Supply and demand in a nutshell by Alfonso Moreno | Page 162 | Forex Factory

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Supply and demand in a nutshell by Alfonso Moreno

  • #3,221
  • Oct 15, 2013 4:46am Oct 15, 2013 4:46am
HOurly SUpply level, Worked out nicely in Downtrend.

Odd enchancers :
Level = Drop base Drop
Type = Fresh
Time frame= Hourly/4h with Daily high component.
Trend= Down./ Trendline slopping down.
How price left the level= Strong.


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  • #3,222
  • Oct 15, 2013 7:39am Oct 15, 2013 7:39am
Quoting Ariful Mamun
{quote} Hi Alfonso, I have been trading supply and demand since last year. It seems that you have some own great idea for this trading system.It is great! And off course it works better.So i personally very much impressed.Thanks for sharing your idea.I have attached chart based on your answer one of our mates.However i personally redraw it and post on for if it is ok or not.Because you note G/U weekly new demand but i differ and it is the previous reaction of weekly demand.please be sure if i am ok or why not.... Regards, Happy trading. {image}
Thanks for your words Ariful, I appreciate that!

That WK demand was taken out by a few pips, sometimes those HTF levels are overshot by a few pips and then reverse, it's typical with the pound and some cross pairs, we need to be ready for that having a wider wiggle room for our SL. I believe I mentioned it in one of my replies but I'm not 100% sure now!

Now that WK demand is validated in the future it could work well. At present time the pound's WK + Monthly supply is in control and it looks like the $index is rallying off WK demand as well. We'll see what happens!

Have a great day!
Alfonso
Set and Forget supply and demand trading community
  • #3,223
  • Oct 15, 2013 7:41am Oct 15, 2013 7:41am
Quoting panoramia
{quote} I do agree with your analysis on the EURUSD. In fact I am short since yesterday morning, it looks I got triggered during the webinar and I didn't realize, saw it at night when I came back home. It's Friday yes, I don't have many trades open, that's the new one, I have others open in MN/D1 position combo so those are uneffected by the weekends. I looked at Monday news events before Friday's close and I saw there was nothing greast on Monday, in fact US and CAD bank holiday, so I decided to leave my euro short alone! Hope that helps Dave!...
It looks like the EURUSD H4 short I took the other day as well as others is starting to work, let's see what happens! Hopefully it will be a runner! I am also long on USDCHF, euro's counterpart, we'll see!


Alfonso
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Set and Forget supply and demand trading community
  • #3,224
  • Oct 15, 2013 2:36pm Oct 15, 2013 2:36pm
Hi Alfonso, I am on page 19 of your great thread and want to see the webinar on Youtube. I see it is marked as private and would love to see it, if possible. How can I do it. Thank you for your hard work and practical style of trading supply and demand. I am slowly working my way through your thread and already had a few a-ha moments. All the best for your trading career.

Regards
  • #3,225
  • Oct 15, 2013 4:34pm Oct 15, 2013 4:34pm
EURUSD intra-day
I am trying to understand if I do it correctly(asking the right questions)

daily we retest the supply zone and started to went south and today we retested a demand zone that isn't fresh and been retested twice in the past,

we are high in the curve, good to involve in shorts positions.

so I see the following example in the H1 for my entry timeframe,
1:3 Risk:Reward

but I am trying to asses if the new demand area that formed which is showed to be fresh but actually it was the 3rd retest of the daily demand zone,
will it probably be break because of many retest or should I take all my profit at this level and leave nothing to the market?
what kind of question for this kind of situation?
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  • #3,226
  • Edited 8:35pm Oct 15, 2013 4:37pm | Edited 8:35pm
Hi to all who follow Alfonso's thread.

Here's a nice 240 demand zone setup that's about to hopefully take place next few hours.

I will take 2 positions (20 pips each) with 1st target at 40 pips profit & 2nd target 100 pips profit. Overall at 3.5 to 1 reward to risk trade.

