Supply and demand in a nutshell by Alfonso Moreno | Page 143 | Forex Factory

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Supply and demand in a nutshell by Alfonso Moreno

  • #2,841
  • Sep 25, 2013 5:47am Sep 25, 2013 5:47am
Quoting panoramia
{quote} Your analysis looks great to me Peter. I am looking at exactly the same thing on EURNZD. The H4 supply is compressed, there is no possibility to set and forget based on H4 since there are no good H4 levels to set a short at... let's see if that opportunity happens! I missed an entry on GBPNZD H4 long yesterday afternoon by 0.5 pips! A nice H4 CP demand with lots of room to opposing supply! Crazy! It's rallied 200 pips now! Pity! Next one! Thanks for pointing that out to others! Alfonso {image}
Hi Alfonso!

I'm puzzled about the GBPNZD trade that you attempted, questions are in the charts below. Hope you can help me with them!

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  • #2,842
  • Sep 25, 2013 6:36am Sep 25, 2013 6:36am
Quoting Myst1z
{quote} Hi Alfonso! I'm puzzled about the GBPNZD trade that you attempted, questions are in the charts below. Hope you can help me with them! {image} {image}
Hi Ivan,

I understand you concern Let me explain it to you, I missed that GBPNZD H4 long trade but that happens.

This is my rationale, there is nothing new. I just waited for the "resistance" not (supply) to be taken out:

  1. Non-fresh D1 demand + non-fresh Weekly demand. They are not used-up
  2. A descending trendline is no longer valid when a higher timeframe is reached. You can wait for that confirmation as stated on 1st Post rules: Wait for confirmation AND trendline break if the higher timeframe level is not fresh and not used up (more than 2 retests)
  3. Round number at 1.9200 was solidly broken, that resistance you can see on my chart with the red horizontal line
  4. A new temporary H4 TL was created. I mean temporary because I needed 2 valleys to confirm it, but I draw them like that at the beginning of what I consider to be a possibly turning point, since I won't buy any level that is not within that accummulation area, if price dropped lower it would mean there is no strength in the movement
  5. Once 1.9200 is solidly broken with a CP (a Continuation Pattern, a strong imbalance), it validates a long for me since we're very low in the curve, no selling is possible and the charts are telling me that we have to buy, brand new levels of demand in the shape of CP are being formed and lots of room to opposing HTF supply zones

Remember one thing, I am trying to capture lots of scenarios in simple rules. Some of them will be slightly modified, there are some nuances like this about a level being solidly broken, will be added to it with the passage of time. This trade was based on the fact that we're too low in the curve, "resistance" (not supply) is solidly broken (round number at 1.9200) and there was a brand new strong H4 CP demand created right above that resistance, thus becoming support (demand as well).

Hope that makes sense to you and anybody reading this post!

NOTE: I will now add the "resistance" nuance to the 1st post.

Alfonso

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Set and Forget supply and demand trading community
  • #2,843
  • Sep 25, 2013 7:30am Sep 25, 2013 7:30am
Looking to buy GBPCAD on H4 demand area.

I believe Markot was long from lower H4 demand at 1.6380ish, that's a good trade.

  1. Price is breaking higher
  2. Room to opposing D1 supply area
  3. Last week high and last month high taken out (blue beads)
  4. Brand new areas of demand, supply areas being taken out
  5. H4 ascending trendline being respected

If new valid levels of demand area formed, the long trade should be moved higher as long as opposing D1 supply is not hit or too high (+80%)
Alfonso

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Set and Forget supply and demand trading community
  • #2,844
  • Sep 25, 2013 8:32am Sep 25, 2013 8:32am
I am still holding a trade on another of my accounts on GBPAUD, based on a H4 CP. I moved my SL below recent swing, I have guaranteed a 100 pips trade, if it wants to break higher to retest the monthly supply then ok, else I will sacrifice 50 pips in order to win 300 pips more. It's worth the risk! It's a winner after all, minimum 4.5:1 win.

