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B.S. Trading with Kenneth Lee

  • #6,101
  • Aug 4, 2014 5:56am Aug 4, 2014 5:56am
What you guys say sounds very logical.

May I ask of another consept of S/D that puzles me.

The less time is spent at a price level, the strongest the S/D difference is. So we consider a 3 bar consolidarion a very strong level when we have Rise-base-rise, correct?

But there is even less time spent in the midle of a big upward candle. Why don't we define the Demand level in the midle of the long candles?
  • #6,102
  • Aug 4, 2014 8:23pm Aug 4, 2014 8:23pm
Quoting bgeorge
What you guys say sounds very logical. May I ask of another consept of S/D that puzles me. The less time is spent at a price level, the strongest the S/D difference is. So we consider a 3 bar consolidarion a very strong level when we have Rise-base-rise, correct? But there is even less time spent in the midle of a big upward candle. Why don't we define the Demand level in the midle of the long candles?
Levels are levels whether they are rally-base drop, rally-base-rally, drop-base-rally or drop-base-drop. Each level must be evaluated in the context of overall PA and evaluating PA in multiple time frames is helpful. You can certainly identify levels in the middle of long candles. While supply/demand trading offers the advantage of clearly identifiable trading areas based only on PA rather than unreliable lagging indicators it does not offer turn-key trading areas. You must evaluate every s/d level carefully.
  • #6,103
  • Edited 1:32am Aug 5, 2014 1:21am | Edited 1:32am
Whinston

Maybe I am missing something. I am trying to understand the concept of an S/D level being considered stronger simply because price spends less time there, ie less bars, considering all other factors equal. So 3 bars is better than 5 bars, 1 bar is better than 3. Right? And I go even further to say that in the midle of a long candle I have spent even less time and I define my S/D level there, considering all other factors equal.

From what I understand this is not a correct S/D level. But what is the rule of S/D theory that I am violating here? Is there a minimum time/bars that needs to be spent at a level?
  • #6,104
  • Aug 5, 2014 3:25am Aug 5, 2014 3:25am
Quoting bgeorge
Whinston Maybe I am missing something. I am trying to understand the concept of an S/D level being considered stronger simply because price spends less time there, ie less bars, considering all other factors equal. So 3 bars is better than 5 bars, 1 bar is better than 3. Right? And I go even further to say that in the midle of a long candle I have spent even less time and I define my S/D level there, considering all other factors equal. From what I understand this is not a correct S/D level. But what is the rule of S/D theory that I am violating...
in that case probably it's a good idea to move down to a shorter time frame and evaluate how price action is behaving where that long candle exist on HTF and get a clearer view whether there is a fight going on or it's simply a one directional push
  • #6,105
  • Aug 5, 2014 6:53am Aug 5, 2014 6:53am
Hi Everybody,

I am happy to find ppl still interact on this thread. I stumbled over Kenneth Lee's work by accident and like a lot
what he presented.

Many thanks to you KL. It is very kind to help others improve.

I did not really have the chance to go through this entire thread yet and all the materials to be found about
supply/demand trading. This approach is pretty simple yet at times it still seems a bit confusing.

Would one of you experienced supply/demand traders be so kind help me out with the materials to be studied. I hear a lot
about Sam Seiden. I found that not all the materials he provides is free to access. Taking a course is pretty pricey.

Is there any recommended approach to understand this style of trading better? Starting to read this thread from page 1
is on my list but this is pretty time consuming.

Thanks to y'all

Cheers,
Never stop to learn
  • #6,106
  • Aug 5, 2014 5:41pm Aug 5, 2014 5:41pm
Here you go buddy. Sam Seiden's videos all in one place. Should keep you busy for a while.


http://www.fxstreet.com/search/contr...&contenttype=w
"Never interrupt your enemy when he is making a mistake" Napoleon Bonaparte
  • #6,107
  • Aug 5, 2014 10:05pm Aug 5, 2014 10:05pm
A supply level is created by strong selling as indicated by strong bearish candles leaving an area of brief consolidation. A demand level is created by strong buying as indicated by strong bullish candles leaving an area of brief consolidation. The obviousness of price leaving an area is probably more important than how long price consolidates. A clean exit from an area is easily identifiable and if easily identifiable it can be targeted as a possible area to trade from when price returns to the area.

In the chart below price creates new H4 demand within a daily demand area. This confirms the daily demand. This is only an H4 chart and one can look at lower time frames to identify demand areas from which to trade from that occur in the daily or new H4 demand areas. Probably one can trade these higher time frames but I will go down to the 1 minute chart to find precise entries.

Buy studying this thread including the PDFs one can gain much education. Redword's thread "Price is Everything" is another excellent thread.


