Supply and demand in a nutshell by Alfonso Moreno | Page 106 | Forex Factory

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Supply and demand in a nutshell by Alfonso Moreno

  • #2,101
  • Sep 9, 2013 2:11am Sep 9, 2013 2:11am
Quoting Reacto
Was a typo, should be USDJPY
Hello Reacto! Good morning to you.

My analysis is for the H1/H4 timeframes. Not the Daily. The Daily is simply used to determine where we are in the curve.
  • #2,102
  • Sep 9, 2013 2:24am Sep 9, 2013 2:24am
Quoting Axlz
{quote} Hello Reacto! Good morning to you. My analysis is for the H1/H4 timeframes. Not the Daily. The Daily is simply used to determine where we are in the curve.
In which case it's within the rules. At the same time it has lower odds
  • #2,103
  • Sep 9, 2013 3:07am Sep 9, 2013 3:07am
Hello, AUDNZD D1 demand and h1 fresh level. Is there a real daily demand?
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  • #2,104
  • Sep 9, 2013 3:21am Sep 9, 2013 3:21am
Quoting Axlz
EURJPY 1H fresh and original supply to go short off of within D1 unfresh supply. {image}
It looks like there was some big gaps last night on the Yen pairs, I guess due to the japan's Final GDP, or who knows what!
I'd have taken the EURJPY short on that H4 speedbump, it was a valid setup as per the rules, but my EA is deactivated automatically till Monday morning at Frackfurt open. This time the EJ short trade wouldn't have worked, but it followed the rules. Something is going on with the Yen related to some kind of news.

I am not allowed to trade at Sunday open, we can have big gaps due to news and/or speculation during the weekend. Stop losses are not respected when a gap is produced, so you'd better stay out of close SD levels at Sunday open or low volatility market hours.

I've posted a new block on Post #1 related to this, when to trade and not to trade (news and slow markets). Little by little a sort of trading plan draft is being built.

WHEN TO TRADE AND NOT TO TRADE. NEWS AND SLOW MARKETS
It's also good to know when to and when not to trade. There are times when we should not be trading because it can result in unnecessary losses.

NEWS

  1. Stay out of trade big news events like central banks % interest rates, CPI, NPF and BCE/FOMC speechs/minutes
  2. You should take your day off when there are big news like NFP or a BCE/FOMC speech, we don't want to gamble, we want to trade. Price can go anywhere
  3. If we already are at breakeven on a trade, we will decide if we want to keep it or close it depending on what the SD technical analysis is telling us to do. I may decide to lock in some profits moving the SL above/below previous valid SD zone and see what happens
  4. Do not scale in or add new positions a couple of hours before, after or during news events, wait for price to resume previous trend or break it, do not anticipate or assume something is going to happen because you don't know what's gonna happen

SLOW MARKETS

  1. Don't trade H1 SD levels formed during slow market conditions, normally after major market closes or the asian session, unless the pair is composed of 2 asian currencies, for instance AUDJPY. Be patient and wait for some volatility and new SD levels formed during fast markets like the London and NY session
  2. Monday mornings are normally very slow, usually no news events. After Monday's NY session sometimes the markets will start moving a bit. Trade only clear levels during these times

LATE FRIDAY AND SUNDAY OPEN

  1. Friday NY sessions are not that volatile normally. If you only trade the NY sesson, take your day off
  2. If you have orders open on Friday, it's wise to close them unless you are a position trader. You don't want to be caught by a big gap on Sunday open due to speculations or an unplanned high impact news event during the weekend
  3. Avoid trading Sunday open, spreads are widened due to the lack of liquidity during those market hours, and gaps may occur due to unexpected high impact news


Alfonso

Set and Forget supply and demand trading community
  • #2,105
  • Sep 9, 2013 3:33am Sep 9, 2013 3:33am
USDCAD: fresh and original speedbump D1 supply level at Monthly supply, just 24 pips. An example of a position type of trade.

We can wait for a confirmation type of trade at the level or set and forget. I am setting and forgetting based on MN/D1, my entry timeframe would be the D1 timeframe, my curve the Monthly chart. 93% high on my monthly curve. There was already an entry on the previous D1 supply (now unfresh), where we could have set some orders.

Price is fractal.

