Supply and demand in a nutshell by Alfonso Moreno | Page 128 | Forex Factory

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Supply and demand in a nutshell by Alfonso Moreno

  • #2,541
  • Sep 16, 2013 5:17am Sep 16, 2013 5:17am
Quoting Myst1z
{quote} Hi Alfonso, thanks for the AJ analysis it makes sense! However I got a question - You mentioned that the H4 supply isn't valid because it didn't remove any previous demand. But in the chart below I've marked out a zone which seems to qualify as demand to me, albeit a weak one. Would you not consider that as demand that has been removed? {image} And that reminded me of another question which I forgot to ask you. Regarding your Fri's USDCHF trade, why didn't you consider the level I marked below as supply? In fact I almost shorted that level...
Take a look at my screenshots Ivan. It explains my rationale. I am adding a new idea there, Fractal Lows/Highs (it's an indicator that it's part of my template on post #1) being absorbed... I will cover this on a new video soon and possibly next webinar.

The screenshots explain it in more detail.
Alfonso
Attached Image(s) (click to enlarge)
Click to Enlarge Name: Screenshot1.png Size: 165 KB
Click to Enlarge Name: Screenshot2.png Size: 104 KB
Set and Forget supply and demand trading community
  • #2,542
  • Sep 16, 2013 6:36am Sep 16, 2013 6:36am
Quoting panoramia
{quote} Take a look at my screenshots Ivan. It explains my rationale. I am adding a new idea there, Fractal Lows/Highs (it's an indicator that it's part of my template on post #1) being absorbed... I will cover this on a new video soon and possibly next webinar. The screenshots explain it in more detail. Alfonso {image} {image}
Hi Alfonso!

Does that mean: A takeout of a supply/demand zone needs a candle close below the zone? I thought we only need the high/low of the candles above/below the level for taking it out...

In your screenshot you say the supply is not valid, because it did not close below the fractal.

Oliver
  • #2,543
  • Sep 16, 2013 6:42am Sep 16, 2013 6:42am
Quoting Olarion1975
{quote} Hi Alfonso! Does that mean: A takeout of a supply/demand zone needs a candle close below the zone? I thought we only need the high/low of the candles above/below the level for taking it out... Oliver
No no Oliver, that's why I said that I would explain it on anther video.... Absorption is needed, closing above/below is "optional", I only use the closing IF there is not such a big imbalanced on the zones like the usdchf example. My trade was on the speedbump because it's the one that took out previous demand and closed below. The one Ivan was pointing out had not a nice imbalance and didn't close. So I always take the clearer one.

But don't get confused, the rules are still the same.. I mentioned it that it could be confusing, don't start thinking over that too much or you will have to reset your brain by turning your ear 3 times

Alfonso
Set and Forget supply and demand trading community
  • #2,544
  • Sep 16, 2013 6:47am Sep 16, 2013 6:47am
Quoting panoramia
{quote} No no Oliver, that's why I said that I would explain it on anther video.... Absorption is needed, closing above/below is "optional", I only use the closing IF there is not such a big imbalanced on the zones like the usdchf example. My trade was on the speedbump because it's the one that took out previous demand and closed below. The one Ivan was pointing out had not a nice imbalance and didn't close. So I always take the clearer one. But don't get confused, the rules are still the same.. I mentioned it that it could be confusing, don't...
Thank you, Alfonso. That explains it.
My ear hurts after your suggestion, I think I turn it into the other direction now.
  • #2,545
  • Sep 16, 2013 7:23am Sep 16, 2013 7:23am
Hi Alfonso,

i wonder why didnt u take into account the broken TL on USD/JPY pair on H4 ( entry tf) ?
Also, on my platform it looks like a minor speed bump( with a gap,original and fresh ), but i dont see it on the other platforms ?

Tnx !
Marko
Attached Image (click to enlarge)
Click to Enlarge Name: Chart_USD_JPY_4 Hours_snapshot.png Size: 66 KB
  • #2,546
  • Edited 8:09am Sep 16, 2013 7:25am | Edited 8:09am
Quoting Nametaker
{quote} I would not trade at that level maybe the one below has greater validity. {image}
Hello Nametaker,

If you're referring to the highlighted zone, that is also that one to which I was referring to.



Also, valid H4 zone to go short on CADCHF, but its not good enough R:R for me to take it. Too close to Daily demand speedbump.