Alfonso
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Set and Forget supply and demand trading community
  • #2,845
  • Sep 25, 2013 8:52am Sep 25, 2013 8:52am
Quoting panoramia
I am still holding a trade on another of my accounts on GBPAUD, based on a H4 CP. I moved my SL below recent swing, I have guaranteed a 100 pips trade, if it wants to break higher to retest the monthly supply then ok, else I will sacrifice 50 pips in order to win 300 pips more. It's worth the risk! It's a winner after all, minimum 4.5:1 win. Alfonso {image}
Hi there Alfonso,
Don't you think the gray area that you marked on your chart doesn't have a great imbalance? I remember photize post a GBPJPY chart a day ago with a similar supply zone like the one on the chart but you said that you don't have any interest in that area. I know when we are bouncing off HTF demand we want to buy not to sell. So what is the different between the supply zone the others day and your zone? Or when we are trading with the trend we going to take any supply or demand zone that going with the trend? Thank you for your support.
  • #2,846
  • Sep 25, 2013 9:07am Sep 25, 2013 9:07am
Quoting frenetic
{quote} Hi there Alfonso, Don't you think the gray area that you marked on your chart doesn't have a great imbalance? I remember photize post a GBPJPY chart a day ago with a similar supply zone like the one on the chart but you said that you don't have any interest in that area. I know when we are bouncing off HTF demand we want to buy not to sell. So what is the different between the supply zone the others day and your zone? Or when we are trading with the trend we going to take any supply or demand zone that going with the trend? Thank you for...
When we are low in a HTF like this one on GBPAUD, we want to buy. I didn't want to set and forget because it was a D1 demand against price bouncing off Monthly supply, so I waited... I waited and then when I saw a CP out of a HTF demand, it's time to buy and buy.

When we are bouncing off higher timeframes the departure (imbalance) is not that important to me. I mean, it's important, I love strong and explosive imbalances, but if those strong imbalances happen, rest assure that price will most likely won't return to that area in short, it might do it in a few days or after weeks for a retest. If the imbalance is great and price returns to the area shortly after, it's not a good sign either, price needs to consolidate away from the level and not return to it in the next couple of candles. Why is it not that important? Because I want to be riding that area as soon as possible, those are accummulation/distribution periods, big imbalances can happen but not always. There will be times when I will have losses, that's taken for granted and they are welcome, but overall we will have an edge, and that's the most important thing.

There is no difference, sometimes it works, others it does not work. The important thing is that those times where it works outnumbers the times that they don't, that's the edge!

Hope that sounds reasonable to you.
Alfonso
Set and Forget supply and demand trading community
  • #2,847
  • Sep 25, 2013 9:15am Sep 25, 2013 9:15am
Quoting panoramia
{quote} Hi Ivan, I understand you concern Let me explain it to you, I missed that GBPNZD H4 long trade but that happens. This is my rationale, there is nothing new. I just waited for the "resistance" not (supply) to be taken out: Non-fresh D1 demand + non-fresh Weekly demand. They are not used-up A descending trendline is no longer valid when a higher timeframe is reached. You can wait for that confirmation as stated on 1st Post rules: Wait for confirmation AND trendline break if the higher timeframe level is not fresh and not used up (more...
Hi Alfonso,

Yep that makes sense and thanks for the detailed reply! I'm really aware how difficult it is to include all the nuances into rules, you've already done a phenomenal job thus far.
  • #2,848
  • Sep 25, 2013 9:29am Sep 25, 2013 9:29am
Quoting Myst1z
{quote} Hi Alfonso, Yep that makes sense and thanks for the detailed reply! I'm really aware how difficult it is to include all the nuances into rules, you've already done a phenomenal job thus far.
I am glad that it makes sense Ivan. Sometimes it's not easy to explain the reasons, but it all follows the same logic even though some might not see it that quickly. We just need screentime and backtesting to see this happen over and over again.

