Supply and demand in a nutshell by Alfonso Moreno | Page 135 | Forex Factory

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Supply and demand in a nutshell by Alfonso Moreno

  • #2,681
  • Sep 19, 2013 5:03am Sep 19, 2013 5:03am
Price pull back from GBPCHF weekly fresh supply. it is absorbing previous daily demand. At 4hour chart trend line broken.Please someone comments about my analysis, if my analysis correct or not !
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  • #2,682
  • Sep 19, 2013 5:13am Sep 19, 2013 5:13am
Quoting ochinkumar
Price pull back from GBPCHF weekly fresh supply. it is absorbing previous daily demand. At 4hour chart trend line broken.Please someone comments about my analysis, if my analysis correct or not ! {image} {image}
Hi OCH
Weekly its not new or fresh just look left for the source.
The H4 trendline's I'm no expert but the Price action on that chart is a drop in price through a series of accumulation, compression to the left price has stopped at an old zone which has been touched 2-3 times , break or bounce no one knows.
Neither chart offers any low risk trading opportunity for me
The H4 may have a new supply at the top as it broke some demand zones.
Photize
  • #2,683
  • Sep 19, 2013 5:31am Sep 19, 2013 5:31am
Quoting panoramia
Planning a long trade on AUDJPY. D1 supply and resistance taken out Lots of room to upper D1 supply at 96.50We must look for fresh H4/H1 demand levels to go long. Alfonso {image} {image}
Hi Alfonso,

On your AUD/JPY chart you mention a missed trade by 1 pip. Wasn't that too high in the curve and prior to the D1 supply being taken out?

Peter
If you act surprised, then you probably missed something
  • #2,684
  • Sep 19, 2013 5:35am Sep 19, 2013 5:35am
Quoting panoramia
Brand new H1 supply level at non-fresh D1 demand on GBPCAD. Ascending TL solidly broken Previous H1 demand brokenIt looks like shorts are validated. Alfonso {image}
Hi Alfonso,

On my chart I have that supply level being hit around 5 or 6 times and discounted that level as being used too many times.

Is there something that you have seen that makes this level of interest to you now and override the number of times the level has been hit?

Thanks
Peter
If you act surprised, then you probably missed something
  • #2,685
  • Sep 19, 2013 5:40am Sep 19, 2013 5:40am
Quoting ochinkumar
Price pull back from GBPCHF weekly fresh supply. it is absorbing previous daily demand. At 4hour chart trend line broken.Please someone comments about my analysis, if my analysis correct or not ! {image} {image}
Hi I mentioned GBPCHF previously too, initially planned to short it based on H1 but decided for a safer short based on H4. You are using Pepperstone which is based on NY close charts, similar to IC Markets which I'm using. On our charts we can't see any H4 zone (due to the rule that there should be at least one basing candle of the opposing color), however sometimes when I suspect that there should be a zone I'll check the chart on another broker. Here is the H4 chart from Oanda which is not based on NY close. Now we have a beautiful H4 zone, I think it fulfills the rules so I'll base my short on it.

