Supply and demand in a nutshell by Alfonso Moreno | Page 156 | Forex Factory

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Supply and demand in a nutshell by Alfonso Moreno

  • #3,101
  • Oct 6, 2013 5:54pm Oct 6, 2013 5:54pm
on the weekly would it be correct to identify this level as supply?

is my analysis correct on the h4 tf in regards to what i see on the weekly?
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  • #3,102
  • Oct 6, 2013 8:23pm Oct 6, 2013 8:23pm
I would say your pretty spot on with this one. Just remember we are into counter trend weekly supply which was a test of a monthly level so price may want to push higher. however I use divergence as a filter for levels I can take & this is thumbs up to short for me. Hopefully we retrace to the weekly demand nice profit margin, but don't be to greedy going against weekly trend. Im waiting for confirmation at this level just to be sure.

good analysis my friend
  • #3,103
  • Oct 6, 2013 8:29pm Oct 6, 2013 8:29pm
Here's a 240 level set & forget trade in the eurcad. My Bias is to short euro this week looking at most eur pairs so here's my charts with full explanation why I like this level as a set & forget.

Divergence is something I use as a filter for good levels & also for confirmation entries to reduce risk.

Not sure why on this chart my supply came out blue... just does this sometimes.
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  • #3,104
  • Edited 10:13pm Oct 6, 2013 9:03pm | Edited 10:13pm
Quoting Pro Trader
{quote} 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. {image}

Im quoting myself as this was a trade I already took. There is also a previous post on this setup before the daily divergence had unfold. page 147.

This setup hopefully will take place this week but price may not retrace a great deal hence using 60 min divergence as confirmation so I don't miss trade. No divergence no trade for me.

Again supply sometimes comes out blue for some reason.
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  • #3,105
  • Edited 11:40pm Oct 6, 2013 11:16pm | Edited 11:40pm
Hi, just want to add another pound setup to those mentioned in my previous post. Btw thanks Alfonso for covering some of them in your webinar, always good to hear your analysis and great webinar as usual.

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Comments are welcome please!
  • #3,106
  • Oct 7, 2013 1:20am Oct 7, 2013 1:20am
Quoting Myst1z
Hi, just want to add another pound setup to those mentioned in my previous post. Btw thanks Alfonso for covering some of them in your webinar, always good to hear your analysis and great webinar as usual. {image} {image} Comments are welcome please!

Hi Ivan,

A short remark, the upper level counts as much as 10 candles, so this would not be a good level.
  • #3,107
  • Oct 7, 2013 2:07am Oct 7, 2013 2:07am
Quoting Reacto
{quote} Hi Ivan, A short remark, the upper level counts as much as 10 candles, so this would not be a good level.
Hi Reacto, thanks for your remark! Indeed that level by itself doesn't look too pretty, in fact both of them don't. I didn't mention this in the previous post, but actually the idea for this trade is that I saw price coming down from weekly supply, and it was forming LH and LL on the daily chart. As such I want to short at the recent daily supply. The H4 chart is just to help me narrow down my entry and reduce risk, hence I didn't worry too much about the lackluster zone. I believe it is also ok to just base a short on the 58 pips daily supply. Of course I could be wrong in my analysis to begin with, in which case Alfonso or someone please correct me!

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  • #3,108
  • Oct 7, 2013 4:56am Oct 7, 2013 4:56am
I've updated 1st post with a clearer explanation of how you have to select your timeframe's combination and how to use them. It's clearer now.

I pasted this information over here as well.

Multiple timeframe analysis is paramount when trading any strategy, supply and demand is not an exception. We can use a 2 timeframes or 3 timeframes combination for our entries. I will personally use a 2 timeframes combination, because it is more stress free and it allows for more free time, which prevents me from watching the charts like a zombie.