Thanks again for your compliments. I just hope that your trading is going a bit better since you started to read the thread.
Alfonso
Set and Forget supply and demand trading community
  • #2,849
  • Sep 25, 2013 9:45am Sep 25, 2013 9:45am
Quoting panoramia
Planning a short on NZDCHF H4 supply zone. Price is dropping from D1 supply for the second time H4 demand being absorbed, supply being respected Lots of room to opposing D1 demandLet's see if this one is triggered and works! Alfonso {image} {image}

Hi Alfonso,

I have a D1 demand zone at current price. It is my believe this is a valid level since it took out supply. To me this is a reason to wait and see a break of that level. Do I see this the wrong way?
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  • #2,850
  • Sep 25, 2013 10:17am Sep 25, 2013 10:17am
Quoting panoramia
{quote} When we are low in a HTF like this one on GBPAUD, we want to buy. I didn't want to set and forget because it was a D1 demand against price bouncing off Monthly supply, so I waited... I waited and then when I saw a CP out of a HTF demand, it's time to buy and buy....
Thanks a lot Alfonso. Actually you have mentioned that a few times on this thread,but sometimes different charts and different zones just give me a little confusion in my thinking process. I will keep that in mind. So when we are trading with HTF trend we should take any supply or demand zones on the way up/down right?
And 1 more thing,I know that you recommend everyone to stick to the timeframe combo like H1/D1 or H4/WK but as I can see,you are often consider even MN,WK zones in trading H1 or D1 zones in trading H4. So I think it's better to know the supply and demand in control on all HTF(D1,WK.MN) before take any trade on LTF (H4,H1) right? Sorry if I'm a bother to you. Thanks.
  • #2,851
  • Sep 25, 2013 10:19am Sep 25, 2013 10:19am
Quoting panoramia
{quote} Hi Bzzz! It's all explained in post #1. If the highest high of a supply level has hit a previous supply level then it's a reaction. You also need to make multiple timeframe analysis to know if that new fresh level (reaction to a previous one) can be traded. It's all on post #1 and throughout the thread. It's difficult to explain it in a couple of sentences because you need to understand the concepts, multiple timeframe analysis and the rest. That will take you some time, it can't be faster sorry, it's how our minds work! Alfonso
I hear you Alfonso many many thank's!!
obviously i have a lot of homework to do
better be not enough salt than too much salt
  • #2,852
  • Sep 25, 2013 10:20am Sep 25, 2013 10:20am
Quoting panoramia
It looks like I've been triggered short on AUDNZD H4 supply at D1 proximal line supply If this D1 supply does not work, I am gonna try the upper one at 1.1487, it confluences with a D1 descending trendline. There are several month lows at the low of that rejection, these might hold and cause me a loss, but rules are rules. Let's see if this one wants to work out! Alfonso {image} {image}
Hi Alfonso, I have my H4 trend line drawn different as shown in pic, is this not valid due to the structure in the circle? The TL has 2 peaks and valleys
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  • #2,853
  • Sep 25, 2013 10:21am Sep 25, 2013 10:21am
Quoting Reacto
{quote} Hi Alfonso, I have a D1 demand zone at current price. It is my believe this is a valid level since it took out supply. To me this is a reason to wait and see a break of that level. Do I see this the wrong way? {image}
My charts look very different to yours Robert! Allelluyah! On my charts I just see compressed demand on the D1, no valid D1 demand areas. I do see that price could not break the top D1 supply and reacting to it in a strong manner.

The D1 trendline, even though it's not a valid one because it can't connect 2 obvious valleys (there are none), serves me as a guide that something is going one there.

That's the reason why I wanted to short NZDCHF. Price is bouncing off 20 EMA, an widely used EMA, reacting to it for now.
As per my charts, I am not allowed to look for a long on NZDCHF. But I see the logic on yours.

Alfonso
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Set and Forget supply and demand trading community
  • #2,854
  • Sep 25, 2013 10:48am Sep 25, 2013 10:48am
Missed some nice trades in the last 2 days on the indexes, it's a pity! I just checked out my VPS on my CFD account and it looks like I've missed a few really nice trades.