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As always, correct me if I'm wrong!
  • #2,686
  • Sep 19, 2013 6:15am Sep 19, 2013 6:15am
Quoting Myst1z
{quote} Hi I mentioned GBPCHF previously too, initially planned to short it based on H1 but decided for a safer short based on H4. You are using Pepperstone which is based on NY close charts, similar to IC Markets which I'm using. On our charts we can't see any H4 zone (due to the rule that there should be at least one basing candle of the opposing color), however sometimes when I suspect that there should be a zone I'll check the chart on another broker. Here is the H4 chart from Oanda which is not based on NY close. Now we have a beautiful H4...
Nice eval Myst1z
It shows the shortcomings of many criteria, specifically candle patterns of individual candles.
I have overlaid the pepperstone over your oanda to see the Price action,
The Question if your broker has not got the Blue candle to allow the H4 zone, the orders have NOT been placed with your broker trade what you see with the broker you are trading with.
Just my opinion hope it gives a valid approach.
photize
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  • #2,687
  • Sep 19, 2013 6:34am Sep 19, 2013 6:34am
Quoting photize
{quote} Nice eval Myst1z It shows the shortcomings of many criteria, specifically candle patterns of individual candles. I have overlaid the pepperstone over your oanda to see the Price action, The Question if your broker has not got the Blue candle to allow the H4 zone, the orders have NOT been placed with your broker trade what you see with the broker you are trading with. Just my opinion hope it gives a valid approach. photize {image}
Hi photize, yep agree with you its simpler to just trade with your broker. And you're right about candle patterns appearing differently on different brokers. When I was still trading pin bars etc it used to irk me a lot. There would be people who took a winning pin bar trade but I missed the trade because there was no pin bar on my feed. In fact, that was one of the reasons why I started to dig deeper to find out how the market works and discovered supply/demand. While zones might appear differently on different feed, I guess the main idea is that there is first a period of volatility contraction/basing followed by a volatility expansion characterized by huge candles or a gap. At the end of the day we're just trying to identify regions of S/D imbalance. As such, I'm more concerned that there is a base rather than how it'll appear in the form of candles. The zones might appear differently on different feed but I guess it is the market dynamics that matters most - Trend, HTF curve, opposing S/D zones being taken out etc. If those are in place, two traders using different feeds might have entries differing by a few pips but it shouldn't affect their overall profitability. Just my two cents!
  • #2,688
  • Sep 19, 2013 7:18am Sep 19, 2013 7:18am
Chaps!
Looks like PA on AUDJPY has broken Daily Supply there are 2 hidden H4 zones underneath but HTF Momo looks strong, I'm going to look around for the demand which has been validated by the supply penetration.
After the school run lol L8r
Photize
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  • #2,689
  • Sep 19, 2013 7:59am Sep 19, 2013 7:59am
Hello

I need to forward / back test this strategy. Can't seem to find a software to do this on MT4... I can use the one they have but I can't use indicators. Can someone help me with this.... recommendations.. I really like this strategy... need to practice seeing.

Thanks
  • #2,690
  • Sep 19, 2013 8:54am Sep 19, 2013 8:54am
Quoting bam5555
Hello I need to forward / back test this strategy. Can't seem to find a software to do this on MT4... I can use the one they have but I can't use indicators. Can someone help me with this.... recommendations.. I really like this strategy... need to practice seeing. Thanks

Hi ,

I have seen Alfonso mention "Forex tester" a quick google should bring it up

/FT
  • #2,691
  • Sep 19, 2013 8:58am Sep 19, 2013 8:58am
Hi Alfonso,

first of all I would like to congratulate you for your work. You must put a lot of days and weeks for this and hopefully it will be rewarded in best possible way. I've been trading price action for years now (swing supply and demand, learning from all free resources that I could get online) and it is very subtle way of trading and yes, as you put it, must be 'robotic' otherwise.... we all know it what happens then.

I don't want to go for too long into this but there is something that occurred to me with supply and demand indicator, in my humble opinion, that could be a problem if you don't know what are you doing (hopefully, no one will get offended by this but the goal is to offer good advice). It seems to record almost every swing highs and lows (yes, I know the imbalance and strategy of DBR and RBD) but usually those are pullbacks into existing supply and demand on lower time frame and with that being said into used levels.

What I'm trying to say is that human factor in analysis must be involved, but trading should be automatic. There will be mistakes and I'm not saying that my approach is right although when it comes to rules of trading we have almost identical approach, probably in 90%.

I will give just a few examples here on Eur Jpy pair (had few others but there is no need, this is enough). Already made notes on them, so I will not go into length here.

Thank you for this opportunity and maybe it is not proper from me to go off the subject of this forum but, again, our goal is to succeed in trading and the smallest thing or idea can change on how we look at the things.

