Supply and demand in a nutshell by Alfonso Moreno | Page 117 | Forex Factory

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Supply and demand in a nutshell by Alfonso Moreno

  • #2,321
  • Sep 12, 2013 1:49pm Sep 12, 2013 1:49pm
Hi Alfonso!

Do you ever close a trade based on candle formation, chart pattern or slowing down of the movement? Or only at locations (sd zones)?

Oliver
  • #2,322
  • Sep 12, 2013 2:27pm Sep 12, 2013 2:27pm
if ff closes this thread or panoramia gets banned i will go away from this forum and move to other forums...

thanks alfonso for all your hard work!! i can't say that enough!! a light here on ff!
  • #2,323
  • Sep 12, 2013 2:53pm Sep 12, 2013 2:53pm
Quoting Olarion1975
Hi Alfonso! Do you ever close a trade based on candle formation, chart pattern or slowing down of the movement? Or only at locations (sd zones)? Oliver
Hi Oliver,
So far I have no rules for closing a trade based on candle formations for one single reason... I am not in front of the charts. I set my trades, and I forget about them. Since I am not in front of my computer, how am I going to see if there are candle formations?

The only thing is that if I log in my VPS and I see that my trade has been holding the same area for 2 days doing nothing, I will re-analyze and I might decide to close it and move my SL to BE and see what happens. Nothing else!

The whole purpose of the way I trade is "set it & forget it". What will probably happen if you look at the candle formations while the trade is running? You will intervene and change the outcome by moving the SL to BE to soon, closing it too early, etc. Pre-plan a trade, let it run, and that's all.

Alfonso
Set and Forget supply and demand trading community
  • #2,324
  • Sep 12, 2013 3:25pm Sep 12, 2013 3:25pm
Quoting Forex Lion
possible short entry on H4 GBP/NZD, see yellow arrow {image}?
Quoting Osman
{quote} Be careful with that short.. we are entering a a daily demand that broke the previous high (pink line), ill be looking more for longs than shorts. We are also very low in the weekly curve. Dont forget that sometimes prices rebounds when entering a daily/weekly level without touching the 4hr demand levels in this case. Hope it helps. Os. {image}
I agree with your view Os, aka as canarión (I am saying this because he's also spanish and he's got a special accent

What I was saying is that on that GBPNZD we're just too low in the curve, selling is not allowed as per the rules. You can take the risk for sure, but the odds are not with you.

Let me ask you a question Peter. The whole idea of swing trading is to try and catch the moves as soon as possible because we're trying to get the most out of it, expecting it to become a good runner, isn't it? Are we expecting on this GBPNZD short to be a big runner with the higher timeframe demand so close now? No, we're not. That H4 short looks like a good setup though, IF price does not drop lower and gets closer to that H4 demand, but the WK demand is too close as well, as per the charts I've seen. I haven't run my MT since this morning when I left, will do in the morning and see what's going on.

I am just saying that we should get the habit to try and catch the trades as high as possible to have swing shorts, and as low as possible to have swing longs. When price is over-extended in a chart and close to HTF curve, we don't have all odds with us.

We all must learn to identify if we are too low or too high and have the guts and the calm to pass on a trade which is too low or too high.
WHY? Look at all the pairs, the opportunities abound over and over! They are all calling us. But we just want to trade when we open a chart, that's the problem!

We must learn to say no, unless she is a really good looking woman
Alfonso
Set and Forget supply and demand trading community
  • #2,325
  • Sep 12, 2013 3:30pm Sep 12, 2013 3:30pm
Stopped out on a EURJPY short.

I am now back to my original drawdown again. When I have multiple losses in a row, I get extremely depressed.

I need to control my emotions and keep going.


I was stopped out on CADJPY due to news and spread widening.

