Supply and demand in a nutshell by Alfonso Moreno | Page 152 | Forex Factory

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Supply and demand in a nutshell by Alfonso Moreno

  • #3,021
  • Oct 2, 2013 12:39am Oct 2, 2013 12:39am
Quoting outapips
{quote} That CP is not on my chart and looks like a Sunday bar to me. Just mentioning it in case you're not aware.
Could be, i have written about that issue. I use GMT broker , both on my MT4 and live Jforex. However, the risk is minor for potential bigger reward.
  • #3,022
  • Oct 2, 2013 12:45am Oct 2, 2013 12:45am
I also plan to take buy on EUR/GBP on fresh and original CP . Round number there as well.
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  • #3,023
  • Oct 2, 2013 12:51am Oct 2, 2013 12:51am
Quoting outapips
Looking to short GBPUSD at daily supply. Daily chart show nice move away last time and we also have levels on levels. Really should have been short on set and forget trade on H4 but missed that so looking to go short on retest. Both H4 and H1 have a trend line break but will set order off at H4 level. {image} {image} {image}
My mistake, set and forget level on H4 is higher up with peak around 1.6338 so I haven't missed that one yet!!
If you act surprised, then you probably missed something
  • #3,024
  • Oct 2, 2013 1:09am Oct 2, 2013 1:09am
Quoting markot
I also plan to take buy on EUR/GBP on fresh and original CP . Round number there as well. {image}
Hi Markot, I believe CPs are not valid for set and forget when counter trend even if they are fresh and original.

Here is the excerpt of this rule from post 1:

  1. Continuation patterns (CP) against the entry timeframe trend. Do not set & forget on these areas if they are against the trend, they are lower odds entries

  • #3,025
  • Oct 2, 2013 1:10am Oct 2, 2013 1:10am
Quoting ochinkumar
{quote} thank you , now i am clear.
I made a mistake on my AUDCHF analysis yesterday Ochin. Remember I told you I would cancel my H4 short? I did. Ivan (Mystic) had planned that area as well.

My mistake was that I hadn't drawn the D1 CP supply. I analyzed this morning all of my pairs and I saw it a good entry. Why? Because the Trendlines are no longer valid onces a higher timeframe area is hit. In this case the D1 CP supply was hit, so the H4 descending TL is no longer valid. The level is working so far.

That was my mistake, sorry for that because it looks like a winning trade. The D1 is with us.

Alfonso
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Set and Forget supply and demand trading community
  • #3,026
  • Oct 2, 2013 1:18am Oct 2, 2013 1:18am
Quoting Myst1z
{quote} Hi Markot, I believe CPs are not valid for set and forget when counter trend even if they are fresh and original. Here is the excerpt of this rule from post 1: Continuation patterns (CP) against the entry timeframe trend. Do not set & forget on these areas if they are against the trend, they are lower odds entries
Quoting markot
I also plan to take buy on EUR/GBP on fresh and original CP . Round number there as well. {image}
Yes, CP are not allowed for and forget if against that timeframe's trend. It looks like a great D1 demand level, but against the rules.
If we look at the Weekly chart, look where that D1 demand is, in the middle of nowhere. Can it work? Yes, of course, but against the rules for set & forget.

I am just following the rules, it's just my view on the markets based on the rules, not intended to prevent anybody from taking a trade. I got triggerd on thae D1 CP supply 10 days ago or so on eurgbp. My bias is shorts.

NOTE: I must say the D1 CP demand looks awesome though!

Alfonso
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Set and Forget supply and demand trading community
  • #3,027
  • Oct 2, 2013 1:27am Oct 2, 2013 1:27am
Quoting panoramia
{quote} I made a mistake on my AUDCHF analysis yesterday Ochin. Remember I told you I would cancel my H4 short? I did. Ivan (Mystic) had planned that area as well. My mistake was that I hadn't drawn the D1 CP supply. I analyzed this morning all of my pairs and I saw it a good entry. Why? Because the Trendlines are no longer valid onces a higher timeframe area is hit. In this case the D1 CP supply was hit, so the H4 descending TL is no longer valid. The level is working so far. That was my mistake, sorry for that because it looks like a winning trade....
Hi Alfonso,

In this example do we need to wait for daily supply to be hit before cancelling trendline?

Could we remove the H4 trend line as soon as we draw the daily supply as that will override the trend line anyway?

Do I have that correct or have I missed something?

