Supply and demand in a nutshell by Alfonso Moreno | Page 144 | Forex Factory

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Supply and demand in a nutshell by Alfonso Moreno

  • #2,861
  • Sep 25, 2013 12:55pm Sep 25, 2013 12:55pm
Quoting panoramia
{quote} 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...

Hi Alfonso, there are big differences, and quit a lot between your data and mine.
Thanks for your explanation. It's clear we cannot go long, but I didn't want to go short because of the D1 demand level so close to price.
  • #2,862
  • Sep 25, 2013 1:18pm Sep 25, 2013 1:18pm
Hello

I am in demo and am ready to go live.. I have MT4 from FXDD and Citi. The spreads on the pairs you trade are high and I need suggestions on brokers.. I live in the U. S.

Best
  • #2,863
  • Sep 25, 2013 5:10pm Sep 25, 2013 5:10pm
Quoting bam5555
Hello I am in demo and am ready to go live.. I have MT4 from FXDD and Citi. The spreads on the pairs you trade are high and I need suggestions on brokers.. I live in the U. S. Best
Hi Bam,

This thread is about SD trading with Alfonso's method. It is not to get into a discussion about which broker to use. Please search the forum I'm sure you'll find plenty of discussion and information about brokers on other threads.

Please respect this thread as we like to remain focused and on topic

Peter
If you act surprised, then you probably missed something
  • #2,864
  • Sep 25, 2013 7:00pm Sep 25, 2013 7:00pm
Quoting outapips
{quote} Hi Franz, Welcome to the thread. Without knowing your rationale for the trade its impossible to comment on it however I will give you my thoughts on how I planned this. I had that GBPUSD short on my radar as it met all the set and forget rules (O&F, Score=9 etc) but unfortunately I forgot to place the pending order for the trade so missed that one. I don't think Alfonso took that trader either however he mentioned one of his friends took it. Personally I always have my exit plan made out before entry so I don't chop and change depending...
Hi Peter,

Thanks a lot for the warm welcome and especially for your thoughts and hints regarding the considerations about an ideal exit strategy.

My rationale according to my analysis behind this short trade in GBPUSD was:

  1. market reached a monthly SL after trading within this monthly range for about 2 years
  2. weekly chart shows same picture. Market also touched weekly supply. We are high in the curve and in addition there is a long-term downtrend in the weekly (yellow)
  3. also in the daily a SL was hit which was fresh
  4. H4 showed a SL right above the lower line of monthly and weekly SL and additionally at at the upper end of the daily SL
  5. So all HTF showed same picture

Therefore I placed an short entry right below the H4 SL at about 1.6150 with a stop above the same daily SL (at about 1.6185). My long-term expectation would be that market tends to retest weekly DL at 1.5570 (500 pips left) some time.
Anyhow my first target was a risk/reward of 1:3 so I closed part at 1.6040. For the remainder my target was the daily DL at 1.5940 and I closed the position shortly before. Today I tried another short trade which did not work...

However many thanks for your help and I will start to work myself through the whole thread to gain a better understanding... :nerd:

Franz

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  • #2,865
  • Sep 25, 2013 8:06pm Sep 25, 2013 8:06pm
Quoting panoramia
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 {image} 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 {image} PLANNING... Set & forget long on DAX-30 cfd at H4 demand...
Hi Alfonso!

I noticed that interestingly enough the exact setup on Dow would have resulted in a loss. In fact it sets up for a short on H4 supply now, correct me if its invalid!

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S&P is really close to your entry now, still a chance you might get triggered in. If so hope it turns out well (which likely also means Dow breakdown was a fakeout )!

And yes my trading has definitely improved since I started on this thread, mainly because your rules enabled me to filter many bad setups. I used to suffer a very bad win rate from touch trading, and it was only after your thread that I realized many of the mistakes I've been repeating. My win rate is still far from ideal, but your comments on my losing trades have helped me greatly too. So yep, thanks for all that!
  • #2,866
  • Sep 25, 2013 8:08pm Sep 25, 2013 8:08pm
Quoting Blackriver67
{quote} Hi Peter, Thanks a lot for the warm welcome and especially for your thoughts and hints regarding the considerations about an ideal exit strategy. My rationale according to my analysis behind this short trade in GBPUSD was: market reached a monthly SL after trading within this monthly range for about 2 years weekly chart shows same picture. Market also touched weekly supply. We are high in the curve and in addition there is a long-term downtrend in the weekly (yellow) also in the daily a SL was hit which was fresh H4 showed a SL right above...
Hi Franz,

Congrats on a well planned the trade using MTF analysis. Sound reasoning and logical.