Ive got tight targets on this based on daily/240 supply zone as shown.

Lets see if it makes entry tonight.

EDIT : I've cancelled this set up at 0200 16 october due to 240 candle break high & 15 min divergence already happened. Just one of my rules to filter out trades I wish to take.
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  • #3,227
  • Oct 15, 2013 5:04pm Oct 15, 2013 5:04pm
Quoting Irad
EURUSD intra-day I am trying to understand if I do it correctly(asking the right questions) daily we retest the supply zone and started to went south and today we retested a demand zone that isn't fresh and been retested twice in the past, we are high in the curve, good to involve in shorts positions. so I see the following example in the H1 for my entry timeframe, 1:3 Risk:Reward but I am trying to asses if the new demand area that formed which is showed to be fresh but actually it was the 3rd retest of the daily demand zone, will it probably be...
Hi Irad. Good analysis by the way.

First I would like to say that I believe Alfonso will make a video in the future regarding profit taking, targets etc. This is the hardest rule to apply as emotion plays such a huge part to depending on previous wins & losses. But the best advice is stick to what ever way you are taking profits.

Example: I take 2 positions on any trade. My first target is around the nearest Lower low or higher high & im looking for a 2 to 1. I will take off 50% or 1 position.
My final target is the nearest higher time frame supply/demand.
So if I enter 240 level then my final target is daily S or D. I would manage trade on 240 trend.
If I enter daily level then my final target is weekly S or D. I would manage trade on daily trend.

Now you could have the first 240 level inside daily level so maybe you want to go for weekly target not daily. This is discretional experience.
Personally this is what I do. Again manage on daily trend.

If your a position trader then you would want to be trading from monthly S & D therefore you need to be in trade as price leaves monthly S & D.
Now you could use a low risk 240/daily/weekly level to get in at monthly level but you would have to give it room to play out. i.e. - Trail the weekly trend.
Again down to analysis.

This is why you need to let trades breathe & play out without getting emotionally involved.
Answer - Plan your trade from beginning to end, including trade management. Then stick to it. Hopefully this will control your emotion.

Now you know why Alfonso tells you he's enjoying life not sitting in front of the screen all day.

An Army saying "prior preparation prevents piss poor performance"

All the best
  • #3,228
  • Oct 15, 2013 5:29pm Oct 15, 2013 5:29pm
Quoting Pro Trader
{quote} Hi Irad. Good analysis by the way. First I would like to say that I believe Alfonso will make a video in the future regarding profit taking, targets etc. This is the hardest rule to apply as emotion plays such a huge part to depending on previous wins & losses. But the best advice is stick to what ever way you are taking profits. Example: I take 2 positions on any trade. My first target is around the nearest Lower low or higher high & im looking for a 2 to 1. I will take off 50% or 1 position. My final target is the nearest higher time frame...
Thank you for your answer, I find it very usefull for this situation
I am intra-day trader(no position), I take daily chart to asses the current momentum of price and go on 1H timeframe for my entry,
if I understood correctly i'll take 50% off at 1:2 or 1:3(whatever market allows me) and then look for extended target over the daily chart where I first look for the momentum, but now i'll look for a Supply or Demand area and take profits off of that zone(with the wiggle and spread ofcourse..)
  • #3,229
  • Oct 15, 2013 6:28pm Oct 15, 2013 6:28pm
Quoting Irad
{quote} Thank you for your answer, I find it very usefull for this situation I am intra-day trader(no position), I take daily chart to asses the current momentum of price and go on 1H timeframe for my entry, if I understood correctly i'll take 50% off at 1:2 or 1:3(whatever market allows me) and then look for extended target over the daily chart where I first look for the momentum, but now i'll look for a Supply or Demand area and take profits off of that zone(with the wiggle and spread ofcourse..)
Yep 50% two targets is what I use.