Stopped out on EURJPY because price went through a supply zone on the 1H and hit my SL.
  • #2,326
  • Sep 12, 2013 3:35pm Sep 12, 2013 3:35pm
Quoting Axlz
Stopped out on a EURJPY short. I am now back to my original drawdown again. When I have multiple losses in a row, I get extremely depressed. I need to control my emotions and keep going. I was stopped out on CADJPY due to news and spread widening. Stopped out on EURJPY because price went through a supply zone on the 1H and hit my SL.
Sorry to hear that Samir... I haven't open my charts for almost 12 hours so I don't know what's going on now with the Yen pairs! We'll look at them tomorrow on the webinar if that's fine with you. I took the day off more or less today and I will do the same tomorrow after the webinar.

Having success in trading depends mostly on how you manage your emotions and your money. That can't be done in 1 month or 6 months. Most traders will never make it, so be patient and stay calmed! This is not a 100 meters hurdles race, it's a 100 km marathon with hardles every 100 meters, the hurdles being placed by yourself and you don't even realize!

No more psychology for today!
Hope to you on the webinar tomorrow!

Alfonso
Set and Forget supply and demand trading community
  • #2,327
  • Sep 12, 2013 3:44pm Sep 12, 2013 3:44pm
Quoting panoramia
{quote} Sorry to hear that Samir... I haven't open my charts for almost 12 hours so I don't know what's going on now with the Yen pairs! We'll look at them tomorrow on the webinar if that's fine with you. I took the day off more or less today and I will do the same tomorrow after the webinar. Having success in trading depends mostly on how you manage your emotions and your money. That can't be done in 1 month or 6 months. Most traders will never make it, so be patient and stay calmed! This is not a 100 meters hurdles race, it's a 100 km marathon...
Thanks Alfonso. I will see you during the webinar.
  • #2,328
  • Sep 12, 2013 3:52pm Sep 12, 2013 3:52pm
AUDCAD 1H:

Price bounced off of 4H demand zone in control and created new 1H demand. Time to go long?

Attached Image (click to enlarge)
Click to Enlarge Name: audcad.png Size: 44 KB
  • #2,329
  • Edited 4:20pm Sep 12, 2013 4:09pm | Edited 4:20pm
Quoting Axlz
AUDCAD 1H: Price bounced off of 4H demand zone in control and created new 1H demand. Time to go long? {image}
As far as I remember Samir, the aussie pairs were dropping from higher timeframe supply, I think that the Weekly supply. I am just basing my analysis on what you are showing me, the D1 demand is much lower.

Price has not reached the opposing higher timeframe demand, so there is no way to look for a confirmation to go long. Confirmation trades are ONLY traded when price reaches a higher timeframe area, not in the middle of the curve. I don't see your D1 demand but I believe it's much lower, so as per the rules there is no long trade, price is bouncing of HTF supply and has not reached an opposing higher timeframe demand.

H4 is not considered a higher timeframe, it's only D1 and above timeframes.

Alfonso
Set and Forget supply and demand trading community
  • #2,330
  • Sep 12, 2013 4:13pm Sep 12, 2013 4:13pm
Thanks for your fast reply, Alfonso.

There is one (simple ?) question that bothers me very much. I watched all webinars a few times and also read the whole thread, but somehow I cannot find the answer:

For example:
If there is a non-fresh H4 level inside a fresh D1 level (demand) and price comes into this sd zone for the first time, what would you do:

1. Ignore the non-fresh H4 level completely -> look for other orgininal & fresh H4 levels inside the fresh D1 level OR confirmation trade (brand new supply H4/H1 supply levels)

OR

2. Confirmation trade on the non-fresh H4 level (brand new supply forming on H1 or H4 at the non-fresh level)

I hope my question makes sense for you.

Oliver
  • #2,331
  • Sep 12, 2013 4:17pm Sep 12, 2013 4:17pm
Quoting panoramia
{quote} As far as I remember Samir, the aussie pairs were dropping from higher timeframe supply, I think that the Weekly supply. I am just basing my analysis on what you are showing me, the D1 demand is much lower. Price has not reached the opposing higher timeframe demand, so there is no way to look for a confirmation to go long. Confirmation trades are ONLY traded when price reaches a higher timeframe area, not in the middle of the curve. I don't see your D1 demand but I believe it's much lower, so as per the rules there is no long trade, price...
Thank you! That was going to be my next question:

"Does H4 count as HTF demand/supply?"

