Supply and demand in a nutshell by Alfonso Moreno | Page 136 | Forex Factory

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Supply and demand in a nutshell by Alfonso Moreno

  • #2,701
  • Sep 19, 2013 11:48am Sep 19, 2013 11:48am
Hi Alfonso and fellow traders..here is my analysis on AUDUSD...it seems to me that the scene is set to go long from Levels 1,2 or 3 labelled on my 4HR chart.
However I am doubting myself as we are so close to the weekly supply in the higher time frame . Please note the two horizontal lines going across the charts at 9284 and 9355 ...this is the proximal and distal lines from the Daily Demand speed bump in control..rally base rally.

Because the ascending trendline is not broken on the daily and 4HR we cannot go short on the Supply Zone just formed on the 4HR original and fresh..[.however we are coming off a Daily Supply zone and working our way to the Weekly Supply area..but the ascending trend lines have not been broken yet and the 4HR Supply area has not taken out previous demand on the 4 HR] .

So would I be correct to go long ,[ because of the location I have also assumed that this would be a confirmation trade only...however the levels [1 and 2 and 3] are fresh and original, but level 1 and 2 have not taken out previous supply, level 3 has. So is Level 3 the right place to buy from and is it set and forget because now we are in the Daily Demand Area level which is fresh and original????

I thank you for all your comments and I very much look forward to your valued comments on this one ....really appreciate them. Thank you.
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  • #2,702
  • Sep 19, 2013 11:57am Sep 19, 2013 11:57am
Hi all many apologies Level 2 is clearyl not fresh or orinal...herewith corrected $HR chart...
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  • #2,703
  • Sep 19, 2013 12:01pm Sep 19, 2013 12:01pm
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 Myst,, the price was bouncing of the daily demand and Tl not broken so personally i think it was too early to short it,, better to wait for the next higher supply which is fresh too.

Hello again, i just realised that you had your question answered by Alfonso and Iron ,,

Regards
  • #2,704
  • Edited Sep 20, 2013 1:37am Sep 19, 2013 12:05pm | Edited Sep 20, 2013 1:37am
Quoting panoramia
Planning a short on EURNZD H4. Non-fresh D1 demand broken Brand new H4 supply area at new D1 supply Room to reach opposing D1 demandAlfonso {image}
Hi Alfonso,

All the the reasons to go short are there, but looking at NZD against some other majors, it is high on quit some. Would you still say this trade has higher odds?

I can see it is not described in the rules, so I assume you have left it out for reasons of simplicity of the method.
  • #2,705
  • Sep 19, 2013 12:15pm Sep 19, 2013 12:15pm
Quoting FishTrader
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 {image} Weekly {image} Daily {image}
You are welcome to the thread, thank you for joining!
A couple of things on your levels:

  1. The Monthly level is not original, it's a reaction to the level marked in red. It's fresh but not original, see attachment
  2. The Weekly levels are ok

    The D1 zones
  3. You D1 zones look ok, the middle one at 1.3359 is drawn right above an unfilled gap (number 1), be careful since the gap has not been filled, gaps tend to be filled since the origin of the imbalance is normally sitting underneath for demand. Level on top of level on that area.
  4. The TL is well painted
  5. See what I mean on the D1 by looking at my D1 chart on my hotforex's demo account

    H4 chart
  6. Too much trading on the zone which the D1 demand zone you have drawn. The big imbalance is dued to emotions after FOMC
  7. The real imbalance with unfilled gap is right underneath

Hope my explanations helps.
Alfonso

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Set and Forget supply and demand trading community
  • #2,706
  • Sep 19, 2013 12:18pm Sep 19, 2013 12:18pm
Quoting Reacto
{quote} Hi Alfonso, All the the reasons to go short are there, but looking at NZD against some other majors, it is high on quit some. Would you still say this trade has higher odds?

