Supply and demand in a nutshell by Alfonso Moreno | Page 110 | Forex Factory

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Supply and demand in a nutshell by Alfonso Moreno

  • #2,181
  • Sep 10, 2013 7:22am Sep 10, 2013 7:22am
Quoting Reacto
Hello all, We just hit daily supply on the DAX, we need confirmation though {image}
We also have lots of room to go long on the Dow Jones.

Attached Image (click to enlarge)
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  • #2,182
  • Sep 10, 2013 7:28am Sep 10, 2013 7:28am
Quoting Axlz
GBPAUD approaching original and fresh daily demand: {image} Fresh 1H demand within the Daily demand: {image} Go long on the fresh 1H demand?
Check the montly charts and see where are we coming from.

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  • #2,183
  • Sep 10, 2013 7:47am Sep 10, 2013 7:47am
Quoting Osman
{quote} Check the montly charts and see where are we coming from.
Like I said, How does the monthly TF affect something as small as the 1H? One monthly bar has 30 daily bars in it (for the sake of argument), which all have 24 hourly bars in it.

Alfonso said focus only on the D1/H1 TF, ect.

We are low in the Daily curve. We are not going to sell, that is low probability. We want to buy.
  • #2,184
  • Sep 10, 2013 7:50am Sep 10, 2013 7:50am
Quoting panoramia
H1: on H1, we had the same scenario but my entry was on the H1 chart {image} Same scenario and entries, different lot sizes because widths were different as well as account's equity. Just decide which timeframe combination you are going to trade and use that same combo ALWAYS. Don't switch! Maybe after quite a few months you will be able to do it, or maybe you shouldn't even do it. If H4 works for you and u are profitable, then why adding another entry timeframe to your decision process... Thing about it. Alfonso
That example on the H1 chart is one of my favorites. You get a zone that cause the TL break and then a return to the source of the break. Perfect.
Today's zone = Tomorrow's opportunity!
  • #2,185
  • Sep 10, 2013 8:35am Sep 10, 2013 8:35am
Quoting Axlz
{quote} Like I said, How does the monthly TF affect something as small as the 1H? One monthly bar has 30 daily bars in it (for the sake of argument), which all have 24 hourly bars in it. Alfonso said focus only on the D1/H1 TF, ect. We are low in the Daily curve. We are not going to sell, that is low probability. We want to buy.
Hey Samir!
That D1 demand is not high odds, we hit the Monthly supply on GBPAUD, when we hit a fresh Monthly supply, opposing lower timeframe D1 are likely to be absorbed, we're just TOO high in the monthly curve, like Osman said.

I am not gonna go long at that D1 demand on a confirmation trade. Look at the D1 ascending TL also solidly broken. Don't overtrade. Too high? Don't buy! wait for that D1 demand to be taken out, if that happens, and sell!

Monthly is related to the D1 levels, same thing happens on a D1/H1 and WK/H4, it's fractal.
Alfonso
Attached Image (click to enlarge)
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Set and Forget supply and demand trading community
  • #2,186
  • Sep 10, 2013 8:37am Sep 10, 2013 8:37am
Quoting panoramia
{quote} Hey Samir! That D1 demand is not high odds, we hit the Monthly supply on GBPAUD, when we hit a fresh Monthly supply, opposing lower timeframe D1 are likely to be absorbed, we're just TOO high in the monthly curve, like Osman said. I am not gonna go long at that D1 demand on a confirmation trade. Look at the D1 ascending TL also solidly broken. Don't overtrade. Too high? Don't buy! wait for that D1 demand to be taken out, if that happens, and sell! Monthly is related to the D1 levels, same thing happens on a D1/H1 and WK/H4, it's fractal....
Oh ok, I see.

I will make sure to keep track of monthly/weekly zones for 1H as well then.

Thanks Alfonso.
  • #2,187
  • Sep 10, 2013 9:06am Sep 10, 2013 9:06am
Just came back from a meeting and realized that I have been taken into a pending long on 4hr USDCHF. Entry is 9335, SL at 9295. Entry was based on the 4hr zone shown which printed at a Daily zone after taking out Daily and 4hr supply. We also took out the falling TL and returned to the source of the break. The previous 4 hr bar appears to have removed some supply with that upper wick so we will see where we go from here.

Thoughts? Comments?
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Today's zone = Tomorrow's opportunity!
  • #2,188
  • Sep 10, 2013 9:10am Sep 10, 2013 9:10am
Hi Alfonso, sorry to keep bugging you but I've just had a series of losses and try as I might I can't seem to identify what went wrong. Would really want to know if the trades were valid and just didn't turn out well or they were invalid to begin with. I really feel there is so much to learn from losing trades, so if it isn't too much hassle could you help check out these 2 trades and correct me if there are any glaringly obvious mistakes? Really appreciate it!

