Supply and demand in a nutshell by Alfonso Moreno | Page 150 | Forex Factory

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Supply and demand in a nutshell by Alfonso Moreno

  • #2,981
  • Oct 1, 2013 3:39am Oct 1, 2013 3:39am
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 Anant!

When you find a contradiction or missed signals on any pair you are looking to trade, you can do 2 things:

  1. Skip that pair for now (the wisest decision). You will have hundreds of opportunities with perfect signals, why bothering with mixed signals?
  2. Take a risk based based on the highest timeframe (WK and/or Monthly)

The bigger the timeframe, the higher its reliability. Go always with the big timefarmes. Don't be worried if you miss a trade.

In your EURAUD or AUDEUR (it's the same after all, but inverse), I would wait for the bigger timeframe's reaction. I mean, if in the lower timeframes you are having supply respected and demand removed, and you are very low at WK/MN demand, then the logical thing to do would be waiting for the bigger demand to "take control". Since your entries are based on H1 or H4 timeframes, the second thing you could do is go short until you are near a good zone on your entry timeframe (H4)... You must be aware that you are low in the WK/MN curve, so if you take a short, you should not be expecting a super big run, but that could happen as well.

Just be aware of the fact that if you are too low in the bigger timeframes (WK or Monthly), the probabilities for a swing short are much lower. It's all about probabilities. You can wait for some reaction to the buy side with brand new levels, or short until you penetrate even lower the higher timeframes, right until you reach a level on H4 with a great imbalance, you would exit before such a level (20-30 pips minimum, don't be greedy). That would be my rationale behind it.

But again, whenever you mind signals.... don't trade! You will have hundreds of opportunities with perfect signals, why bothering with mixed signals?
Alfonso

Set and Forget supply and demand trading community
  • #2,982
  • Oct 1, 2013 3:49am Oct 1, 2013 3:49am
Missed these 2 D1 demand entries by very few pips on AUDCAD and AUDUSD. Pity! I got the AUDJPY long though, which I posted on Friday and yesterday!
Good news for the Aussei last night, so the Aussie is rallying a bit.

The AUDCAD D1 demand base was not the best in the world because it had a single doji as a base, BUT that doji was accompanied by a gap, so it validated the area for me.

This is the reason why I just trade what I see on my charts, I had 3 orders on those AUD pairs D1 demand areas. Only was was triggered. If I had chosen the AUDCAD or the AUDUSD, I would not be on any trade right now. At least I am in one, I could be in the three trades or even have 3 losses.... but that's the game!

Alfonso
Attached Image (click to enlarge)
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Set and Forget supply and demand trading community
  • #2,983
  • Edited 4:47am Oct 1, 2013 4:00am | Edited 4:47am
Quoting ochinkumar
{quote} Hey alfonso, are you still sell mode at audchf 4hr chart supply label ?
I have cancelled that short on AUDCHF Ochin. It would probably break the H4 descending trendline, it's not a clear setup now, so not taking it. Besides there were some good news on the aussie last night and price could take out that zone... Not in sell mode now. I have some limit buy orders at the bottom H4 demand levels... Will sell if last lows are taken out, not now. It might work but it's not a clear setup now for me.

Alfonso
Set and Forget supply and demand trading community
  • #2,984
  • Oct 1, 2013 4:41am Oct 1, 2013 4:41am
Quoting panoramia
{quote} I have cancelled that short on AUDCHF Ochin. It would probably break the H4 descending trendline, it's not a clear setup now, so not taking it. Besides there were some good news on the aussie last night and price could take that zone... Not in sell mode now. I have some limit buy orders at the bottom H4 demand levels... Will sell if last lows are taken out, not now. It might work but it's not a clear setup now for me. Alfonso

thank you , now i am clear.
  • #2,985
  • Oct 1, 2013 5:06am Oct 1, 2013 5:06am
I asked this question before, and i'm not sure if it was just a stupid question, or no one saw it.

Alfonso, do you think since higher timeframes = higher reliability, that the higher timeframe we use, the higher the win rate?

For instance, if we use WK/MN time frame, it would have higher win rate because of reliability?
  • #2,986
  • Oct 1, 2013 6:16am Oct 1, 2013 6:16am
Quoting Tok
I asked this question before, and i'm not sure if it was just a stupid question, or no one saw it. Alfonso, do you think since higher timeframes = higher reliability, that the higher timeframe we use, the higher the win rate? For instance, if we use WK/MN time frame, it would have higher win rate because of reliability?
The higher the tf the bigger the reliability does not necessarily mean a higher win rate. Price is fractal, the same happens on all timeframes.

