Supply and demand in a nutshell by Alfonso Moreno | Page 133 | Forex Factory

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Supply and demand in a nutshell by Alfonso Moreno

  • #2,641
  • Sep 18, 2013 12:21pm Sep 18, 2013 12:21pm
Quoting gembel
hii all.... try to use jing on chart.. here my POV on USDX and AUDUSD for tommorow FOMC news USDX {image} price to low on bigger TF demand (mostly used up) short sell not recommended right? AUDUSD {image} {image} {image} {image} risky short sell on AUDUSD H4 used demand....ofc with demo account and tight SL... joke2 away from SND analysis, maybe AU,EU bearish for tommorow (GU rally after MPC Official Bank Rate Votes news)
Hey Gembel,, don't know what side of this planet you're on but the FOMC news is in less than an hour and not tomorrow buddy, that's just a reminder so that you are prepared specially that your post is only just over an hour old
  • #2,642
  • Sep 18, 2013 12:26pm Sep 18, 2013 12:26pm
First of all, I can not thank enough Panoramia for his efforts provided and the time he gave to make this thread a real learning classroom,a place of reflexion, exchange and sharing of ideas, all in a climate of respect and a pleasant atmosphere .panoramia thank you for your patience, humility and commitment.
I confess that since I discovered the world of trading, I realized the following thing (maybe I'm wrong may not be,to be discussed):it is like a system that is composed of elements that interact trying to evolve while keeping a balance, but the tractions between its different elements often create situations of disequilibrium, knowing the activity that drives this system is none other than the sale / purchase which involves that situations of disequilibrium generated are none other than areas of supply and demand. In my head I could not understand why prices react a certain way once they hit a certain area, why sometimes a zone forms a barrier for price and sometimes it is crossed easily
when I found this thread and I started to read the first post,things became clearer (but not quite)so I count on you Mr Panoramia and all members to support me, I ask you to accept to help me because I will have a lot of questions
better be not enough salt than too much salt
  • #2,643
  • Sep 18, 2013 1:24pm Sep 18, 2013 1:24pm
Quoting bzzz
First of all, I can not thank enough Panoramia for his efforts provided and the time he gave to make this thread a real learning classroom,a place of reflexion, exchange and sharing of ideas, all in a climate of respect and a pleasant atmosphere .panoramia thank you for your patience, humility and commitment. I confess that since I discovered the world of trading, I realized the following thing (maybe I'm wrong may not be,to be discussed):it is like a system that is composed of elements that interact trying to evolve while keeping a balance, but...
This is the core aspect of every market. However the disequilibrium you mention cannot only be found at demand or supply zones. As long as price moves into one direction there is a disequilibrium. Otherwise prices would not move. Prices soar if demand exceeds demand and vice versa. This is valid for each move.
  • #2,644
  • Sep 18, 2013 2:47pm Sep 18, 2013 2:47pm
Quoting rolfw
{quote} This is the core aspect of every market. However the disequilibrium you mention cannot only be found at demand or supply zones. As long as price moves into one direction there is a disequilibrium. Otherwise prices would not move. Prices soar if demand exceeds demand and vice versa. This is valid for each move.
thank you sir for replying
that is why each supply/demand area needs an opposite supply/demand area to get back the lost equilibrium.
you've just described a stable equilibrium,i was referring to an unstable equilibrium
better be not enough salt than too much salt
  • #2,645
  • Sep 18, 2013 3:03pm Sep 18, 2013 3:03pm
I'm watching the charts and the news today and wanted some other people's opinions on what I'm thinking about. How much faith should be have in our zones for anything that the US Dollar is involved in? Basically the whole fundamental view of the Dollar has changed.
A woman drove me to drink, and I forgot to thank her
  • #2,646
  • Sep 18, 2013 3:10pm Sep 18, 2013 3:10pm
Quoting bzzz
{quote} thank you sir for replying that is why each supply/demand area needs an opposite supply/demand area to get back the lost equilibrium. you've just described a stable equilibrium,i was referring to an unstable equilibrium
A stable equilibrum means fixed prices. You find this in many markets such as cars, furniture etc. In spot markets there is most of the time no stable equilibrum. Demand/supply zones represent price points where market participants start/continue (depending on the type) buying or selling. If a point is reached where prices are at a level where participants find them too high, buying stops and selling overwhelms.
  • #2,647
  • Sep 18, 2013 3:52pm Sep 18, 2013 3:52pm
Quoting rolfw
{quote} A stable equilibrum means fixed prices. You find this in many markets such as cars, furniture etc. In spot markets there is most of the time no stable equilibrum. Demand/supply zones represent price points where market participants start/continue (depending on the type) buying or selling. If a point is reached where prices are at a level where participants find them too high, buying stops and selling overwhelms.
allow me to disagree,a stable equilibrium means a fixed gap prices,for example in a given time slot price can rise by x pips and fall by x pips so dx(gap) in this case equal to 0
better be not enough salt than too much salt
  • #2,648
  • Sep 18, 2013 4:05pm Sep 18, 2013 4:05pm
Quoting bzzz
First of all, I can not thank enough Panoramia for his efforts provided and the time he gave to make this thread a real learning classroom,a place of reflexion, exchange and sharing of ideas, all in a climate of respect and a pleasant atmosphere .panoramia thank you for your patience, humility and commitment. I confess that since I discovered the world of trading, I realized the following thing (maybe I'm wrong may not be,to be discussed):it is like a system that is composed of elements that interact trying to evolve while keeping a balance, but...
Thanks for your message and compliments Bzz! I am doing my best to help others. My views are not always correct, they are also part of the game's number!

