Supply and demand in a nutshell by Alfonso Moreno | Page 228 | Forex Factory

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Supply and demand in a nutshell by Alfonso Moreno

  • #4,541
  • Jul 21, 2014 5:32pm Jul 21, 2014 5:32pm
Quoting sonigl
Hello guys, Thanks to Alfonso and piphunt11 for your comment, I was learning and try to understand the rule and play the rule in my trading. sometimes I got lots of pips profit but sometimes I got loss many. but after I share my analysis here and got response from the others, I got new clue that make me more understand the rule. nice share... thanks all of you guys.. sonigl
sonigl, i am just learning like you. Alfonso is the expert i'll post my next trade set-up for your comments soon.
piphunt11
  • #4,542
  • Jul 21, 2014 7:32pm Jul 21, 2014 7:32pm
Quoting alegargano
{quote} Yes, i'm using forex tester 2 it's all simulated
OK, just thought this method would be pretty difficult to backtest unless done manually.
  • #4,543
  • Jul 22, 2014 2:38am Jul 22, 2014 2:38am
Quoting rohule
{quote} Great, thank you!
There is something I see incorrect in the EURCAD trade, the D1 demand area within which the H4 demand is located is not 2:1. A D1 demand that is not 2:1 would invalidate the H4 demand within. It could work of course, in fact price reacted from it, but it's not part of the rules. It's worth trying because its location within a MN and D1 demand zone, I just wanted to point that out

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Set and Forget supply and demand trading community
  • #4,544
  • Jul 22, 2014 8:21am Jul 22, 2014 8:21am
Quoting panoramia
{quote} There is something I see incorrect in the EURCAD trade, the D1 demand area within which the H4 demand is located is not 2:1. A D1 demand that is not 2:1 would invalidate the H4 demand within. It could work of course, in fact price reacted from it, but it's not part of the rules. It's worth trying because its location within a MN and D1 demand zone, I just wanted to point that out {image}
thank you for your comments,


on Daily we dont have a perfect set up but we have a nice flip zone to try, the set up on h4 was great to give a try.

i got another trade on GPG/SGD , on MN we are in a stron supply zone as well on w1, on Daily we have a downtrend and a flip zone and on h4 we have a downtrend and new levels of supply and no demmand zones ahead to deal with.
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passion and discipline
  • #4,545
  • Jul 22, 2014 10:17am Jul 22, 2014 10:17am
Hi to all in the picture below i wrote my analysis on usd Index monthly. Are my thoughts correct?


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  • #4,546
  • Jul 22, 2014 2:09pm Jul 22, 2014 2:09pm
Quoting alegargano
Hi to all in the picture below i wrote my analysis on usd Index monthly. Are my thoughts correct? {image}
A zone that has been overshot by 1 signle pip is NO LONGER valid my friend. There can be a fakeout of course, but that does not negate the fact that the zone is no longer valid and negated. That one in particular has been overshot a few times, it's NOT valid.

Alfonso
Set and Forget supply and demand trading community
  • #4,547
  • Jul 23, 2014 12:36am Jul 23, 2014 12:36am
Quoting panoramia
{quote} A zone that has been overshot by 1 signle pip is NO LONGER valid my friend. There can be a fakeout of course, but that does not negate the fact that the zone is no longer valid and negated. That one in particular has been overshot a few times, it's NOT valid. Alfonso
Hi Alfonso thank you for the reply, i went into confusion if we must waiting a closure above\belov the level or not... so the situation is something like this

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  • #4,548
  • Jul 23, 2014 12:57am Jul 23, 2014 12:57am
Quoting panoramia
{quote} There is something I see incorrect in the EURCAD trade, the D1 demand area within which the H4 demand is located is not 2:1. A D1 demand that is not 2:1 would invalidate the H4 demand within. It could work of course, in fact price reacted from it, but it's not part of the rules. It's worth trying because its location within a MN and D1 demand zone, I just wanted to point that out {image}
This was mentioned a few posts back. It looks like EURCAD removed non 2:1 D1 demand zone. We talked about the non-validity of this level as per the rules, sometimes non 2:1 levels will work but if we stick to the rules then we'll be more relaxed and won't doubt at all when making a trading decision. The H4 demand entry was not valid because the D1 demand zone it was nested within was not 2:1 it was not valid. If the bigger timeframe is not confirmed for trading as per the rules, all nested levels (on any TF) lower than the bigger timeframe will be negated. Rules are rules! This D1 demand was not one of the exceptions, that is, it was not located at an important breakout spot, it didn't remove anything, etc.

