DislikedGbp/Jpy, nothing spectacular so far but quite safe to trade. {image}Ignored
-milkeyway
- #341
- Mar 14, 2014 7:05am Mar 14, 2014 7:05am
- Joined May 2011 | Status: Trader | 1,374 Posts
-milkeyway
{quote} Hello SSS, From the school I learned supply and demand, they always say that news levels do not represent the origin of imbalance between supply and demand. In some class A news such as NFP you always see a super strong candle created. these types of candles are not the consequence of normal market condition where demand exceeds supply ( demand zone) or supply exceeds demand ( supply zone). These candles forms because of low volume of the market. Always remember at the news time smart money goes out of the market and wait for the out come...
,keeps u on your feet.
well i follow the school of supply and demand inventor "Sam Seiden".
letme answer your questions inline with ur response.
Hello SSS, From the school I learned supply and demand, they always say that news levels do not represent the origin of imbalance between supply and demand. In some class A news such as NFP you always see a super strong candle created.my school says don't worry about news levels, as u can't always distinguish which levels are news based.also any price going up or down is the result of some news at some time,some news have immediate effects while some effect over time.
these types of candles are not the consequence of normal market condition where demand exceeds supply ( demand zone) or supply exceeds demand ( supply zone). These candles forms because of low volume of the market.price will go up or down only when there is difference in supply and demand, be it normal or abnormal market condition, this does not change. also i would think the same way like you earlier, that low volume is bad and that there should be lots of trading activity,i.e volumes at a level, but this perspective of mine changed ,after i met SAM SEIDEN the god of supply and demand and attended his seminar,just read this quote from him below, which is marked in yellow
More importantly, how much time price spent there which is essentially the same thing. If supply and demand were that much out of balance, price would not spend that much time in that area.
The Logic: The less time price spends at a level, the more out of balance supply and demand is at that level.
Conventional technical analysis teaches traders that strong support and resistance levels are areas on the chart where you have lots of trading activity, many candles on the screen, and above average volume. If you think the simple logic through, I think you will find that the opposite is true as I am suggesting above.
so these candles formed because of low volumes are very good levels, as this suggests there is a lot of unfilled orders still remaining in those area's.this new perspective changed the whole way of my trading, and that to for the better.
Always remember at the news time smart money goes out of the market and wait for the out come of the news and then get in the market at the first possibility.According to my school. Smart money is already in before anyone else is and before any news,so its only the unfilled orders of smart money that we guys using Supply and Demand take advantage of, when price retraces back to such levels,
Many people think that strong candles at the news time is the result of high volume and lots of orders however simply its not true. again we are not looking for high volumes we are looking for places with strong candles with the least possible volumes
In USD-CHF chart which you shared, you can see that level created by such a strong move away didn't work but lower level worked better. In this chart lower level doesn't look a high quality level with a super strong move away but in fact lower level could represent the origin of imbalance and higher level is the result of low volume market. hey the level that i gave worked superbly, there was no lower and upper level, i was only one level,it gave a almost 35 pips on stoploss of 17 pips, so RRR of 1:2 achieved on this trade,all i was doing was using the unfilled orders in that level,it may have been a level created by news, but i don't care as i don't keep a track of news levels, as i think it is a waste of time. just see the chart which i have posted below for references, showing all targets achieved,
Back to the discussions how we can identify if a level is news based or not, if we are trading on the levels which created within a week or two, it will not be difficult to find out date and time and go and check if there was any class A news. for older levels it would be difficult little bit. thats what i said, if we are keeping track of some pairs or if its a current news ,its easy to spot levels created because of that news, u can do that even with some news which is a few days old too, but the further back u go the more difficult it becomes to recognize such levels,i think this is all very time consuming and don't like to spend so much time on things which don't matter
You need to know about historical levels if you want to trade counter trend. There is nothing wrong with counter trend trading but a friendly suggestion would be, even if a historical level looks good, always wait for the price to show some sort of reaction in the level before get in the trade. thanks for the friendly suggestion, Danial, i appreciate it, but that's obvious u can trade only when u know were a level is, i do trade counter also, i have my rules set for it, i many a times i have managed to catch the start of a new trend doing counter trend trades all because of the beauty of Supply and Demand.
Have a great trading week[/quote]. Thanks you too have a green and successful trades
i did the best to answer the question that u asked, but we both might not agree on it, thats ok because everyone as a point of view, but as long as we have such healthy discussion, it will enhance our knowledge,was great discussing this on the forum.
, just sharing whatever i know...
- #349
- Mar 18, 2014 9:16am Mar 18, 2014 9:16am
- Joined May 2011 | Status: Trader | 1,374 Posts
-milkeyway
- #354
- Mar 18, 2014 2:04pm Mar 18, 2014 2:04pm
{quote} hello Danial, Sorry for the late reply ,but i was tied-up with trading and other work.and its really great 2 have a healthy discussion
yes, price rejection at the extremes ie. support and resistance ussually have low volume, ie. almost no interreste in trading at those areas.. ie. prices are considered unfair high (res.) or unfair low. (sup) .. where almost no transactions take place.. whereas the most trades take place in the middle or mean ie. the midpoint between sup. and res. (range) .. ist simple auction market theory...
think about it the way , that price is consistently on the lookout to fasciliate a trade between to partys.. ie. price is advertizing itself all the time
and in that process.. we do have prices which are considered fair or unfair to the market.. and on unfair prices.. less trading takes place.. while on fair prices alot of transactions take place.. till there is a shift in balance of supply and demand .. which drives price (imbalance) to the next level of balance.. and so on..and so forth...
smart money(informed) knows that and knows the factor of "dumb money"(uninformed) involved in that.. which will be used to their advantage..
like buying into weakness , selling into strenght.. absorbtion.. shakeouts.. etc.. smart money positions itselff way before and during a move to their advantage.. while "dumb money" drives price...
and if their is alot of trading activity going on at a extreme (sup/res.. etc.) then whatch closely what price is capable to do and what not.. if it doesnt does what might one excpect on a certain area.. then it mostlikley does the opposite.. and catch everyone cold handed... (fullfilled and unfullfilled expectations!)
price ultimately likes to take the path of the least resistance...
- #357
- Mar 18, 2014 2:21pm Mar 18, 2014 2:21pm
- Joined May 2011 | Status: Trader | 1,374 Posts
-milkeyway
- #358
- Mar 18, 2014 2:27pm Mar 18, 2014 2:27pm
{quote} Do you mean I will able to know them when I will get lot of experience.?
actually its not neccessary to know if a level holds/works or not.. its just a mather of losing less when it doesent and win alot more when it does..
but yea.. u can actually change the odds drastically in your favour.. if you know how to read / judge the market by its own actions towards and at those levels..
but u need to setup a trading plan which suites you and your personal skills/characteristics.. to actually make money out of it..
ie. results= market understanding x (you + trading strategy).
{quote} actually its not neccessary to know if a level holds/works or not.. its just a mather of losing less when it doesent and win alot more when it does..