Supply and demand in a nutshell by Alfonso Moreno | Page 147 | Forex Factory

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Supply and demand in a nutshell by Alfonso Moreno

  • #2,921
  • Sep 28, 2013 7:27am Sep 28, 2013 7:27am
Hi everyone,

I am follwing this thread for a while now and trying to absorb all the outstanding information that Alfonso is giving/teaching.
It's a shame that a few video's were removed but reading threw all the postings is compensating that, for me.
The video's that are on the Youtube channel are very clear and together with the posted charts and questions/reply's of all you guys give's me, and i am sure a lot of others, very valuable and needed information to become a succesfull S/D trader.
My compliments to Alfonso for all his hard work and clear answers to the posted questions.

I don't know if i am going to post screenshots, all my question that i had for the last weeks were allready clarified in the previous posts.
What i certainly will do is keep on following this thread, and pumping the rules in my brain .

Wishing averyone a lot of pips.
  • #2,922
  • Sep 28, 2013 11:03am Sep 28, 2013 11:03am
Hi Alfonso and All,

Thanks so much for sharing your knowledge and willingness to help us all to be a better trader.

I am currently reading your very first post and got a question for main factor. on your "Strength of the move (departure). This is the way in which price left the level. Ideally quickly with large ERC candles".

May I know what is ERC candles?

Thanks.

Regards,
Clement
  • #2,923
  • Sep 29, 2013 9:08am Sep 29, 2013 9:08am
Hi to all,

i have a h1 sell setup on USD/CAD (10 pip zone) but i am abit concerned if the setup is abit aggressive or not,
here is my setup.
Attached Image(s) (click to enlarge)
Click to Enlarge Name: usd_cad_daily.png Size: 30 KB
Click to Enlarge Name: usd_cad_H1.png Size: 31 KB
  • #2,924
  • Sep 29, 2013 2:06pm Sep 29, 2013 2:06pm
Hi Caparzo,

Yes, the setup on H1 looks aggressive. Problem is, the green shaded level is not original and is a pullback into an original level. So it is no longer fresh.
Second issue is that on daily chart , I don't see a strong supply level where the price has just dropped from.

To me, USD/CAD looks to be in the middle of nowhere, so am avoiding it.

Just my thoughts....lets see what other have to say.

Cheers
Invest
  • #2,925
  • Sep 29, 2013 3:34pm Sep 29, 2013 3:34pm
Dear Alfonso and fellow traders, I have a potential set up on the Aud/Eur that I would really appreciate your comments on as it is giving me mixed signals.
I have marked the sell area on the H1 with sell arrows. However as you can see the departure from the supply area is strong[2],risk reward of 3 is possible[2]
,big picture is where I have an issue .In my curve Daily Chart the descending trendline has been broken as has the Weekly so I cannot sell. Moreover the price is in the Monthly and just above the Weekly Demand area. So we are high in the curve on the Daily but very low on the Weekly and Monthly!

But now that I have a supply area that has taken out previous demand [and I have two peaks to draw a descending trendline] on the Daily and the descending trendline is valid on the 4H and H1 Time Frames can I sell?. Despite being so low in the curve on the weekly and monthly? If so big picture would be[2],retracements[1],arrival we dont know yet[0].Total 7 No trade.

I would really appreciate your comments to improve my understanding. Thankyou.
Attached Image(s) (click to enlarge)
Click to Enlarge Name: EUR (DFB)29.09 ih.png Size: 29 KB
Click to Enlarge Name: EUR (DFB)29.09 d.png Size: 32 KB
Click to Enlarge Name: EUR (DFB)29.09 w.png Size: 27 KB
Click to Enlarge Name: EUR (DFB)29.09 m.png Size: 18 KB
Click to Enlarge Name: EUR (DFB)29.09 1h.png Size: 27 KB
  • #2,926
  • Sep 29, 2013 4:30pm Sep 29, 2013 4:30pm
Quoting ar58
Dear Alfonso and fellow traders, I have a potential set up on the Aud/Eur that I would really appreciate your comments on as it is giving me mixed signals. I have marked the sell area on the H1 with sell arrows. However as you can see the departure from the supply area is strong[2],risk reward of 3 is possible[2] ,big picture is where I have an issue .In my curve Daily Chart the descending trendline has been broken as has the Weekly so I cannot sell. Moreover the price is in the Monthly and just above the Weekly Demand area. So we are high in the...
Hi ar58,


