Supply and demand in a nutshell by Alfonso Moreno | Page 220 | Forex Factory

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Supply and demand in a nutshell by Alfonso Moreno

  • #4,381
  • Jun 17, 2014 1:42am Jun 17, 2014 1:42am
Quoting panoramia
{quote} Hello! The rectangle reader indicator DOES NOT draw any rectangle my friend, it's the Supply_Demand_Zones indicator that does. I am not using it for my trading, but I've added it and set it so that it draws only on H1, but if you edit that indicator's visualization properties, you can select what timeframes you want it to be displayed. Alfonso

it draws perfectly. this is an amazing template my friend
  • #4,382
  • Jun 17, 2014 5:45am Jun 17, 2014 5:45am
Dear friends! Could you explain me two things about freshness and when to wait for confirmation or not.
Question #1: if we have first pullback to D1 fresh area (it was not tested previously) I understand right that this D1 area is considered to be FRESH?
Question #2: So, if we have first pullback to D1 Supply fresh area and new H1 Supply level is formed, should we wait for confirmation or not for this new H1 level?
In the post #1 I see two different things:

  1. Exception: if we are at the extremes in the curve (D1 demand fresh zone, it doest not apply to non-fresh zones) we won't need that the new lower timeframe demand (H1 in this case) takes out previous H1 supply area for our entries, since the D1 demand is fresh. If the D1 demand was not fresh then we'd need that previous supply be removed before the brand new demand is considered for a confirmation type of trade
  2. When to wait for confirmation

  1. At higher timeframe supply and demand areas. If waiting to short on a D1 supply area, you have to wait for the D1 supply proximal line to be hit, do not try to go short before the zone is reached, you would entering too soon, be patient.

  • #4,383
  • Jun 17, 2014 6:09am Jun 17, 2014 6:09am
Quoting Ivan-M
Dear friends! Could you explain me two things about freshness and when to wait for confirmation or not. Question #1: if we have first pullback to D1 fresh area (it was not tested previously) I understand right that this D1 area is considered to be FRESH? Question #2: So, if we have first pullback to D1 Supply fresh area and new H1 Supply level is formed, should we wait for confirmation or not for this new H1 level? In the post #1 I see two different things: Exception: if we are at the extremes in the curve (D1 demand fresh zone, it doest not apply...
Hello there Ivan!

If a zone has not been hit yet then it's fresh, we look right and see if price has hit it. A brand new H1 zone at a fresh D1 zone is exactly confirmation of the D1 zone. You don't need to wait for anything else. Proper multiple timeframe analysis is needed though. If the D1 zone is not fresh then the new H1 zone needs to remove opposing zone because the main D1 zone is not fresh. If the D1 zone is used-up, too much trading, then that zone can't be traded.

Hope that makes sense, there are lots of videos that explain that, a few webinars and so on, you need to watch them and take your time to understand them and practice those rules
Alfonso
Set and Forget supply and demand trading community
  • #4,384
  • Jun 17, 2014 6:20am Jun 17, 2014 6:20am
Quoting panoramia
{quote} Hello there Ivan! If a zone has not been hit yet then it's fresh, we look right and see if price has hit it. A brand new H1 zone at a fresh D1 zone is exactly confirmation of the D1 zone. You don't need to wait for anything else. Proper multiple timeframe analysis is needed though. If the D1 zone is not fresh then the new H1 zone needs to remove opposing zone because the main D1 zone is not fresh. If the D1 zone is used-up, too much trading, then that zone can't be traded. Hope that makes sense, there are lots of videos that explain that,...
Dear Alfonso, many-many thanks for your answer. Now everything is clear for me about this.
  • #4,385
  • Jun 18, 2014 5:23pm Jun 18, 2014 5:23pm
Quoting panoramia
{quote} Hi Jamaa, I don't use any kind of pivots. My entries are based purely on supply and demand imbalances. I use flip zones and other features as confluence for the zones, I don't use any kind of pivot zones, unless you are referring to flip zones as pivots! Alfonso
Hi Alfonso,

What I mean is that frequently you come across high quality zones with good departure, fresh, little time at the zone, strong move away, etc. like the one below. Eventually they turn out to pivot points, so how do we weed out such pivot points from the charts and increase the odds?

Regards

Jamaa

Attached Image (click to enlarge)
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  • #4,386
  • Jun 18, 2014 11:23pm Jun 18, 2014 11:23pm
Quoting jamaa
{quote} Hi Alfonso, What I mean is that frequently you come across high quality zones with good departure, fresh, little time at the zone, strong move away, etc. like the one below. Eventually they turn out to pivot points, so how do we weed out such pivot points from the charts and increase the odds? Regards Jamaa {image}
There are rules for that on Post #1 that will allow you to weed out such zones. Fresh levels versus non-fresh and used-up levels. The odds are increased by certain parameters which are described in the first post of the thread and many of the videos.