Alfonso
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Set and Forget supply and demand trading community
  • #2,106
  • Edited 4:09am Sep 9, 2013 3:53am | Edited 4:09am
Hi everyone, just want to share a short setup on GBPCHF H1. Do let me know if I'm overlooking something and it is invalid, thanks!

Attached Image (click to enlarge)
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Attached Image (click to enlarge)
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Note that the H1 uptrend line is also broken, forgot to add that to the H1 chart.
  • #2,107
  • Sep 9, 2013 4:25am Sep 9, 2013 4:25am
Valid D1 speedbump demand on NZDUSD, still room to opposing fresh supply.
Hope that it all makes sense. This is a good example of clear levels and what we have to do and not to do.

  1. We are allowed go long on NZDUSD at the fresh and original H4 demand level at 0.7886, set and forget
  2. If previous D1 supply is hit before, then we should wait for confirmation. The demand level in purple is not valid yet because it didn't broken the previous highs
  3. The top peak supply looks good for set & forget but it's too wide, more than 40 pips pip risk tolerance, we'd need to drill it down or wait for confirmation
  4. The speedbumo at D1 proximal line supply needs confirmation since it's a speedbump against the H4 uptrend. Speedbumps are not high odds when against the current timeframe's trend

Hope it makes sense to you.
Alfonso

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Set and Forget supply and demand trading community
  • #2,108
  • Sep 9, 2013 4:44am Sep 9, 2013 4:44am
Hi Alfonso,

do you trade the indexes (Nasdaq, S&P500, Russel, Dax etc.) for swing and intraday recently? Or do you only focus on currency pairs in the moment?
  • #2,109
  • Sep 9, 2013 5:18am Sep 9, 2013 5:18am
Quoting panoramia
{quote} It looks like there was some big gaps last night on the Yen pairs, I guess due to the japan's Final GDP, or who knows what! I'd have taken the EURJPY short on that H4 speedbump, it was a valid setup as per the rules, but my EA is deactivated automatically till Monday morning at Frackfurt open. This time the EJ short trade wouldn't have worked, but it followed the rules. Something is going on with the Yen related to some kind of news. I am not allowed to trade at Sunday open, we can have big gaps due to news and/or speculation during the...


I never knew that we shouldn't open trades on Sunday open . It makes sense, though. I will remember this from now on.
  • #2,110
  • Sep 9, 2013 5:22am Sep 9, 2013 5:22am
Quoting Myst1z
Hi everyone, just want to share a short setup on GBPCHF H1. Do let me know if I'm overlooking something and it is invalid, thanks! {image} {image} Note that the H1 uptrend line is also broken, forgot to add that to the H1 chart.
I saw this as well, but there is FAR too much trading in that area for me to take a position on.

As Alfonso says, the golden rule is................Time at level = 0!

Check all of this out:

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  • #2,111
  • Sep 9, 2013 5:26am Sep 9, 2013 5:26am
Quoting bobyv87
Hello, AUDNZD D1 demand and h1 fresh level. Is there a real daily demand? {image} {image}
I saw this area, but I do not count it as valid.

Why?

At the beginning of a trend (as we see here), price must have a R:R of at least 2:1.


The demand zone candle area = 27 pips.

Price moved only 48 pips after that.

To enable me to take a position on that area, as per Alfonso's rules, I would require at least a 54 pip move from the demand zone.


And since I must trade like a robot.....No 2:1 RR = NO TRADE for me.
  • #2,112
  • Sep 9, 2013 5:50am Sep 9, 2013 5:50am
Quoting panoramia
Valid D1 speedbump demand on NZDUSD, still room to opposing fresh supply. Hope that it all makes sense. This is a good example of clear levels and what we have to do and not to do. We are allowed go long on NZDUSD at the fresh and original H4 demand level at 0.7886, set and forget If previous D1 supply is hit before, then we should wait for confirmation. The demand level in purple is not valid yet because it didn't broken the previous highs The top peak supply looks good for set & forget but it's too wide, more than 40 pips pip risk tolerance, we'd...
Hi Alfonso,, shouldn't you wait for price to create a higher high ( absorb supply) before marking the Demand zone as a valid speedbump on the daily Nzd/Usd or is that allowed because it is a speedbump?
Thanks
  • #2,113
  • Sep 9, 2013 5:58am Sep 9, 2013 5:58am
There is an excellent supply zone on GBPNZD 1H. It is also very small! Huge R:R potential here if it works out.