Trade 1: CADCHF Short

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Trade 2: EURNZD Long

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Both trades were based on D1 zones as my curve time frame. I waited for confirmation in the form of engulfs on the H1 before taking the trades.
  • #2,189
  • Edited 10:37am Sep 10, 2013 10:12am | Edited 10:37am
Quoting Myst1z
Hi Alfonso, sorry to keep bugging you but I've just had a series of losses and try as I might I can't seem to identify what went wrong. Would really want to know if the trades were valid and just didn't turn out well or they were invalid to begin with. I really feel there is so much to learn from losing trades, so if it isn't too much hassle could you help check out these 2 trades and correct me if there are any glaringly obvious mistakes? Really appreciate it! Trade 1: CADCHF Short {image} {image} Trade 2: EURNZD Long {image} {image} Both trades...
Hello Myst!
You are bugging me too much, where is that dinner and beer you wanted to invite me to?

This morning a friend of mine to whom I am teaching SD was at home for a couple of hours and we precisely looked at a few losses he had had... yours were on his list, so I know your charts and what I'm gonna tell you. This is not on hindsight, it's what it's. It's key that you know where the right levels are and where the higher timeframes are located, SPEEDBUMPS are KEY and PARAMOUNT to it as you will soon realize.

EURNZD H4 LONG:
- Longs are forbidden UNLESS we reach a fresh and higher timeframe demand area
- The D1 demand you chose is not fresh and it's not the origin. There is an original D1 speedbump demand (not fresh now) which is the origin of it all
- You didn't wait for price to reach the opposing D1 demand. That D1 demand is not that good, too much trading, confirmation if anything at the lower end
- Right up there was Weekly speedbump supply. See my next chart. That's a bull trap, it was buying into WEEKLY supply.

H4 and weekly charts attached

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Attached Image (click to enlarge)
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CADCHF SHORT:

- D1 supply has not yet been hit, you need to wait for D1 supply to be hit in order to wait for a confirmation trade
- It all depends on what your D1 levels are. The one you painted is a reaction to the top one which is at the WK supply area. I will always wait for the D1 supply to be hit, it always does hit them sooner or later. Your levels are not painted the way I did
- D1 descending TL broken solidly
- D1 level on top of level, too much trading in the area, compressed supply on the D1
- Opposing D1 supply has not been reached, nor the WK supply.
- H1 trendline has not been solidly broken either

Attached Image (click to enlarge)
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Hope that helps... Rules are very strict as to what to do and not what to do. For confirmation we need a good fresh level on the D1 at least to start waiting for a trade, not a used-up level. But it all depends on how to draw your levels. Speedbumps are key!

Off to the gym and beach, long day solving many techincal problems! Need to disconnect!
Hope my comments will help you and others! I didn't do anything different, it's just the rules. But since I sort of fine tuned them, I have a little bit more experience, that's all. You will all get there and become a Sensei!

Alfonso
Set and Forget supply and demand trading community
  • #2,190
  • Sep 10, 2013 10:17am Sep 10, 2013 10:17am
Quoting pres78
Just came back from a meeting and realized that I have been taken into a pending long on 4hr USDCHF. Entry is 9335, SL at 9295. Entry was based on the 4hr zone shown which printed at a Daily zone after taking out Daily and 4hr supply. We also took out the falling TL and returned to the source of the break. The previous 4 hr bar appears to have removed some supply with that upper wick so we will see where we go from here. Thoughts? Comments? {image}
The departure from the zone does not look strong to warrant a zone IMO and the candles have wicks ,i would expect the DBD above to come in play to resume down trend.
  • #2,191
  • Sep 10, 2013 10:18am Sep 10, 2013 10:18am
Long on Dow Jones next supply:

We are low in the Weekly and Daily curve.

Monthly:

Attached Image (click to enlarge)
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Weekly:

Attached Image (click to enlarge)
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Daily:

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1H:

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  • #2,192
  • Sep 10, 2013 10:27am Sep 10, 2013 10:27am
Quoting Gxp1
{quote} The departure from the zone does not look strong to warrant a zone IMO and the candles have wicks ,i would expect the DBD above to come in play to resume down trend.
Hey Gxp1 thanks for taking the time to reply. What you say is all good points and are things I did consider however for me the 4 hr zone was a confirmation zone that printed at a daily zone RBR that acheive great things for the bulls by removing / taking out a supply zone which had previously been tested severl times before finally giving way.

In turn we printed a base at the Daily base and in turn broke the decending TL so this was enough for me despite the lackluster looking departure. For me we should at minimum head back up to the RBD seen to the left on my chart which gives me a decent enough R:R (3:1 right around the proximal). At this point I don't see much weight in that DBD speedbump as other than touching the Daily demand it really took out nothing of any value as the bar before it with the crazy long lower wick cleared the demand from the mini DBR.

These are my reasons but I am still a newbie to the S/D thing so I could well be wrong.
Today's zone = Tomorrow's opportunity!
  • #2,193
  • Sep 10, 2013 10:49am Sep 10, 2013 10:49am
Quoting pres78
Just came back from a meeting and realized that I have been taken into a pending long on 4hr USDCHF. Entry is 9335, SL at 9295. Entry was based on the 4hr zone shown which printed at a Daily zone after taking out Daily and 4hr supply. We also took out the falling TL and returned to the source of the break. The previous 4 hr bar appears to have removed some supply with that upper wick so we will see where we go from here. Thoughts? Comments? {image}
Firstly - The zone has a bad departure, as someone has said above me. Not a good departure.