EDIT: Apologies. It was CADCHF, NOT GBPCHF.
  • #2,547
  • Sep 16, 2013 7:40am Sep 16, 2013 7:40am
Quoting markot
Hi Alfonso, i wonder why didnt u take into account the broken TL on USD/JPY pair on H4 ( entry tf) ? Also, on my platform it looks like a minor speed bump( with a gap,original and fresh ), but i dont see it on the other platforms ? Tnx ! Marko {image}
Hi Marko!
I had that H4 ascending trendline on USDJPY H4 as well, which is solidly broken. A valid H4 speedbump of 7 pips is on my UJ H4 chart, but D1 demand is too close, almost hit on mine. Speedbumps are not that high odds when we are so close to opposing D1 demand area. My trade would be at the peak, the extreme price that caused price to remove previous lows.

Off to lunch and the beach! Break time! Hope you all get some nice pips today, even though it's Monday

Alfonso
Set and Forget supply and demand trading community
  • #2,548
  • Sep 16, 2013 9:01am Sep 16, 2013 9:01am
Quoting panoramia
{quote} Hi Robert! That D1 area is too much trading in the zone, wicky, not an OBVIOUS valley, it's a meadow with lots of spiky bushes You need 2 OBVIOUS valleys or peaks to connect a trendline. Alfonso {image}
Thanks Alfonso for the clarification, like I said, I learned the rules, and I understand them, now it's time to learn to apply them properly, I bought Forex Tester 2 to help me speed up my learning curve.
  • #2,549
  • Sep 16, 2013 9:38am Sep 16, 2013 9:38am
Quoting panoramia
{quote} Take a look at my screenshots Ivan. It explains my rationale. I am adding a new idea there, Fractal Lows/Highs (it's an indicator that it's part of my template on post #1) being absorbed... I will cover this on a new video soon and possibly next webinar. The screenshots explain it in more detail. Alfonso {image} {image}
Hi Alfonso, thanx for ur points I think I get your rationale. Though I must admit the USDCHF still kinda bothers me because I thought that if price is trending nicely we don't need strong imbalance or price closing above/below fractal high/low to take a trade. A good example would be the recent EURUSD H4 long trade you covered in the last webinar.

Attached Image (click to enlarge)
Click to Enlarge Name: EURUSD.png Size: 34 KB


For the USDCHF trade, it seems like you were ignoring a weak lower supply zone to go short at a higher strong supply zone. I've tried to replicate the scenario on the drawing below.

Attached Image


So my point is, even though supply 2 is weak, according to rules shouldn't it also be a valid short because in a downtrend we don't need strong imbalance or price closing below fractal low? Hope you don't mind my questions, am learning a lot from your replies!
  • #2,550
  • Sep 16, 2013 9:51am Sep 16, 2013 9:51am
Quoting asim.iqbal
Trade for JPY. {image}

Got In again!
Attached Image(s) (click to enlarge)
Click to Enlarge Name: JPY.PNG Size: 29 KB
Click to Enlarge Name: Gold.PNG Size: 28 KB
Price Is The Best Indicator Itself.
  • #2,551
  • Sep 16, 2013 9:54am Sep 16, 2013 9:54am
Quoting Myst1z
{quote} Hi Alfonso, thanx for ur points I think I get your rationale. Though I must admit the USDCHF still kinda bothers me because I thought that if price is trending nicely we don't need strong imbalance or price closing above/below fractal high/low to take a trade. A good example would be the recent EURUSD H4 long trade you covered in the last webinar.
I'm also curious about this Alfonso.

In the webinar you explained that the new fractal high, which Myst1z pointed out, made it higher by 1 pip and this was enough for you to validate that demand zone and take the long trade there on a pullback. Now you say price has to CLOSE above the fractal high, not just violate it. OR is it just a personal choice of an aggressive (violate it) or a more conservative (close above it) entry?
  • #2,552
  • Sep 16, 2013 1:55pm Sep 16, 2013 1:55pm
What do you think about cadjpy short h4? Trend down, daily used up zone.
Attached Image(s) (click to enlarge)
Click to Enlarge Name: d1.png Size: 171 KB
Click to Enlarge Name: h4.png Size: 164 KB
  • #2,553
  • Sep 16, 2013 2:43pm Sep 16, 2013 2:43pm
Quoting bobyv87
What do you think about cadjpy short h4? Trend down, daily used up zone. {image} {image}

Daily continuation pattern demand right below you. Too close for longs imo.
  • #2,554
  • Sep 16, 2013 3:53pm Sep 16, 2013 3:53pm
Quoting Axlz
{quote} Daily continuation pattern demand right below you. Too close for longs imo.

