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Price Action made simple with Supply and Demand levels

  • #61
  • Oct 18, 2013 10:21am Oct 18, 2013 10:21am
Thanks everyone for your messages/comments in this thread! Here's a quick update.

As planned, I just updated the first post of this thread with new content about "Entry, take profit and stop loss", I think you will like it! You can also read it at the bottom of this post.
As always, let me know if you have any questions.

---

Entry, take profit and stop loss
Once you identify a good level that you want to trade, you have to set up the trade. Here's how I do it with a little example, based on the first chart of this thread.

Attached Image


Legend:
- Blue rectangle: the supply level
- Blue line: the entry of the trade, at the beginning of the level
- Red line: the stop loss (SL), usually a few pipes above the end of the level
- Green line: the take profit (TP), that is simply placed in a way to have a 1:2 or 1:3 risk:reward ratio (in this example it's a 1:3)

So once you know how to draw levels, setting up a trade is really simple with these rules.
  • #62
  • Oct 18, 2013 10:30am Oct 18, 2013 10:30am
Quoting bg_sunny
{quote} Forget trends. Trends are illusions you create in hindsight. The market moves somewhere because: a) many small players go somewhere collectivly, sharing the same belief OR b) some player with big pockets sells/buys huge amounts. If I asked you in 1918 after WW1 what would happen in 20 years you would give me the same answer as if I asked you today about it and that is (considering you are honest): "I don't know". you could never predict WW2. Why? Too many components, too complexly linked together... You do not know what is behind a movement...


Quoting thomaas
Introduction Hi everyone! I'm a long time reader of ForexFactory, and I learned a lot here about trading. And now I think it's time for me to return the favour, and show you how I trade. I've discovered Forex 3 years ago, then blown up demo accounts for 2 years, and for the last 6 months I'm profitable with a real account.
Thanks for this interesting thread Thomaas, can you take a little time to elaborate why you decided to go live? do you have statistical evidence based on trades taken that your approach works in the longer term and that you have a genuine edge. perhaps an old demo account showing a large sample size to review?

many thanks again
  • #63
  • Oct 18, 2013 11:11am Oct 18, 2013 11:11am
Quoting stricky1967
{quote} {quote} Thanks for this interesting thread Thomaas, can you take a little time to elaborate why you decided to go live? do you have statistical evidence based on trades taken that your approach works in the longer term and that you have a genuine edge. perhaps an old demo account showing a large sample size to review? many thanks again
See, dear thomaas this is something you will have to live with: skeptic people. Please do not get de-motivated through my or some one else's posts, I for my part want to eliminate the bulls**t as far as possible. There is a reason why people subscribe to your thread. For me it is the clarity of it.

I join stricky1967 and would be interested in statistical evidence of a big sample size. Not to say that you are right or wrong, but in order to gain confidence in what I am going to invest my time in.

Thanks

Take care
Demo only
  • #64
  • Oct 18, 2013 11:42am Oct 18, 2013 11:42am
Quoting Riskit
Points noted. Trends are lagging, and a reflection of history. You never "know" what price is going to do, you can only "read" what price has done in the past.

Correct.
It is even worse. We do not even understand historic data/history.
Consider the following two scenarios.

You put an ice cube into a warm room. You have to predict how it is going to look like 5 min later - the shape of the remaining ice, the shape of the water and the quantity. This is very hard to do, but still possible. You'd have to take a limited (though very big) number of components into consideration, but still doable.

Now I show you the half melted ice cube and the water around it and ask you to tell me how the initial ice cube looked like.
This is impossible to do. The possibilities for the initial form are quasi infinite.

History /historical data seems to be a question of interpretation.

The question is then: How to make decisions?
1. Be open minded for positive events (big price moves coming back from the same price level)
2. Be paranoid about bad events (blow up, extreme price movement against you. Use a Stop loss)

Even a SL is not enough. Have you considered the fact that you rely on technology to execute your emergency exit (the SL at a certain percentage o your account)? What if it fails?
Your account may be protected by some law/regulation which will protect your funds up to 100.000£ as it is the case with ActivTrades. So what? If they blow up what do you think? They're going to pay out all this? If they really blow up.... I don't want to think about it.

The nature of this business is that we have to be skeptic and empirical at the same time. The market is for me a representation of real life. That's why I love it.
Maybe it is completely random or it is governed by an extremely complex rule/algorithm/ pattern.
But for me operating in it it makes no difference. No operational difference.
We have to decide (in both cases) under uncertain uncertainty.

We have to expose our self as much as possible to big moves and keep our losses tight.

Take care
Demo only
  • #65
  • Oct 18, 2013 11:46am Oct 18, 2013 11:46am
You guys are getting way too complicated. You may not know w.hat price will do but you can plan an action IF it does anything before it actually occurs

Ie I'm a buyer at x, seller at y. Why? Because price.

Very simple
Any prices quoted are futures
  • #66
  • Oct 18, 2013 12:15pm Oct 18, 2013 12:15pm
Quoting redteamgo
You guys are getting way too complicated. You may not know w.hat price will do but you can plan an action IF it does anything before it actually occurs Ie I'm a buyer at x, seller at y. Why? Because price. Very simple
True, I made it a bit complicated.

How far do you consider time as a factor? New York/London session? Any thoughts on this? Would love to hear it.