Secondly - You've drawn the zone incorrectly. If it was drawn correctly, there wouldn't even be an entry available.


Here is a picture. The blue horizontal line is your entry.

Attached Image (click to enlarge)
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  • #2,194
  • Sep 10, 2013 10:58am Sep 10, 2013 10:58am
Quoting Axlz
{quote} Firstly - The zone has a bad departure, as someone has said above me. Not a good departure. Secondly - You've drawn the zone incorrectly. If it was drawn correctly, there wouldn't even be an entry available. Here is a picture. The blue horizontal line is your entry. {image}
OK.

I appreciate your comments, I do not agree with the drawing of the zone. Why would you only include the first bar and not the next 2 sidweays moving basing candles?

As I said I could well be wrong and will learn and move on.

Again thanks for taking the time to reply.
Today's zone = Tomorrow's opportunity!
  • #2,195
  • Sep 10, 2013 11:02am Sep 10, 2013 11:02am
Quoting pres78
{quote} OK. I appreciate your comments, I do not agree with the drawing of the zone. Why would you only include the first bar and not the next 2 sidweays moving basing candles? As I said I could well be wrong and will learn and move on. Again thanks for taking the time to reply.
I could very well be wrong, as I am a newbie, but from I've seen and what I've been doing, the zone should only ever revolve around 2 candles. No more.

It should include the lowest/highest wick (Depending on valley or peak), and cover only up to the highest/lowest candle body (again, depending on valley or peak).

EDIT: And never include the upper wicks (in a valley), or lower wicks (in a peak). Whole candles should never be included in any zone, unless there is no opposite wick (obvious exception).

Happy trading.
  • #2,196
  • Sep 10, 2013 11:19am Sep 10, 2013 11:19am
Quoting Axlz
{quote} I could very well be wrong, as I am a newbie, but from I've seen and what I've been doing, the zone should only ever revolve around 2 candles. No more. It should include the lowest/highest wick (Depending on valley or peak), and cover only up to the highest/lowest candle body (again, depending on valley or peak). EDIT: And never include the upper wicks (in a valley), or lower wicks (in a peak). Whole candles should never be included in any zone, unless there is no opposite wick (obvious exception). Happy trading.
Two candles only in a base? I have never seen or read that anywhere. Is this something you are testing or did I completly miss something along the way. I have seen many examples both here and also at other forums and on many videos that have bases with more than 2 candles.
Today's zone = Tomorrow's opportunity!
  • #2,197
  • Sep 10, 2013 11:21am Sep 10, 2013 11:21am
Quoting pres78
{quote} Two candles only in a base? I have never seen or read that anywhere. Is this something you are testing or did I completly miss something along the way. I have seen many examples both here and also at other forums and on many videos that have bases with more than 2 candles.
I mean the zone should only ever REVOLVE around 2 candles.


This means you should draw them based on 2 candles, not a group of many.

I have to go, so I just found a quick picture on this page to help put it into context.

This is a picture Alfonso posted:

http://www.forexfactory.com/attachme...6&d=1378819981

Look at the upper peak.

Notice how it only takes the the candle with the highest wick, but then also, include the candle with the highest body. It is based around those 2 candles. The one in the middle is irrelevant to the zone, as it does not serve any purpose.
  • #2,198
  • Sep 10, 2013 11:25am Sep 10, 2013 11:25am
Quoting pres78
{quote} Two candles only in a base? I have never seen or read that anywhere. Is this something you are testing or did I completly miss something along the way. I have seen many examples both here and also at other forums and on many videos that have bases with more than 2 candles.
Here is another picture from Alfonso on the first page. Notice the peak at the top. Same thing - highest wick, highest body. That is all you need to focus on. Lowest wick, lowest body for a valley.

http://www.forexfactory.com/attachme...8&d=1368866121

If you have any further questions, I can answer them on my phone.
  • #2,199
  • Sep 10, 2013 11:35am Sep 10, 2013 11:35am
Quoting Axlz
Alfonso, Following the rule you have just stated above, would we count this EG 1H demand zone as a good zone ? I ask because it is extremely wicky, but as you said, it is right on top of D1 Demand, so we shouldn't care? Under normal circumstances, I wouldn't enter this trade. Thanks. {image}
I canceled my order on this.. Its no longer valid for me brcause on h1 made HL so trendline will not be valid anymore. Any oppinion?
  • #2,200
  • Sep 10, 2013 11:38am Sep 10, 2013 11:38am
Quoting Axlz
Long on Dow Jones next supply: We are low in the Weekly and Daily curve. Monthly: {image} Weekly: {image} Daily: {image} 1H: {image}
Very nice entries on the 4hr
Attached Image (click to enlarge)
Click to Enlarge Name: ymu3-h4-fxpro-financial-services.png Size: 74 KB
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