Another thing is that if u take h4 trades at wk/mn areas, they have higher odds of becoming runners. A wk demand trade based on the wk demand level itself (whole level) will require 3:1 risk/reward. If the level is 200 pips u will need 600 pips to validate a wk entry. But if u locate a h4 demand level within that wk demand area, u will be planning a low $ risk trade, with a tigher entry. That's the whole idea behind higher tf levels.

Hope that's clear. Htf zones are not more profitable, they are the same as a h4 zone since price is fractal. But u can use the methodology to drill the zone down for a tigher entry.

Taking a flight now, so wont be available!
Alfonso
Set and Forget supply and demand trading community
  • #2,987
  • Oct 1, 2013 7:14am Oct 1, 2013 7:14am
Hi to all,

there is a EUR/USD H1 sell confirmation setup.
we are inside Daily supply area.
there is no need H1 TL to be broken to validate the H1 sell signal however it could have been nice to see.
let's see.
Attached Image(s) (click to enlarge)
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Click to Enlarge Name: eur_usd_H1.png Size: 24 KB
  • #2,988
  • Oct 1, 2013 7:49am Oct 1, 2013 7:49am
Quoting panoramia
{quote} The higher the tf the bigger the reliability does not necessarily mean a higher win rate. Price is fractal, the same happens on all timeframes. Another thing is that if u take h4 trades at wk/mn areas, they have higher odds of becoming runners. A wk demand trade based on the wk demand level itself (whole level) will require 3:1 risk/reward. If the level is 200 pips u will need 600 pips to validate a wk entry. But if u locate a h4 demand level within that wk demand area, u will be planning a low $ risk trade, with a tigher entry. That's the...
Very interesting. thanks.
  • #2,989
  • Oct 1, 2013 8:00am Oct 1, 2013 8:00am
Quoting Myst1z
{quote} Hi Rohule, I would be wary of that daily demand because it is pretty used up (tested 4 times), with each time going deeper. This could be a sign that the demand is going to break. Personally I would prefer to minimally wait for the daily supply (Alfonso shorted from here too) to break first before considering any longs. Note also that AUD Cash Rate and RBA Rate Statement is coming up in an hour time, could be potentially volatile for the AUD pairs. Just my personal opinion, and hope it works out for you! {image}

thank you for comment, i will keep that in mind
passion and discipline
  • #2,990
  • Oct 1, 2013 9:33am Oct 1, 2013 9:33am
All,

Thought I'd post my loss from this morning on the GBPUSD. Did I perhaps not have enough padding + wiggle room? Anyway, happy about my analysis but saddened by my loss. Hoping for a big ride on the AUDJPY to make up for it .
Attached Image (click to enlarge)
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  • #2,991
  • Oct 1, 2013 12:12pm Oct 1, 2013 12:12pm
Quoting panoramia
{quote} Hi Anant! When you find a contradiction or missed signals on any pair you are looking to trade, you can do 2 things: Skip that pair for now (the wisest decision). You will have hundreds of opportunities with perfect signals, why bothering with mixed signals? Take a risk based based on the highest timeframe (WK and/or Monthly)The bigger the timeframe, the higher its reliability. Go always with the big timefarmes. Don't be worried if you miss a trade. In your EURAUD or AUDEUR (it's the same after all, but inverse), I would wait for the bigger...
Thank you very much Alfonso, your point is noted. I found it most helpful. Thank you.
  • #2,992
  • Oct 1, 2013 12:25pm Oct 1, 2013 12:25pm
Quoting matei
{image} {image} {image} http://gannmasterforex.blogspot.ro/
Hello Matei!
Thanks for your post. We're not using Gann or any other indicators on the thread, they are not allowed. It's all mentioned on first post. Could you please be so kind as to remove your post? It goes against Post #1 rules. You posted 3 images, you didn't say a single introductory word and you posted images that have nothing to do with the subjects discussed on this thread.

Until then you are not allowed to post in the thread, I can't allow posting analysis against the supply and demand strategy! Sorry if I am too harsh and straight but rules are rules.

Thanks for your comprehension!
Alfonso
Set and Forget supply and demand trading community
  • #2,993
  • Oct 1, 2013 12:47pm Oct 1, 2013 12:47pm
Alfonso,

Would I be correct in saying should go long AUDJPY @ 91.5 valley on H4?

Price bounced off daily demand @ 91.2.

Weekly and monthly are also in the middle of no where, so neither of them are in control anymore, since daily demand has been hit and price bounced up.