Price missed it by 1 pip, and started reversing. Hopefully it pulls back and hits it because this seems like an excellent trade.


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  • #2,114
  • Sep 9, 2013 6:12am Sep 9, 2013 6:12am
Quoting Axlz
{quote} I saw this area, but I do not count it as valid. Why? At the beginning of a trend (as we see here), price must have a R:R of at least 2:1. The demand zone candle area = 27 pips. Price moved only 48 pips after that. To enable me to take a position on that area, as per Alfonso's rules, I would require at least a 54 pip move from the demand zone. And since I must trade like a robot.....No 2:1 RR = NO TRADE for me.

Thanks!
  • #2,115
  • Sep 9, 2013 6:15am Sep 9, 2013 6:15am
Quoting bobyv87
{quote} Thanks!
It could work out, who knows. But this is just my opinion as a newbie who tries to follow the rules as strictly as possible.

Wish you all the best this week.
  • #2,116
  • Sep 9, 2013 6:21am Sep 9, 2013 6:21am
Quoting panoramia
Valid D1 speedbump demand on NZDUSD, still room to opposing fresh supply. Hope that it all makes sense. This is a good example of clear levels and what we have to do and not to do. We are allowed go long on NZDUSD at the fresh and original H4 demand level at 0.7886, set and forget If previous D1 supply is hit before, then we should wait for confirmation. The demand level in purple is not valid yet because it didn't broken the previous highs The top peak supply looks good for set & forget but it's too wide, more than 40 pips pip risk tolerance, we'd...
It's something we have to live with, I know, but it's also annoying to see differences as below even in a daily chart
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  • #2,117
  • Sep 9, 2013 6:24am Sep 9, 2013 6:24am
Quoting Reacto
{quote} It's something we have to live with, I know, but it's also annoying to see differences as below even in a daily chart {image}
I know what you mean.


What I do now, Is I downloaded another broker's MT4 client outside of my country.


For instance, I live in Australia, and I downloaded FXCM's client (USA).

I now switch between the two to double check my entries (the candles). This way I manage to spot valid speedbumps that aren't visible on my chart.

Maybe that will help you?
  • #2,118
  • Sep 9, 2013 7:03am Sep 9, 2013 7:03am
Quoting Axlz
{quote} I know what you mean. What I do now, Is I downloaded another broker's MT4 client outside of my country. For instance, I live in Australia, and I downloaded FXCM's client (USA). I now switch between the two to double check my entries (the candles). This way I manage to spot valid speedbumps that aren't visible on my chart. Maybe that will help you?
Thanks Axlz,

I have a second one, but the point is that there none that is right, or maybe better, there all right. For my trading I'll just stick to one, but when we are comparing charts on this thread, it's strange to see that there is a valid level for someone and for another person the same price level is not a valid level.
  • #2,119
  • Sep 9, 2013 7:18am Sep 9, 2013 7:18am
Quoting Reacto
{quote} Thanks Axlz, I have a second one, but the point is that there none that is right, or maybe better, there all right. For my trading I'll just stick to one, but when we are comparing charts on this thread, it's strange to see that there is a valid level for someone and for another person the same price level is not a valid level.
Welcome to the biggest market in the world, unregulated but the biggest though LOL I think we should use confluences with the zodiac signs and pray that the levels are tested
Set and Forget supply and demand trading community
  • #2,120
  • Sep 9, 2013 7:22am Sep 9, 2013 7:22am
Quoting Olarion1975
Hi Alfonso, do you trade the indexes (Nasdaq, S&P500, Russel, Dax etc.) for swing and intraday recently? Or do you only focus on currency pairs in the moment?
Yes Oliver, I still am trading Nasdaq, SP500, Russell, Dow and Dax, but not right now. My EA is not working well yet with indexes and metals and takes bigger risks than it's programmed to, so I am not taking any trades, there were some nice ones, but I am not doing any manual trading, the execution is done by my EA, don't want to interfere with it, the results would be different.

But yes, I will be trading the CFD indexes as soon as I solve my problems, soon hopefully.
Alfonso
Set and Forget supply and demand trading community
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