This is going to very difficult for most of us as we trade the EUR/AUD not AUD/EUR which is opposite way around.
Probably best to see if you have the EUR/AUD pair available and do your analysis on that otherwise it will get confusing and possibly lead to mistakes.

Peter
If you act surprised, then you probably missed something
  • #2,927
  • Sep 29, 2013 4:56pm Sep 29, 2013 4:56pm
How do you guys generally deal with "Levels on Levels?" My entry TF is the 1HR so I could have two levels 10-15 pips apart. That throws off the RR ratio so I ask this: Take the first one price touches? Or risk missing the trade for the higher levels?
Greatness exists in all of us.
  • #2,928
  • Sep 29, 2013 5:10pm Sep 29, 2013 5:10pm
Quoting UpComerFX
How do you guys generally deal with "Levels on Levels?" My entry TF is the 1HR so I could have two levels 10-15 pips apart. That throws off the RR ratio so I ask this: Take the first one price touches? Or risk missing the trade for the higher levels?
You could have a blanket rule to cover all situations or access each on individually.

A blanket rule would be always take the further level (most conservative and probably highest probability but you will potentially miss several trades).

Accessing each one so in some cases you may take one level, sometimes take both levels and treat each one independently (highest possibility of entry and potentially a few more losses).

Personally I judge each one on its merits and will take both levels if need be. If you only risk a small percentage per trade you can handle these situations without stress.

If its looks like compression then I will take the extreme level and be at ease if that means I miss the trade then so be it.
If you act surprised, then you probably missed something
  • #2,929
  • Sep 29, 2013 5:31pm Sep 29, 2013 5:31pm
Quoting outapips
{quote} You could have a blanket rule to cover all situations or access each on individually. A blanket rule would be always take the further level (most conservative and probably highest probability but you will potentially miss several trades). Accessing each one so in some cases you may take one level, sometimes take both levels and treat each one independently (highest possibility of entry and potentially a few more losses). Personally I judge each one on its merits and will take both levels if need be. If you only risk a small percentage per...
Makes sense. Narrowing risk means narrowing reward so I might be inclined to take the extremes. It might sound greedy but I'd rather be safe than sorry. I was on a mini tear until Friday's Price Action in G/U caused me to lose a couple trades, would of won if I'd taken the extreme.
I'll forward test. Thanks
Greatness exists in all of us.
  • #2,930
  • Sep 29, 2013 7:28pm Sep 29, 2013 7:28pm
Hey fellow S/D traders, I have a question regarding gaps. How are we to properly draw the levels for gaps? Any tips, screenshots, etc?
  • #2,931
  • Sep 29, 2013 7:35pm Sep 29, 2013 7:35pm
Quoting outapips
{quote} Hi ar58, This is going to very difficult for most of us as we trade the EUR/AUD not AUD/EUR which is opposite way around. Probably best to see if you have the EUR/AUD pair available and do your analysis on that otherwise it will get confusing and possibly lead to mistakes. Peter
Thank you Peter....point taken and I shall try another pair for comment.
  • #2,932
  • Sep 29, 2013 10:05pm Sep 29, 2013 10:05pm
Hi fellow trader's. I have been using divergence for confirmation at or very close too S & D levels but I do recommend back testing for your confidence. As an example I use daily divergence in a monthly level, 240 divergence in a weekly level, 60 min divergence in daily level & 15 min divergence in a 240 level.