Peter
If you act surprised, then you probably missed something
  • #3,028
  • Oct 2, 2013 1:32am Oct 2, 2013 1:32am
Quoting panoramia
{quote} I made a mistake on my AUDCHF analysis yesterday Ochin. Remember I told you I would cancel my H4 short? I did. Ivan (Mystic) had planned that area as well. My mistake was that I hadn't drawn the D1 CP supply. I analyzed this morning all of my pairs and I saw it a good entry. Why? Because the Trendlines are no longer valid onces a higher timeframe area is hit. In this case the D1 CP supply was hit, so the H4 descending TL is no longer valid. The level is working so far. That was my mistake, sorry for that because it looks like a winning trade....
I went ahead and took it as the RR n everything else still seems good enough to trump the trend line break, locked some profits above H1 supply. Was scary to know you cancelled your order though

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Btw my entry is lower than the H4 zone because I was trying to include a H1 SZ too, the departure there was very strong and I was afraid of missing out should price turn there.
  • #3,029
  • Oct 2, 2013 1:38am Oct 2, 2013 1:38am
Quoting Myst1z
{quote} I went ahead and took it as the RR n everything else still seems good enough to trump the trend line break, locked some profits above H1 supply. Was scary to know you cancelled your order though {image} Btw my entry is lower than the H4 zone because I was trying to include a H1 SZ too, the departure there was very strong and I was afraid of missing out should price turn there.
Congratulations on your trade! I made a mistake on my analysis, so I didn't take that one, it's a pity! Great you took your own decision, nice!!! Hopefully you will get quite a bunch of pips on that short!

Alfonso
Set and Forget supply and demand trading community
  • #3,030
  • Oct 2, 2013 1:40am Oct 2, 2013 1:40am
Quoting outapips
{quote} Hi Alfonso, In this example do we need to wait for daily supply to be hit before cancelling trendline? Could we remove the H4 trend line as soon as we draw the daily supply as that will override the trend line anyway? Do I have that correct or have I missed something? Peter
Yes, once the D1 Supply is hit the ascending trendlines you have on your chart are not longer valid, they are in "standby mode". If the D1 supply is taken out then you can reuse them, but until then the trendlines on timeframes lower than D1 are negated. I didn't have that D1 CP supply on my charts so I followed the TL rules and didn't take that trade, rules you know. But there was a valid D1 CP supply there! Glad that at least Ivan took that trade

Alfonso
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  • #3,031
  • Edited 2:08am Oct 2, 2013 1:49am | Edited 2:08am
Planning a set & forget H4 short on AUDNZD at D1 supply distal line. Strong H4 imbalance at a higher timeframe zone!

We can't go long since we're too high in the D1 curve, in fact there is a H4 demand level (purple) but it's not valid because D1 supply has not been taken out. If we remove that demand we could have some selling.

We need to be patient, but patience will pay off as you can see on the thread! Just be patient and look for high quality areas at the right location
Alfonso
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  • #3,032
  • Oct 2, 2013 2:19am Oct 2, 2013 2:19am
Quoting Myst1z
Hi here are some setups I'm looking at for today. Comments are welcome please! {image} {image} {image} I've also removed my GPBAUD order mentioned here. Could still work out but I don't like where it went to (major S/R flip around 1.72, very close to daily demand), and how it is approaching (strong bull momentum, taken out H1 supply etc).
I was triggered long on USTEC (Nasdaq e-mini) H4 demand zone Ivan.. Were you triggered as well? We'll see what happens

Alfonso
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  • #3,033
  • Oct 2, 2013 2:20am Oct 2, 2013 2:20am
Take a look at one of the messages I got from a trader following the thread and my recommendation of using a backtesting software for some months in order to gain confidence on the strategy. It's not only useful for supply and demand, but for ANY trading strategy to want to gain confidence at.

Quote
Hola ermano. Just giving you a heads up with my progress so far. I started trading on the Forex Tester 2 on January 1st 2001 and now I'm in July the 23rd 2001 and so far only on the EU I'm up 113%. You've cleared up soo many things that were grey for me and now I feel as if I bought a new pair of glasses and I can see clear. Thanks for that. Hopefully one day I'll go to Spain and visit so I can buy you some wine and a dinner at least. Muchas gracias.

