Supply and demand in a nutshell by Alfonso Moreno | Page 232 | Forex Factory

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Supply and demand in a nutshell by Alfonso Moreno

  • #4,621
  • Aug 12, 2014 1:55am Aug 12, 2014 1:55am
Quoting panoramia
{quote} We are talking about IF THEN scenarios here with no chart... the answer is correct. I don't really understand your reply. Maybe I misunderstood Emmilia's question and she meant that Level A had not taken any opposing zone so Level B cannot be a level after all.... but let me put this down clearly since the rules are pretty straight forward in this matter: IF level X takes out level Y, then Level X is a valid tradeable level. BUT, level must meet the 2:1 imbalance, good base, etc... then we need to make a top down analysis in order to assess...
Yes, clear as crystal. Thanks for your reply, Alfonso.

-Steve
  • #4,622
  • Aug 12, 2014 8:26am Aug 12, 2014 8:26am
Hello again and thank you for your answer, sorry I didnt attach any picture. I have to admit, I am still a little bit confused, maybe its because I am blonde
Here is a picture, do I see the level E right? Per rules, it is not valid level. ( http://i.imgur.com/GMU45pq.png )
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  • #4,623
  • Aug 12, 2014 5:32pm Aug 12, 2014 5:32pm
Quoting Emmilia
Hello again and thank you for your answer, sorry I didnt attach any picture. I have to admit, I am still a little bit confused, maybe its because I am blonde Here is a picture, do I see the level E right? Per rules, it is not valid level. ( http://i.imgur.com/GMU45pq.png ) {image}
Hello blondie Emmilia

Let me answer your question, I believe you are misunderstanding the rules and when a level is taken out or not, and by how much.

  1. The D1 supply level at E took out level B which took out level A, so it's a valid D1 supply level. It also took out the blue level I drew, which is the one that took out level A
  2. Level B did NOT take out level A by 1 pip, price kept on rallying and took it out but quite a few pips

Alfonso

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Set and Forget supply and demand trading community
  • #4,624
  • Edited 9:47am Aug 13, 2014 5:04am | Edited 9:47am
Hi Alfonso,

I have found your thread quite insightful. It has helped me alot in looking at the market with out the use of indicators.

I have been trying to understand the process involved, using forex tester and a demo account. I have a GBP/JPY trade in progress that I wanted to share. What I particularly like about this trade is how the rules on a buffer for a zone keep you in the trade.

While that is all fine and well, it also shows my analysis of the pair. It would be nice to know what I have right or wrong.

Attached Image (click to enlarge)
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  • #4,625
  • Aug 14, 2014 2:06am Aug 14, 2014 2:06am
Quoting panoramia
{quote} Hello blondie Emmilia Let me answer your question, I believe you are misunderstanding the rules and when a level is taken out or not, and by how much. The D1 supply level at E took out level B which took out level A, so it's a valid D1 supply level. It also took out the blue level I drew, which is the one that took out level A Level B did NOT take out level A by 1 pip, price kept on rallying and took it out but quite a...
Thank you a lot for your chart and comment, I appreciate it. I see, this is going to be a long process to understand it, but it seems to be a system with a logic behind, I like that a lot. Was my question about members in your forum inappropriate? I would understand
  • #4,626
  • Aug 14, 2014 4:07am Aug 14, 2014 4:07am
Quoting nurotic
Hi Alfonso, I have found your thread quite insightful. It has helped me alot in looking at the market with out the use of indicators. I have been trying to understand the process involved, using forex tester and a demo account. I have a GBP/JPY trade in progress that I wanted to share. What I particularly like about this trade is how the rules on a buffer for a zone keep you in the trade. While that is all fine and well, it also shows my analysis of the pair. It would be nice to know what I have right or wrong. {image}
Thanks for sharing your trade, your reasoning looks good. I missed a D1 short on GBPJPY by a couple of pips and dropped like a rock. I am mainly concentrating on D1 imbalances now that I am away, but your H4 short makes sense and the analysis is great, congratulations.