Please check and advise. Thanks.
  • #2,994
  • Oct 1, 2013 12:49pm Oct 1, 2013 12:49pm
Hi Alfonso,

on SP500 Daily chart;
- absoluately we are still in uptrend,
-TL is being respected along the way up,

however the Brown coloured Daily zone has been taken over by supply zone,
can we sell confirmation lowerTF short setups inside Daily original and fresh supply level with green colour since we have alot of rooms to go down untill Daily TL.
Attached Image (click to enlarge)
Click to Enlarge Name: SP500_DAILY.png Size: 26 KB
  • #2,995
  • Oct 1, 2013 3:46pm Oct 1, 2013 3:46pm
Quoting panoramia
This is the indicator I'm using, it's been working since the very beginning.
Thanks ! for indicator.
  • #2,996
  • Oct 1, 2013 8:22pm Oct 1, 2013 8:22pm
Quoting panoramia
{quote} Zone 2 is demand in control but against that TF's trend. Price has retested Zone 2 twice, about to test it 3 times. Not valid for set & forget, it's still Demand in control! See my attachment Alfonso {image}

Alfonso,

Have you changed the way you draw Supply and demand?

Because the speedbump you marked is definitely 100% not the way you have been teaching for 90% of the thread.


For instance, you have never included the top wick in an uptrend, unless it is the beginning of a downtrend that consumed demand. It was always the body and the lower wick in an uptrend.

So technically, that zone did not consume demand.


And previously I am reading that you said reactions are still valid new, fresh zones. They are just not original. But now I see you are not marking them as zones at all. You only mark the zone they reacted to.


I thought this was a really good thread, but you can't just keep changing things like this. It makes no sense!

Even if you watch your early videos, and then watch your later ones, you can see how you have changed the rules over time without realizing it. Even by just looking at your charts in the video you will notice this.

And I am not wrong in this post. I have read all the pages of the thread and watched all the videos. Your analysis on how to do things has changed considerably from time to time. You should look for yourself, because you are no longer following your original rules.

I know you keep saying you want a 100% mechanical system, but changing the way you do things over and over is just going against that.

But anyway, I wish you all the best. I am not here to bash you or anyone. I am simply concerned that you have not noticed these changes over the thread's progression, and your contradictions. This may put your hard earned money at risk, and I am sure you do not want that after putting all this effort in.



Please, read back in the thread/watch the videos and you will see I am correct.

All the best.
  • #2,997
  • Oct 1, 2013 8:49pm Oct 1, 2013 8:49pm
Quoting trackntrader
All, Thought I'd post my loss from this morning on the GBPUSD. Did I perhaps not have enough padding + wiggle room? Anyway, happy about my analysis but saddened by my loss. Hoping for a big ride on the AUDJPY to make up for it . {image}
Maybe im wrong but AUDJPY daily supply is now in control so I have shorted the pullback to daily supply. Its also bouncing from weekly supply (non trend direction) but has room to weekly demand. Again the monthly demand is non trend Demand but has room to bounce higher to monthly supply. So following daily supply/demand with room on the weekly curve is why im shorting. If I was to go long now then I would at least wait for daily demand to form which means higher highs again or wait till we are back into weekly demand. Please feel free to correct my analysis. Safe trading everyone
  • #2,998
  • Oct 1, 2013 8:58pm Oct 1, 2013 8:58pm
Quoting Tok
{quote} Alfonso, Have you changed the way you draw Supply and demand? Because the speedbump you marked is definitely 100% not the way you have been teaching for 90% of the thread. For instance, you have never included the top wick in an uptrend, unless it is the beginning of a downtrend that consumed demand. It was always the body and the lower wick in an uptrend. So technically, that zone did not consume demand. And previously I am reading that you said reactions are still valid new, fresh zones. They are just not original. But now I see you are...

The truth is, no indicator is going to be able to teach you which setups are going to be good and which are just crap. Supply and demand is key but not all of them are as tasty looking as others...sometimes the context of the fundamentals news is important to what needs to be done. Eventually you get a "feel" for it. Honestly I hate these kinds of threads, especially the ones that give you an indicator and tell you that you can do it just like the big boys... but I thought I'd throw my two cents your way.
  • #2,999
  • Oct 1, 2013 9:14pm Oct 1, 2013 9:14pm
Quoting Kanzler
Eventually you get a "feel" for it.
That really is the crux of the matter isn't it? One has to develop a "feel' for it and that takes a long time to develop, and it never stops developing. It is simply impossible to develop this "feel" in a few weeks or months.....
Doing what you like is Freedom. Liking what you do is Happiness.
  • #3,000
  • Oct 1, 2013 9:17pm Oct 1, 2013 9:17pm
Quoting Pro Trader
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 {image} {image}

This was my previous post after Sunday open. Here is the live set up ive just entered on a break below Tuesdays candle. You can wait for small pullback today or 60/240 supply to short but you may not get the pullback this deep into monthly supply & possibly miss trade. This is a position trade hence the entry now with 84 pip stop.
Attached Image (click to enlarge)
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