Remember this was just an example of how I take targets & manage trades. My point is what ever you decide...You have to give it a fair test for a few months without tweaking or changing take profit plan. There is no right or wrong if you stick to rules, only measurable results. If your profitable one way & more profitable another then you have your answer. Time & patience will tell.

An idea is to open several demo accounts with the same amounts & leverage etc. Take all entries as planned just have different profit strategies which must be recorded like a scientific experiment. After several months you will have the data & the emotional choice for you. I wish I had done this years ago.

Note: Make sure they are not to similar i.e. maybe you move stop to break even first target.
Another you don't move stop, instead only managing trade following trend.
Maybe you take 3 targets (33% per target) or only the one. Just make it simple to follow & do it like a robot.

Hope this helps.
  • #3,230
  • Oct 16, 2013 2:49am Oct 16, 2013 2:49am
Quoting Pro Trader
{quote}Example: I take 2 positions on any trade. My first target is around the nearest Lower low or higher high & im looking for a 2 to 1. I will take off 50% or 1 position. My final target is the nearest higher time frame supply/demand.
That's an interesting profit taking strategy Pro Trader. One question: when you close 50% of your position do you set the other half to breakeven?
  • #3,231
  • Oct 16, 2013 2:56am Oct 16, 2013 2:56am
Quoting Ranagol
{quote} That's an interesting profit taking strategy Pro Trader. One question: when you close 50% of your position do you set the other half to breakeven?
Yes, that's an interesting way of doing it. I talked to Pro Trader and he's doing it in a similar way to mine. I've not added yet the "trade management and exit tactics" to the first post, but it's the similar to what I do if not the same.

  1. After 2:1 or 3:1, you can close half of your position
  2. Your SL is not moved to breakeven, now the trade can't be a loser, your emotions are out of the game and your ego is kicked hard in the ***
  3. By doing so, you prevent price from retesting your entry price, which happens A LOT, quite TOO often
  4. If you move your SL to BE you might risk getting out of the trade too soon to see hours later that your trade run without you 400 pips

I will talk in detail about it on the next webinar!
Alfonso

Set and Forget supply and demand trading community
  • #3,232
  • Oct 16, 2013 3:07am Oct 16, 2013 3:07am
Quoting panoramia
{quote} Yes, that's an interesting way of doing it. I talked to Pro Trader and he's doing it in a similar way to mine. I've not added yet the "trade management and exit tactics" to the first post, but it's the similar to what I do if not the same. After 2:1 or 3:1, you can close half of your position Your SL is not moved to breakeven, now the trade can't be a loser, your emotions are out of the game and your ego is kicked hard in the *** By doing so, you prevent price from retesting your entry price, which happens A LOT, quite TOO often If you...
Yesterday I had a GU winner that went to breakeven after i got my 1:3 and still haven't violated supply zone(1H chart) so I am out but i'll give that a second thought to keep my stops above supply/demand zone and just after a new zone has formed, moving my stops.
  • #3,233
  • Oct 16, 2013 3:10am Oct 16, 2013 3:10am
Quoting Irad
{quote} Yesterday I had a GU winner that went to breakeven after i got my 1:3 and still haven't violated supply zone(1H chart) so I am out but i'll give that a second thought to keep my stops above supply/demand zone and just after a new zone has formed, moving my stops.
I believe it's a nice way of doing it because the market works like that, I mean, entry areas are retested often. Besides, your emotions are put aside because you closed part of your trade at 3:1 for example so you won't have a loss. Once you have a trade that can't lose, you can trail the SL technically above/bewlo new valid SD formed in your direction. It's a very mechanical way of doing it, it can help you a lot!

