Supply and demand in a nutshell by Alfonso Moreno | Page 163 | Forex Factory

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Supply and demand in a nutshell by Alfonso Moreno

  • #3,241
  • Oct 16, 2013 8:11am Oct 16, 2013 8:11am
Quoting panoramia
{quote}After 2:1 or 3:1, you can close half of your position Your SL is not moved to breakeven By doing so, you prevent price from retesting your entry price, which happens A LOT, quite TOO often
This was what I was curious about, thank you Alfonso.

My dilemma is:
1. Put SL to BE at 2:1, but stay in the trade with the full position, then risk breaking even for a potential bigger profit.
2. Close 50% at 2:1 and leave SL untouched, letting price retest the entry. Worst case scenario is still breakeven, while the best case scenario being profitable with half the position.
  • #3,242
  • Oct 16, 2013 8:58am Oct 16, 2013 8:58am
I put two orders on GBPUSD , i am not so sure about them so any feedback would be greatly appreciated
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  • #3,243
  • Oct 16, 2013 9:58am Oct 16, 2013 9:58am
Quoting Ranagol
{quote} This was what I was curious about, thank you Alfonso. My dilemma is: 1. Put SL to BE at 2:1, but stay in the trade with the full position, then risk breaking even for a potential bigger profit. 2. Close 50% at 2:1 and leave SL untouched, letting price retest the entry. Worst case scenario is still breakeven, while the best case scenario being profitable with half the position.
I believe Alfonso will talk about it in detail in his next webinar but I'd like to share some ideas with you.

I'm not a experienced trader on any aspect,still have a lot to learn. And of course I don't know every money management plan so I can't talk much about it. I believe every MM plan is great if use correctly. But your first idea about MM,I have like 4 months of experiences with it. I don't know about others but this is my thoughts: when you put your SL to BE at 2:1,yes you can earn a greater profits but like Alfonso and Pro Trader had said,PA will come back to our entry and then go in our trade direction(many times,not always). But if you have a lot of BE trades,you will think: "Man,I should have taken a little profit back then" or "Look at that 100 pips move in my direction,if I just give it a little room to breath...". And the most dangerous thing is you are not follow your rules anymore.

Don't take my story in a offensive way. It's just my little experiences,maybe you can control your emotions and follow your rules and after a lot of BE you will a 1 trade with a huge profit and you can still win in this game. But as Pro Trader said,you should choose a MM plan that suit you and your emotions.

And about the second one,the worst case scenario is not BE,you still have profit but a little one. So about this,when you close half of your trade at 2:1 and leave another 50% on the table,your emotions are out because you have a free trade now. You still win in the end,think about the remaining 50% is a bonus profit you will get if you let the trade run.

Anyway,it's my little thoughts on this one. If you have visited those trading systems here on forexfactory you should know about it: it's not about the entries,it's about the MM plan that make you a winner in the end. So have a solid MM plan is really important.

Regards,
  • #3,244
  • Oct 16, 2013 10:53am Oct 16, 2013 10:53am
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?
I used too, but now I leave it where it is until another level is created then move stop as per trade management. This is something new which I am currently testing.
  • #3,245
  • Oct 16, 2013 11:08am Oct 16, 2013 11:08am
Quoting Pro Trader
{quote} I used too, but now I leave it where it is until another level is created then move stop as per trade management. This is something new which I am currently testing.
hows that going for you so far? I am thinking of adopt that too because of the same reason you gave before
  • #3,246
  • Edited 12:05pm Oct 16, 2013 11:23am | Edited 12:05pm
Quoting Pro Trader
{quote} I used too, but now I leave it where it is until another level is created then move stop as per trade management. This is something new which I am currently testing.
While we are on the topic has anyone compiled any data on this(I'm sure that the data differs for trend and counter trend and for the different time frames).
What are the % of trades that are a straight loss
What are the % that go to .5:1, 1:1. 1.5:1 etc. and then a loss
What are the % that go to .5:1, 1:1. 1.5:1 etc. and then go to break even
And what % are runners
I think this would be very helpful in making your trade management decision.

