Supply and demand in a nutshell by Alfonso Moreno | Page 212 | Forex Factory

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Supply and demand in a nutshell by Alfonso Moreno

  • #4,221
  • Apr 9, 2014 12:02pm Apr 9, 2014 12:02pm
Hello fellow traders!

Today's webinar covered the basics on how to draw supply and demand zones mechanically and consistently, as well as how to draw and update trendlines.

However, does basic mean that it's something you should not pay attention to? Absolutely not. Many of you will think or believe that you are following the rules on how to draw zones and trendlines but in fact you might be breaking some rules when doing it.

Practising and testing for hundreds of hours is the only way to achieve mastery, are you willing to complete that hard work? Believing in what you do is essential, but believe will not make you profitable unless it's accompanied by hard work.

What was covered in today's webinar?

  1. How to mechanically and consistently draw a trendline
  2. Always use the latest 2 obvious valleys or peaks to draw a trendline
  3. Never use a CP pattern to draw a trendline unless there are more than 3 CP patterns (Continuation Patterns) and price is over-extended
  4. Don't buy after a strong rally in price or sell after a big drop in price, when price is over-extended, it's low odds and you are doomed to failure
  5. Mechanical rules on how to draw bases were shown, draw the levels always the same way in order to be consistent
  6. How to locate imbalances by using 6 of the most common candlestick patterns
  7. Bullish patterns: bullish engulfing pattern, bullish harami and piercing pattern
  8. Bearish patterns: bearish engulfing pattern, bearish harami and dark cloud cover
  9. If you want to learn more about candlestick patterns, buy one of the books by Steve Nison, but do not get obsessed with candlesticks, by themselves they are useless unless they are combined with something else, supply and demand is one of those combinations, there are others, but only those patterns are needed, nothing else

YOU CAN WATCH THE VIDEO HERE:

Inserted Video


Have a great day and week, thank you for your massive support!

My best wishes!
Alfonso
www.set-and-forget.com
Set and Forget supply and demand trading community
  • #4,222
  • Edited 6:43pm Apr 9, 2014 6:25pm | Edited 6:43pm
Quoting panoramia
{quote} Hello Ivan, The reason why is explained in the posts and the videos, you will see dozens of examples. Both the WK and the MN can be used as curve timeframes, also a combination of both in what I call the sequence, but that's a more advance type of analysis not covered in post #1. You sometimes have to wait for weeks for a reversal, but that does not mean you can't trade the opposite, there are rules to trade with the D1 trend or after a trendline break. But like I have said repeatedly on the forum and on the videos, you have to test the...
Alfonso, thank you so much, I do not think anybody could summarize it better! Crystal clear.
That is what I experience in my trading as I progress, from the beginning.
Give a strategy to someone, works for me, does not work for him...with the same clear rules... true.
Why athlets are practicing 8 or more hours a day? Why they are watching the videos of the champions in slow motion and try to repeat?
Why would it make anybody a world champion of running if we have seen the TV broadcast how the champions run? Then stand to the start line believing we will achieve the same?
P.s. we are lucky having MT4 just restricted TFs, what about entry TF 8 hrs diagram, and HTF for trend and additional HTF levels 18.5 hrs and maybe 38 hrs diagrams? There will be other setups and entry conditions too. Just a matter of zoom-in and zoom-out probably..
  • #4,223
  • Apr 10, 2014 12:46am Apr 10, 2014 12:46am
Can anybody tell me if RectangleReader available for Forex Tester 2 or not?
I'm sorry if the answer is somewhere inside the topic but it takes days to read 200+ pages (but I'm in a process).
  • #4,224
  • Apr 10, 2014 1:47am Apr 10, 2014 1:47am
Quoting Ivan-M
Can anybody tell me if RectangleReader available for Forex Tester 2 or not? I'm sorry if the answer is somewhere inside the topic but it takes days to read 200+ pages (but I'm in a process).
No, it's not available. There is a cutdown version available that will extend the levels, change colors and a couple more things but only available to the community together with other indicators for backtesting the rules under Forex Tester 2. But the full RR indicator is not available, it's not needed because on Forex Tester you will test only one pair at a time and you can have several windows in cascade to see price reaction to each timeframe you are interested in.

