Supply and demand in a nutshell by Alfonso Moreno

Hello,

My trade on usd cad is almost in target. Fresh daily supply, confirmed on h4.
For now it's about 180 pips.

perfect job sebkor. well done

Hello my friend,

I am on my phone so excuse the crude reply.

That zone, upon closer inspection, was never valid for me anyway. That is why i never placed an order. I will quote my past reply in my next post, which will explain why.

That EG zone is not within the daily demand zone, so it does not qualify for the exception that Alfonso explained.

also, the daily zone is used up, so that also makes it invalid.

under normal circumstances, I would not take that zone as well, since there are too many wicks taking out buy orders.

No trade for me on all fronts.

hope that helps.

Congratulations Sebkor!

Hi - The reason of supply still being dominant is that the last demand is being absorbed and the price is bit higher up in the curve so the turn of price from your demand level could be a reaction to the daily level.Anyway we will know what is the real force behind it in a few hours

Im confused Alfonso i thought you said we can trade just d1/h1 and wk/h4. If i am trading just D1/H1 then i wouldnt be aware of that monthly supply. Wouldnt you incur alot of losses if you dont keep track of all the Tframes? (H1/D1/WK/MN)

Please tell me what "ECR' candles mean - can't find any explanation towards this type of candles.

Thank you

Thank you!

expanded range candle

I thank you for this reply

Regards

Hello guys,

I hope some of you took this 1H Dow Jones entry I posted earlier in the thread.

Unfortunately, I just found out that I can't trade CFD's with my broker, even though I can view the charts.




Regards.

Sorry if you are confused, I didn't mean to confuse you or anybody

Of course you can trade only with the D1/H1 combination without looking at the Monthly. I like to know where my monthly is, if close to it or bouncing I am not going to go against it, drawing a monthly SD area takes a few seconds and you only need to draw it once every few months, isn't it worth?

Look at what I said in my post! See the last chart attached again in this post:

1. Is the D1 timeframeve too high in the curve? Look at the chart! It's been rallying FOR AGES
2. Now price reached a resistance, you are supposed not to look at the monthly chart ok?
3. The D1 ascending trendline has been solidly broken
4. Price is dropping and creating speedbumps to the sell side on the D1 timeframe
5. These speedbumps are TAKING AWAY profir margin from the D1 demand area. It's basing before it reaches the level, that means, brand new sellers popping into the market
6. Price reaches a fresh D1 demand with the TL broken

You still want to buy in that D1 demand area on GBPAUD?
I am not going to buy there now, I can tell you that! Not now and never in the future whenever I see such an scenario!

You are possible confused for only reason maybe (I don't know exactly but I think it's this one reason). Have you taken your time to forward test these kind of levels and scenarios on a backtesting software like Forex Tester for weeks? (I am not making any kind of advertising, it's just that it's the only software I know capable of performing multiple timeframe forward testing)

I guess you haven't. If you haven't, you and everybody in here should. WHY? You have to see in order to believe.

1. If you live test the markets in demo or live mode, it will take you AGES to achieve and progress if you don't do it
2. You can forward test a whole year on H4 chart in a few hours. How long will it take you to forward test all this with your demo/live account in metatrader? Exactly a year

It's up to you, you decide Remember I have nothing against you or anybody, it's a recommendation that comes with the experience I've gained. I already did that job and I gained the experience and confidence to do what I am doing. It's now your turn and everybody else's over here. I can't force you into doing that, you decide!

Remember this is nothing personal, it's just the way your b***dy mind works! If you go against your nature, you are doomed to fail or enter into a neverending loop!

Alfonso

I am planning a new live webinar for this Friday 13th!

1. Date: Friday 13 th September 2013
2. Time: Right one hour before New York Session Open, from 1:00 PM - 3:00 PM CEST

*That is 1 hour before I normally organize them, I have a lunch with some friends on the beach and I can't miss that one

If you are interested in attending, please send me a private message or fill out the form at this link: http://eepurl.com/EVXLT
Those who have already joined one of the webinars before don't need to send me any email.

What will this webinar cover?

1. Speedbumps, more speedbumps. On lower and higher timeframes. They are key!
2. Used-up higher timeframe SD areas versus fresh areas
3. Swing H4 Live analysis based on the SD methodology. Let's plan next week ahead of time

If you have any losing or winning trades, have them ready because we can comment on those as well

Hope to see you there! Hope your trading is also improving a little bit! You are all doing a great job on the thread.
Alfonso

Fantastic. Thank you again Alfonso.