Thanks,
Joe
  • #3,247
  • Oct 16, 2013 12:02pm Oct 16, 2013 12:02pm
Quoting frenetic
{quote}And about the second one,the worst case scenario is not BE,you still have profit but a little one. So about this,when you close half of your trade at 2:1 and leave another 50% on the table,your emotions are out because you have a free trade now. You still win in the end,think about the remaining 50% is a bonus profit you will get if you let the trade run.
That's true, my mistake. We'll actually close in profit equal to half our initial risk.
  • #3,248
  • Oct 16, 2013 12:57pm Oct 16, 2013 12:57pm
Great discussion on position management, which I believe is 2nd in importance only to psychology. I used to move to BE near 2:1 or demand/supply levels, but now trying tiering (Partial profits) positions similar to what Protrader is doing and leaving the stop as is. While I can't say I am a veteran of the game, I've seen my BE stop both rob me of some pips and also save me from losses on different occasions. Therefore I'd also be curious to know if anyone compiled any data on this. From a FXstreet webinar I remember S.Seiden mention he does not manage the at all after entering. My psyche at this time makes that difficult to do.

I'm also exploring adding to positions on new levels of Supply/Demand as long as it is still at a acceptable place on the curve. Does anyone else do this (I believe Alfonso does) and experienced positive results? Great thread by the way.

Cheers,
  • #3,249
  • Oct 16, 2013 1:07pm Oct 16, 2013 1:07pm
Dear Alfonso Sir,

Which indicator we are using for Divergence.......... It is written as MACD but my MACD is little diffrent. & how we confirms the divergence.

If anyone can provide feedback than that will a great help.

Thanks
  • #3,250
  • Oct 16, 2013 1:22pm Oct 16, 2013 1:22pm
1st of all EURUSD touched the supply level and went south as expected.

2nd I went through some pairs, and I think I've found Set&Forget trade on the USDCAD, i'll look for a target on the other extreme but where do I take profit on the first trade? or I shouldn't set and forget untill I see a level where I can take some profits off, tell me what do you think
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  • #3,251
  • Oct 16, 2013 1:27pm Oct 16, 2013 1:27pm
Quoting Irad
{quote} hows that going for you so far? I am thinking of adopt that too because of the same reason you gave before
Well its going good so far. I find it easier on my emotions which is another step in the right direction. Early days at the moment.
  • #3,252
  • Oct 16, 2013 1:35pm Oct 16, 2013 1:35pm
Quoting fortunateson
{quote} While we are on the topic has anyone compiled any data on this(I'm sure that the data differs for trend and counter trend and for the different time frames). What are the % of trades that are a straight loss What are the % that go to .5:1, 1:1. 1.5:1 etc. and then a loss What are the % that go to .5:1, 1:1. 1.5:1 etc. and then go to break even And what % are runners I think this would be very helpful in making your trade management decision. Thanks, Joe
I strongly believe you will never have a best exit strategy as the markets always vary to some degree. The true question is which exit strategy can you emotionally stick too? Consistency is key. Forward testing is the only answer.
  • #3,253
  • Oct 16, 2013 2:10pm Oct 16, 2013 2:10pm
Quoting picorian
Great discussion on position management, which I believe is 2nd in importance only to psychology. I used to move to BE near 2:1 or demand/supply levels, but now trying tiering (Partial profits) positions similar to what Protrader is doing and leaving the stop as is. While I can't say I am a veteran of the game, I've seen my BE stop both rob me of some pips and also save me from losses on different occasions. Therefore I'd also be curious to know if anyone compiled any data on this. From a FXstreet webinar I remember S.Seiden mention he does not...
I also add to my position this way. Then let em run managing on the way to final target. This is done as a number 3 - location & momentum trade only for me.
  • #3,254
  • Oct 16, 2013 6:42pm Oct 16, 2013 6:42pm
Quoting Kaloko
I put two orders on GBPUSD , i am not so sure about them so any feedback would be greatly appreciated
Hi Kaloko, I'm seeing price as just bouncing off of monthly and weekly demand and too high in the curve to buy into. I also see H4 in a down trend so for me the only thing is shorts.
Hope that helps, Greg