Hope it makes sense!
Alfonso

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Set and Forget supply and demand trading community
  • #4,549
  • Jul 23, 2014 1:58am Jul 23, 2014 1:58am
Hi everybody,

Talking about GBP/CAD 4hrs: as long as the daily supply above the PA has been pierced, if the price will trend downward and if will hit the daily demand area and then reverse, where would you see the best long entry? And would this be a valid set-up overall (long at demand area)? Talking hypothetically, as price isn't there and may never reach that area at all.

All comments appreciated,
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  • #4,550
  • Jul 23, 2014 3:59am Jul 23, 2014 3:59am
Quoting Funnypip
Hi everybody, Talking about GBP/CAD 4hrs: as long as the daily supply above the PA has been pierced, if the price will trend downward and if will hit the daily demand area and then reverse, where would you see the best long entry? And would this be a valid set-up overall (long at demand area)? Talking hypothetically, as price isn't there and may never reach that area at all. All comments appreciated, {image}
Hi funnypip i want to try to answer your question with a chart.
Before of that let me ask you What kind of trader you want to be? Position (monthly daily combination) or swing (Weekly h4 combination)?
This question is important because if we can affirm that on the monthly we have an uptrend, in the weekly we don't have any trend, but consolidation.
Now take a look at my chart

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The demand zone that you had marked don't remove anything so that zone is not tradable by the rule.... On the 4H we don't have a beautiful level in that zone....
Furthermore we are in a flipzone on the daily as you can see in the picture so we should waiting for a confluences with weekly daily h4 zone and if you look better maybe there are a levele on the h4 that can be a trade
  • #4,551
  • Jul 23, 2014 4:23am Jul 23, 2014 4:23am
Quoting alegargano
{quote} Hi funnypip i want to try to answer your question with a chart. Before of that let me ask you What kind of trader you want to be? Position (monthly daily combination) or swing (Weekly h4 combination)? This question is important because if we can affirm that on the monthly we have an uptrend, in the weekly we don't have any trend, but consolidation. Now take a look at my chart {image} The demand zone that you had marked don't remove anything so that zone is not tradable by the rule.... On the 4H we don't have a beautiful level in that zone.......
Thanks a lot Alegargano for your help. I'm swing mostly although I've done position trades as well. That's why I posted a 4hrs chart as I see it as the lowest time frame for me (week, day, 4hrs).

A couple of quick questions though: Flip zone is defined as an area where consolidation has occurred in the past (where the dotted 50% body candles show up) and where support become resistance and the opposite? I know that's the standard definition with S/R but I see you guys use zones, which actually makes a lot more sense to me.

Second question: when you say: " The demand doesn't remove anything", what does that mean exactly? Remove a former Supply area? Former demand area?Or and opposite Supply? Located where?

Sorry for the bunch of questions but after reading all the materials I still have troubles grasping this concept of "removal" of former demand/supply zones.

And again thanks a lot for the help.
  • #4,552
  • Jul 23, 2014 4:40am Jul 23, 2014 4:40am
Alegargano, please have a look at my chart where I've marked the previous daily supply area. When I thought about the demand area (1.8204/1.8271) I thought it removed the previous daily supply at (1.8317 /1.8289) - marked white on my chart.

So we had a supply, then a demand below it, then the price went upwards from demand area, removed the supply and went to further pierce (and invalidate) the other supply at 1.845 area.

I see what you mean that the trade isn't that great, with the flip zone and all. But for now I really want to understand this "demand removes supply" and the opposite.

Thanks
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  • #4,553
  • Jul 23, 2014 4:52am Jul 23, 2014 4:52am
Quoting Funnypip
{quote} Thanks a lot Alegargano for your help. I'm swing mostly although I've done position trades as well. That's why I posted a 4hrs chart as I see it as the lowest time frame for me (week, day, 4hrs). A couple of quick questions though: Flip zone is defined as an area where consolidation has occurred in the past (where the dotted 50% body candles show up) and where support become resistance and the opposite? I know that's the standard definition with S/R but I see you guys use zones, which actually makes a lot more sense to me. Second question:...
Don't worry Funny, it is a month that I read and reread the forum and I see and I see videos on youtube of Alfonso. I think it's normal to have doubts that are nothing more than little confidence in this vision of the trading.
Let's start from the bottom: The area in question does not remove anything because the imbalance does not push the price over the green area above. if you check, it does not for one pip. The high of the base is 1.8503, while the candle that touches high 1.8502 has therefore not been able to go further, even one pip of that price level. In this case, it is said that the area of ​​application is not tradable because it has not removed any area of supply.