Hello. I am quite new this strategy but moderately familiar with supply/demand with regards to Forex. I am still finding my footing as a trader however. As far as this strategy goes, I agree with your post. It is to my knowledge that the non-majors move based off their major counterparts, comparatively to the USD. I admit I have found areas of fresh demand/supply prior to FOMC produce great trades, such as shorts on the G/Aus and G/Nzd. I am just cosigning your concern as I have questioned this myself.
Greatness exists in all of us.
  • #2,707
  • Edited 2:09pm Sep 19, 2013 1:28pm | Edited 2:09pm
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}
update: Just read the posts before and realized the question had been answered :-)

Just got back
I had to avail this for our chat room a friend also took the trade
The area where you took the trade looks actually above his entry (the speed bump, retail entry) of my friend so you picked the top zone which is great .
If you look at the zone its too wide for a start so breaks the rules but if you look carefully it has many spikes up this is a stop run and shows institutions clearing stops from the retail who shorted the gap and haven't left enough wiggle room. all the orders above are cleared.

It's commonly seen in compression areas where there is an uptrend the spikes drop clearing everything along the way.

On return price passed through for both reasons too many candles hence too much trading and the fact the zone had been manipulated.
Another less obvious condition is that price is in the middle of the daily range , less liquidity so is a bit lost for direction.
just my take ignore all of the above if anyone dis-agrees
:-)
Photize
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  • #2,708
  • Sep 19, 2013 1:43pm Sep 19, 2013 1:43pm
Hi Alfonso,

would you consider the marked CP on the GBPJPY H1 chart as valid, even though it did not take out previous demand?
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  • #2,709
  • Sep 19, 2013 1:47pm Sep 19, 2013 1:47pm
Quoting Iron Pawn
{quote} This is because you are selling swing high. Be careful with indicators, use your head... {image} {image}
Nice and simply put Iron Pawn trading the outside and targeting the middle nice and safe with improved odds.

I can also see the area that people were shorting also looked enticing as it was a base and engulfed some previous demand if the zone had scored a 10 in the same position it would of had the odds to work.
As it happened its score was way below par .
I have just opened my charts from earlier and forgot I had seen a supply it was already drawn it seems our brokers evidently have a different order book compare the charts,Which is probably why it didn't stick in my mind.
Happy trading
Photize
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  • #2,710
  • Sep 19, 2013 1:54pm Sep 19, 2013 1:54pm
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, USDJPY 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...
Great Evaluation Alfonso
I love to see the bigger picture, I am relatively new to the larger timeframes (except for trend ) usually scalping lower down so I am finding your critique a great source of knowledge.
Many thanks
Photize
  • #2,711
  • Sep 19, 2013 2:31pm Sep 19, 2013 2:31pm
Quoting panoramia
{quote} The big imbalance is dued to emotions after FOMC The real imbalance with unfilled gap is right underneathHope my explanations helps. Alfonso {image} {image} {image}
Any explanations will help me as i learn how to walk on SD levels . Thank You
  • #2,712
  • Edited 5:51pm Sep 19, 2013 2:50pm | Edited 5:51pm
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, USDJPY chart itself: D1 ascending TL was being respected You tried to sell against that D1 uptrend
I had same loss trade , ignored D1 time frame chart story telling me, and price bounce from near weekly demand level

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  • #2,713
  • Sep 19, 2013 4:49pm Sep 19, 2013 4:49pm
Hi,

Did anyone manage to get in on the short for GBPUSD? Somehow I missed this one although it was on my radar.

First time back into weekly zone and within that the Daily has original and fresh level

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Drilling down to H4 for entry

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Sorry for not having all info on charts this was done on another computer not the normal one I use for analysis.

Peter
If you act surprised, then you probably missed something
  • #2,714
  • Sep 19, 2013 5:12pm Sep 19, 2013 5:12pm
Hi Alfonso

Closed this USDCHF trade yesterday
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Now low in the curve - is the lower fresh/original level on H4 valid for set and forget long?

Many thanks again for your valuable input.
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  • #2,715
  • Sep 19, 2013 5:19pm Sep 19, 2013 5:19pm

Hello everyone, I am fairly new to trading and still trying to get clarification on many of these rules. Reading through the forum has been very very educational and I want to thank all of you for your input. I have a quick question though.


I had shorted the EURJPY earlier this week for the same reasons that I saw other posters use and, as many of you did, I got stopped out also. Moving forward I am trying to understand the best use of the rules. The Daily and Weekly supply has been touched 3+ times so by rules we should leave this alone and wait for a clearer picture as they are used up but I am conflicted because the monthly that is just now being touched (probably has on other brokers) is fresh and original. Do I wait for daily and weekly to be taken out and then look for shorting opportunities while still in the monthly? Or since it has just touched the Fresh and Original Supply do I look for the first good shorting opportunity?

