ReadtheMarket - Supply and Demand with Price Action

Very true, and only Joe Calzaghe could ever have been Joe C!

But

When the market leaves its chin exposed, there's one thought which should always spring to mind: Hit it!

The orders were there for the taking, and their target was a few pips below, so the chin was exposed

I regularly left my chin open. It was a great way to make an opponent do what I wanted them to do

something close to what you guys practice in here in relation of reading the price..
nice thread.

GBP Official Bank Rate Trade



will it go north into compression zone??
let's s see
set +1

take a scalp on EURUSD,

It seems to me this thread is about order flow, and how to read it from the charts. You can understand all of this by learning to read the tape. It's the same thing. And you don't necessarily need a L2 to do it, either... although that will help expedite your understandings.

Anywho, nice job on the thread!

Hi Smash

I think I understand what you've said, but my understanding was always that there's no centralised all-knowing tape or level 2, and that the only thing which shows every single order and player in the market is price itself.

Look at high frequency trading for example. That's not a bunch of limit orders left at a level. Rather it's a rapid succession of market orders placed to pile on a position without moving price. This can't be seen before the level hits, and very often can't be seen in history, but must be observed in real time

I've finally had some time to take another look at my trading, made a little change tonight on a fast scalp (not sure if this is a "real" SAS but I felt confident enough to short) but missed the gold mine by a fraction of a pip. Always annoying to know it's time to cancel the order once price runs away.

Hi Ifmyante!

You are absolutely correct, and it is my mistake for phrasing it the way that I did. What I meant is simply: if you know how to read the tape, then it will translate very well in the FX world.

There is no centralized tape or Level II in the FX world, like you said. Some brokers may provide a DOM screen, but it is virtually useless -- just like tick charts in MT4.

I should have clarified this. I used to be a daytrader at a Chicago-based equity prop firm, and some of THE BEST traders there would trade strictly off of the L2, so I had no choice but to learn about the concept of order flow. I did not excel at it at the time (because it can be extremely complicated, especially to newbies), but now that I have more experience with FX and charting techniques, I have found that it translates extremely well in the FX world.

What I mean by "translate" is the ability to spot when major banks (CBs)/institutions are buying or selling, and at what levels. Very similar to support and resistance, except not always at those levels, because the concept of order flow and liquidity can be applied everywhere, at all prices, and at any given point in time.

Also, I want to emphasize that understanding order flow does NOT require a Level II screen or TOS or DOM or anything for that matter, other than a basic chart (although a L2 will help). But... even if you do not have a L2 screen (forex, for example), orders are still being executed almost every second of the day and it is how you understand and interpret these orders that matter.

Tape reading is not a necessary skill to have, but it will help you immensely if you can understand how it works... (not speaking to you in particular, because I know you obviously "get it").

Anyways, there is another member here who is extremely good at the concept of order flow, but I am hesitant to post the information publicly. You can certainly find it here on the forums if you do your own research, but you (or anyone) will have to msg/PM me if you really want to know the details. I do not subscribe to this member. I just know that he is very very good at what he does.

Anyway, it'd be interesting to hear your thoughts on this. Do you agree or disagree? Is order flow a major part of your trading or not? How is the website working out for ya? Just would be interesting to hear how you're doing and your thoughts on some of these topics... !

- smash

[quote=smash1820;7933466]{quote} Hi Ifmyante! You are absolutely correct, and it is my mistake for phrasing it the way that I did. What I meant is simply: if you know how to read the tape, then it will translate very well in the FX world. There is no centralized tape or Level II in the FX world, like you said. Some brokers may provide a DOM screen, but it is virtually useless -- just like tick charts in MT4. I should have clarified this. I used to be a daytrader at a Chicago-based equity prop firm, and some of THE BEST traders there would trade strictly off of the L2, so I had no choice but to learn about the concept of order flow. I did not excel at it at the time (because it can be extremely complicated, especially to newbies), but now that I have more experience with FX and charting techniques, I have found that it translates extremely well in the FX world. What I mean by "translate" is the ability to spot when major banks (CBs)/institutions are buying or selling, and at what levels. Very similar to support and resistance, except not always at those levels, because the concept of order flow and liquidity can be applied everywhere, at all prices, and at any given point in time. Also, I want to emphasize that understanding order flow does NOT require a Level II screen or TOS or DOM or anything for that matter, other than a basic chart (although a L2 will help). But... even if you do not have a L2 screen (forex, for example), orders are still being executed almost every second of the day and it is how you understand and interpret these orders that matter. Tape reading is not a necessary skill to have, but it will help you immensely if you can understand how it works... (not speaking to you in particular, because I know you obviously "get it"). Anyways, there is another member here who is extremely good at the concept of order flow, but I am hesitant to post the information publicly. You can certainly find it here on the forums if you do your own research, but you (or anyone) will have to msg/PM me if you really want to know the details. I do not subscribe to this member. I just know that he is very very good at what he does. Anyway, it'd be interesting to hear your thoughts on this. Do you agree or disagree? Is order flow a major part of your trading or not? How is the website working out for ya? Just would be interesting to hear how you're doing and your thoughts on some of these topics... ! - smash[/quote


Check your P.M

Hi, Guys,

Me a newbie here in forex. Just happened to read up aboout RTM materials a weeek ago and has beem really impressed with the concept of supply and demand.