In order to make things easier for those viewing your images could you either include the top status bar of MT4 window eg

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or the bottom bar

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Alternatively there is an indicator that you can place on the chart that shows the current time frame. It was posted several pages ago but not sure which post.

Just makes it easier for all when viewing images to know the time frame of the image.

Peter
If you act surprised, then you probably missed something
  • #2,867
  • Sep 25, 2013 10:55pm Sep 25, 2013 10:55pm
Hi I'm looking at AUDJPY for a long trade, comments are welcome!

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There is a similar H1 setup on NZDJPY but I'm wary of it because price is coming down from strong Weekly supply which previously engulfed down. Could still work though.

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  • #2,868
  • Sep 25, 2013 11:09pm Sep 25, 2013 11:09pm
Quoting Myst1z
Hi I'm looking at AUDJPY for a long trade, comments are welcome! {image} {image} There is a similar H1 setup on NZDJPY but I'm wary of it because price is coming down from strong Weekly supply which previously engulfed down. Could still work though. {image}
I agree with a long on the AUDJPY. I very nearly took a long trade on it yesterday (based on the 4H chart), the only thing that stopped me was that I wasn't 100% happy with the demand level I was basing the trade off (price took a long time to come back to the level, and a long time to make a higher high).

I am now slightly regretting not taking that trade...
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Understanding yourself is synonymous with understanding the markets.
  • #2,869
  • Sep 25, 2013 11:52pm Sep 25, 2013 11:52pm
Quoting mjrsaunders
{quote} I agree with a long on the AUDJPY. I very nearly took a long trade on it yesterday (based on the 4H chart), the only thing that stopped me was that I wasn't 100% happy with the demand level I was basing the trade off (price took a long time to come back to the level, and a long time to make a higher high). I am now slightly regretting not taking that trade... {image}
Hey if you're also planning to get long on the H1 zone and it does trigger and work out, you won't be regretting anymore because it'll be less than half the risk of your original H4 trade (Btw I would have drew the H4 zone differently). And if price continues to climb higher, I believe there should be further opportunities. Quite honestly I'm still having doubts about the long because of various reasons - No clean break of daily supply, bear divergence on H4, lack of strong departure on daily demand, possibility of a head and shoulders, many other yen pairs coming off HTF supply, unfilled gap below etc. Struggling to overcome my former self and just stick to Alfonso's rules, the RR is good enough to wager a trade anyway. Hope it works out!
  • #2,870
  • Sep 25, 2013 11:58pm Sep 25, 2013 11:58pm
Quoting Myst1z
{quote} Hey if you're also planning to get long on the H1 zone and it does trigger and work out, you won't be regretting anymore because it'll be less than half the risk of your original H4 trade (Btw I would have drew the H4 zone differently). And if price continues to climb higher, I believe there should be further opportunities. Quite honestly I'm still having doubts about the long because of various reasons - No clean break of daily supply, bear divergence on H4, lack of strong departure on daily demand, possibility of a head and shoulders,...
How would you draw the H4 differently? I feel pretty confident in drawing SD zones now with the exception of when the market gaps (like this one!). I'm definitely half-guessing when it comes to drawing them around a gap.

With regards to the H1 trade, I'm trying to limit myself to H4 entries only just to keep things nice and simple while I'm still learning how to get better at SD trading. I'll most definitely start looking at H1 opportunities down the track though. Which daily supply do you want it to clean up? As far as I can see on my charts, there's quite a bit of room till we hit another unbroken D1 supply zone.
Understanding yourself is synonymous with understanding the markets.
  • #2,871
  • Sep 26, 2013 12:29am Sep 26, 2013 12:29am
Quoting mjrsaunders
{quote} I agree with a long on the AUDJPY. I very nearly took a long trade on it yesterday (based on the 4H chart), the only thing that stopped me was that I wasn't 100% happy with the demand level I was basing the trade off (price took a long time to come back to the level, and a long time to make a higher high). I am now slightly regretting not taking that trade... {image}

Hi mjrsaunders/myst1z.

