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Price movement as a function of Supply and Demand 43 replies

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Supply and Demand Zones 43 replies

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Attachments: Supply and demand in a nutshell by Alfonso Moreno
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Supply and demand in a nutshell by Alfonso Moreno

hi alfonso,

I'm trying to draw SnD level on D1 chart. Would you like to correct my SnD drawing? Thanks

here the chart..
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Thanks,
Soni
hi alfonso, after load .ex4 indicator into data folder and apply rectangular on supply/demand level in the chart why it did not draw the level automatically. I must switch to other timeframe then it will draw the level.

orion
Quoting orionfx
hi alfonso, after load .ex4 indicator into data folder and apply rectangular on supply/demand level in the chart why it did not draw the level automatically. I must switch to other timeframe then it will draw the level. orion
Hi Orion,

My first thought is that you might have the indicator in the wrong folder on your computer? You mentioned "data folder" but it should actually be stored in the "...Metatrader 4 / experts / indicators" folder.

My 2nd thought - Were you trying to draw the rectangle when the markets were closed or is your Internet connection slow? If so, then all you need to do once you plotted the rectangle on the chart is to:
1) position your cursor somewhere in a blank space of the chart
2) select RIGHT CLICK to see the pop up menu
3) then select REFRESH

The rectangle should then draw itself.

If this does not work for you then my final thought is that I reckon you will need to walk through the settings you have for your indicator compared to what default settings Alfonso recommends.

Hope this helps

Cheers
Greg
Quoting sloker
Thank you, Alfonso, for the repply, ok, I'll try to do it by myself. So I have drawn some levels, and what I just want to say is: I can't see levels which is tested less than 1 time. But they are not fresh in this case. I mean maybe I see some of them, but I'm in doubt. When I see that the price is reacting to a level, then I can know that the level is a real level. I think I need practising. Well, another problem is that I often adapt levels to a next test. But as you said if a next pull-back was not reaching for a level, then it was not a real...
Hello my friend,

You are replyig to your questions. What do you do in life when you are in doubt? Nothing, isn't it? Trading is the same thing, when in doubt do nothing and learn from the experience. You are saying things that you know are wrong, but you still do them. It's not about the trading rules, but controlling your emotions. You say that you always think it may be a real pull-back, thinking is not allowed, or you'll blow up your account.

You have painted certain levels, but there is one very important distinction, a level can be valid and/or tradeable as per the rules. The questions about the demand zones are correct, are they levels? THe bottoom one is not, not well formed, part of the rules. The top one is valid, but what about the Trendline? Is it tradeable?

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Set and Forget supply and demand trading community
Quoting Solomon1a
Hi alfonso, i watched your last webinar about how to draw TL and zones mechanically and the avi gave me good way to draw them, with those 6 candle stick patterns, i have tried and practice it on my chart after watching the video, Please have a look on my TL and zones {image}
Hi there my friend,

All your levels are correctly drawn, congratulations. But all the Trendlines are wrong sorry You did not follow any of the TL rules, I guess the longer term one belongs to another timeframe. The purple one is wrong, the second point you used to draw a TL did not made a higher high than the highest high created by the first valley, you broke the rules. You need to see a W shape for demand and an inverted W or M for a descending TL.

Valid trendlines are painted in Yellow, both have already been broken by price, so there is no possibility to draw a Trendline on that chart. Not drawing a TL is also an option that happens many times. The possibilities are: UP, Down or NO TL.

Hope that it makes sense
Alfonso

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Set and Forget supply and demand trading community
Quoting orionfx
hi alfonso, after load .ex4 indicator into data folder and apply rectangular on supply/demand level in the chart why it did not draw the level automatically. I must switch to other timeframe then it will draw the level. orion
Hi there my friend,

The RectangleReader indicator will extend a rectangle IF and ONLY IF there is a new tick. If the market is slow or closed, it will not extend it because there is no tick. When you switch timeframes, it will extend on the TF you have switched to because switching TFs = re-initializing the indicator = 1 tick, so the rectangle is extended on the wrong timeframe.

In order to avoid that you need to:

  1. Refresh the chart, right mouse button, refresh
  2. Install a tick generator, this is the best one, its free https://fx1.net/mt4ticker.php

It looks like GregT already replied to it as well in a later post but I've included the MT tick generator that will help a lot. I use it always
Hope that helps

Alfonso

Set and Forget supply and demand trading community
Quoting sonigl
hi alfonso, I'm trying to draw SnD level on D1 chart. Would you like to correct my SnD drawing? Thanks here the chart.. {image} Thanks, Soni
Hi Soni,

Correctly drawn my friend, except the lower blue level. That's not a D1 demand level, I believe that should be a WK demand level. The valid D1 demand levels are attached on a new chart, take a look at it.

The bottom yellow D1 demand is not well formed, spiky, that means it's normally a reaction to liquidity lower, to lower demand zones.
Hope my comments help

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Set and Forget supply and demand trading community
hi alfonso, thanks for your reply. but I will ask you...