You are welcome to ask any questions you want, me or others on the thread will be glad to help you, I hope so
Alfonso
Set and Forget supply and demand trading community
  • #2,649
  • Sep 18, 2013 4:11pm Sep 18, 2013 4:11pm
I just hope you didn't trade the FOMC, that's big impact news! As per my rules, described in detailed on Post #1, I am not allowed to plan any trade near FOMC news, so that's what I did. Good because the BRENT short Ivan had spotted, which I loved, would have been a loss. My EA was disconnected so no triggers! News can produce lots of pips but it can also take out good zones like butter and change market dynamics.

Maybe you love news, I don't. No matter what others say out there about not taking into account news when trading SD, just look and see it by yourself. Knowing that, I just avoid big impact news because things like today's happen! Just have a look at the charts, the markets dynamics have changed. A few priviledged companies in the world already knew what the FED was going to announce of couse, they were positioned already there. Novices gave the professionals the liquidity they needed and you know the rest!

I stick to my rules as far as news trading is related, they have saved me from a few losses for sure! Hope you did the same, rules are rules.

Still riding gbpjpy and cadjpy short, as well as audnzd long. I movd SL to BE on eurjpy because it was an euro pair, it's normally more affected than the other pairs during FOMC news. Let's see what the market brings during the next hours. There are many new tradeable levels now, this is the good thing about news, you just wait and now after the stom comes the calm and brand new levels.

Alfonso
Set and Forget supply and demand trading community
  • #2,650
  • Sep 18, 2013 4:16pm Sep 18, 2013 4:16pm
Quoting simpleguy
I'm watching the charts and the news today and wanted some other people's opinions on what I'm thinking about. How much faith should be have in our zones for anything that the US Dollar is involved in? Basically the whole fundamental view of the Dollar has changed.
Hello, may I ask .... Changed from what to what ?

Since February E/U has traded in a range from 1.3500 down to 1.2750. Now price is back at the top of the range. Also check the Wkly candles back to
Nov 2009. Note that price is currently at the mid point of that H to L.
  • #2,651
  • Sep 18, 2013 4:31pm Sep 18, 2013 4:31pm
Quoting panoramia
{quote} Thanks for your message and compliments Bzz! I am doing my best to help others. My views are not always correct, they are also part of the game's number! You are welcome to ask any questions you want, me or others on the thread will be glad to help you, I hope so Alfonso
believe me i meant every word i said Panoramia.
from the last few posts that i read,i noticed that everyone is using the same way to draw dem/sup areas but i can not find the indi they are using,so is there a link where i can download it?i am using one that is quite good but the levels are a little bit different from yours
better be not enough salt than too much salt
  • #2,652
  • Sep 18, 2013 4:34pm Sep 18, 2013 4:34pm
Quoting bzzz
{quote} believe me i meant every word i said Panoramia. from the last few posts that i read,i noticed that everyone is using the same way to draw dem/sup areas but i can not find the indi they are using,so is there a link where i can download it?i am using one that is quite good but the levels are a little bit different from yours
Thanks again Bzzz!
You can download ALL indicators from Post #1. Go to the end of post #1 on first page and download the indicators.zip. All is there
Alfonso
Set and Forget supply and demand trading community
  • #2,653
  • Sep 18, 2013 4:36pm Sep 18, 2013 4:36pm
Quoting Myst1z
{quote} Hi ar58, I'm not Alfonso but I figured I'll try to ease his load by helping to answer questions if I can. That way he can just chip in to correct/add any further analysis that I left out or got wrong. Here are some points: Your monthly supply is drawn a tad too low. I've drawn mine in the chart below. According to this chart we're close but not yet in monthly supply. You drew your weekly supply correctly though. {image} I'm not sure how you derived your Daily supply, but in my chart we're not in any Daily supply yet: {image} Based on the...
Thank you very much Mist1z for your comments..points taken on board.
  • #2,654
  • Sep 18, 2013 4:48pm Sep 18, 2013 4:48pm
Hi alphonso or anyone,
would you consider gaps (up/down) as supply demand imbalance and if so how do you draw the zone?