I always come out of these webinars better than I was before. They are excellent!

Hi Alfonso, ok with this post I think I really need to buy you dinner and beer You know I spent a few hours re reading your reply, going through your first page trading rules, and thinking a lot. It has really bothered me like an unsolved puzzle and kept me awake till 3am. Your reply to the GBPAUD discussion by the other guys didn't help either. I've understood and agreed with most of the points you stated in your reply to me and the others (trend line break, bull trap to weekly supply etc), but there is just one huge fundamental point which I don't get. I thought hard about how to best phrase my question, and I hope that the below charts will help convey my question well.







I understand that the above zones of interest are not valid for set and forget, nor are they valid for confirmation in the form of new zones being created. However, I don't understand why they are not valid for confirmation in the form of engulf patterns. They might not be original, but they are fresh. And in the case of EURNZD and CADCHF, we even have a very strong departure which means strong S/D imbalance is still present even though the zones are not original. In both cases, an opposing zone is taken out too.

I guess my whole confusion can be summed up in this question: When is confirmation in the form of engulf patterns not acceptable?

Btw I need to let you know that I really appreciate your detailed attention and attempt to reply to every question on this thread. I do not take it for granted and know that there are not many traders who are so generous and patient in their sharing. Really hope to be able to sort everything out soon and be able help others like what you are doing.

Hi Alfonso,

if price reaches a fresh, monthly supply level, would it be sufficient to wait for a confirmation trade on H4/H1 or must we wait for a confirmation on D1 (new, fresh supply level)? Exactly this happens right now on GBPJPY.

Hi thre!
First and foremost, sorry to have kept you awake till so late in the night. Hope you were accompanied by a good beer

I don't mind missing out a potential entry for one single reason. There are 25+ pairs to look at where I know I will have clearer entries! My ego has been subyugated

1. That D1 supply on CADCHF is a retest of previous areas which at the same are too much trading in the zone and spiky, they are all a reaction to each other, it's compressed supply
2. The D1 TL is still up and not broken
3. I want the H4 TL broken solidly as well as previous demand, that will confirm me that there are enough supply left in the zone

This is just the way I do things, not the unique way of doing things, just my way! May I be wrong? Yes, for sure. But it's logical and common sense to me and my lonely neuron left

EURNZD:

1. As you correctly pointed out, those zones are reaction to each other, not fresh. I am allowed to go long at non fresh zones when the trend on that timeframe is down or consolidating? You can answer yourself
2. We're dropping from higher timeframe supply aresa on EURNZD, do I want to go long at such an area of demand?
3. In order to go short, I need a brand new direction to the upside, 2 valleys allowing me a new trendline and with enough profit margin +4:1 to reach the opposing supply area

GBPAUD D1 DEMAND ZONE:

1. I don't mind missing out potential longs, no I don't Ego under control
2. BUT as you said, if those D1 speedbump supplies are taken out and I do have again a direction to go long, I will, but I will not go long at that D1 demand zone because it's too high in the D1 chart and too high in the monthly, bouncing off fresh Monthly supple zone, so I don't even think of going long there, I just skip that level, set an alert to be notified on my mobile when the D1 demand is broken, if that happens

It's always the same thing, I believe we just just need to ask ourselves the right questions AND remove your ego from the equation. That is, aren't or haven't there been CLEAR opportunities in the last days/weeks and months? Why bothering with entering on zones that are not that clear and low odds? Just look back in time at any pair, ain't I right?

For me the engulf patterns are only valid for confirmation IF the zone is valid for confirmation. If the zone is too used-up or compressed, I will not take into account any engulf or unengulf or superultra engulf pattern Hope that is clear! If the higher timeframe zone is not good for longs, why should I wait for a "lower timeframe" engulf demand pattern to confirm a used-up zone? It doesn't make sense to me, so that rule has long been deleted from my neuron's archives or my head will weight too much with so many baggage

Alfonso

Hi Oliver!
Just, that's more than enough. You are on a fresh monthly zone. You just sell all the valid supply levels that you mange to see and grab! That's what I always do. Because do we want to buy that high in the curve? BY NO MEANS! I just want to sell on ALL supply levels that I see. I won't wait for super ultra big imbalances there.

The purple H1 supply could be a valid supply level if previouis demand zone is taken out, right now it's not yet valid. It would also break the ascending H1 trendline. TL are not valid once a higher timeframe has been reached, BUT you can use them as a confirmation for more security.

Hope that helps!
Alfonso

Thanks for clearing that up Alfonso.