Supply and demand in a nutshell by Alfonso Moreno | Page 210 | Forex Factory

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Supply and demand in a nutshell by Alfonso Moreno

  • #4,181
  • Apr 4, 2014 3:29am Apr 4, 2014 3:29am
Quoting apereiro
Hi Alfonso I would like you could give me your opinion about XAUUSD. I have been wathching it and I think than we must wait because there is not position in any timefrime. Allover in 4H, I don´t know if I forgot to draw some level . I think than there are too many levels . I hope your opinión about it. Thanks for all. {image} {image} {image}
Hi there my friend,

Let me reply to your gold analysis...

  1. The Monthly supply zone you drew is not a zone, it's not well formed... Maybe on the D1 or WK you will have a better one if any
  2. Price is reacting to a D1 flip zone, previous support becoming resistance. D1 supply in purple is not valid, not a minimum of 2:1 imbalance
  3. Descending H4 TL has been broken. The level that broke H4 TL was the one at 1284, reacting to it
  4. H4 compressed supply, too much trading in the zone

Hope that helps!

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Set and Forget supply and demand trading community
  • #4,182
  • Apr 4, 2014 3:34am Apr 4, 2014 3:34am
Quoting negi_29
{quote} hI, If we are at the extremes in the curve (D1 supply fresh zone, it doest not apply to non-fresh zones) we won't need that the new lower timeframe supply (H4 in this case) takes out previous H4 Demand area for our entries, since the D1 supply is fresh. If the D1 supply was not fresh then we'd need that previous demand to be removed before the brand new supply is considered for a confirmation type of trade.
Thanks Negi - so in this situation, we just need a R:R of 2:1 or more? I'll study those rules again!...

Another question. Why 3:1 minimum targets? Seems to me 2:1 (or even 1:1) would be fine too. You'd get a better win rate, but lower average win. Perhaps testing has shown 3:1 or more to work better than 2:1?

All the best,

TzK.
  • #4,183
  • Edited 5:09am Apr 4, 2014 4:09am | Edited 5:09am
Quoting tzkennedy
{quote} Thanks Negi - so in this situation, we just need a R:R of 2:1 or more? I'll study those rules again!... Another question. Why 3:1 minimum targets? Seems to me 2:1 (or even 1:1) would be fine too. You'd get a better win rate, but lower average win. Perhaps testing has shown 3:1 or more to work better than 2:1? All the best, TzK.
Why 3:1 minimum target? Make your numbers with a 1:1 or 2:1 exit, and a 50% or 40% success ratio... You will see what I mean, you will always lose.
Make your calculations with a 40-50% success ratio and exit at 3:1, you will see you will always be on the winning side. That simple.

Risking 1% to win 1% is not a sound and logical money management strategy! Trading to get just 1% of 2% of your entry? If I did that, I'd have to choose another job
This is something emphasized a lot at the private community, we even have a challenge and rules for that... It's all about your exits and not your entries... Entering a trade is very easy, exiting is not. See sample image.

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Hope that make sense
Alfonso
Set and Forget supply and demand trading community
  • #4,184
  • Apr 4, 2014 7:55am Apr 4, 2014 7:55am
Quoting panoramia
{quote} Why 3:1 minimum target? Make your numbers with a 1:1 or 2:1 exit, and a 50% or 40% success ratio... You will see what I mean, you will always lose. Make your calculations with a 40-50% success ratio and exit at 3:1, you will see you will always be on the winning side. That simple. Risking 1% to win 1% is not a sound and logical money management strategy! Trading to get just 1% of 2% of your entry? If I did that, I'd have to choose another job This is something emphasized a lot at the private community, we even have a challenge and rules...
Thank you for your reply. I'm not sure I quite understand your calculations. It seems to me that a R:R of 2:1 (reward:risk) and a success ratio of 50%, or even 40%, would be profitable. 100 trades = 40 wins @ 2%, 60 losses @ 1% = 20% gain. With a 50% success ratio it would be 50% gain (and it seems logical to me that shooting for 2:1 would result in a higher success ration than 3:1). Maybe I'm missing something? But I'm quite happy to believe 3:1 would work out better still in the long run.

Thanks for sharing your experience on this most excellent thread.

