Supply and demand in a nutshell by Alfonso Moreno

Glad you found testing essential to gain confidence in trading my friend. It is in my opinion the most powerful tool you will ever have to test any strategy, be it supply and demand rules laid out in this thread or any other strategy. Most traders will not find the time to test rules by themselves and if they do, they will stop testing after a few days instead of making testing part of their daily/weekly routine.

Wish you good luck with your trading!
Alfonso

Hello fellow traders!

This is just a reminder for today's live webinar, 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

See you in a while!
Alfonso

Today's supply and demand webinar recording has been uploaded. On this webinar lots of questions and doubts were answered.

I must apologize because I had tecnical issues with my laptop and I had to change to a second laptop that I have, so the sound quality is medium since I didn't have the latest recording software I use on the new laptop.

1. We analised in detail the higher timeframes for GBPAUD and EURUSD and the reasons why some levels were low probability whereas others were high probability. It's wise to trade with the trend, the trendline rules as well as other rules allow us to be more mechanically when deciding what level and/or direction to take
2. Some tricky scenarios like the Monthly CP supply in EURUSD's 2008 drop was explained in detailed, it's not just about locating the levels, but it's also important to reac canclesticks to understand what levels have accomplished. In this EURUSD Monthly supply zone, it removed 4 aras of MN demand, does it mean it's strong or weak? You should know the answer by now

You can watch the video here:

Thanks for your massive support, hopefully you will have started to understand the supply and demand concepts and rules laid out on this forum.
Alfonso

Hello everyone,

I have been digging into SD trading for a while but am new to this thread and trying to get my head around panoramia's approach. I'm only currently watching the videos from his first post and a few questions came up. Please bear with me if they are already answered in the course of this thread.


Above is a screenshot from Panoramia's video on How to Draw Supply and Demand trading levels and trendlines. My question concerns the demand level I marked on the chart. Panoramia mentions that the level only became a valid demand level when the highest high at (A) was broken. I don't really get that, wasn't (B) the next opposing supply level that had to be broken to validate the demand level? I know that (B) does not have a clear base and pretty long wicks, but technically speaking it is a supply level, isn't it? And since it was broken by the move up from the demand level it is a validation of demand.

EDIT: As soon as I posted my question I already had found the answer: level (B) was not a valid supply level at that time because it had not broken any opposing demand. Right?

Thank you very much anyway
Hans

Yes, exactly, it's good that you found the answer by yourself! Remember that I might have done a mistake, I make many and will be making more in the future.
Have a great day!
Alfonso

Hello panoramia and all others. Check my trade for today - AUDUSD - D1H4H1 combo. Any comments are wellcome. This is the greatest thread by the way. Cheers.

Thanks for your help, Panoramia.

Alfonso,

May I ask the name of the indicator that you use to calculate the Pip value and pip spread at the top left corner your chart in our last Webminar please? Many thanks

It's already included in the installed indicators, it's called support and resistance, the one that draws the blue and red beads (dots) for last month/week highs/lows. It does both things, pip value/spread and support and resistance.

Alfonso

Hi alanso,

I try install as post that post but cant view rectangle box area..can you guide...tq

Thanks so much Alfonso

Hello there,

The rectangleReader indicator WILL NOT draw rectangles by itself, you need to draw them, the indicator will extend the ones you draw and then calculate the curve, pips, etc. It's all described on the video on how to use them.

Alfonso

Not all trades are winners, there are MANY losses as well. Let me show you one scenario where I had a loss selling NZDCAD and then I tried again to go short again at a higher level... Why did I try to go short over and over? Because we are very high in the Monthly curve, fresh and orignal Monthly supply zone.

This was a trade planned at the Set and Forget supply and demand community for quite some time and it finally happened last night after some news on NZD.

Let me share each step of the process since the 21st April 2014.

1. ​IF THEN SCENARIO to short NZDCAD
2. We need the D1 demand zone at the D1/WK flip zone to be removed with a D1 candle close, if that happens we could have some nice shorts since we are bouncing off MN supply. Right now it's a complete mess

1. It looks like NZDCAD D1 supply has been validated for a short, nice H4 supply within. Bouncing off fresh and original MN supply
2. It's a pity that price did not pullback to previous D1 supply zones, let's see if price wants to continue the drop

One of the members was worried about the zone, I was as well, but we were already in. We had a loss on that short.

1. Triggered short on H4 on NZDCAD
2. I believe I had mentioned this level on the weekly analysis, departure was great and was the one the removed some important demand
3. I had a loss on the D1 supply but it looks like this short could work, now we DO have sellers up there
4. Remember we're bouncing off fresh and original MN supply
5. H4 over-extended, ascending H4 TL broken now
6. Brand new H4 supply formed at the top now

Not all are winners, but the mentality of taking all valid levels is what we should be good at. Out of all levels provided by your set of rules, no matter which rules they are, you should take all valid levels or the final result or success/loss ratio will not represent the odds provided by the rules you are trading, in this case supply and demand rules, but you can extrapolate this to any set of rules for any strategy.

Have a great day!
Alfonso

I just wanted to share with you my analysis on the Dollar Index. The Dollar index is inversely correlated with the EURUSD and directly correlated with the USDCHF (it's normally a mirror), so whatever happens on the Dollar Index will give us some clues as to what might be happening with the majors

1. The Dollar index is doing nothing, very low in the MN curve, MN demand used-up
2. WK demand is holding, it has not been able to have a single WK candle closed under 79.25, the yellow line
3. WK demand is used-up, further penetration is what normally happens. It could accummulate for some time at the extreme and rally a bit for a long or completely remove the used-up WK/MN demand
4. The D1 trend is clearly down, low in the curve though. No D1 supply to trade, it's way high at 80.56
5. A new D1 CP demand might be in the oven at 79.28 if it removes D1 demand
6. We want to trade at least in the direction of the D1 chart, that is shorts... so longs in the majors unless price is low in the higher timeframe's curves (where it's now), we need to wait for demand to be taken out, higher timeframe zones are used-up so they could be penetrated further down, so being more aggressive with out SL management is a good idea if we want to go short

Have a great day!
Alfonso

hi,

Looking for compagnon(s) / fellow trader(s) to trade this system with.

If interested pls pm me!

thanks for your dollar index thoughts. Alfonso can you share your view on dow and ftse?

Hello,
amazing thread. I am a big Sam Seiden fan and i am glad i found this here. It helped me a lot. I am trading very similiar but i am still a beginner.
I agree with you panoramia to become better you have to spend a lot of time working on your craft. I want to do it with Forextester 2.
My concern is that the difference from my broker to the data FT2 uses will affect me. Can you give me your thoughts on this? Was Ft2 and your broker different as well? I would appreciate an answer or any kind of input. Thank you in advance.

hi guys,

i just want to share my lastest trade, its on eurgbp h4, everything is down and i have a try on a valid supply zone, lets see how this works out

Hello my friend!

Thanks for your post and welcome to the thread. There is just ONE thing I can tell you about the broker's difference which is what I do and what I always say: trade what you see on YOUR charts. As simple as that. Who cares what other brokers are displaying? There will be difference sometimes, yes, but who cares? Sometimes you will miss a trade on your broker because the candle formation was not good for a CP, others you will get them. Sometimes you will lose, others you will win. Just play the odds based on what you see on your charts and things will work!

Hope that helps!
Alfonso

Congratulations on your trade my friend!

Watch your trade, it's getting very low in the curve and approaching a MN area of demand. Trying to penetrate a non-fresh are of demand.



Alfonso