Yes, but daily demand wasn't touched yet!
  • #2,555
  • Sep 16, 2013 5:26pm Sep 16, 2013 5:26pm
Quoting Myst1z
{quote} Hi Alfonso, thanx for ur points I think I get your rationale. Though I must admit the USDCHF still kinda bothers me because I thought that if price is trending nicely we don't need strong imbalance or price closing above/below fractal high/low to take a trade. A good example would be the recent EURUSD H4 long trade you covered in the last webinar. {image} For the USDCHF trade, it seems like you were ignoring a weak lower supply zone to go short at a higher strong supply zone. I've tried to replicate the scenario on the drawing below. {image}...
Hi Ivan!
The EURUSD long and USDCHF short were trades where I used the rules like always, but "sometimes" you just look at candles, departure, what it does, how it breaks/closes and it's like "I want to sell higher and not there". It's not 1+1. I am trying to come up with a fix rule for those cases, the Fractals (bill williams) work pretty well as a mechanical way of doing things, I use it as part of my main arsenal to filter out levels. I am backtesting to decide if I want a close below/above a fractal swing or just a break of the fractal swing...

Alfonso
Set and Forget supply and demand trading community
  • #2,556
  • Sep 16, 2013 5:29pm Sep 16, 2013 5:29pm
Quoting Ranagol
{quote} I'm also curious about this Alfonso. In the webinar you explained that the new fractal high, which Myst1z pointed out, made it higher by 1 pip and this was enough for you to validate that demand zone and take the long trade there on a pullback. Now you say price has to CLOSE above the fractal high, not just violate it. OR is it just a personal choice of an aggressive (violate it) or a more conservative (close above it) entry?
Yes, but when I have level on top of level, I normally go for the furthest away in price for higher odds... Like I said in Ivan's reply, it's something I am working on, I do take all valid levels but when there are some of them stacked on top of each other (level on top of level) and the trend is valid for all, the furthest away from price is normally higher odds. But we'll see many more examples like this that we'll comment upon.

Alfonso
Set and Forget supply and demand trading community
  • #2,557
  • Sep 16, 2013 5:32pm Sep 16, 2013 5:32pm
Quoting asim.iqbal
{quote} Got In again! {image} {image}
Hi Asim
This is Alfonso from the SUpply and Demand thread. You've posted a couple of posts where no supply/demand analysis was posted, no levels painted, no explanation of why you too the trade, no multiple timeframe analysis. We need you to explain all that if you post a trade. A plain chart with nothing is not welcome, it is useless for all of us.

Please, don't take it wrong. But only trades following the methodolgoy and fully explained are welcome on the thread!
Alfonso
Set and Forget supply and demand trading community
  • #2,558
  • Sep 16, 2013 6:56pm Sep 16, 2013 6:56pm
Hello Alfonso and fellow traders..I am new to all this but very keen to learn and would appreciate your comments etc. Thank you.

Please find here my first humble attempt at trying to identify trades what do you guys think,
Attached Image (click to enlarge)
Click to Enlarge Name: USD (DFB) audusd 00.45 17.09.png Size: 22 KB
Attached Image (click to enlarge)
Click to Enlarge Name: USD (DFB)audusd 00.45 daily 17.09.png Size: 24 KB
I would very much welcome your views.
  • #2,559
  • Edited 9:18pm Sep 16, 2013 9:03pm | Edited 9:18pm
Quoting ar58
Hello Alfonso and fellow traders..I am new to all this but very keen to learn and would appreciate your comments etc. Thank you. Please find here my first humble attempt at trying to identify trades what do you guys think,{image}{image} I would very much welcome your views.
Hi ar58, welcome to the thread! I'm still learning so don't take my word for it, but here is my opinion:

Attached Image (click to enlarge)
Click to Enlarge Name: AUDUSD.png Size: 64 KB


Alfonso do correct me if I'm wrong!
  • #2,560
  • Sep 16, 2013 9:05pm Sep 16, 2013 9:05pm
Quoting panoramia
{quote} Hi Ivan! The EURUSD long and USDCHF short were trades where I used the rules like always, but "sometimes" you just look at candles, departure, what it does, how it breaks/closes and it's like "I want to sell higher and not there". It's not 1+1. I am trying to come up with a fix rule for those cases, the Fractals (bill williams) work pretty well as a mechanical way of doing things, I use it as part of my main arsenal to filter out levels. I am backtesting to decide if I want a close below/above a fractal swing or just a break of the fractal...
Ah ok got it! Right this discretionary factor is something that I need more experience with, somehow feel quite a few of my losses are due to similar scenarios. Thanks and looking forward to your Fractals video!
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