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  • #6,108
  • Aug 6, 2014 2:28am Aug 6, 2014 2:28am
Quoting MushyPeas
Here you go buddy. Sam Seiden's videos all in one place. Should keep you busy for a while. http://www.fxstreet.com/search/contr...&contenttype=w
Thanks buddy. This will keep me occupied for time being
Never stop to learn
  • #6,109
  • Aug 7, 2014 8:41pm Aug 7, 2014 8:41pm
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  • #6,110
  • Aug 7, 2014 9:03pm Aug 7, 2014 9:03pm
Quoting Winston Reed
{image}

NICE
  • #6,111
  • Aug 7, 2014 9:28pm Aug 7, 2014 9:28pm
Quoting Winston Reed
{image}
Hey Winston. I have a similar trade going with the AUDNZD.

My target is WAY south. will have to watch and wait on this one. Playing a very large range on the daily chart.

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Illegitimi non carborundum - Noli pati a scelestis opprimi.
  • #6,112
  • Aug 8, 2014 7:15am Aug 8, 2014 7:15am
Quoting Rufus
{quote} Hey Winston. I have a similar trade going with the AUDNZD. My target is WAY south. will have to watch and wait on this one. Playing a very large range on the daily chart. {image}
  • #6,113
  • Aug 8, 2014 8:49am Aug 8, 2014 8:49am
Quoting Winston Reed
{image}
Nice catch, Winston.

For a better understanding, may I ask a few questions with regards to your trade?

My thoughts might get confusing, bare with my novice knowledge about supply/demand trading.

My first question is
1. How did you classify the marked area as a strong supply area?
Price did not move strongly away.

Now a bit long winded question
2. Your entry shows a strong move. Wouldn't your entry classify this area as strong supply?
In that case you would need to wait for price to move back to supply to have a short entry.
But if price moved back to supply, would it be still fresh, as prices were already here?

Hope to get more insight on this, as it still seems a bit difficult to identify solid supply and demand zones.

Cheers,
Never stop to learn
  • #6,114
  • Aug 8, 2014 9:26am Aug 8, 2014 9:26am
Quoting Whatsmyname
{quote} Nice catch, Winston. For a better understanding, may I ask a few questions with regards to your trade? My thoughts might get confusing, bare with my novice knowledge about supply/demand trading. My first question is 1. How did you classify the marked area as a strong supply area? Price did not move strongly away. Now a bit long winded question 2. Your entry shows a strong move. Wouldn't your entry classify this area as strong supply? In that case you would need to wait for price to move back to supply to have a short entry. But if price...

Maybe I can answer one for you with how I see charts at times.

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See the shaved top? A lot of sell orders make that. It also would not surprise me if those orders were made by institutions that knew what the news release would be.
Illegitimi non carborundum - Noli pati a scelestis opprimi.
  • #6,115
  • Aug 8, 2014 10:23am Aug 8, 2014 10:23am
Quoting Rufus
{quote} Maybe I can answer one for you with how I see charts at times. {image} See the shaved top? A lot of sell orders make that. It also would not surprise me if those orders were made by institutions that knew what the news release would be.
Hi Rufus,
thanks for your reply.

I think I understand. Sort of

But wouldn't the whole sideways move be the base and the strong move down
classify this area the supply zone? Since noone knows where the buy and sell orders lie you can only see
after the price movement by observing how strong price moves.

The shaved top seems initially like a resistance and became a supply zone after the strong move??

I did modify your chart with some comments and questions. It would be very helpful to understand
this strategy.

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I did experiment with this type of trading for a bit with limited success.
Never stop to learn
  • #6,116
  • Aug 8, 2014 10:38am Aug 8, 2014 10:38am
Quoting Whatsmyname
{quote} Hi Rufus, thanks for your reply. I think I understand. Sort of But wouldn't the whole sideways move be the base and the strong move down classify this area the supply zone? Since noone knows where the buy and sell orders lie you can only see after the price movement by observing how strong price moves. The shaved top seems initially like a resistance and became a supply zone after the strong move??...
on my phone now. So not able to see the chart to well at least the text that you put in. Keep in mind that resistance and support are made by buyers and sellers.with positions like this I will often enter high in the zone to limit risk. Th shaved top is a line in the sand so to speak. It can be a risky trade with a news release eminent. But that is where I weigh in the potential reward.Not every trade works. But once we become comfortable with failed trades as a part of doing business it becomes easier to take these somewhat blind.When I gethink back to my desktop will look in more detail
Illegitimi non carborundum - Noli pati a scelestis opprimi.
  • #6,117
  • Aug 8, 2014 7:42pm Aug 8, 2014 7:42pm
Quoting Whatsmyname
{quote} Nice catch, Winston. For a better understanding, may I ask a few questions with regards to your trade? My thoughts might get confusing, bare with my novice knowledge about supply/demand trading. My first question is 1. How did you classify the marked area as a strong supply area? Price did not move strongly away. Now a bit long winded question 2. Your entry shows a strong move. Wouldn't your entry classify this area as strong supply? In that case you would need to wait for price to move back to supply to have a short entry. But if price...
I'll try to answer your questions as best as I can.