TzK.
  • #4,185
  • Apr 4, 2014 9:04am Apr 4, 2014 9:04am
Quoting tzkennedy
{quote} Thank you for your reply. I'm not sure I quite understand your calculations. It seems to me that a R:R of 2:1 (reward:risk) and a success ratio of 50%, or even 40%, would be profitable. 100 trades = 40 wins @ 2%, 60 losses @ 1% = 20% gain. With a 50% success ratio it would be 50% gain (and it seems logical to me that shooting for 2:1 would result in a higher success ration than 3:1). Maybe I'm missing something? But I'm quite happy to believe 3:1 would work out better still in the long run. Thanks for sharing your experience on this most...
Maybe I didn't explain it that well. It all depends on the number of losses in a row as well. The whole point of it, trading for a 1:1 or 2:1 exit is very risky, you need a lot of accuracy in your entries, or drawdowns will be high. The bigger the RR exit, the better. A goal of 5:1 or more in any given trade is not logical, the markets will not always provide you with such trades. Going for a 3:1 and a low accuracy ratio will be a more relaxed trading. 1:1 is not, 2:1 is not either once you get a good number of losses in a row, and that can happen easily if markets dynamics change. 3:1 keep you better on the safe line.

Have a great weekend!
Alfonso
Set and Forget supply and demand trading community
  • #4,186
  • Apr 4, 2014 9:28am Apr 4, 2014 9:28am
Thanks again Alfonso.

Can I just ask where I can get the basing bars indicator? I have signed up, and I have the other indicators working but not that one.

TzK.
  • #4,187
  • Apr 4, 2014 10:03am Apr 4, 2014 10:03am
Quoting tzkennedy
Thanks again Alfonso. Can I just ask where I can get the basing bars indicator? I have signed up, and I have the other indicators working but not that one. TzK.
Hello TZ,

It's part of the Rectangle reader. You may need to check it is enabled. See screen shots.
If you want to change the colour of the dots, do it with the colour tab.
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  • #4,188
  • Apr 4, 2014 11:00am Apr 4, 2014 11:00am
Hi S/D guys,

Will you consider taking a swing/position trade from the D1 timeframe on friday afternoon ? Thanks
  • #4,189
  • Apr 4, 2014 11:37am Apr 4, 2014 11:37am
First of all hi everyone, i'm new here, new to Alfonso Strategy, i'm still in the very beggining of it, but i want to congratulate and thank Alfonso for the excelent job and the will to help other ppl like you are doing here. I had alot of doubts relating supply and demand, and now thanks to you'r thread i'm starting to understand it like i've never been able so far. I wanted to config my work area like Alfonso's and start testing my knowledge but i cant seem to find all the indicators he's using, i already have the latest version of RectangleReader, but i cant get the rest of the indicator's, can someone help me? Thanks everyone, nice and profitable trading to all
  • #4,190
  • Apr 4, 2014 12:00pm Apr 4, 2014 12:00pm
Quoting JimN
{quote} Hello TZ, It's part of the Rectangle reader. You may need to check it is enabled. See screen shots. If you want to change the colour of the dots, do it with the colour tab.{image}{image}
Thanks Jim - but I don't seem to have that setting for some reason. I have the latest version of Rectangle Reader as far as I can tell...
  • #4,191
  • Apr 4, 2014 12:28pm Apr 4, 2014 12:28pm
Quoting CapiptainPT
First of all hi everyone, i'm new here, new to Alfonso Strategy, i'm still in the very beggining of it, but i want to congratulate and thank Alfonso for the excelent job and the will to help other ppl like you are doing here. I had alot of doubts relating supply and demand, and now thanks to you'r thread i'm starting to understand it like i've never been able so far. I wanted to config my work area like Alfonso's and start testing my knowledge but i cant seem to find all the indicators he's using, i already have the latest version of RectangleReader,...
Hi,

WHERE TO DOWNLOAD THE LATEST RECTANGLE EXTENDER INDICATOR AND INSTALLER:

  1. The files are no longer available in this first post
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  3. If you want to have the latest supply and demand rectangle extender indicator's version and installer, you need to fill out the webinar's form above. At the end of the process you will get the download link. The download link will be different for each new version released.(Installer will automatically install all the indicators and template)
  4. If you are interested in attending a free live webinar, please fill out this form: www.set-and-forget.com/free_webinars

  • #4,192
  • Apr 4, 2014 5:27pm Apr 4, 2014 5:27pm
Quoting tzkennedy
{quote} Thanks Jim - but I don't seem to have that setting for some reason. I have the latest version of Rectangle Reader as far as I can tell...
See negi's post (4191) above. You need to make sure the indi. is in the MQL4\indicators folder for it to work.
If you still have problems, drop me a PM and I will try to help. I had to fiddle a bit to get mine working.