many thanks
  • #2,655
  • Edited 5:38pm Sep 18, 2013 4:55pm | Edited 5:38pm
Quoting Gxp1
Hi alphonso or anyone, would you consider gaps (up/down) as supply demand imbalance and if so how do you draw the zone? many thanks
Gaps are great, up or down. But you need to make a distinction between professional versus novice gaps.

  1. Professional gap: a gap away from higher timeframe's SD areas
  2. Novice gap: a gap into higher timeframe's SD areas. That, a gap buying into supply or a gap selling into demand

If you find a gap, your entry should be at the level above/below the gap. For a demand area, locate the level underneath.
Trade always against the novice gaps!

Hope that's clear!
Alfonso

Set and Forget supply and demand trading community
  • #2,656
  • Sep 18, 2013 5:03pm Sep 18, 2013 5:03pm
Quoting panoramia
{quote} Gaps are great, up or down. But you need to make a distinction between professional versus novice gaps. Professional gap: a gap away from higher timeframe's SD areas Novice gap: a gap into higher timeframe's SD areas. That, a gap buying into supply or a gap selling into demandIf you find a gap, your entry should be at the level above/below the gap. For a demand area, locate the level underneath. Hope that's clear! Alfonso

  • #2,657
  • Sep 18, 2013 5:06pm Sep 18, 2013 5:06pm
Planning some long trades on the CFD indexes I track, hopefully my EA is fixed for indexes. Will learn it soon

Planning H4 longs on S&P 500 e-mini H4, Nasdaq e-mini H4 and Russell 2000 H1 (H4 level is too much, no RR).
Alfonso
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Set and Forget supply and demand trading community
  • #2,658
  • Sep 18, 2013 6:47pm Sep 18, 2013 6:47pm
lol..
wrong time convert to my time..
actually FOMC release at midnite my local time...
i thought it would be tonight,,,,
AUDUSD hit SL...
alsoo hit trigger my buy limit....

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  • #2,659
  • Sep 18, 2013 7:21pm Sep 18, 2013 7:21pm
Quoting panoramia
I just hope you didn't trade the FOMC, that's big impact news! As per my rules, described in detailed on Post #1, I am not allowed to plan any trade near FOMC news, so that's what I did. Good because the BRENT short Ivan had spotted, which I loved, would have been a loss. My EA was disconnected so no triggers! News can produce lots of pips but it can also take out good zones like butter and change market dynamics. Maybe you love news, I don't. No matter what others say out there about not taking into account news when trading SD, just look and see...
Alas I forgot the news would hit Brent too, so took a loss on this and also on AUDNZD (Btw I noticed many setups have failed on this difficult pair, about to remove it from my tradable list ). FOMC has created new zones on many pairs and I was just scanning through for the best ones. Not sure if its just me but it seems most of the pairs are too high/low on the curve and near to opposing levels. Ended up with only 2 pairs for consideration besides the indices that you pointed out. Comments are welcome!

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  • #2,660
  • Sep 18, 2013 7:22pm Sep 18, 2013 7:22pm
Is anyone else watching GBPNZD for a long trade... low, low, low in the W and D curves...

Weekly (prox right at 9300) we are at a lovely DBR zone which was fresh and original (that big long blue bar wall stops the look left to make it original IMHO)...

Daily again we are at a lovely demand base that was fresh and original and is within (at the bottom) of the weekly zone...

Not sure how I will play this as I missed the touch trade so will I wait for confirmation or perhaps hope for a break of the weekly proximal and a re-test... HMM so many decisions.

With those 3 straight strong looking upbars to the left on the Daily and the last mostly compressive move back down just full of upper wicks removing demand I see no real demand until at least 9650 so a long should work well from here. Yes there is a stacking of demand zones so they may want lower prices but this highest fresh zone had one of the strongest moves away and engulfed various supplies on the way up so this FTB should see a buyers reaction.

Also not surprised that we had a sell off after pushing a little higher above that super round 2.0000 level...

Let's see what happens from here.
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