Alfonso
Set and Forget supply and demand trading community
  • #4,387
  • Jun 19, 2014 6:02am Jun 19, 2014 6:02am
Hi Alfonso,

Kudos for all the work you're doing here. Life gives us back with interest what we give to others around us. All I can say is more grease to your elbow!

The advancement in technology has exacerbated the race for HFT trading by the big boys. Given that the institutions deploys highly sophisticated computers, executing millions of trades within nano seconds. Considering that as SD traders, we are looking for institutional orders to latch on while using manual system, isn't the race getting too fast and we may possibly be left out very soon?

This is just a food for thought.

Cheers

Jamaa
  • #4,388
  • Jun 19, 2014 8:35am Jun 19, 2014 8:35am
Does anyone have supply-demand indicators ?, Thanks
  • #4,389
  • Jun 19, 2014 2:49pm Jun 19, 2014 2:49pm
Quoting dandken
Does anyone have supply-demand indicators ?, Thanks
Hey dandken,

Alfonso had graciously provided the link for the indicator download in thread 1. Hope this helps.

Regards,

Jamaa.
  • #4,390
  • Jun 19, 2014 3:50pm Jun 19, 2014 3:50pm
hi guys,

this morning when i open the chart i surprised by the gold chart on HTF (D1) because 2 of original & fresh supply area have been broken in one shoot. look at the chart below

Attached Image (click to enlarge)
Click to Enlarge Name: xauusddaily2.png Size: 35 KB


look at the chart. maybe supply A is CP but there is original & fresh i think. supply B is an original & fresh at peak. in my analised... i will set & forget in this area but in the morning when i open the chart, i am really surprised how it can be...?? does anybody can help me to explain this case... ??? i would like to hear from you guys...

thanks,
sonigl
  • #4,391
  • Jun 19, 2014 10:33pm Jun 19, 2014 10:33pm
Quoting sonigl
hi guys, this morning when i open the chart i surprised by the gold chart on HTF (D1) because 2 of original & fresh supply area have been broken in one shoot. look at the chart below {image} look at the chart. maybe supply A is CP but there is original & fresh i think. supply B is an original & fresh at peak. in my analised... i will set & forget in this area but in the morning when i open the chart, i am really surprised how it can be...?? does anybody can help me to explain this case... ??? i would like to hear from you guys......
Supply A is not the correct area because too much trading there and so many wicks.
  • #4,392
  • Jun 20, 2014 12:54am Jun 20, 2014 12:54am
Quoting sonigl
hi guys, this morning when i open the chart i surprised by the gold chart on HTF (D1) because 2 of original & fresh supply area have been broken in one shoot. look at the chart below {image} look at the chart. maybe supply A is CP but there is original & fresh i think. supply B is an original & fresh at peak. in my analised... i will set & forget in this area but in the morning when i open the chart, i am really surprised how it can be...?? does anybody can help me to explain this case... ??? i would like to hear from you guys......
Hey Sonigl,

My analysis shows that you are low on the curve, therefore bad location to sell at both a and B. Furthermore A has too much trading in the zone while B is a pivot point, as such lower odds See chart below:


Regards,

Jamaa
Attached Image (click to enlarge)
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  • #4,393
  • Jun 20, 2014 2:37am Jun 20, 2014 2:37am
hi mate...

Thanks all of you both Solomon1a and Jamaa. In the morning I review my chart and you both right and remember me if many candles and wicks not good for trade then the B area is not fresh area and below the resistance. After I review my analysis anymore i made decision to sell after confirmation pullback on H1. look the chart below:

Attached Image (click to enlarge)
Click to Enlarge Name: xauusddaily_200614.png Size: 48 KB


sorry if my english not good because english is not my mother language.

Thanks & Regards,
Sonigl
  • #4,394
  • Edited 5:31am Jun 20, 2014 4:01am | Edited 5:31am
Quoting sonigl
hi guys, this morning when i open the chart i surprised by the gold chart on HTF (D1) because 2 of original & fresh supply area have been broken in one shoot. look at the chart below {image} look at the chart. maybe supply A is CP but there is original & fresh i think. supply B is an original & fresh at peak. in my analised... i will set & forget in this area but in the morning when i open the chart, i am really surprised how it can be...?? does anybody can help me to explain this case... ??? i would like to hear from you guys......
There was someone else that explained this for me, too much trading in the zone. Also, if you try to understand why every single level is removed, then you will run into many problems. Take a look at the Monthly demand zone, price is rallying from a MN and WK demand zone, supply zones have much lower probability since they are too low in the Monthly curve. In a competition between a Monthly and Weekly zone, normally the Monthly will win, so lean on the bigger one always since it's higher probability.