SWING TRADING CONFIGURATION:
Timeframe's combination for medium-term setups

  1. BIG PICTURE timeframe: Weekly chart as our supply/demand curve and bigger picture direction
  2. EXECUTION and trade management timeframe: H4 chart

    1. This is the chart where we should draw and pick our levels up, where we will set our limit orders. If the H4 level is too wide, we can drill it down by using either a fix number of pips (for instance a 40 pips on EURUSD for H4 charts) or a third timeframe to fine tune our entry. I will not zoom in and look for levels on lower timeframes above or below that area because it's the H4 area that interests me, if the level itself is on H4 then I have to base my decisions on this timeframe, the one I use for my entries as defined here. Otherwise we'll end up chasing the trade and finding what we want to see on the charts, not what the market has to offer us at that particular area
    2. This is also the chart where we will manage our trades, we'll use technical SL to move our SL above/below new H4 SD areas. This is explained on another lesson

  3. FINE TUNING timeframe (optional): H1 or M15 chart. I never use this third timeframe, will never go lower than H1 to locate fine tune my entries, but maybe you will feel comfortable adding it.

POSITION TRADING CONFIGURATION:
If we choose to focus on the D1 SD levels as your entry timeframe then switch to this longer term combination

  1. BIG PICTURE timeframe: Monthly chart as our supply/demand curve and bigger picture direction
  2. EXECUTION and trade management timeframe: D1 chart

    1. This is the chart where we should draw and pick our levels up, where we will set our limit orders
    2. This is also the chart where we will manage our trades, we'll use technical SL to move our SL above/below new D1 SD areas. This is explained on another lesson

  3. FINE TUNING timeframe (optional): H4 chart

INTRADAY TRADING CONFIGURATION:
If we choose to use H1 levels as your entry timeframe, then we will swich to this timeframe combination:

  1. BIG PICTURE timeframe: Daily chart as our supply/demand curve and bigger picture direction
  2. EXECUTION timeframe: H1 chart

    1. This is the chart where we should draw and pick our levels up, where we will set our limit orders
    2. This is also the chart where we will manage our trades, we'll use technical SL to move our SL above/below new H1 SD

  3. FINE TUNING timeframe (optional): M15 or M5 chart. I never use this third timeframe, will never go lower than H1 to locate fine tune my entries, but maybe you will feel comfortable adding it.

    NOTE: H1 timeframe can also be used for swing trading as long as you use this chart to drill down your entry at a higher timeframe supply demand area. It all depends on your style of trading. H4 levels will give you more time

REMEMBER: concentrate on 1 single combination for a better performance. Decide your combo and stay loyal to it! Don't switch around or you will probably be doomed to failure

​Alfonso

Set and Forget supply and demand trading community
  • #3,109
  • Oct 7, 2013 6:36am Oct 7, 2013 6:36am
Quoting Myst1z
{quote} Hi Reacto, thanks for your remark! Indeed that level by itself doesn't look too pretty, in fact both of them don't. I didn't mention this in the previous post, but actually the idea for this trade is that I saw price coming down from weekly supply, and it was forming LH and LL on the daily chart. As such I want to short at the recent daily supply. The H4 chart is just to help me narrow down my entry and reduce risk, hence I didn't worry too much about the lackluster zone. I believe it is also ok to just base a short on the 58 pips daily...
I agree on your analysis but looking at the monthly & weekly s & d levels, there doesn't look like there's a great profit margin (consolidation) so why trade this pair when there are better pound pairs with descent profit if price drops. I also believe that you can take not so nice looking levels in higher time frame areas... One thing this is good for is pound bias & correlation when entering other pound trades. I personally have all my pound pairs as one profile to look for correlation like you would using dollar index, but I will only take best looking setups with descent profit & potential to work. All the best
  • #3,110
  • Oct 7, 2013 8:17am Oct 7, 2013 8:17am
Quoting Pro Trader
{quote} I agree on your analysis but looking at the monthly & weekly s & d levels, there doesn't look like there's a great profit margin (consolidation) so why trade this pair when there are better pound pairs with descent profit if price drops. I also believe that you can take not so nice looking levels in higher time frame areas... One thing this is good for is pound bias & correlation when entering other pound trades. I personally have all my pound pairs as one profile to look for correlation like you would using dollar index, but I will only...
Hey pro trader, thanks for your comments and agreed! I too will not take all the pound setups, probably only 1 or 2 (I risk 2% per trade so I can't afford to have too much correlated risk). Good point regarding correlation and profit potential, will bear that in mind!
  • #3,111
  • Oct 7, 2013 7:10pm Oct 7, 2013 7:10pm
would you agree this has now become a supply level on the weekly because its swapped?

on the H4 chart i think it might reach 0.9300ish because thats a demand level. would this level act like a magnet for price?
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  • #3,112
  • Oct 7, 2013 11:38pm Oct 7, 2013 11:38pm
Quoting jay24
would you agree this has now become a supply level on the weekly because its swapped? on the H4 chart i think it might reach 0.9300ish because thats a demand level...