I have my answer now. Thanks!
  • #2,332
  • Sep 12, 2013 4:22pm Sep 12, 2013 4:22pm
...and a second simple question about set & forget in general, that I think about a lot:

In post #1 you wrote:

When to set & forget?

  1. Use only fresh levels of supply of demand when the market is trending. The first pullback is the safest and has the highest odds of working out
  2. Use original AND fresh levels if you want to go counter-trend. Make sure your trade has a proper location. Location is key, that is, your trade should be located very high in the curve for selling and very low in the curve for buying

Does this mean, we should only take set & forget trades at the higher TF / inside the higher TF area?
Or can we also take set & forget trades in the lower/upper 30% range of the entry TF?

  • #2,333
  • Sep 12, 2013 4:27pm Sep 12, 2013 4:27pm
Quoting Olarion1975
Thanks for your fast reply, Alfonso. For example: If there is a non-fresh H4 level inside a fresh D1 level (demand) and price comes into this sd zone for the first time, what would you do: 1. Ignore the non-fresh H4 level completely -> look for other orgininal & fresh H4 levels inside the fresh D1 level OR confirmation trade (brand new supply H4/H1 supply levels) OR 2. Confirmation trade on the non-fresh H4 level (brand new supply forming on H1 or H4 at the non-fresh level) I hope my question makes sense for you. Oliver
You are welcome Oliver! I am not that fast always on everything I must say
Let me answer your question, also quickly because the rule is clear about it:

  1. If you have a non-fresh H4 demand area at a fresh D1 demand area, the H4 can't be used for set & forget, since the nature of the set & forget always requires a fresh level, first pullbacks has always the higher odds, I believe all SD trades agree on this point
  2. I will wait for a confirmation trade at that H4 area or lower, wherever it happens. Remember we are within a D1 demand zone and a D1 zone can be big and levels sometimes overshoot to see them going our way. So fresh is always the best option, confirmation if non-fresh
  3. If the lower timeframe demand level within the D1 demand level is used-up or too much trading in the zone, I will not look for a confirmation trade. I will wait for previous opposing supply and trendline to be solidly broken

Hope that makes sense Oliver! It's so many small nuances, but it's always the same, price is fractal.
Alfonso

Set and Forget supply and demand trading community
  • #2,334
  • Sep 12, 2013 4:34pm Sep 12, 2013 4:34pm
Quoting Olarion1975
...and a second simple question about set & forget in general, that I think about a lot: In post #1 you wrote: When to set & forget? Use only fresh levels of supply of demand when the market is trending. The first pullback is the safest and has the highest odds of working out Use original AND fresh levels if you want to go counter-trend. Make sure your trade has a proper location. Location is key, that is, your trade should be located very high in the curve for selling and very low in the curve for buyingDoes this mean,...
No Oliver! You can set & forget lower and higher in the curve if the entry timeframe's trend is being respected and lots of room to opposing higher timeframe zone.
In that Post on page 1 I was referring to "Counter-Trend", we will only trade at original and fresh areas on D1 and higher timeframes, so we will only set & forget wihtin those higher timeframes when we want to counter-trend!

Alfonso
Set and Forget supply and demand trading community
  • #2,335
  • Sep 12, 2013 4:37pm Sep 12, 2013 4:37pm
Quoting panoramia
{quote} You are welcome Oliver! I am not that fast always on everything I must say Let me answer your question, also quickly because the rule is clear about it: If you have a non-fresh H4 demand area at a fresh D1 demand area, the H4 can't be used for set & forget, since the nature of the set & forget always requires a fresh level, first pullbacks has always the higher odds, I believe all SD trades agree on this point I will wait for a confirmation trade at that H4 area or lower, wherever it happens....
Ok, thank you. This was another important piece in my s&d puzzle.