Alfonso
Set and Forget supply and demand trading community
  • #3,234
  • Oct 16, 2013 3:16am Oct 16, 2013 3:16am
Quoting panoramia
{quote} I believe it's a nice way of doing it because the market works like that, I mean, entry areas are retested often. Besides, your emotions are put aside because you closed part of your trade at 3:1 for example so you won't have a loss. Once you have a trade that can't lose, you can trail the SL technically above/bewlo new valid SD formed in your direction. It's a very mechanical way of doing it, it can help you a lot! Alfonso
I also do a similar style to this. However I don't always leave stop at initial stop level and will only do that depending on location of the initial trade.
If you act surprised, then you probably missed something
  • #3,235
  • Oct 16, 2013 3:25am Oct 16, 2013 3:25am
I wanted to share with you an example of an IF THEN SCENARIO on NZDCHF. I am always creating this IF THEN scenarios as if I was a robot. I will do whatever happens first.

  1. I couldn't catch NZDCHF on the way up. I have started to trade it a few days ago. The level at 0.7637 was triggered but it was too high, right on the D1 supply zone, so not high odds even though it's working
  2. The D1 supply zone could be taken out, if that happens, we have LOTS of room to keep on buying
  3. NZDUSD is rallying, so it could help NZDCHF to break the D1 supply
  4. IF THEN SCENARIO:

    1. if we solidly break the ascending H4 TL and we remove previous demand, we could have some shorts opportunities
    2. The purple D1 zone is not yet a valid D1 demand area because it has not taken the D1 supply zone yet

Hope it makes sense to you
Alfonso

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Set and Forget supply and demand trading community
  • #3,236
  • Oct 16, 2013 5:18am Oct 16, 2013 5:18am
Quoting panoramia
The purple D1 zone is not yet a valid D1 demand area because it has not taken the D1 supply zone yetHope it makes sense to you Alfonso {image} {image}
Hi alphonso,
The purple area you marked does not seem to have a good departure,congestion and also candles with wicks so why would you consider this as a zone? (sorry to question you)
  • #3,237
  • Oct 16, 2013 5:22am Oct 16, 2013 5:22am
Quoting Gxp1
{quote} Hi alphonso, The purple area you marked does not seem to have a good departure,congestion and also candles with wicks so why would you consider this as a zone? (sorry to question you)
You can question me as many times as you want, I am human and I accept all kind of criticisms, positive and negative. The D1 purple zone would not be a great zone, but I'm not talking about how good or bad the zone is, only that it would become a zone. If the zone is not that great, it's not good for set & forget, you'd pass on it and wait for some reaction on the level, that's what I'd do.


Hope that makes sense!
Alfonso
Set and Forget supply and demand trading community
  • #3,238
  • Oct 16, 2013 6:52am Oct 16, 2013 6:52am
Quoting TraderinSD
{quote} Your point: Quote: " I went into the essential importance of having the proper respect and education for one of humanity's first professions: trading! It's what defines the truly successful traders from the posers in-my-opinion " My Point: I see so many traders get all wrapped up in: Who started this , Who started that, You took from this, You took from that...This does not work, That does not work.. etc, etc .. blah , blah , blah.... This really is detrimental to a traders mind set. Yet so many traders get to a point where they fall into...
Again, fair enough. Why did you reply to me here and not the other thread? I really don't want to get into it here and detract from this great thread, which has more to do with trading strategy and technique than philosophy. That said I take your point and will reply to your post in [my] thread, if you care to read it.

Thanks,
Soca
  • #3,239
  • Oct 16, 2013 7:03am Oct 16, 2013 7:03am
Hello i would like to post my analysis for AUDJPY
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  • #3,240
  • Oct 16, 2013 7:49am Oct 16, 2013 7:49am
Yes Kaloko, I believe there is a potential long on AUDJPY, but I first need to see that resistance taken out, don't want to buy into sellers now, it would not be high odds to buy without those highs being taken out first. I am waiting for those highs to be violated before I go long and adding to my existing long positon on the AUDJPY. Been holding my long trade for 2 weeks now based on the MN/D1 timeframe. Lots of room to opposing supply if that resistance is taken out.

Alfosno
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