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  • #3,255
  • Oct 16, 2013 9:08pm Oct 16, 2013 9:08pm
Quoting esanjayplaye
Dear Alfonso Sir, Which indicator we are using for Divergence.......... It is written as MACD but my MACD is little diffrent. & how we confirms the divergence. If anyone can provide feedback than that will a great help. Thanks
Hi esanjayplaye. This is a private indicator I use for confirmation of certain levels but to be honest its not necessary. If your confident & understand supply & demand as well as Alfonso then no indicator is needed. In fact its more of a distraction. The closer you are to pure price action supply & demand the easier & clearer it is to follow rules.

I wont show this indicator again.

We need to all follow the same path to really understand supply & demand & follow the rules Alfonso has given us. Hope those who have emailed me are not offended. I really do intend to help not confuse you.

Stay true to what Alfonso has been good enough to show you & the penny will drop much quicker. All the best
  • #3,256
  • Oct 16, 2013 9:16pm Oct 16, 2013 9:16pm
Pro Trader,

Thanks for your great reply.
I dont want to hurt you to use your indicator, you are free to use your indicator even in your charts. We dont have any excuse/complain. Infect we like it.

You are right in the sense that we should use supply and demand rules given by alfonso for our Good effect.
I like your comment.

Lets trade & be profitable.

Thanks once again
  • #3,257
  • Oct 16, 2013 9:54pm Oct 16, 2013 9:54pm
Here's a possible short in the eurcad for this week following the Weekly/240 swing trading rules.
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  • #3,258
  • Oct 17, 2013 12:21am Oct 17, 2013 12:21am
I am a retired engineer. This means that I am afflicted with a desire to quantify everything I see. This is a terrible affliction when reading forex forums, as you must be aware, nevertheless my mind will not settle until I have tried.

Here we have a thread titled ...Trading Journal.... It is a wonderful thread with many trades that have been described. The system seems to work well, but requires a good deal of art. Defining zones, defining trendlines, and so on are best done after much practice and trading experience. That means that I don't think I can write an EA to automate the trades. It may be possible for humans to "trade like a robot", but in this system it is either impossible, or very difficult for a robot to "trade like a robot".

So what is the poor engineer left to do? Well I would like to collect data on actual trades. Since I am not an artist, or much of a trader, I cannot do this without help.

I have read most of this thread, and have found no report of actual trades made. It seems that a system such as this which is based on making high probability trades should have some published account reports so that we can get an idea of win%, etc.

If you have been trading this method on demo long enough to have as few as 20 trades, then you probably have a demo account report that shows the trades and summarizes the statistics. (You can get this from the terminal by right-clicking anywhere in the account history panel, and selecting "Save as detailed report".)

I think it would be very helpful to the forum (and will help satisfy my craving for data) if everyone who is trading a demo trading account would upload a detailed report to the forum.(Just use the "Attach files" panel under the "post new reply" command). If you do, I will attempt to consolidate the results and upload a consolidated report. Please do not be bashful. So what if you have blown an account or two, let us know why, and submit a report.

MadCow
  • #3,259
  • Oct 17, 2013 3:47am Oct 17, 2013 3:47am
Hello guys.
iam just looking on CABLE.

can anybody share his ideas whats better short ? 1. or 2. ?
or rather stay away of trade.
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  • #3,260
  • Oct 17, 2013 5:09am Oct 17, 2013 5:09am
Quoting adriann
Hello guys. iam just looking on CABLE. can anybody share his ideas whats better short ? 1. or 2. ? or rather stay away of trade. {image}
Hi Adriann - where is your weekly curve? How far up the curve is this price?

I have similar H4 zones marked and have price sitting at about 75% up the curve. I feel that price is only just entering the top 25% of the curve, so I would be waiting to trade short from higher up the curve possibly around your #1 DBD.

I will be interested to hear others comment whether my approach is lower probability or not (ar any other observations others may care to share)

Good on you for bringing more to this forum...
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