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  • #2,716
  • Sep 19, 2013 5:21pm Sep 19, 2013 5:21pm
Quoting photize
{quote} Nice and simply put Iron Pawn trading the outside and targeting the middle nice and safe with improved odds. I can also see the area that people were shorting also looked enticing as it was a base and engulfed some previous demand if the zone had scored a 10 in the same position it would of had the odds to work. As it happened its score was way below par . I have just opened my charts from earlier and forgot I had seen a supply it was already drawn it seems our brokers evidently have a different order book compare the charts,Which is probably...

Yes, it's interesting thing about seeing 'things'. As for brokers and order books I don't think there is any significant difference on our charts and no one, in my opinion, should be looking too much into that. Charts can show us certain shapes from time frame to time frame, but behind it, it is always price action on any time frame and we need to know where it is and recognize behavior behind shapes and what lies inside them in advance, of course in most simple way. This is why am I saying that we need to see things first and that doesn't come easy. Anyhow, this is off topic and I'll get myself booted out this forum


All the best in your trading...

Iron Pawn
"A handful of patience is worth more than a bushel of brains"
  • #2,717
  • Sep 20, 2013 1:02am Sep 20, 2013 1:02am
Quoting Olarion1975
Hi Alfonso, would you consider the marked CP on the GBPJPY H1 chart as valid, even though it did not take out previous demand? {image}
Hi Oliver,
I just read your message, your post was a bit late so I was unavailable That H1 speedbump on GJ is not valid because it didn't take out any demand or low, it was just a candle, nothing else, there was no supply in such a formation. We need that the speebump takes out some previous lows/highs (in this case lows), or takes out previous demand, in order to confirm there are sellers. The GJ was not such a case. There was no absorption, no imbalance really.

Alfonso
Set and Forget supply and demand trading community
  • #2,718
  • Sep 20, 2013 1:12am Sep 20, 2013 1:12am
Quoting ar58
Hi Alfonso and fellow traders..here is my analysis on AUDUSD...it seems to me that the scene is set to go long from Levels 1,2 or 3 labelled on my 4HR chart. However I am doubting myself as we are so close to the weekly supply in the higher time frame . Please note the two horizontal lines going across the charts at 9284 and 9355 ...this is the proximal and distal lines from the Daily Demand speed bump in control..rally base rally. Because the ascending trendline is not broken on the daily and 4HR we cannot go short on the Supply Zone just formed...
Hello Anant,
Thanks for your message and charts. Just a couple of things that I would like to add to your analysis, a warning. Even though the zones are fresh and originals on your entry timeframe, you need to take into account how high or low those zones area the curve, as well as being aware if price is bouncing off higher timeframe supplies. There are specific rules about that on Post #1. It's hard for me to do a proper analysis of your AUDUSD since you are using another platform, but the AUDUSD has been analyzed thoroughly on last webinars, we know its bouncing off fresh Monthly CP demand. I can see your levels on entry timeframe but I can't see those levels on the higher timeframes, so it's not that easy.

If the D1 is up, Weekly is up but H4 is not creating any impulsion to the up side, price will most likely be correctly to a fresh and/or original zone on higher timeframes like the D1, if that happens we have a "sequence". You entry timeframe H4 will probably hit a valid fresh area of demand as per the rules and continue its rise.

Hope it makes sense to you!
Alfonso
Set and Forget supply and demand trading community
  • #2,719
  • Sep 20, 2013 1:22am Sep 20, 2013 1:22am
Very interesting situation on CHFJPY at least on my broker

Price has broken up thru daily and weekly levels and I don't have enough history to be able to analyse anything on weekly or daily time frames.

The only chart I have is monthly below. So, as we are in monthly supply we can probably either leave this pair alone or look to short on trend line breaks

An unusual situation. Thoughts anyone?

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If you act surprised, then you probably missed something
  • #2,720
  • Sep 20, 2013 1:28am Sep 20, 2013 1:28am
Hello Alfonso, What do you think about this? On h4 we have a new formed supply level which didn't take any demand but is formed in a daily fresh area.
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