Alfonso
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  • #3,034
  • Oct 2, 2013 2:36am Oct 2, 2013 2:36am
Quoting panoramia
{quote} I was triggered long on USTEC (Nasdaq e-mini) H4 demand zone Ivan.. Were you triggered as well? We'll see what happens Alfonso {image}

Hi Alfonso, I posted it because it looked good and I wanted to get critique if my analysis was wrong, but actually I'm not trading indices atm so nope I'm not in it. I plan to start on indices real soon though. Really hope it works out well for you!
  • #3,035
  • Oct 2, 2013 2:53am Oct 2, 2013 2:53am
It's a pity I couldn't get any pullbacks on GBPCAD's H4 demand areas. It's given no opportunity to go long. There was only once down there at 1.6384 but I was not available and I couldn't take it. Now we're too high at a D1 supply zone, we need either a break of that D1 supply zone or a long near opposing D1 demand area.

There are a couple of good H4 demand zones

Alfonso
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  • #3,036
  • Oct 2, 2013 3:00am Oct 2, 2013 3:00am
Thank you Alfonso, my EURAUD and EURGBP are at BE now. What do you think guys about GBPUSD h4? We have a fresh level for short. price hit the d1 supply and d1 supply.
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  • #3,037
  • Oct 2, 2013 3:38am Oct 2, 2013 3:38am
Quoting bobyv87
Thank you Alfonso, my EURAUD and EURGBP are at BE now. What do you think guys about GBPUSD h4? We have a fresh level for short. price hit the d1 supply and d1 supply. {image}
Congratulations on your trades Boby!
Not a valid supply area for me, didn't take out previous demand. The pound is still too strong to sell.

There are 2 monthly supply levels on top of each other. GBPUSD may have more room to keep on rallying.
Alfonso
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  • #3,038
  • Oct 2, 2013 3:41am Oct 2, 2013 3:41am
Quoting panoramia
{quote} I made a mistake on my AUDCHF analysis yesterday Ochin. Remember I told you I would cancel my H4 short? I did. Ivan (Mystic) had planned that area as well. My mistake was that I hadn't drawn the D1 CP supply. I analyzed this morning all of my pairs and I saw it a good entry. Why? Because the Trendlines are no longer valid onces a higher timeframe area is hit. In this case the D1 CP supply was hit, so the H4 descending TL is no longer valid. The level is working so far. That was my mistake, sorry for that because it looks like a winning trade....
Hi everyone, hope the week's treating you all well thus far!

I have a question that I believe deals with what may be a fundamental error in my thinking... so hopefully we can make some sense of it.

In the D1 chart that you posted here Alfonso, you drew the D1 supply zone without any opposing demand zones having been absorbed. There were also no lower lows in the price action that I can see (compared to the previous low at around .820). Now I'm thinking that something is wrong with my thought process here, because the first post of the thread says this:

  1. We need that the opposing supply/demand area is taken out (absorbed) before we consider an area to be valid

Is this not the case for CPs in the direction of the prevailing trend? Or is the simple fact that the price went lower after the the zone was drawn enough as per this rule:

  1. For instance, if we see a D1 demand forming, we'd require that at least one full candle (OHLC, Open, High, Low and close) closes entirely above the potential D1 demand basing area in order for that demand area to be considered as demand, otherwise it will be considered part of the base

I do hope this question makes sense, and look forward to your replies.

Mike

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  • #3,039
  • Oct 2, 2013 5:14am Oct 2, 2013 5:14am
Hi Alfonso, great thread! I'm up to page 20, can I ask one question. How do you determine exits (TP) ? Is it simply the next valid opposing SD level or do you consider other factors?
  • #3,040
  • Oct 2, 2013 5:43am Oct 2, 2013 5:43am
Quoting mjrsaunders
{quote} Hi everyone, hope the week's treating you all well thus far! I have a question that I believe deals with what may be a fundamental error in my thinking... so hopefully we can make some sense of it. In the D1 chart that you posted here Alfonso, you drew the D1 supply zone without any opposing demand zones having been absorbed. There were also no lower lows in the price action that I can see (compared to the previous low at around .820). Now I'm thinking that something is wrong with my thought process here, because the first post of the thread...
Hi Mike,

If a D1 chart, a H4 or any timeframe is making lower lows, brand new CP areas and lots of room to opposing zone like in this case, you don't have to wait for opposing zone to be absorbed. You want to wait for days before you can trade? That zone you refer to on the charts took out the lows anyway, it was the decision point at where those lows were absorbed.

If the D1 chart in this case is making lower lows (it is), and there is lots of room to opposing D1 demand, you can look at your entry timeframe (H4) for the short setup. Another thing would be that this D1 short was right above a D1 demand area, it would not be zone until it took out the D1 demand zone.

Now price seems to be dropping and lots of room to opposing demand. Hope that helps
Alfonso
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