 54 KB
Click to Enlarge Name: eurcadh1.png Size: 49 KB
  • #1,943
  • Sep 4, 2013 8:51am Sep 4, 2013 8:51am
Quoting sebkor6
Hi, here are some of my trades: aud usd hits weekly supply, so i closed one of positions. +185 pips. Sl 11 pips. RR ąlmost 1:18 Another position i decided to hold, because we bounced from monthly demand area. eur nzd sell. Supply in controll. Took sell on h1 supply area. Now + 205 pips. eur cad sell. Supply in controll. For now + 225. Hope that will hit the target. {image} {image} {image} {image}
Congratulation Sebkor6. Would be interesting to see your position management. When you move the sl to BE. Do you use trailing stops to protect you, or you take partially profits? Thank you!
  • #1,944
  • Sep 4, 2013 9:07am Sep 4, 2013 9:07am
I have a loss on XAUUSD
  • #1,945
  • Sep 4, 2013 9:08am Sep 4, 2013 9:08am
Quoting bobyv87
{quote} Congratulation Sebkor6. Would be interesting to see your position management. When you move the sl to BE. Do you use trailing stops to protect you, or you take partially profits? Thank you!
Thank's

I move my sl to BE after price hits 2:1 RR.
I don't use trailing stops because this could cose, that it would not be able to get to the target.
When i have oppotrunity (sometimes i can't take partially profit) i close half of position after hitting significant supply or demand zone on h4, .
  • #1,946
  • Sep 4, 2013 9:08am Sep 4, 2013 9:08am
Quoting bobyv87
I have a loss on XAUUSD

If a new supply/demand is printed on the higher TF, I think it is wise to hold it valid, even if it hasn't violated any supply/demand, until it is broken.
  • #1,947
  • Sep 4, 2013 9:14am Sep 4, 2013 9:14am
Quoting bobyv87
I put my long order on second speedbump on gold. First dont look like a speedbump in my chart because of brokers difference. Also, h1 trendline wasn't broken yet for me. Price almost hit my sl. Let's see what happens. {image}
I wonder where your weekly and daily supply zones are?
In my chart we are in the weekly supply zone with some overshoot in yesterday's move.
  • #1,948
  • Sep 4, 2013 9:16am Sep 4, 2013 9:16am
Quoting Reacto
{quote} I wonder where your weekly and daily supply zones are? In my chart we are in the weekly supply zone with some overshoot in yesterday's move.
That overshoot counts as a new level of weekly supply.
  • #1,949
  • Sep 4, 2013 9:26am Sep 4, 2013 9:26am
Quoting Reacto
{quote} I wonder where your weekly and daily supply zones are? In my chart we are in the weekly supply zone with some overshoot in yesterday's move.

Weekly supply wasn't touched and price was rejected from d1 demand !
Attached Image (click to enlarge)
Click to Enlarge Name: metatrader - pepperstone.png Size: 158 KB
  • #1,950
  • Sep 4, 2013 9:30am Sep 4, 2013 9:30am
Quoting bobyv87
{quote} Weekly supply wasn't touched and price was rejected from d1 demand ! {image}
In my opinion there is an other valid zone underneath yours.
Attached Image (click to enlarge)
Click to Enlarge Name: Image1.png Size: 87 KB
  • #1,951
  • Sep 4, 2013 9:33am Sep 4, 2013 9:33am
Quoting bobyv87
{quote} Weekly supply wasn't touched and price was rejected from d1 demand ! {image}

This time with the right chart.
Attached Image (click to enlarge)
Click to Enlarge Name: Image1.png Size: 88 KB
  • #1,952
  • Sep 4, 2013 9:37am Sep 4, 2013 9:37am
Quoting sebkor6
Hi, here are some of my trades: aud usd hits weekly supply, so i closed one of positions. +185 pips. Sl 11 pips. RR ąlmost 1:18 Another position i decided to hold, because we bounced from monthly demand area. eur nzd sell. Supply in controll. Took sell on h1 supply area. Now + 205 pips. eur cad sell. Supply in controll. For now + 225. Hope that will hit the target.
Hi Sebkor, where did you put your TPs for EURNZD and EURCAD, next daily demand? You said you put your SL to BE after 2:1 but what happens after that? I doubt anyone lets i.e. a 5:1 R:R go to BE because he wants his TP of 10:1 to be hit, so when do you move your SL to protect some of your profits?
  • #1,953
  • Sep 4, 2013 10:32am Sep 4, 2013 10:32am
Quoting Ranagol
{quote} Hi Sebkor, where did you put your TPs for EURNZD and EURCAD, next daily demand? You said you put your SL to BE after 2:1 but what happens after that? I doubt anyone lets i.e. a 5:1 R:R go to BE because he wants his TP of 10:1 to be hit, so when do you move your SL to protect some of your profits?
Hi
yes, i put my eur nzd and eur cad TPs at next daily demand.
When we put our TP is very subjective. Someone wants to take profit after price hits 1:3 RR, someone want's to take whole move. When i know that supply is in controll on daily, i want price to hitt daily demand.
Sometimes price will never get to our target. As I wrote before, look at aud usd. I know, that we bounced from monthly demand speedbump. I close one of the position in the weekly supply zone, so now i have a lot of pips on my account. Another position i left at BE. Maybe it will proceed north and absorbe this supply weekly area, mayby won't. We dont know, but because of the fact that price respected monthly demand, maybe i will have a chance that price will go notrh to the monthly supply.
Attached Image(s) (click to enlarge)
Click to Enlarge Name: eurcaddaily.png Size: 49 KB
Click to Enlarge Name: eurnzddaily.png Size: 53 KB
  • #1,954
  • Sep 4, 2013 10:36am Sep 4, 2013 10:36am
Quoting sebkor6
{quote} Hi yes, i put my eur nzd and eur cad TPs at next daily demand. When we put our TP is very subjective. Someone wants to take profit after price hits 1:3 RR, someone want's to take whole move. When i know that supply is in controll on daily, i want price to hitt daily demand. Sometimes price will never get to our target. As I wrote before, look at aud usd. I know, that we bounced from monthly demand speedbump. I close one of the position in the weekly supply zone, so now i have a lot of pips on my account. Another position i left at BE. Maybe...