Cheers,
Alfonso
Set and Forget supply and demand trading community
  • #4,627
  • Aug 14, 2014 5:25pm Aug 14, 2014 5:25pm
I took this two setups today from UCAD 1hr supply zone. monthly and daily is up trend then 1hr is down low in the curve. so price retraces my supply zone and i took it.
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  • #4,628
  • Aug 14, 2014 5:40pm Aug 14, 2014 5:40pm
I just want to thank ALFONSO for his wonderful thread and webinars. I have read your thread 4times, watch your videos many times and also love your sexy voice I can now see what price is telling us every trading day.The rules are so simple and easy IF YOU WORK HARD. However, i might make some mistakes in my analysis but i know with time i will get there. ALFONSO thank you very much
  • #4,629
  • Aug 14, 2014 10:40pm Aug 14, 2014 10:40pm
Quoting sympathy
I just want to thank ALFONSO for his wonderful thread and webinars. I have read your thread 4times, watch your videos many times and also love your sexy voice I can now see what price is telling us every trading day.The rules are so simple and easy IF YOU WORK HARD. However, i might make some mistakes in my analysis but i know with time i will get there. ALFONSO thank you very much
I have to agree with this post, I am amazed by the complexity of this system ... and sexy voice, of course
  • #4,630
  • Aug 15, 2014 3:43am Aug 15, 2014 3:43am
Quoting sympathy
I just want to thank ALFONSO for his wonderful thread and webinars. I have read your thread 4times, watch your videos many times and also love your sexy voice I can now see what price is telling us every trading day.The rules are so simple and easy IF YOU WORK HARD. However, i might make some mistakes in my analysis but i know with time i will get there. ALFONSO thank you very much
Quoting Emmilia
{quote} I have to agree with this post, I am amazed by the complexity of this system ... and sexy voice, of course
Thanks for your kind words, I'm glad that the content of this thread and mechanical rules are helping you to become more consistent and understand a bit more how supply and demand works as per the rules.

Have a great weekend!
Alfonso
Set and Forget supply and demand trading community
  • #4,631
  • Aug 15, 2014 5:00am Aug 15, 2014 5:00am
A new live webinar will be held next Tuesday 19th August 2014. I am back from a 2 weeks holidays, will be around for a few days and probably leave again for some days, but I first wanted to organize a new webinar.

We'll cover again The Sequence and The Realignment rules, the new concept that was introduced in the last webinar that has been available for a few months now at the supply and demand trading community

  1. SUBJECT: Longer term position trading, the Sequence and the Realignment
  2. DATE: Thursday 19th August 2014
  3. TIME: 9:00 AM - 10:30 AM CEST (Central European Summer TIme), right at London Open
  4. LINK TO JOIN: if you haven't joined one of the webinars before, fill out this form in order to obtain the link... you will get it in the confirmation email, check your spam folder just in case

You can join now, you will be notified by email 1 day and 1 hour before it starts. The webinar will be recorded as always

I will try to cover all these topics:

  1. Longer term position trading
  2. The Sequence and The Realignment, a new concept introduced a few months at the Set and Forget community
  3. How to trade with the D1 supply and demand imbalances
  4. Under which conditions we should hold a trade and how
  5. Will try to be as simple and specific as possible so everything is as clear as water to plan a trade

Hope to see you there
Alfonso

Set and Forget supply and demand trading community
  • #4,632
  • Aug 15, 2014 4:51pm Aug 15, 2014 4:51pm
Can we go over Flag Limits too in the webinar
  • #4,633
  • Aug 16, 2014 2:14am Aug 16, 2014 2:14am
Quoting TradeMonstr
Can we go over Flag Limits too in the webinar
I don't use flags, I don't really know what a flag limit is, it's obviously not part of the strategy so I can't go over it sorry.
Alfonso
Set and Forget supply and demand trading community
  • #4,634
  • Aug 19, 2014 6:00am Aug 19, 2014 6:00am
Hello fellow traders!

We had a great webinar today, I'm happy with the topics that were covered, I believe it should have solved many of the doubts that you might have. It's important to understand that the fact that you may have understood the rules and scenarios laid out in this webinar, does not mean that you are ready to detect them and trade them. It requires a lot of work and practice in order to create a habit and the mind patterns in order to enable you to locate them and trade them second nature. It's fortunately or unfortunately how our mind work. I said fortunately because if it was that easy then everybody would be profitable and there would be no way to earn money in the markets since everybody would do things right

Jokes apart, let me summarize what we covered in today's webinar:

  1. We made a detailed top down analysis for several instruments: NZDUSD, NZDCAD, Spot GOLD and Spot SILVER
  2. The sequence and the realignment rules to locate set and forget trades for longer term position trading
  3. How to mechanically define an uptrend, a downtrend and consolidation. It's crucial in order to apply the realignment rules and locate the closest valid level to trade set and forget or confirm with new SD imbalances in the direction you wish to trade
  4. How to draw and negate a trendline, when to draw a steeper trendline when we have 3 or more CP (Continuation Patterns)
  5. How lower timeframes entries are negated if the higher timeframe where those levels are is not tradable (not a 2:1 imbalance). We covered this on NZDUSD D1 zone nested at WK demand zone at the MN ascending TL
  6. Make sure you have as much history as possible to prevent unnecessary losses, like NZDCAD longs mentioned in the webinar
  7. How to assess if price is to high in the Monthly curve, this should prevent us from taking longs, moreover if the MN supply is fresh and original
  8. When to wait for confirmation and when to set and forget your trades
  9. Compression and accumulation, compression areas have higher odds of being absorbed when price revisits the areas
  10. The difference between an original level and a fresh level
  11. How it all has to do with emotions, control your emotions by using mechanical rules and you will step into the next stage of your trading career