In a previous post I mentioned I had a set and forget on AUDJPY and Joe (fortunateson) asked about the 91.84 level as I said I would be watching that level for a confirmation entry.

This is how it played out for me and like Alfonso says lets keep it simple.

AUDJPY is in an uptrend so demand is being respected and supply is being violated so I look for fresh demand zones.

  1. On D1 there is a fresh zone around 92.25. On my feed I need to wait for confirmation entry.
  2. Price comes down into D1 level
  3. On H1 chart price makes a nice move away creating new H1 demand showing buyers are there
  4. I place entry at top of new H1 demand for long entry and wait to see what happens.
  5. Several hours later I find I am long AUDJPY.

Now its still early days and trade could end up a winner, breakeven or a loss and in time we will know the result.

What more do we need to enter a trade?

I have marked up the new H1 area on your chart myst

Peter

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If you act surprised, then you probably missed something
  • #2,872
  • Edited 2:38am Sep 26, 2013 2:13am | Edited 2:38am
Quoting mjrsaunders
{quote} How would you draw the H4 differently? I feel pretty confident in drawing SD zones now with the exception of when the market gaps (like this one!). I'm definitely half-guessing when it comes to drawing them around a gap. With regards to the H1 trade, I'm trying to limit myself to H4 entries only just to keep things nice and simple while I'm still learning how to get better at SD trading. I'll most definitely start looking at H1 opportunities down the track though. Which daily supply do you want it to clean up? As far as I can see on my charts,...
Hi mjrsaunders, I would have drawn my H4 supply as such:

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The reason is that gaps tend to get filled, the S/D indicator draws it like this too.

Peter: Totally agree with your analysis, AUDJPY D1 zone was fresh and original so we could either touch trade it or even if we preferred to wait for confirmation on LTFs, there isn't a need for price to take out an opposing zone. A new zone being created was good enough, and you traded that so good for you! I tend to be more conservative which is why I preferred to wait for an opposing zone to be taken out first, but I think what you did was perfectly valid.

A new H1 CP demand has been formed on AUDJPY so the previous entry is no longer valid. However many nice H1 CP has also been formed on AUD and NZD cross pairs (EURAUD, EURNZD, GBPAUD, GBPNZD etc) so I'm gonna just select one or two to trade. Wouldn't want to overexpose my risk by taking them all.
  • #2,873
  • Sep 26, 2013 3:19am Sep 26, 2013 3:19am
It looks like EURNZD is dropping as expected from the fresh D1 supply zone.

I missed the D1 level short on my D1 account by the spread I beleive, now it's dropping and looks like a nice H1 setup around 1.6385

  1. Dropping from fresh D1 supply
  2. Weekly support has been solidly broken
  3. New descending H1 trendline connecting 2 valleys
  4. Lots of room to keep on dropping

We'll see what the kiwi market has in store, I love kiwis
Alfonso

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Set and Forget supply and demand trading community
  • #2,874
  • Sep 26, 2013 3:45am Sep 26, 2013 3:45am
Hi to all,

on NZD/USD , there is a 1H buy setup at CP since we are bouncing from Daily demand level.
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  • #2,875
  • Sep 26, 2013 3:54am Sep 26, 2013 3:54am
Quoting caparzo
Hi to all, on NZD/USD , there is a 1H buy setup at CP since we are bouncing from Daily demand level. {image} {image}
Nice spot there! I am already long on H4 demand zone at 0.8230 (posted my entry yesterday), but that H1 looks like a nice H1 CP to go long at!

Hope it can make it down there!
Alfonso
Set and Forget supply and demand trading community
  • #2,876
  • Sep 26, 2013 5:13am Sep 26, 2013 5:13am
Quoting Myst1z
{quote} Hi mjrsaunders, I would have drawn my H4 supply as such: {image} The reason is that gaps tend to get filled, the S/D indicator draws it like this too. Peter: Totally agree with your analysis, AUDJPY D1 zone was fresh and original so we could either touch trade it or even if we preferred to wait for confirmation on LTFs, there isn't a need for price to take out an opposing zone. A new zone being created was good enough, and you traded that so good for you! I tend to be more conservative which is why I preferred to wait for an opposing zone...
Thanks for showing me that mate (and thanks for explaining your reasoning), that'll help me out a lot in future.