I don't want to clutter up Alfonso's excellent trading thread with technical issues
  • #4,193
  • Apr 4, 2014 5:33pm Apr 4, 2014 5:33pm
Hello Alfonso,

I am currently learning how to paint Trendlines and Zones. i am posting this D1 zones of EURUSD, please hav ea look and tell me if this is correct.
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  • #4,194
  • Apr 5, 2014 5:01am Apr 5, 2014 5:01am
Hi all, thank you Negi_29 and JimN for the answers, i was having some issues with the installer but in fact they were really simple to solve i already have everything in order, and ready to start tks guys.
  • #4,195
  • Apr 6, 2014 2:13am Apr 6, 2014 2:13am
Quoting Solomon1a
Hello Alfonso, I am currently learning how to paint Trendlines and Zones. i am posting this D1 zones of EURUSD, please hav ea look and tell me if this is correct.{image}
Hello Solomon

The ascending TL is not well painted, the second point didn't make a higher high than the first point.
Levels are correctly painted, but you are not being exact with the bases, that can signify that you may miss a trade or consider a level fresh when it's actually non-fresh, you may incur in incorrect analysis and thus incorrect assumptions and unnecessary losses. You have to be VERY mechanical as to have you draw the bases, but overall they are correctly painted, it's just the bases.

I can see you didn't install the latest rectangle reader indicator that displays dots in the candles that are basing candles, that can help you a lot.

Alfonso
Set and Forget supply and demand trading community
  • #4,196
  • Edited Apr 7, 2014 1:15am Apr 6, 2014 3:02am | Edited Apr 7, 2014 1:15am
Hi Alfonso,

My default MA_CCI indicator ( MA period is set to 100 ) ( MA type is set to 3 ) MA period should be 20 because we're using 20ema ?
Thanks boss
  • #4,197
  • Apr 6, 2014 8:10am Apr 6, 2014 8:10am
Quoting panoramia
{quote} Hello Solomon The ascending TL is not well painted, the second point didn't make a higher high than the first point. Levels are correctly painted, but you are not being exact with the bases, that can signify that you may miss a trade or consider a level fresh when it's actually non-fresh, you may incur in incorrect analysis and thus incorrect assumptions and unnecessary losses. You have to be VERY mechanical as to have you draw the bases, but overall they are correctly painted, it's just the bases. I can see you didn't install the latest...
thanks for your reply alfonso sir, i have updated the rectangle indicator now, but now rectablgle indicator showing the black dots. i will learn it. thanks i hope i will get the right analysis soon.
  • #4,198
  • Apr 6, 2014 8:48am Apr 6, 2014 8:48am
i tried to re paint the zones please have a look

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  • #4,199
  • Apr 6, 2014 12:03pm Apr 6, 2014 12:03pm
(Thanks Jim for the tips - got it working!)

I'm considering going long USDCAD at 1.0935. Price is currently at an (aggressive) weekly ascending trend line:

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The daily level we're at is not fresh, but it caused a strong reaction which broke recent resistance:

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So I've looked within this level at the distal edge for a fresh H4 level:

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I would put my stop at about 1.0875, below the round number, and below another H4 level.

On the down side, the daily up trend has been broken recently. Any feedback appreciated.

Thanks,

TzK.
  • #4,200
  • Apr 7, 2014 2:47am Apr 7, 2014 2:47am
Hi Alfonso,

My default MA_CCI indicator ( MA period is set to 100 ) ( MA type is set to 3 ) MA period should be 20 because we're using 20ema ?
I bought forex tester 2. Anyone here will code and convert alfonso's mt4 indicators to forex tester pls because I'm finding it difficult to test without the proper alfonso's template . Thx for your help
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