Supply and demand in a nutshell by Alfonso Moreno | Page 188 | Forex Factory

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Supply and demand in a nutshell by Alfonso Moreno

  • #3,741
  • Dec 19, 2013 12:28am Dec 19, 2013 12:28am
Quoting frenetic
{quote} {quote} Thank you for your opinion,I just want to be clear on this matter. Like which trendline is the valid one. If the upper trendline is the valid one then after D1 demand is taken out and trendline is broken then long is no longer valid. But after it bounced from the lower demand zone,then what happen to the supply that took out the demand on D1 and can we now draw a new trendline(like the one in my chart) and what should we do in this scenario? I hope Alfonso can read this,I just have a feeling that maybe he like to ignore my post ...
The lower TL is not valid, it has not made a new high removing previous high created by the first valley, that's a rule you CAN'T break when drawing TLs.

The upper TL is valid but price broke it, read this post I wrote today about the TL, it will explain why the D1 demand on GU would bevalid, http://www.forexfactory.com/showthre...66#post7165866

Alfonso
Set and Forget supply and demand trading community
  • #3,742
  • Dec 19, 2013 6:10am Dec 19, 2013 6:10am
Hi traders,

I have a theoretical question. What rule could be used to decide, whether the price was testing an earlier zone or it created a new fresh but not original level.
On the chart the gray demand zone is tested. When can I use the test as a new zone?
Attached Image
  • #3,743
  • Dec 19, 2013 6:53am Dec 19, 2013 6:53am
Quoting Serijbok
Hi traders, I have a theoretical question. What rule could be used to decide, whether the price was testing an earlier zone or it created a new fresh but not original level. On the chart the gray demand zone is tested. When can I use the test as a new zone? {image}

That is clear, the fact that there is a new high formed, higher than the previous reaction from that level
  • #3,744
  • Dec 19, 2013 7:38am Dec 19, 2013 7:38am
Quoting Reacto
{quote} That is clear, the fact that there is a new high formed, higher than the previous reaction from that level
Thank you Reacto.
That means if other conditions are suitable, then it is possible to buy when the price returns to the blue fresh not original level.
  • #3,745
  • Edited 9:32am Dec 19, 2013 8:23am | Edited 9:32am
Quoting Reacto
{quote} That is clear, the fact that there is a new high formed, higher than the previous reaction from that level

Is the criteria a new high or is it that it has to absorb a contrair level, in this case a demand level, the cp-level?

Because the fractal high is, in my humble opinion, no level because it did not absorb any supply level!!!
"When the student is ready, the teacher will appear"
  • #3,746
  • Edited 9:08am Dec 19, 2013 8:57am | Edited 9:08am
Quoting Serijbok
Hi traders, I have a theoretical question. What rule could be used to decide, whether the price was testing an earlier zone or it created a new fresh but not original level. On the chart the gray demand zone is tested. When can I use the test as a new zone? {image}
If no supply is absorbed after the rise, it is not a demand zone. Then if no demand is absorbed when price drops, the market is in consolidation/sideways. You'll need to wait for a break and the creation of a new SD zone.


If previous supply zone is broken, it validates the level as new demand zone. (In your example green zone is absorbed)

When price comes again to that demand zone, you will need to assess the direction of the trend at that moment,

Is trend still up in the same TF? (no demand broken), no UTL broken?
Is trend down in the same TF, but HTF trend is still UP?
Is trend sideways?

These are trend and counter trend trading rules that lead to set and forget trades, confirmation trades, or no trade. Check those concepts in the first post.


PS: I forgot to mention:
When price comes again to that zone, did price reached a HTF supply zone, before dropping? How hig/low is price in the curve?
  • #3,747
  • Dec 19, 2013 9:42am Dec 19, 2013 9:42am
Quoting jsr
{quote} If no supply is absorbed after the rise, it is not a demand zone. Then if no demand is absorbed when price drops, the market is in consolidation/sideways. You'll need to wait for a break and the creation of a new SD zone. If previous supply zone is broken, it validates the level as new demand zone. (In your example green zone is absorbed) When price comes again to that demand zone, you will need to assess the direction of the trend at that moment, Is trend still up in the same TF? (no demand broken), no UTL broken? Is trend down in the same...
Right JSR!!

But do you take that, or do we have to take that concept, according to the theory on page 1, into account when we discussing the picture on the curve??
Or do we have to take this concept into account only on the entry timeframe?
"When the student is ready, the teacher will appear"
  • #3,748
  • Dec 19, 2013 3:21pm Dec 19, 2013 3:21pm
Quoting Serijbok
Hi traders, I have a theoretical question. What rule could be used to decide, whether the price was testing an earlier zone or it created a new fresh but not original level. On the chart the gray demand zone is tested. When can I use the test as a new zone? {image}
My 2c .. If this scenario is with a HTF trend then the blue demand becomes valid once the fractal high is breached. If other factors pass validation then level is tradeable.
If you act surprised, then you probably missed something
  • #3,749
  • Dec 19, 2013 7:04pm Dec 19, 2013 7:04pm
Quoting FxDoji
{quote} Right JSR!! But do you take that, or do we have to take that concept, according to the theory on page 1, into account when we discussing the picture on the curve?? Or do we have to take this concept into account only on the entry timeframe?
I'm not sure if I understand your question, but I can tell you this: We can't make decisions based in just one TF. Each TF is a fractal of a higher TF and we need to know where in that HTF is that price action taking place . In other words: Location, location, location.