Enjoy your day and summer time!
Alfonso

Inserted Video
Set and Forget supply and demand trading community
  • #4,635
  • Aug 20, 2014 7:07am Aug 20, 2014 7:07am
Hello everyone,
relating to yesterdays webinar, if i want to set and forget at demand level drawn on NZDCAD, then i need to look for a fresh and original demand level within it, because D1 (entry) trend is down when arriving at MN demand, or i set and forget at new demand formed after reaching MN demand, right?

Another question, if D1 is out of allignment and i am correct with the rules above, we look to set and forget at W1 sd zone, if not too high/low. We could miss the trade when there is no fresh and original level within it and we get no pullback to new sd zone?

Thanks & Greetings
Joe
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  • #4,636
  • Aug 20, 2014 1:17pm Aug 20, 2014 1:17pm
Hi everyone,

Perhaps Alfonso or someone wouldn't mind answering a very basic question, which has been bugging me when learning the rules...

If a new area of demand takes out an area of supply, but the area of supply is not a valid area of supply, is the new area of demand still valid?

Thanks,

Trader555
  • #4,637
  • Aug 20, 2014 2:43pm Aug 20, 2014 2:43pm
Quoting Trader555
Hi everyone, Perhaps Alfonso or someone wouldn't mind answering a very basic question, which has been bugging me when learning the rules... If a new area of demand takes out an area of supply, but the area of supply is not a valid area of supply, is the new area of demand still valid? Thanks, Trader555
Can you define "not a valid area of supply" please?

An area can valid supply but not tradable because it does not meet some of the needed requirements (2:1 imbalances, consolidation away, bad basing, etc). It does not matter, if the supply area was removed by demand, either tradeable or not, it validates the opposing one (demand)

Hope it makes sense!
Alfonso
Set and Forget supply and demand trading community
  • #4,638
  • Aug 21, 2014 11:38am Aug 21, 2014 11:38am
Quoting panoramia
{quote} Can you define "not a valid area of supply" please? An area can valid supply but not tradable because it does not meet some of the needed requirements (2:1 imbalances, consolidation away, bad basing, etc). It does not matter, if the supply area was removed by demand, either tradeable or not, it validates the opposing one (demand) Hope it makes sense! Alfonso
Hi Alfonso,

This is the answer I was looking for. Thank you very much. And just to clarify, say for example the supply does not make a lower low, and then demand takes it out, does this still count as demand? Please excuse my simple drawing...

Attached Image
  • #4,639
  • Aug 21, 2014 12:32pm Aug 21, 2014 12:32pm
Trader555

This is a quote from post 1.

When is a supply or demand level confirmed as a level?

  1. We need that the opposing supply/demand area is taken out (absorbed) before we consider an area to be valid AND/OR price making Higher Highs or Lower Lows in the timeframe where the level is being drawn
  2. If previous opposing area is not taken out AND/OR price is not making HH or LL, the new level will be negated
  3. For instance, if we see a D1 demand forming, we'd require that at least one full candle (OHLC, Open, High, Low and close) closes entirely above the potential D1 demand basing area in order for that demand area to be considered as demand, otherwise it will be considered part of the base
  4. 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


Not all imbalances are valid SD zones. Also, an imbalance in price could be strong or weak, and could be original or a test of a previous zone.


The zone you marked as supply is not valid supply because it did not take out previous demand.

Maybe this helps.

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  • #4,640
  • Aug 21, 2014 12:38pm Aug 21, 2014 12:38pm
Quoting jsr
Trader555 This is a quote from post 1. When is a supply or demand level confirmed as a level? We need that the opposing supply/demand area is taken out (absorbed) before we consider an area to be valid AND/OR price making Higher Highs or Lower Lows in the timeframe where the level is being drawn If previous opposing area is not taken out AND/OR price is not making HH or LL, the new level will be negated For instance, if we see a D1 demand forming, we'd require that at least one full candle (OHLC, Open, High, Low and close) closes entirely above...
This helps immensely jsr. Thank you for the visual - much easier to get my head around.
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