NASDAQ E-MINI LONG H4 DEMAND right above D1's proximal line:
Price spiked down without breaking the ascending trendline rule. Valid entry but it was missed by few ticks
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S&P 500 E-MINI LONG AT D1 DEMAND
There is no H4 level to go long at set % forget, so took the whole D1 zone on my D1 account. No trigger
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PLANNING...

Set & forget long on DAX-30 cfd at H4 demand at 8507.50. Nice imbalance at a level within the fresh and origignal D1 demand, with a nice unfilled professional gap.

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Alfonso
Set and Forget supply and demand trading community
  • #2,855
  • Sep 25, 2013 10:52am Sep 25, 2013 10:52am
eur/usd
both D1 and H1 just hit a fresh areas but i didn't take the trade because a CP on H1 and a demand area on the H4,was that a good decision Panoramia?
thank you
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better be not enough salt than too much salt
  • #2,856
  • Sep 25, 2013 10:57am Sep 25, 2013 10:57am
hi to all,
i have a short setup on EUR/NZD.
we are at original and fresh Daily supply area along with the Daily direction,
and H1 confimation sell zone with brake of H1 upward TL.

http://screencast.com/t/D1Q6fYxVK
http://screencast.com/t/TP6OmvKPTKy
  • #2,857
  • Sep 25, 2013 10:58am Sep 25, 2013 10:58am
It looks like I was triggered long on NZDUSD on a nice H4 CP demand with a strong imbalance at D1 demand CP a few hours ago. This one is VERY similar to the one on GBPUSD H4 but I didn't take the pound's because it was bouncing off Monthly supply. It's not the case on NZDUSD.

I had not realized because I have the "show trade levels" switched off so that I don't see the entries and exits, don't want to know what it's going on.

Note: H4 ascending trendline is not valid once a higher timeframe is reached, in this case D1 demand, but I do have there painted from the past

Let's see if this one wants to work out or not!
Alfonso
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Set and Forget supply and demand trading community
  • #2,858
  • Sep 25, 2013 11:04am Sep 25, 2013 11:04am
Quoting bzzz
eur/usd both D1 and H1 just hit a fresh areas but i didn't take the trade because a CP on H1 and a demand area on the H4,was that a good decision Panoramia? thank you {image} {image}
I don't understand what you are trying to say about the euro bzzz! I don't know what you intended to do on the euro, if buying or selling, you don't mention it.
The euro has no trade for me, it looks it wants to drop. Buying is not possible because we're too high and we can't buy after a strong rally in price. We don't have a selling confirmation, so no trade for now.

I am waiting on the euro. On Friday our friend Draghi will open his mouth, it will change market dynamics again and we'll see new levels hopefully. In the meantime, I am being patient.

Alfonso
Set and Forget supply and demand trading community
  • #2,859
  • Sep 25, 2013 11:24am Sep 25, 2013 11:24am
Quoting caparzo
hi to all, i have a short setup on EUR/NZD. we are at original and fresh Daily supply area along with the Daily direction, and H1 confimation sell zone with brake of H1 upward TL. http://screencast.com/t/D1Q6fYxVK http://screencast.com/t/TP6OmvKPTKy
,
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  • #2,860
  • Sep 25, 2013 11:43am Sep 25, 2013 11:43am
Quoting panoramia
{quote} I don't understand what you are trying to say about the euro bzzz! I don't know what you intended to do on the euro, if buying or selling, you don't mention it. The euro has no trade for me, it looks it wants to drop. Buying is not possible because we're too high and we can't buy after a strong rally in price. We don't have a selling confirmation, so no trade for now. I am waiting on the euro. On Friday our friend Draghi will open his mouth, it will change market dynamics again and we'll see new levels hopefully. In the meantime, I am being...
sorry i was talking about selling,in the meantime my D1 nzd/usd looks quite different from yours i wonder why?
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better be not enough salt than too much salt
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