The image shown by Serijbok is isolated. We can't see anything else. In the TF where the supply is being absorbed, we know for sure that a new zone of demand has been created, but we don't know if it will be valid for trading when price comes to test it.

This picture is just a piece of a puzzle. The question is: how it fits into the bigger picture?
  • #3,750
  • Dec 19, 2013 9:50pm Dec 19, 2013 9:50pm
hey, I have a question... does anyone have Supply & Demand indicator with sound and pop-up alert when new zone appears?
Trade or not to trade - that is the question...
  • #3,751
  • Dec 20, 2013 4:10am Dec 20, 2013 4:10am
Hi Alfonso

If your template is applied, indicator not drawing zone at higher timeframes - H4, D1, W1, MN1. But it is drawing zones at lower timeframes from minutes up to H1. Is that intentionaly left to draw zones manualy at higher timeframes? Maybe you can tell that is idea of that?

Regards
  • #3,752
  • Dec 20, 2013 5:54am Dec 20, 2013 5:54am
Quoting freakout
hey, I have a question... does anyone have Supply & Demand indicator with sound and pop-up alert when new zone appears?
yes: II_SupDem v2.mq4 (so source is also available, as a plus, it is also MTF one)
  • #3,753
  • Dec 20, 2013 6:47am Dec 20, 2013 6:47am
Quoting kimis
Hi Alfonso If your template is applied, indicator not drawing zone at higher timeframes - H4, D1, W1, MN1. But it is drawing zones at lower timeframes from minutes up to H1. Is that intentionaly left to draw zones manualy at higher timeframes? Maybe you can tell that is idea of that? Regards
Hi Kimis,

I am drawing the higher timeframe's zones manually, I will not let the automatic one do that for me... that's why I do have it disconnected by default, it's just the way I decided to do it myself. I trust my analysis so I draw them manually.

Hope that makes sense to you!
Alfonso
Set and Forget supply and demand trading community
  • #3,754
  • Dec 20, 2013 7:29am Dec 20, 2013 7:29am
Quoting panoramia
{quote} Hi Kimis, I am drawing the higher timeframe's zones manually, I will not let the automatic one do that for me... that's why I do have it disconnected by default, it's just the way I decided to do it myself. I trust my analysis so I draw them manually. Hope that makes sense to you! Alfonso

Thanks Alfonso.

Thats clear now. Does it mean that automatic zones are or can be inaccurate ? especialy at higher timeframes?
Have been trying to watch video from post 20. it is about how to draw zones. But youtube says it is private
  • #3,755
  • Dec 20, 2013 7:31am Dec 20, 2013 7:31am
Quoting kimis
{quote} Thanks Alfonso. Thats clear now. Does it mean that automatic zones are or can be inaccurate ? especialy at higher timeframes? Have been trying to watch video from post 20. it is about how to draw zones. But youtube says it is private
They are accurate many times, others they are not 100% accurate as per the rules, others too wide, etc...

The video on how to draw the zones is no longer available on YouTube, I had to make it private to avoid problems, sorry.
Alfonso
Set and Forget supply and demand trading community
  • #3,756
  • Dec 20, 2013 7:38am Dec 20, 2013 7:38am
ok, thanks for the answers. is it possible to see it somewhere else? or maybe there is some other material where it is in details explained how to draw zones?

p.s. I found good reason to draw HiTF zones manualy - rectangle reader will depict trendlines of those rectangles on lower TF, and percentage of location at curve will be shown
  • #3,757
  • Dec 20, 2013 8:33am Dec 20, 2013 8:33am
and one more question regarding zones formed by news spike. Particularly this one (orchid color) has been formed by NFP spike down after what price ralied up, removed some older zone. Is this ok to use such zones? I know, that this one is not very good as is to wide and we have weekly zone very close above, but in general - are those "news" zones tradable ?
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  • #3,758
  • Dec 20, 2013 12:22pm Dec 20, 2013 12:22pm
Quoting kimis
ok, thanks for the answers. is it possible to see it somewhere else? or maybe there is some other material where it is in details explained how to draw zones? p.s. I found good reason to draw HiTF zones manualy - rectangle reader will depict trendlines of those rectangles on lower TF, and percentage of location at curve will be shown
There are a few of videos describing to how draw zones and trendlines, but they are only available to subscribers in the private set-and-forget.com forum.

Alfonso
Set and Forget supply and demand trading community
  • #3,759
  • Edited 12:44pm Dec 20, 2013 12:25pm | Edited 12:44pm
Quoting kimis
and one more question regarding zones formed by news spike. Particularly this one (orchid color) has been formed by NFP spike down after what price ralied up, removed some older zone. Is this ok to use such zones? I know, that this one is not very good as is to wide and we have weekly zone very close above, but in general - are those "news" zones tradable ? {image}
I skip all zones that have long spikes (tails and wicks), they are normally reaction to previous levels, it's one of the rules... a good base does not have longs spikes, it's NOT a level.... unless you have rules for levels with long spikes (I don't have any for now, sticking to the well structured levels, there are PLENTY of them).

Hope that helps
Alfonso
Set and Forget supply and demand trading community
  • #3,760
  • Dec 20, 2013 7:24pm Dec 20, 2013 7:24pm
Quoting panoramia
{quote} There are a few of videos describing to how draw zones and trendlines, but they are only available to subscribers in the private set-and-forget.com forum. Alfonso
Hey Alfonso, any specific reason these videos were removed? I guess it is not commercial, rather trademark (or what) question? Plz let us know.
Tnx
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