Thanks.
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"A handful of patience is worth more than a bushel of brains"
  • #2,692
  • Sep 19, 2013 9:03am Sep 19, 2013 9:03am
Quoting bam5555
Hello I need to forward / back test this strategy. Can't seem to find a software to do this on MT4... I can use the one they have but I can't use indicators. Can someone help me with this.... recommendations.. I really like this strategy... need to practice seeing. Thanks
Hi
heres a freebie
has limits but use it on a demo Mt4 could help keep it simple
http://forums.babypips.com/newbie-is...tml#post185189
photize
  • #2,693
  • Sep 19, 2013 9:06am Sep 19, 2013 9:06am
Quoting Myst1z
{quote} Hi photize, yep agree with you its simpler to just trade with your broker. And you're right about candle patterns appearing differently on different brokers. When I was still trading pin bars etc it used to irk me a lot. There would be people who took a winning pin bar trade but I missed the trade because there was no pin bar on my feed. In fact, that was one of the reasons why I started to dig deeper to find out how the market works and discovered supply/demand. While zones might appear differently on different feed, I guess the main...
Hi
I can agree with your comments , so why did you need to open Oanda to validate a zone you already had 1 TF lower ?
photize
  • #2,694
  • Sep 19, 2013 9:21am Sep 19, 2013 9:21am
Quoting photize
{quote} Hi I can agree with your comments , so why did you need to open Oanda to validate a zone you already had 1 TF lower ? photize
Hi it is because there were stacked zones on the H1, and sometimes when the stacked zones are so close they will appear as a bigger zone on a HTF. In such cases I prefer to just take the HTF zone or the further zone if the RR is still decent. Because of my psychology makeup, I don't mind a lower RR from the wider HTF zone, but I absolutely hate it if I took the H1 zone and got stopped up only for price to hit the further stacked supply and work out in the end. Its really a personal thing, probably no right or wrong.
  • #2,695
  • Sep 19, 2013 9:27am Sep 19, 2013 9:27am
Hi I just had a loss on USDJPY H4, can anyone enlighten me on anything I missed out that made this a bad trade? Thanks!

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  • #2,696
  • Sep 19, 2013 9:46am Sep 19, 2013 9:46am
Good day every one......alfonso you are sure doing a great job...........i see the thread has grown.....i have question does anyone have an idea a good platform for futures....i want to tart to demo futures but most........of what i see on meta4 is some how......example is this jpy...futures
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  • #2,697
  • Sep 19, 2013 9:51am Sep 19, 2013 9:51am
Quoting Myst1z
Hi I just had a loss on USDJPY H4, can anyone enlighten me on anything I missed out that made this a bad trade? Thanks! {image}
This is because you are selling swing high. Be careful with indicators, use your head...
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"A handful of patience is worth more than a bushel of brains"
  • #2,698
  • Edited 11:03am Sep 19, 2013 10:02am | Edited 11:03am
Quoting Myst1z
Hi I just had a loss on USDJPY H4, can anyone enlighten me on anything I missed out that made this a bad trade? Thanks! {image}
Hi Ivan,

I have been away all morning, now I am here for 1 hour or so and saw your message about UJ failed trade.

As far as the rules go, there are 2 "errors" in that H4 short trade (a friend of mine took it as well).

First reason, USDJPY chart itself:

  1. D1 ascending TL was being respected
  2. You tried to sell against that D1 uptrend
  3. There was a D1 speedbump demand that broke higher. It was taken out, (fakeout) respecting to the pip the D1 ascending TL
  4. So you were trying to sell into higher timeframe trend and demand
  5. We should never go against a D1 TL

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Second reason, $index D1 chart:

  1. Price dropped like a rock and reached the only D1 original and fresh level the $index had. Too low in the curve
  2. Since USDJPY is highly correlated with index, your odds were lower
  3. $index against you

Add to that that you were selling against USDJPY D1 uptrend with ascending TL, the odds were too low.

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That's what I see Ivan! Does it make sense to you?
Alfonso
Set and Forget supply and demand trading community
  • #2,699
  • Sep 19, 2013 10:20am Sep 19, 2013 10:20am
Quoting panoramia
{quote} Hi Ivan, I have been away all morning, now I am here for 1 hour or so and saw your message about UJ failed trade. As far as the rules go, there are 2 "errors" in that H4 short trade (a friend of mine took it as well). First reason, USDCAD chart itself: D1 ascending TL was being respected You tried to sell against that D1 uptrend There was a D1 speedbump demand that broke higher. It was taken out, (fakeout) respecting to the pip the D1 ascending TL So you were trying to sell into higher timeframe trend and demand We should never go against...
Hi Alfonso and Iron Pawn, appreciate your points! Interestingly enough you saw the D1 speed bump being taken out as a fakeout, but I saw it as an engulf which gave me confidence to short in the first place. The points you made do make sense, indeed the D1 picture doesn't look bearish at all, I was too caught up with the strong departure on the H4. Good lesson learned here, thanks!

Btw I think you meant USDJPY and not USDCAD
  • #2,700
  • Sep 19, 2013 11:32am Sep 19, 2013 11:32am
Hello Everyone.
I wish to thank Alfonso for sharing his methodollogy and all contributors to this tread. I'm in proccess of learning this trading method. I'm interested in set and forget rules, trading in direction of the trend . I attached some screenshots of EURUSD along with questions written on them.
Monthly
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Weekly
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Daily
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