I have a Pending Order short on the AU around .9500 so I agree with your bearish sediment. But from the USD Index, it appears as we might continue lower in the near term. It could break the downward sloping TL though, which would send majors down as early as the start of tomorrows session. Anything could happen when it comes to trading, just keep an eye on the Dollar for direction.
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Greatness exists in all of us.
  • #3,113
  • Oct 8, 2013 12:36am Oct 8, 2013 12:36am
Quoting jay24
would you agree this has now become a supply level on the weekly because its swapped? on the H4 chart i think it might reach 0.9300ish because thats a demand level. would this level act like a magnet for price? {image} {image}
I personally dont look at this the way you are. Yes this could be a weekly flip zone but you can clearly see we are at weekly supply but this is counter trend weekly supply which I dont rate highly this low on the monthly curve, also the daily does'nt look that clean at the moment. I would like to see much better trend levels in the daily time frame for direction. I would prefer to take out the weekly supply then get on board with the up trend.

The short is not in my plan this week. If its in your plan then go for it. Again all we got are our rules.
  • #3,114
  • Oct 8, 2013 1:20am Oct 8, 2013 1:20am
Quoting jay24
would you agree this has now become a supply level on the weekly because its swapped? on the H4 chart i think it might reach 0.9300ish because thats a demand level. would this level act like a magnet for price? {image} {image}
Hello Jay,
You have to read the Post #1 and the rest of the thread, that is not a supply zone, a supply zone is not drawn like that.

You look up and left and stop where you find the first candle, we don't cut through candles. For a demand zone we look down and left and we find the zone. Never cut through candles. A flip zone is not a supply or a demand zone, it's a flipe zone, it's not a zone. Please read the first post and the rest of the forum, or you will be drawing zone that are not zones at all. It's not easy sometimes to draw zones, but if you start drawing zones that are not defined as zones in the rules, then you will make it even more complicated.


Alfonso
Set and Forget supply and demand trading community
  • #3,115
  • Oct 8, 2013 4:44am Oct 8, 2013 4:44am
@ Alfonso Moreno
I am having little confusion about this. I am watching all the video available on Youtube.


http://prntscr.com/1w02sl
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  • #3,116
  • Oct 8, 2013 5:14am Oct 8, 2013 5:14am
hey guys i just wanted to ask, what the best way to scan pairs for opportunities for swing trading opportunities?
feels like i got traders block :/
  • #3,117
  • Oct 8, 2013 6:07am Oct 8, 2013 6:07am
Quoting rickyrk
@ Alfonso Moreno I am having little confusion about this. I am watching all the video available on Youtube. {image} {image}
Yes, it's correct, the rules on Post #1 are pretty clear.

Fresh levels when you have a trend on the TF where you drew them, original AND fresh if you want to try a counter-trend!
Alfonso
Set and Forget supply and demand trading community
  • #3,118
  • Oct 8, 2013 9:14am Oct 8, 2013 9:14am
Hi Mr. Alfonso and mates

im wating for a long on audchf, the price absorb supply and left a nice imbalance, im trading H4 and D1 for the curve and i have good results but i dont know if im doing it wrong.
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passion and discipline
  • #3,119
  • Edited 4:18pm Oct 8, 2013 3:26pm | Edited 4:18pm
Quoting jay24
hey guys i just wanted to ask, what the best way to scan pairs for opportunities for swing trading opportunities? feels like i got traders block :/

See this Alfonso thread for the best way to scan for opportunities, unfortunately the video has been taken down :

http://www.forexfactory.com/showthread.php?t=424894
It never gets easier, you just get better
  • #3,120
  • Oct 8, 2013 4:24pm Oct 8, 2013 4:24pm
Hi
Alphonso or anybody,i have a problem deciphering how to look at EUR;

Daily- shows price level high on curve hence indicating to look for shorts

Hourly-i have only shown immediate supply demand zones ,it shows price to break TL1 indicating to look for shorting opportunity but it is above TL2 meaning its an uptrend and according to the rules shorting is not permited.

how can this be traded (i know if ones unsure then dont trade)

Thanks
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