Here's a live example unfolding in the GBPUSD

Hope this helps. Safe trading
Attached Image(s) (click to enlarge)
Click to Enlarge Name: gbpusd_monthly.png Size: 24 KB
Click to Enlarge Name: gbpusd_daily.png Size: 64 KB
  • #2,933
  • Sep 29, 2013 10:21pm Sep 29, 2013 10:21pm
Do you use this divergence as another reason to take a trade? If there wasn't any divergence, I'm asking, could a trade still be valid to you?
As for this G/U trade, I'd have to say it looks promising. I'm anticipating entering when a valid supply level appears but until then, this pair continues to rally. Maybe in the next day or two we see the USD Index gain some strength.
Greatness exists in all of us.
  • #2,934
  • Sep 29, 2013 10:33pm Sep 29, 2013 10:33pm
I always use divergence to take a trade but back testing is key to confidence. Use in conjunction with larger time frame S & D zones for consistency. This catches the turn in price. In this instance I would wait for daily candle close then a break lower next day to either enter trade or wait for intraday pullback using maybe 240 supply zones with 15/30 min divergence for better entry & stop. I always look for good structure of price to hone in correct S & D zones & divergence time frame, but its pretty consistent with above specs.
  • #2,935
  • Sep 29, 2013 10:41pm Sep 29, 2013 10:41pm
P.S. By the way this is not your usual MACD, but RSI at standard setting is pretty close. Again back testing is key, but divergence is a filter rule I must have before taking any trade.

Safe trading

Pro Trader
  • #2,936
  • Sep 29, 2013 11:56pm Sep 29, 2013 11:56pm
Alright, Good stuff. I've never implemented oscillators into my trading approach but I've always respected the signal of an oscillators divergence. Especially with your multiple TF touch to it, it should give me something to research while I allow trades to come to me.
Greatness exists in all of us.
  • #2,937
  • Sep 30, 2013 3:44am Sep 30, 2013 3:44am
Looking to trade these two pairs:

Attached Image (click to enlarge)
Click to Enlarge Name: Screenshot1.png Size: 44 KB


Attached Image (click to enlarge)
Click to Enlarge Name: Screenshot2.png Size: 47 KB


Both have some distance before major opposing levels so RR is good. Comments are welcome please!
  • #2,938
  • Sep 30, 2013 4:12am Sep 30, 2013 4:12am
Quoting Myst1z
Looking to trade these two pairs: {image} {image} Both have some distance before major opposing levels so RR is good. Comments are welcome please!
Just a word of caution on GBPNZD H4 long Ivan... take a look at where you are on the D1 timeframe. You didn't draw that D1 CP supply are which took previous demand zone (white on my chart). You would be buying against D1 supply in control unless previous D1 CP was taken out. It looks like the D1 supply zone could be absorbed, but I don't base my entries on assumptions, we shouldn't. So as long as the D1 supply is not taken out, I am not allowed to go long on that H4 demand zone.

Alfonso
Attached Image (click to enlarge)
Click to Enlarge Name: Screenshot2.png Size: 133 KB
Set and Forget supply and demand trading community
  • #2,939
  • Sep 30, 2013 4:20am Sep 30, 2013 4:20am
Hi to all,

i have a H1 sell CP setup on GBP/AUD.
-Daily TL broken downward
-We are inside Daily supply zone
Attached Image(s) (click to enlarge)
Click to Enlarge Name: gbp_aud_daily.png Size: 25 KB
Click to Enlarge Name: gbp_aud_hourly.png Size: 22 KB
  • #2,940
  • Sep 30, 2013 4:30am Sep 30, 2013 4:30am
Quoting panoramia
{quote} Just a word of caution on GBPNZD H4 long Ivan... take a look at where you are on the D1 timeframe. You didn't draw that D1 CP supply are which took previous demand zone (white on my chart). You would be buying against D1 supply in control unless previous D1 CP was taken out. It looks like the D1 supply zone could be absorbed, but I don't base my entries on assumptions, we shouldn't. So as long as the D1 supply is not taken out, I am not allowed to go long on that H4 demand zone. Alfonso {image}
Hi Alfonso, good point thanks for pointing it out, I overlooked that D1 CP. Will pass on this one then
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