In other news, I've just started up my own trading journal based entirely on Alfonso's swing method (4H entries) at the following thread.. figured I could keep a record of all of my trades for reference and also to help out any other prospective traders who're also struggling down the path of learning.

http://www.forexfactory.com/showthread.php?t=449526

Feel free to drop by if you like!

- Mike
Understanding yourself is synonymous with understanding the markets.
  • #2,877
  • Sep 26, 2013 6:46am Sep 26, 2013 6:46am
Planning to go long on GOLD H4 demand level.

  1. Gold is bouncing off Weekly demand
  2. New demand areas being formed, no entries yet
  3. New ascending trendline off a Weekly/Daily demand area

Haven't been looking at Gold for some time, I see there was a great new D1 demand level formed at the Weekly demand, pulled back into the D1 demand level after it took high highs (CP), dropped and now rallying.

Alfonso

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Set and Forget supply and demand trading community
  • #2,878
  • Sep 26, 2013 6:56am Sep 26, 2013 6:56am
Planning a new short on AUDNZD H1 supply to scale in my entry.

I am already short based on H4 supply, I posted the entry yesterday I believe. Now there are new H1 supply levels to look at.

  1. Price bouncing off D1 supply
  2. Previous demand broken and room to to opposing demand
  3. New descending H1 trendline to validate our short entries
  4. Single doji candles are not good for CP levels, so that doji underneath the peak is not valid

I am also long on NZDUSD, at breakeven, posted the entry yesterday. Both are correlated, so if one works the other "should" most likely work as well. At breakeven on these trades, as well as my silver and eurgbp d1 shorts. So far so good! On to the next one!

Alfonso

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Set and Forget supply and demand trading community
  • #2,879
  • Sep 26, 2013 7:23am Sep 26, 2013 7:23am
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}
Got triggered short on NZDCHF H4 trade I planned yesterday.

I am now on 3 NZD trades... we'll see what happens. I just took the trades based on the rules and each of the charts I was watching, I didn't take into account any kind of correlation. I just traded what I see.

I am now on these 3 NZD trades:

  1. NZDCHF H4 short
  2. NZDUSD H4 long at breakeven
  3. AUDNZD H4 short at breakeven as well

Let's see what the market brings. They were all trades based on the exact rules I've been explaning over and over as you can see. Pre-planned before they happened, and shown when they triggered, no tricks. But well, you should know that already if you have been following me for some time.

I am also short on EURGBP D1 supply and SILVER D1 supply, both at breakeven. Both trades were posted a few days ago on the thread.

I will take a good break now! Hope you will get some nice pips today.

REMEMBER that Dragghi speaks tomorrow Firday at 10 a.m GMT. I will not be trading the euro pairs during the London market, it's my safety rule. Will wait and see what he has to say and how the markets reacts. Besides it's Friday, I don't want to open new trades because they might not run that much and I don't want Sunday gaps or widened spreads to hit my SLs. I am just trying to avoid unnecessary losses, that's all.

Alfonso

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Set and Forget supply and demand trading community
  • #2,880
  • Sep 26, 2013 7:30am Sep 26, 2013 7:30am
Quoting panoramia
{quote} Got triggered short on NZDCHF H4 trade I planned yesterday. I am now on 3 NZD trades... we'll see what happens. I just took the trades based on the rules and each of the charts I was watching, I didn't take into account any kind of correlation. I just traded what I see. I am now on these 3 NZD trades: NZDCHF H4 short NZDUSD H4 long at breakeven AUDNZD H4 short at breakeven as wellLet's see what the market brings. They were all trades based on the exact rules I've been explaning over and over as you can see. Pre-planned before they happened,...
Hi Alfonso,

After reading your post I started to wonder about what to do if multiple trading opportunities presented themselves on the same currency (eg. NZD/XXX) and in the same direction. For example, if you had a NZDUSD bull trade, a NZDCHF bull trade and a EURNZD bear trade all at the same time, would you be cautious about taking on some of the extra positions in case you become over-exposed to that currency? Or is it advisable to just "trade what you see," like you say?

Looking good though, thanks for the updates! Hope you enjoy your break.

Mike
Understanding yourself is synonymous with understanding the markets.
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