Alfonso
Set and Forget supply and demand trading community
  • #4,225
  • Apr 10, 2014 5:15am Apr 10, 2014 5:15am
Quoting panoramia
{quote} No, it's not available. There is a cutdown version available that will extend the levels, change colors and a couple more things but only available to the community together with other indicators for backtesting the rules under Forex Tester 2. But the full RR indicator is not available, it's not needed because on Forex Tester you will test only one pair at a time and you can have several windows in cascade to see price reaction to each timeframe you are interested in. Alfonso
Thank you.
  • #4,226
  • Apr 11, 2014 3:20am Apr 11, 2014 3:20am
Hello Alfonso,

I'm trying to draw some level of SnD, is that correct...?? How to draw a level in the ellipse area...
Attached Image (click to enlarge)
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I want to hear from you..... Thanks

Regards,
Soni

Note: Does any Indonesian people who join n read Alfonso thread...??? If any, contact me please... I need share each other.
  • #4,227
  • Apr 11, 2014 5:09am Apr 11, 2014 5:09am
Dear alfonso,

I am testing. Can you please explain this image to me. This is a Daily chart, Ascending trendline broke, taking out compressed demand with 2 big ERC's . So I know that the pivot high supply is strong and was a nice rejection zone in the past so it is good to counter trend with 1st pullback confirmation . But now I have 2 peaks BUT 1 V-shape . Is this correct to confirm a downtrend or I need to wait for another V-shape please ? The horizontal line is the current price . Thanks for your support for us
Attached Image (click to enlarge)
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  • #4,228
  • Apr 11, 2014 5:14am Apr 11, 2014 5:14am
Quoting sonigl
Hello Alfonso, I'm trying to draw some level of SnD, is that correct...?? How to draw a level in the ellipse area... {image} I want to hear from you..... .

Too much trading in that area . Remember 6 bars is our max basing
  • #4,229
  • Apr 11, 2014 5:52am Apr 11, 2014 5:52am
Quoting philbri
{quote} Too much trading in that area . Remember 6 bars is our max basing
Thanks for your response philbri... so, do I have to leave the level? there's one good momentum in one candle, I'm just think about it.... any suggest from others???

Regards,
Soni
  • #4,230
  • Apr 11, 2014 6:31am Apr 11, 2014 6:31am
Quoting sonigl
Hello Alfonso, I'm trying to draw some level of SnD, is that correct...?? How to draw a level in the ellipse area... {image} I want to hear from you..... Thanks Regards, Soni Note: Does any Indonesian people who join n read Alfonso thread...??? If any, contact me please... I need share each other.
Hi Soni,
The lower H1 zone in ellipse area is not a good zone, there is a rule that says that more than 6 candles in the zone is not a good base, so you've got your answer there then Phil already replied to it, thanks Phil

Alfonso
Set and Forget supply and demand trading community
  • #4,231
  • Apr 11, 2014 6:33am Apr 11, 2014 6:33am
Quoting philbri
Dear alfonso, I am testing. Can you please explain this image to me. This is a Daily chart, Ascending trendline broke, taking out compressed demand with 2 big ERC's . So I know that the pivot high supply is strong and was a nice rejection zone in the past so it is good to counter trend with 1st pullback confirmation . But now I have 2 peaks BUT 1 V-shape . Is this correct to confirm a downtrend or I need to wait for another V-shape please ? The horizontal line is the current price . Thanks for your support for us {image}
Now you've got a downtrend on the D1... but ONLY one timeframe is NOT enough to make a decision, we need Multiple Timeframe Analysis. It's all described in post #1. As per the rules, now the D1 trend is down, but what about the higher timeframes, those higher than the TF where you detected that TL? You have to make that analysis and be consistent in your decisions.

Alfonso
Set and Forget supply and demand trading community
  • #4,232
  • Apr 12, 2014 8:08pm Apr 12, 2014 8:08pm
alfonso, don't know if you already answered this question, but why did you stop the weekly pair analysis?

thanks
  • #4,233
  • Edited 4:20pm Apr 14, 2014 4:00pm | Edited 4:20pm
I wanted to share with you a screenshot created by one of the members at www.set-and-forget.com supply and demand community. It's related to the last webinar in Post 4221

Last live webinar was about how to draw supply and demand levels by taking into account 6 candlestick patterns which cover 99% of the supply and demand zones structure. You may know all of them already, but just in case I wanted to share the screenshot created by Istvan.

6 BASIC CANDLESTICK PATTERNS USED TO DRAW SUPPLY AND DEMAND IMBALANCES
Screenshot provided by one of our members, Istvan

Full explanations of these candlestick patterns can be seen on the webinar or by buying one of Steve Nison books. I've added a couple of rules to mechanically draw the levels based on my backtesting, which is not on any book I believe.