Thanks
Demo only
  • #67
  • Oct 18, 2013 3:56pm Oct 18, 2013 3:56pm
thomas in GBP/USD
I'm confused which level i must choose?
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  • #68
  • Oct 18, 2013 5:10pm Oct 18, 2013 5:10pm
An interesting read...
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Money Can't Buy Happiness. Poverty Can't Buy SHIT! You Choose!
  • #69
  • Oct 18, 2013 6:25pm Oct 18, 2013 6:25pm
Quoting FerruFx
{quote} Yes of course ... and in this case, we won't have to make the wrong decision on the level!

my point was that you could be waiting a very very long time to see any signals. like i said price usually continues in the same direction, retraces may be minor and may not be to the same level.
  • #70
  • Oct 18, 2013 6:29pm Oct 18, 2013 6:29pm
Quoting rtkwar
thomas in GBP/USD I'm confused which level i must choose? {image}
nothing confusing here. unfortunately both trades would be losses. goes back to what i said in my last post, price more often continues in the same direction.
  • #71
  • Oct 18, 2013 6:32pm Oct 18, 2013 6:32pm
Quoting thomaas
Introduction Hi everyone! I'm a long time reader of ForexFactory, and I learned a lot here about trading. And now I think it's time for me to return the favour, and show you how I trade. I've discovered Forex 3 years ago, then blown up demo accounts for 2 years, and for the last 6 months I'm profitable with a real account. My trading technique is simple: price action with supply and demand levels. If you are interested to hear more about it, keep reading! Price Action with Supply and Demand levels There are a lot to cover here, and my time is limited....
yes ,looks good ,waiting for more,thank's.
  • #72
  • Oct 19, 2013 4:28am Oct 19, 2013 4:28am
To the people asking me for proof that my system works: I don't know what to say since every proof I could show you can be faked.
Will this system work for you? Am I just lucky with my trades? I have no idea. All I know is that this system is working for me right now, and I know other traders that are profitable with S&D levels.
The best proof you can get is by trying S&D levels for yourself, and see how it goes.

Quoting rtkwar
thomas in GBP/USD I'm confused which level i must choose? {image}
Good question! I plan to write about how to identify good levels. Here's my comment about your levels:

Attached Image (click to enlarge)
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Legend:
1- The price movement is not strong at all here. So not a good level.
2- This level is interesting, but you can see that the level is quite large, so getting a RRR of 1:2 it's going to be difficult. So not a good level.
3- The price movement is not super strong, but I like this level.

Oh, I wanted to say a big thank you to the people who vouched me since I started this thread, it means a lot!
  • #73
  • Oct 19, 2013 4:43am Oct 19, 2013 4:43am
Quoting thomaas
To the people asking me for proof that my system works ...
Just ignore these kind of request. If people don't believe what you are saying, there are plenty of other threads where they can go ...

There's no reason to show a proof of anything ... except those who are selling something ... which is absolutely not the case here.
MT4/MT5 EAs/Indicators/Alerts coder
  • #74
  • Oct 19, 2013 4:53am Oct 19, 2013 4:53am
Hi Thomaas

Don't worry about proof, what you are discussing is the important point here! Looking forward to further posts.
  • #75
  • Oct 19, 2013 5:00am Oct 19, 2013 5:00am
Nice simple and good explanation Thomaas! agreed with FerruFX and Mickeyf, no proof required. Time will do it.

I got a question regarding your good level (red level No.3) on your recent picture. What sort of pip range you usually looking at?

Thanks.

Regards,
Clement
  • #76
  • Oct 19, 2013 5:28am Oct 19, 2013 5:28am
Let's take a look!
  • #77
  • Oct 19, 2013 5:31am Oct 19, 2013 5:31am
Would be great to see some real trades posts here.(i mean also demo but some trades)
how people trade this levels.
not just Analysis of how he or she would trade it or what level are good or bad.
  • #78
  • Oct 19, 2013 5:43am Oct 19, 2013 5:43am
Quoting thomaas
To the people asking me for proof that my system works: I don't know what to say since every proof I could show you can be faked. Will this system work for you? Am I just lucky with my trades? I have no idea. All I know is that this system is working for me right now, and I know other traders that are profitable with S&D levels. The best proof you can get is by trying S&D levels for yourself, and see how it goes. {quote} Good question! I plan to write about how to identify good levels. Here's my comment about your levels: {image} Legend: 1- The...
thank you thomas for your reply
I'm with you
And I believe in your system
I read about these levels and tried it for 3 weeks ( i still training)
it Is successful levels
And I want to learn from you more
Do not listen to people who are causing frustration
If they really are not interested in
Why they reading this topic?
I am sure they are using those levels, but they just deny the truth
So keep up the good work and I'm with you
  • #79
  • Oct 19, 2013 5:45am Oct 19, 2013 5:45am
Quoting adriann
Would be great to see some real trades posts here.(i mean also demo but some trades) how people trade this levels. not just Analysis of how he or she would trade it or what level are good or bad.
Are you asking for proof to you? Practice, spend your time in front of computer, take a risk....No one has any obligation to you....your money, your account and your responsibility....
The Market pays you to be disciplined
  • #80
  • Oct 19, 2013 6:14am Oct 19, 2013 6:14am
Quoting mima
{quote} Are you asking for proof to you? Practice, spend your time in front of computer, take a risk....No one has any obligation to you....your money, your account and your responsibility....
You dont understand what i wrote.
i what not asking about any proof or performance . i dont need any proof. iam trading live account using s/d.
what i suggested was. post some examples of trades of others traders who also trading s/d.
this is valuable for me. there are many similar threads in FF about s/d about this topic . but i always love to see how other trading s/d.
mean trading not teaching. so therfore i was suggested to bring some light to this thread using some real examples.
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