1. The area on a 1 minute chart IS a "strong" supply area. Look at the candles moving away. Forget this is a 1 minute chart. If it was a H4 chart you might think differently.

2. I think it was partially answered above. However the strong move away in response to the news announcement does classify this as a strong supply area. The second chart shows a perfect reaction to this supply. I wish they all happened that way. The market makers satisfy orders as efficiently as possible. You may see juicy supply further above and the market makers see this too but they will satisfy these orders only as necessary. The news event pushed price up to the next level necessary and then the market makers sold when there was enough sellers. This was a good example of "levels on top of levels". This is when levels are stacked closely together. In this case price often will move the higher level. Sam Seiden talks about this.

My trading has changed to what many call "scalping". But I start from as high as the weekly chart and move all the way down to the 1 minute chart. I"ve been doing this a while now so my analysis takes but a few minutes. I'm not opposed to trading higher time frames but the 1 minute action quite frankly has me addicted. I trade higher lot sizes so this inclines me to take profit earlier rather than letting trades run. I do take off 1/2 or 2/3 often but still I end up closing fairly early.

The key is good analysis from HTF to LTF. I favor trading from what I perceive as the power most in control (supply or demand). Supply/demand is the way the market works. Not by indicators. It takes a while but continued vigilant study of how s/d looks on a price chart I believe is the path to successful trading.

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  • #6,118
  • Aug 8, 2014 8:04pm Aug 8, 2014 8:04pm
Quoting Whatsmyname
{quote} Hi Rufus, thanks for your reply. I think I understand. Sort of But wouldn't the whole sideways move be the base and the strong move down classify this area the supply zone? Since noone knows where the buy and sell orders lie you can only see after the price movement by observing how strong price moves. The shaved top seems initially like a resistance and became a supply zone after the strong move?? I did modify your chart with some comments and questions. It would be very helpful to understand this strategy. {image} I did experiment...
Everything you posted on that chart is correct. It comes down to how individual traders see the chart and how they trade it with there personalities. Personally I don't believe there is any one correct way of trading supply/demand. We all have our own path. I throw in a lot of Fibonacci, occasionally some Gartley patterns, also starting to incorporate some Elliot Wave, and of course you see stochastic and moving averages on my chart. Theses are all tools that I have incorporated into my trading. Supply/Demand purists may say that the other things I look at are pointless. But they aren't me living in my brain. I trade a chart like a Chess board...Strategic. I am endeavoring to understand all the moves on the board/chart and why. For example the zone I have laid out corresponds with a 50% fib...BUT... it was spiked. Yet price obeyed the zone latter. To me the spike was institutions clearing out retail orders to fill theirs. There are a lot of S/D traders out there and the institutional traders know it. They are working hard to take out our orders before price moves so they have the profit leaving us in the dust wondering what happened.

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Trading is challenge I have come to love....

‘My satisfaction always came from beating the market, solving the puzzle. The money was the reward, but it was not the main reason I loved the market’ – Jess Livermore 1920s
Illegitimi non carborundum - Noli pati a scelestis opprimi.
  • #6,119
  • Aug 8, 2014 8:06pm Aug 8, 2014 8:06pm
Quoting Rufus
{quote} Everything you posted on that chart is correct. It comes down to how individual traders see the chart and how they trade it with there personalities. Personally I don't believe there is any one correct way of trading supply/demand. We all have our own path. I throw in a lot of Fibonacci, occasionally some Gartley patterns, also starting to incorporate some Elliot Wave, and of course you see stochastic and moving averages on my chart. Theses are all tools that I have incorporated into my trading. Supply/Demand purists may say that the other...
Well-said Rufus!
  • #6,120
  • Aug 8, 2014 8:08pm Aug 8, 2014 8:08pm
Quoting Winston Reed
{quote} I'll try to answer your questions as best as I can. 1. The area on a 1 minute chart IS a "strong" supply area. Look at the candles moving away. Forget this is a 1 minute chart. If it was a H4 chart you might think differently. 2. I think it was partially answered above. However the strong move away in response to the news announcement does classify this as a strong supply area. The second chart shows a perfect reaction to this supply. I wish they all happened that way. The market makers satisfy orders as efficiently as possible. You may...

Great post Winston
Illegitimi non carborundum - Noli pati a scelestis opprimi.
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