Based on all that, one of the members took a D1 long on Gold which worked great, super runner. Let me share the screenshot analayis he made at the community, it was him who made the analysis not me, we have rules so he just followed them. He added also MN and WK analysis to support his D1 long entry. And now look what happened to the trade, big rally from that tiny D1 CP demand. Awesome trade that he took, 7.5% risk reward, he's already out of the trade.

Hope that makes sense.
Alfonso

Attached Image (click to enlarge)
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Attached Image (click to enlarge)
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Set and Forget supply and demand trading community
  • #4,395
  • Jun 20, 2014 5:23am Jun 20, 2014 5:23am
Quoting panoramia
{quote} There was someone else that explained this for me, too much trading in the zone. Also, if you try to understand why every single level is removed, then you will run into many problems. Take a look at the Monthly demand zone, price is rallying from a MN and WK demand zone, supply zones have much lower probability since they are too low in the Monthly curve. In a competition between a Monthly and Weekly zone, normally the Monthly will win, so lean on the bigger one always since it's higher probability. Based on all that, one of the members...
it's very cool analysis alfonso thank you very much for your explanation

Regards,
Sonigl
  • #4,396
  • Jun 20, 2014 7:48am Jun 20, 2014 7:48am
In the last live webinar I mentioned that I had been triggered long on S&P 500 but we didn't have time to look at that trade and many others, in 2 hours and trying to explain how supply and demand works, we just can't look at live analysis and potential trades, I am normally concentrated on trying to put forward how the rules work and have as many of you getting a clearer idea how all rules and rationale works.

Take a look at the S&P 500 D1 long trade taken a few days ago. The same type of trade happened on Dow Jones and D1 demand also worked.

MN is up, WK is up, D1 is up and broke all time highs... What can we do? Only buying, buying and buying! Who wants to sell intraday when an instrument is behaving like that? The D1 demand long taken was located at the retest of all time highs on S&P 500. Price dropped into last month highs (blue beads) and rallied like an out of control rocket A few of us took this trade at the www.set-and-forget.com supply and demand community

Attached Image (click to enlarge)
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Take a look as well at a 2 D1 long trades taken on GBPSEK after removing bigger timeframe supply, 2 trades were taken on D1 levels as per the rules. The bottom entry was taken a bit higher than normal due to news slippage, but both worked great, trade is still running.

Attached Image (click to enlarge)
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Set and Forget supply and demand trading community
  • #4,397
  • Jun 20, 2014 8:46am Jun 20, 2014 8:46am
Hello Alfonso,
do you take a confirmation trade (H1) when curve sd area (D1) is not valid yet but break out and have a full candle above? D1 is trending.

regards
joe
  • #4,398
  • Edited 9:43am Jun 20, 2014 9:02am | Edited 9:43am
Quoting JoeMcCool
Hello Alfonso, do you take a confirmation trade (H1) when curve sd area (D1) is not valid yet but break out and have a full candle above? D1 is trending. regards joe
Hello Joe,

If D1 is trending, the only thing we should be doing is taking H1 trades in the direction of that D1 trend. If D1 zone is overshot and there is a brand new level on your entry timeframe, be it H1, H4 or D1, and validates the zone with a minimum 2:1 imbalance, consolidating away off the new entry TF level and a well structured base, THEN and only then we should take that H1 zone or whichever TF you use for your entry.

Similar example in previous post on a D1 demand entry on S&P 500, or GBPSEK D1 demand long. Price creates a brand new level removing/overshooting previous one, that gives me permission to go in the direction of the trend. We not only need a full candle above, but a level, at least with the rules laid out at post #1. Could there be other type of setups based on another way of trading supply and demand or any other strategy? Yes, of course, but that has nothing to do with the rules in this thread, I am sure you know what I mean

Hope all is clear now.
Alfonso
Set and Forget supply and demand trading community
  • #4,399
  • Edited 1:25pm Jun 20, 2014 9:09am | Edited 1:25pm
thanks, it's as clear as it can get
in this situation

but i got a new question
how do you define your extremes? i thought the RBD and DBR would be extremes

missed the part of your webinar...
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  • #4,400
  • Jun 20, 2014 6:05pm Jun 20, 2014 6:05pm
hi alfonso,

I want to ask to you about the setting of indicator because I did setting the indicator as the rule but the result was different. take a look by the pictures below...

I got this picture from your last post
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and this's the picture in my chart
Attached Image (click to enlarge)
Click to Enlarge Name: pileup1.png Size: 26 KB


you can see 2 of pictures above when S&D area pile up, the color in my pictures not same with yours. Is there any setting to this probs? I can't find this setting in my chart... what's the differences?

Regards,
Sonigl
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