So speedbumps can be used as valid supply/demand in extremes?
  • #1,955
  • Sep 4, 2013 10:57am Sep 4, 2013 10:57am
Quoting Axlz
{quote} So speedbumps can be used as valid supply/demand in extremes?
I'd say not for set & forget trades. But you shold be aware that it's there and watch the behaviour of price. In this case, price rallied, creating new demand zones.

So far it seems to me the logic is something like this:

1. Basic premise: Once price hit a higher TF zone of SD, price will react and will begin it's path to the opposing level in control of SD curve. First trade can be set & forget, no confirmation needed if level is fresh and at extremes. If speedbump, confirmation is needed.


2. Validation/confirmation: Price will absorb previous zones and create new ones in lower TFs. When this reaction creates new zones in our trading TF, then we begin to trade in the direction of the new trend.


3. Concerns: Higher TF opposing SD zones.


In this case.


1. Price hit a monthly demand zone and rallies.


2. Supply is absorbed and new demand is created in lower timeframes. As long as this behaviour continues, we can scale in at each new level, while the ascending trendline in the trading TF is respected.


3. If higher TF fresh supply is hit, then we may expect our trading TF demand zones to be violated, however we are trusting the trend. If you want to give the market the chance to prove if there is momentum, you may want to keep scaling in, and stop placing orders only if UTL is broken, and or when a trade fails. If you are cautious, maybe you'd like to pause, until price confirms you can continue to buy. Buying will be resumed when/if new demand zones are created while price absorbs supply zones in the trading TF.


If demand zones are violated in our trading TF, we can still verify if higher TF UTL are still in place, and expect correction will end at higher TF SD zones. However same rules apply to our analysis.


Price can even return to the origin of the rally, and then, again, we have to wait for confirmation trades.

  • #1,956
  • Edited 11:13am Sep 4, 2013 11:01am | Edited 11:13am
Quoting Axlz
{quote} So speedbumps can be used as valid supply/demand in extremes?
Hello Axlz,
I am away on my mobile, I can smell the sea in front of me Your message was short so I just wanted give you a quick reply on speedbumps (I will make a video just on them soon):

  1. Speedbumps are best at the beginning of the move or while the trend is evolving. Once we are too high or too low, speedbumps are low probability
  2. Peaks and vallyers, that is, U and inverted U levels (swings) are best at the extremes

So, we should not use the speedbumps at SD extremes.
Alfonso

Set and Forget supply and demand trading community
  • #1,957
  • Sep 4, 2013 11:28am Sep 4, 2013 11:28am
Can you put webinar on YouTube ?
  • #1,958
  • Sep 4, 2013 11:32am Sep 4, 2013 11:32am
Quoting doctorflush
Can you put webinar on YouTube ?
He always does: http://www.youtube.com/user/panoramia/videos
  • #1,959
  • Sep 4, 2013 11:45am Sep 4, 2013 11:45am
Quoting panoramia
{quote} Hello Axlz, I am away on my mobile, I can smell the sea in front of me Your message was short so I just wanted give you a quick reply on speedbumps (I will make a video just on them soon): Speedbumps are best at the beginning of the move or while the trend is evolving. Once we are too high or too low, speedbumps are low probability Peaks and vallyers, that is, U and inverted U levels (swings) are best at the extremesSo, we should not use the speedbumps at SD extremes. Alfonso
Hello Alfonso,

thank you for the reply, but I meant something a little different. Or maybe I misunderstood.

if we are trading on H1 and on daily we see price approaching a speedbump, should we treat it the same as a valley or peak, and assume that price may revers, or should we only assume this for valleys on our extreme TF?
  • #1,960
  • Sep 4, 2013 11:56am Sep 4, 2013 11:56am
Quoting Axlz
{quote} Hello Alfonso, thank you for the reply, but I meant something a little different. Or maybe I misunderstood. if we are trading on H1 and on daily we see price approaching a speedbump, should we treat it the same as a valley or peak, and assume that price may revers, or should we only assume this for valleys on our extreme TF?
I didn't quite understand!
If we see that price is approaching a D1 speedbump? Take a look at the AUDUSD Monthly demand speedbump, it's the same thing. Once we approach a fresh and original SD area on higher timeframes, we should respect it. If that D1 supply speedbump matches the D1 downtrend and even the Weekly downtrend, then we can set & forget the same way we've done on H4 shorts on eurnzd, euraud, etc. It's all about multiple timeframe analysis, where are we in the higher timeframes.

Also, we should never assume that price may reverse. There is only one thing sure about the markets, or anything in life and that is that we don't know what's gonna happen next. We have to respect higher timeframes if they are fresh and original, and even if they are non-fresh. I am not going to assume that a D1 supply is going to be broken because it's been retested 5 times. I can show an example of that. I trade on the premise that the higher timeframes have to be respected.

If you have a recent snapshot of this H1/D1 scenario, please share it so that I can be more "precise".

Alfonso
Set and Forget supply and demand trading community
5 traders viewing now