Attached Image (click to enlarge)
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I am sure you will understand much better last webinar's video by having this screenshot side by side.

Let me post the video link from last live webinar again:
Inserted Video


Have a great day!
Alfonso
Set and Forget supply and demand trading community
  • #4,234
  • Apr 14, 2014 4:12pm Apr 14, 2014 4:12pm
Quoting panoramia
I wanted to share with you a screenshot created by one of the members
Alfonso,

Thank you so much for the work you put in here. Your politeness and patience is appreciated, especially as most of the time your truthful response is "you haven't read and understood post one, go and do it!"

I am considering taking up THE 3:1 RISK REWARD CHALLENGE.

Does it have to be H4/W1 rather than H1/D1
My reason for asking is that my Forex Tester trades (which are showing some success) have been with the H1/D1 combination.

Jim
  • #4,235
  • Apr 14, 2014 4:17pm Apr 14, 2014 4:17pm
Quoting JimN
{quote} Alfonso, Thank you so much for the work you put in here. Your politeness and patience is appreciated, especially as most of the time your truthful response is "you haven't read and understood post one, go and do it!" I am considering taking up THE 3:1 RISK REWARD CHALLENGE. Does it have to be H4/W1 rather than H1/D1 My reason for asking is that my Forex Tester trades (which are showing some success) have been with the H1/D1 combination. Jim
You don't need to thank me Jim, I am doing my best to help anybody that shows interest at supply and demand, be it here at the free forum (as much as I can) or the private community, I've always done it and will always do.

As far as the timeframe combination, any combo works, WK/H4, D1/H1. There are some new concepts introduced in the community which I've been testing for a few months that are now part of the rules, but haven't been covered here for one simple reason: the basics need to be known before more advanced techniques are applied. Drawing zones and trendlines as per the rules is more important than anything, the thing is that some may be good at that already, but most are not, so I can't cover the new items here because more is less if you are not good at the basics.

The new concept allow to have the WK TF as well in a sequence with the MN and D1, or any lower timeframe sequence, so the combination is just a matter of what type of trader you are, time availability you have and so on!

Cheers,
Alfonso
Set and Forget supply and demand trading community
  • #4,236
  • Apr 14, 2014 10:56pm Apr 14, 2014 10:56pm
hiii Alfonso , i register on the web, but i receive email "Please Confirm Subscription". i donot look indicator or template?
  • #4,237
  • Apr 15, 2014 12:17am Apr 15, 2014 12:17am
Quoting smallshark
hiii Alfonso , i register on the web, but i receive email "Please Confirm Subscription". i donot look indicator or template?
I don't understand your question my friend. When you register you will receive a series of emails to confirm your email address, and the last one will give you the temporary link to download the indicators and installer. Confirmation is needed by the double opt-in email system.
Alfonso
Set and Forget supply and demand trading community
  • #4,238
  • Apr 15, 2014 12:31am Apr 15, 2014 12:31am
The Dollar Index is a very important instrument which is closely related to Forex majors. All currency pairs have a currency pair with the US Dollar, but only 6 of them are part of it, 4 are European currencies (euro, Swiss franc, pound and Swedish krona), accounting for 75% of the US Index.

Having said that, it serves to measure the strength of the US Dollar against the majors, also inversely correlated with the main US indexes.

 

  1. Monthly chart is in consolidation, price is bouncing of non-fresh Monthly demand area. Only tradeable if we get confirmation in the shape of a D1 demand area
  2. The D1 is also in consolidation, bouncing strongly from a D1 demand area with an unfilled gap, lots of room to rally to the opposing D1 supply area after a descending D1 TL
  3. Potential H4 demand zone if supply is removed. The purple zone is a very aggressive H4 supply because it's way too low in the MN and WK curve, it's low probability. If removed, the majors could experience a bigger drop and provide some longs on the US Index, shorts on the majors

​

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Set and Forget supply and demand trading community
  • #4,239
  • Apr 15, 2014 1:52am Apr 15, 2014 1:52am
Hello Alfonso, I have just one question, can I post here my Forex Tester orders where I'm confused? At the moment I can't sign up Set and Forget forum.
  • #4,240
  • Apr 15, 2014 3:57am Apr 15, 2014 3:57am
Quoting sloker
Hello Alfonso, I have just one question, can I post here my Forex Tester orders where I'm confused? At the moment I can't sign up Set and Forget forum.
Of course you can do that my friend, as long as you follow the rules in Post #1 and the core strategy methodology!
Alfonso
Set and Forget supply and demand trading community
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