One question about your answer: Did you not mean original levels (instead of fresh levels) for set & forget trades in your highlighted answer?
  • #2,336
  • Sep 12, 2013 4:41pm Sep 12, 2013 4:41pm
Quoting Olarion1975
{quote} Ok, thank you. This was another important piece in my s&d puzzle. One question about your answer: Did you not mean original levels (instead of fresh levels) for set & forget trades in your highlighted answer?
Nope, it needs not to be original....

Imagine this scenario... it's what I call a sequence and others call it the triple screen something I think maybe...

  1. Weekly is up and strong
  2. D1 is up and strong and we have a nice D1 demand area, Trendline is even being respected on the D1 chart, ok?
  3. The H4 is down, dropping like a rock into fresh and original D1 demand area
  4. There is a fresh (not original) H4 swing low (valley) level with a great departure right at the D1 demand proximal line

What would you do? Telling you this because this is a very common scenario.
Alfonso

Set and Forget supply and demand trading community
  • #2,337
  • Sep 12, 2013 4:47pm Sep 12, 2013 4:47pm
Quoting panoramia
{quote} Nope, it needs not to be original.... Imagine this scenario... it's what I call a sequence and others call it the triple screen something I think maybe... Weekly is up and strong D1 is up and strong and we have a nice D1 demand area, Trendline is even being respected on the D1 chart, ok? The H4 is down, dropping like a rock into fresh and original D1 demand area There is a fresh (not original) H4 swing low (valley) level with a great departure right at the D1 demand proximal lineWhat would you do? Telling you this because this is a very...
Ok, this makes perfect sense.
There are so many small nuances that have to be burned into my old brain. Thanks for helping me with that by writing such logical examples.
  • #2,338
  • Sep 12, 2013 4:52pm Sep 12, 2013 4:52pm
Quoting panoramia
{quote} No Oliver! You can set & forget lower and higher in the curve if the entry timeframe's trend is being respected and lots of room to opposing higher timeframe zone. In that Post on page 1 I was referring to "Counter-Trend", we will only trade at original and fresh areas on D1 and higher timeframes, so we will only set & forget wihtin those higher timeframes when we want to counter-trend! Alfonso
Thank you, Alfonso. This confirms what I thought about it. Makes perefect sense, as always.
  • #2,339
  • Sep 12, 2013 4:54pm Sep 12, 2013 4:54pm
Quoting Olarion1975
{quote} Ok, this makes perfect sense. There are so many small nuances that have to be burned into my old brain. Thanks for helping me with that by writing such logical examples.
It all may seem too complex, but it's not. But it all comes down to the same rules over and over

  1. Trade only fresh levels when you are in a trending market and room to opposing higher timeframe area
  2. Trade original AND fresh levels at higher timeframes areas if you want to go counter trend
  3. Do not trade non-fresh levels on set & forget
  4. Wait for confirmation always at higher timeframe areas if they are fresh, original and/or fresh (set and forget as well here), or not used-up. Higher timeframe areas are D1, Weekly and Monthly
  5. Wait for confirmation and trendline break if the higher timeframe level is not fresh and not used up (more than 2 retests)
  6. If a higher timeframe area is used-up, that is, 2 or more retests, neither trade it on confirmation nor on set & forget, pass on it

Learn those rules by heart and apply them, ONLY if they make sense and are logical to you! Else, don't use them!
Alfonso

Set and Forget supply and demand trading community
  • #2,340
  • Sep 12, 2013 5:00pm Sep 12, 2013 5:00pm
Quoting panoramia
{quote} It all may seem too complex, but it's not. But it all comes down to the same rules over and over Trade only fresh levels when you are in a trending market and room to opposing higher timeframe area Trade original AND fresh levels at higher timeframes areas if you want to go counter trend Do not trade non-fresh levels on set & forget Wait for confirmation always at higher timeframe areas if they are fresh, original and/or fresh (set and forget as well here), or not used-up. Higher timeframe areas are D1, Weekly and Monthly If a higher timeframe...

Hold on, I thought we could trade on confirmation if a HTF level is not fresh? Waiting for TL break and opposing areas violated?
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