  1. I don't understand what's the reason that the lower blue level is not right demand area.
  2. I'm confused that you said "The bottom yellow D1 demand is not well formed, spiky, that means it's normally a reaction to liquidity lower, to lower demand zones."

Would you like to explain to me please? And I try to practice my draw skill on WK SnD level...

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is the WK SnD level right..? I am waiting from you.... Thank a lot.

Regards,
Soni

note: I am so sorry if my english poor
Quoting sonigl
hi alfonso, thanks for your reply. but I will ask you... I don't understand what's the reason that the lower blue level is not right demand area. I'm confused that you said "The bottom yellow D1 demand is not well formed, spiky, that means it's normally a reaction to liquidity lower, to lower demand zones." Would you like to explain to me please? And I try to practice my draw skill on WK SnD level... {image} is the WK SnD level right..? I am waiting from you.... Thank a lot. Regards, Soni note: I am so sorry if my english poor
Hi Soni,

I am afraid you need to do your homework. Read Post #1, what a good basing is, etc. Watch the videos over and over. It's all there step by step. Weekly zones look ok to me at first glance, they look fine. But as far as bad and good basing, no matter what I tell you, it will be useless, you need to see it through testing the rules and seeing thousand of good and bad bases, the rules in Post #1 summarize that, testing is needed on your side to gain the insight and confidence to know what is good and bad basing.

Alfonso
Set and Forget supply and demand trading community
Quoting panoramia
{quote} Hi there my friend, All your levels are correctly drawn, congratulations. But all the Trendlines are wrong sorry You did not follow any of the TL rules, I guess the longer term one belongs to another timeframe. The purple one is wrong, the second point you used to draw a TL did not made a higher high than the highest high created by the first valley, you broke the rules. You need to see a W shape for demand and an inverted W or M for a descending TL. Valid trendlines are painted in Yellow, both have already been broken by price, so there...

thanks i am happy to read your reply and thanks thats i am painting the zones correctly. my yellow TL was correct, the pink TL was wrong yes we can draw a TL at this elvel right now. i got it.. i will follow this.
hi alfonso,

thanks for your suggest. everyday I always read post #1 step by step but you right i need testing to gain the insight and confidence to know what is good and bad basing. I'll do it.... thank a lot

Regards,
Soni
Quoting GregT
{quote} Hi Orion, My first thought is that you might have the indicator in the wrong folder on your computer? You mentioned "data folder" but it should actually be stored in the "...Metatrader 4 / experts / indicators" folder. My 2nd thought - Were you trying to draw the rectangle when the markets were closed or is your Internet connection slow? If so, then all you need to do once you plotted the rectangle on the chart is to: 1) position your cursor somewhere in a blank space of the chart 2) select RIGHT CLICK to see the pop up menu 3) then select...
Thanks Greg for your advice.
Quoting panoramia
{quote} Hi there my friend, The RectangleReader indicator will extend a rectangle IF and ONLY IF there is a new tick. If the market is slow or closed, it will not extend it because there is no tick. When you switch timeframes, it will extend on the TF you have switched to because switching TFs = re-initializing the indicator = 1 tick, so the rectangle is extended on the wrong timeframe. In order to avoid that you need to: Refresh the chart, right mouse button, refresh Install a tick generator, this is the best one, its free https://fx1.net/mt4ticker.php...
Thanks master for your advice.
Quoting panoramia
{quote} Thanks for your message and your kind words. There are many levels of supply on EURUSD Monthly chart as per the rules my friend. Take a look at the attached chart and you will see a few more in yellow. Hope that helps Alfonso {image}
Hi Alfonso, first of all a Happy Easter to you and yours!!

Your answer to the question of ABC007 (post 4,255) , concerning the valid levels on a monthly chart, is confusing me. The rules on page 1 says that for a level to be valid it has to take out a contrair level (or in case of a lack of information from your broker or in the case of we are in region were the pair wasn't ever been before, a higher high or lower low). Pls confirm that this interpretation of the rules is right. It is basic stuff so it is important to understand it throughly.

Now concerning the implementation of this rule towards the monthly Euro/Usd chart as posted by ABC007.
We see a move up till 1,60 (before sept 2008) forming alot of demand levels in his way up. The move down, starting in august 2008 is taking out almost all the demand levels. It is was a very impulsive move, fuelled by the credit crisis, without forming any supply levels in his way down (all based on monthly chart).
So this move is leaving us with a demand level at 1.21 and a supply level at 1,55.

All years coming later than october 2008, there were no moves that took either of these two levels out (again, still only taking the monthly chart in account).

So is it right to interpret the demand and supply levels that you drew on the chart (the yellow ones) during the period after october 2008, are valid demand and supply levels taking other lower timeframe moves into account (for instance the weekly timeframe). Maybe it sounds very hypothectical that someone is only trading from monthly charts and as so is not interested in lower tf levels. But limiting the scope to only the monthly chart is or at least must make clear to me and maybe also others who are in doubt concerning when a level is valid, how the rule on page 1 must be interpreted!!