The flip zone is a zone of support and resistance where the price-shaped areas of demand and supply. If you look at 1.8230 has been tested so many times in one direction and then in another, that point is a point of support becomes resistance and vice versa, the same goes for 1.8223, if you want you can trace the lines and scrool to the left the chart and you'll see how it behaved the price....

I hope I was helpful...
  • #4,554
  • Jul 23, 2014 5:18am Jul 23, 2014 5:18am
funnypips follow the pictures from the start, we always read the chart from the start of the situation.

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if the area in the ellipse had removed the green area, then that area would be an area of ​​demand tradable
before this zone of demand there are too much trading in the zone, too much confusion
  • #4,555
  • Jul 23, 2014 5:27am Jul 23, 2014 5:27am
Quoting alegargano
{quote} Don't worry Funny, it is a month that I read and reread the forum and I see and I see videos on youtube of Alfonso. I think it's normal to have doubts that are nothing more than little confidence in this vision of the trading. Let's start from the bottom: The area in question does not remove anything because the imbalance does not push the price over the green area above. if you check, it does not for one pip. The high of the base is 1.8503, while the candle that touches high 1.8502 has therefore not been able to go further, even one pip...
It really was helpful. I now spotted where I was wrong: I had the supply area marked all wrong, so my further judgement from that point on was no good. I use FXCM so I can't use your S/D tool, I have to draw the rectangles by eye.

To sum this up: when marking supply areas, you start from the top and if you have price retesting a supply area, this isn't considered as a newer lower supply, but merely a retest, right? In order to be a stand-alone new lower supply it has to not touch previous supply areas above?
  • #4,556
  • Jul 23, 2014 5:35am Jul 23, 2014 5:35am
Quoting Funnypip
{quote} It really was helpful. I now spotted where I was wrong: I had the supply area marked all wrong, so my further judgement from that point on was no good. I use FXCM so I can't use your S/D tool, I have to draw the rectangles by eye. To sum this up: when marking supply areas, you start from the top and if you have price retesting a supply area, this isn't considered as a newer lower supply, but merely a retest, right? In order to be a stand-alone new lower supply it has to not touch previous supply areas above?

hey funnypip i am with fxcm as well and was using MT4 for analysis and TS2 for execution and i was finding that there seems to be a difference in price between mt4 and ts2. the zones on ts2 were being violated for some reason but on mt4 were not, so to solve this i just moved my account from ts2 to mt4.
  • #4,557
  • Jul 23, 2014 8:41am Jul 23, 2014 8:41am
Quoting Funnypip
{quote} It really was helpful. I now spotted where I was wrong: I had the supply area marked all wrong, so my further judgement from that point on was no good. I use FXCM so I can't use your S/D tool, I have to draw the rectangles by eye. To sum this up: when marking supply areas, you start from the top and if you have price retesting a supply area, this isn't considered as a newer lower supply, but merely a retest, right? In order to be a stand-alone new lower supply it has to not touch previous supply areas above?
Funny, as rightly said Dimi, you can do your own analysis on a mt4 demo in another broker, I use mainly fx pro.
Also I have FXCM mt4 and there are the same problems that I had on ts2, (at least as far as my server): the daily candle closes at 11 pm and Sundays creates a new candle for an hour alone.
Fx Pro is set the candle that closes at midnight and does not create the candle on Sundays.

Finally we must always look at the source of things:
to evaluate a downtrend we have to start from the top and vice versa for an uptrend, never starting in the middle

I'm glad to have been of help to you
  • #4,558
  • Jul 23, 2014 8:50am Jul 23, 2014 8:50am
huy guys,

I just want to up tade my las trade on gbpsgd that is now closed with profit as per the rules,
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passion and discipline
  • #4,559
  • Jul 23, 2014 9:01am Jul 23, 2014 9:01am
Quoting Funnypip
{quote} It really was helpful. I now spotted where I was wrong: I had the supply area marked all wrong, so my further judgement from that point on was no good. I use FXCM so I can't use your S/D tool, I have to draw the rectangles by eye. To sum this up: when marking supply areas, you start from the top and if you have price retesting a supply area, this isn't considered as a newer lower supply, but merely a retest, right? In order to be a stand-alone new lower supply it has to not touch previous supply areas above?

funny take a look at this

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  • #4,560
  • Jul 23, 2014 3:18pm Jul 23, 2014 3:18pm
Hello everyone. New to FF and this thread but not entirely new to the markets (still a beginner though). Looks like a great thread. How would you recommend I go through this thread? Would it be best to start reading from the beginning and slowly make my way through?

Thanks!
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