But still kind of confused about how we know price will go back to the source of origin and the relationship between the reaction to supply and demand.

The theory at one look may seems easy and i actually enjoy reading the RTM materials. But when applying in it, i realised i am not that good at looking the overall whole pic from left to right and from HTF to LTF. Always got lost half way through.

I posted a EURUSD weekly chart here. Hope to receive guidance from you guys especially IF as i really want to learn more abt it.

In the weekly chart of EURUSD,

- In the pink zone, is the label "1" a FTR and also a demand zone?

- Then on label "2", is this what RTM called as engulf of the Label "1" FTR/ Dp zone where it signals that it wants to go down, which subsequently did happened after it rebounded back to the pink zone and fell down to label "4"?

- About label "4", am i correct that it is rebounding because it is at the demand zone looking to the left at Label "3", Coloured orange

- And that the label 3 is a FTB of label 5 demand zone?

- Is my pink and orange zone range drawn correctly?

- Also, i have drawn a blue line which i wonder if i am right to call it a "S/R" flip?

- And am i right to say that this S/R" flip is a small demand zone caused by the RBR which is in between label "3" and label "1" ( I highlighted a small yellow circle on it)

- Is it correct to say that this RBR or a dp zone has been also engulfed and now become a supply zone?

OK, now assuming that the above are so far correct, looking at the right side of the chart, we see that this week EURUSD is on a rebound as mentioned that it was supported by the demand zone of label "3". I see that for the past 4-5 weeks, EURUSD has been trading below the blue line which seems likely to be a resistance level.

However, the main question i want to ask is - this currency pair has been on sharp downtrend since May 2014. Now that it has reached the weekly support zone

Scenario 1 - Having touched on the demand zone of label 3 and rebound, do i suppose the this pair is sooner to crack the blue resistance line since RBR zone is just a small base and that the ultimate supply zone it wants to go back is the pink zone and once it reaches this pink zone, the downtrend will resume and eventually falls to label "5?" demand zone?

Scenario 2 - OR is it going back to the May 2014 high starting from this week ? or further observation is still needed when it reach the pink supply zone to see how price react?

Thank you.

AUDNZD

The chart shows that price has fall back to the monthly support zone.

Time for rebound?

Monthly chart





On H1 chart, do i suppose the source of origin is that blue zone drawn? How do we know when price will go back to that level? What should we observe or look out for?

IF, I have had steady success swing trading but have always wanted to learn to scalp. I really didn't think it was probable for me. I felt safe using larger stops and just letting the trade play out. A friend of mine (C.W.) told me about your site and I gulped up all I could of the value you have presented there and here at FF and I am still absorbing as much as possible. I don't know how often you trade, how large you trade, if you trade demo or live, manage funds, are financially independent by now or you just do FX as a game and I REALLY DON'T CARE because what you have shown me happens in the markets consistently- again and again and it's up to ME to apply it. This has enabled me to look at small time frame trading in an entirely different light and perspective. I thank you for your time to do the videos, chart mark ups and narratives. I know it takes much time consumption for you to contribute and I am grateful to be learning from you. Again, thanks for all of the contributions that you give to aspiring day traders which have decided to learn from you about the very root of the way the market works....Supply/Demand.

DS

Thanks so much DS for your kind words.
It means a lot to me whenever somebody takes the time to show their appreciation

Hi IF
these trades got failed !
Here i have attached two charts. Kindly correct me if i wrong!

Attached Image (click to enlarge)

Attached Image (click to enlarge)

hello.
Congratulation for the 3d. I have read also marketpedia. I have some question for you :

1) wht do you mean whit FAILURE TO RETURN(FTR) ?In a post you say that it is a beginning of a new trend . So if we are on a tf 1d , and have a bull trend with the demand zone respected (higher lows ), we could have a FTR point when a demand zone is violated (engulfed to down by price action), and have a new lower low.
Please sorry for my english and thanks

Dhu, I haven't answered because I saw you ere answered in RTM

Raffae, I won't spoonfeed the very simple stuff (soon you'll see that wasn't meant to be at all offensive )

Had to trade lately to pay for Christmas. Only had Loon chart open, so here's the essence of it

thank you very much. Infact i have read carrefully the section about the price action, ancd there is a great explication abot FTR.

thank you very much!!!

Hey IF this is Hotrod from RTM. Just a having a go at the reasons for your entries and management. I would mark up 1M charts but the wife is calling me.

edit: forgot to add that this was all at weekly supply.

edit 2: I missed an exit. The first half of your 3rd entry was exited at first target.

Hi Hotrod

You were pretty much exactly right with that

Also look at m1 for the first entry - it was all compressed above