As before, I think this is basic stuff and must be understood throroughly, so if explaining it will take you a lot of time, do discuss this matter in a coming webinar.

Thanks in advance,

Greetz, Doji
"When the student is ready, the teacher will appear"
Quoting FxDoji
{quote} Hi Alfonso, first of all a Happy Easter to you and yours!! Your answer to the question of ABC007 (post 4,255) , concerning the valid levels on a monthly chart, is confusing me. The rules on page 1 says that for a level to be valid it has to take out a contrair level (or in case of a lack of information from your broker or in the case of we are in region were the pair wasn't ever been before, a higher high or lower low). Pls confirm that this interpretation of the rules is right. It is basic stuff so it is important to understand it throughly....
Thanks a lot for your detailed explanation and questions, it all makes perfect sense what you are saying and I will be glad to reply. The answer will be quick and simple because no rule is being broken, the levels drawn in the EURUSD chart I posted in a previous post (re-attached again here) were levels that are holding "now", in order to be validated they need to remove an opposing zone (there are 2 exceptions for validations, but won't go into detail in this post).

You are missing a couple of important CP (Continuation Patterns) levels that when broken validated other levels. It's all about links in a chain, a domino effect. Once you miss one link in the chain, the chain is broken and the analysis may seem contradictory or incorrect, even going against the rules. But the fact is that it does not break any rules, you didn't see the CP patterns described in the new attachment, they were the ones that caused the areas of demand to be validated.

Like I said there are a couple of exceptions for a zone to be validated automatically without removing an opposing zone, but I won't mention them in the first post or in this one because it will only cause confusion and I don't want that. But as you can see on the new chart, no rule has been broken. There is also the cocept of inheritance and des-inheritance, not covered in first post (it's a new concept I've introduced with a couple more), but those will confuse many people so they are not covered in first post. They are very important for many scenarios, but they are not being discussed because this is "supply and demand in a nutshell", if all tricky concepts that may seem contradictory (they are not) are introduced, it will create confusion. You first have to be consitent following the basic rules and understanding the 2 basic patterns and how missing one single of them can break the whole analysis.

Hope that makes sense my friend.
Alfonso

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Set and Forget supply and demand trading community
Hello fellow traders!

I will be holding a new live webinar on supply and demand next Monday 28th April 2014.
This webinar will be a FREE webinar for all to join, so feel free to join it.

DATE: Monday 28th April 2014
TIME: 1 PM to 2:30 Central European Time | 7 AM to 8:30 AM EST. Right 1 hour before NY Market Open
LINK TO JOIN: fill out this form if you haven't previously joined one of my webinars http://www.set-and-forget.com/free_webinars
If you have, you will already have the link in your inbox

WHAT WILL THIS WEBINAR COVER?

  1. Trading with the higher timframe's direction
  2. Questions and answers on how to locate and draw potential supply and demand zones to trade in a mechanial way

Hope to see you there!
Alfonso

Set and Forget supply and demand trading community
Let me share with you one of the latest trades I got triggered, it's a EURZAR long, an exotic pair, Euro versus South African Zar.

I wanted to show you the whole process of a trade while Waiting for confirmation at a non-fresh level, as per the rules, one by one by the book.

  1. Triggered long on after H4 TL break long happened
  2. Brand new H4 CP demand at the retest of the TL break, after the descending D1 TL was also broken and bouncing of non-fresh D1 demand, so I had to wait for confirmation
  3. Non-fresh D1 demand within a WK demand zone, so waited for confirmation
  4. Lot of trading in the zone, H4 CP demand above was right at the break of the H4 TL
  5. Potential D1 demand level if we break higher and remove D1 resistance

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After a few days the trade was moved to breakeven, brand new H4 demand zone, so I moved my SL to breakeven and locked in some profits underneath new H4 demand zone
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  1. I was waiting to scale in to add to my existing EURZAR long position but price did not pullback to the new fresh demand levels.
  2. If supply is removed we could have some more buying
  3. Now my SL is being trailed underneath previous H4 demand zones, locked in almost 4%

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Set and Forget supply and demand trading community
alfonso, thanks for the great thread.
I know it's slightly off topic (for which I apologise now), but I notice the recent release of your RectangleReader indicator now has a SCALE reset button - well, I've been searching for this specific functionality for a very long time as it would potentially save many hours of my life!
Is there any chance you can ask your developer Chris to share (or give hints) as to how this is done?
Hello Alfonso,

I want to thank you so much for your dedication and work with all your fantastic webinars and by this thread. The most important thing you learned me is that practice is EVERYTHING! Whatever you do in life, nothings come easy. Trading is no exception. I now understand how valueable it is to forwardtest and can simulate thousands of trades that would take years to learn from live.

I hope I can contribute with something valueable to this thread later on but for now more practice is needed!
alfonso, please ignore my previous post: i know now how to reset scale fix with a script so won't clutter up your thread any more with my spam. All the best anyway!
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