Support/Resistance vs Supply/Demand... What is the difference? | Page 2 | Forex Factory

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Support/Resistance vs Supply/Demand... What is the difference?

  • #21
  • Jul 6, 2014 2:47pm Jul 6, 2014 2:47pm
@Molby you are partially correct about sup/dem vs sup/res I'll try and attach an example.
https://www.tradingview.com/x/UQ5NNzD3
i tried to upload a chart for you but best I can do is this link. You may have to copy and paste.

as to the flip level, sometimes called a swap level it is a very valid phenomenon that does work like a charm
It to depends on sup/dem though.

if you would like further explanation you can find me at tradingview.com it's free and I participate in a couple chats on gold, S&P and supply and demand trading. It's a web based charting service where traders can easily exchange ideas etc.
give it a shot and look me up when you get there.
  • #22
  • Dec 12, 2014 8:16am Dec 12, 2014 8:16am
Quoting skenobi
{quote} From my institutional experience... Support/Resistance: Levels "where price tested a few times and failed to breakthrough", also known as "where sell/buy orders are stacked" Supply/Demand: Vague and sometimes unquantifiable economic concepts.
Short and Excellent Definition @skenobi

Thanks
  • #23
  • Dec 12, 2014 9:23am Dec 12, 2014 9:23am
well first of u r actually talking about supply and demand Levels i presume !?!

however , Support and resistance can "form" in one of two ways (the law of supply and demand take place in both)

1st For example, if Price is rising and the buying interrest is losing is steam ie. no one is following Price any higher , a lack of demand so to speak
at one Point supply / sellers will outnumber buyers by such an extend that Price starts to decline , that Price Level is reffered to resistance , actually
only if Price at least rejected that Level 2 or more times... it doesnt mean , a shitload or fresh supply came into the market but rather (auction market style)

ie. Price got rejected at that level due to A LACK OF TRADING GOING ON AT THAT PRICE :: NO INTERREST::


2nd If Price found resistance if , we do have a strong buying Background ie. buying pressure actually increases , ie demand is huge (breakout Traders ie. stacked buy stops from aggressive bulls and weak bears) .. but the market actually stuff all the supply they have down the throat of the bulls! then we have an active supply wave coming in outnumbering the demand to such an extend that Price will eventually decline.. if all the buyers are "consumed"



vice versa for Support Levels...


u see it depends on how" the"´formed .. and if Price trades back to that Levels How the market reacts at those Levels..

ie. does a former "rejected Level now finds more acceptance or even drives thru it ?

does a heavy supply area now gets absorbed ?

etc. etc..


supply/demand isnt the same as sup./res.. but one is the cause for the other ##get it ?
  • #24
  • Dec 13, 2014 1:54am Dec 13, 2014 1:54am
If one cannot convince the next natural course of action is to confuse. Hence the creation of known words with unknown consequences filled with unending ambiguity.....

GS.
  • #25
  • Dec 17, 2014 12:58pm Dec 17, 2014 12:58pm
Hello,

These are the definitions I find correct:

Supply = the amount of a commodity, product, or service available and the desire of buyers for it, considered as factors regulating its price.
Demand = An economic principle that describes a consumer's desire and willingness to pay a price for a specific good or service. Holding all other factors constant, the price of a good or service increases as its demand increases and vice versa.

Resistance = A chart point or range that caps an increase in the level of a stock or index over a period of time. An area of resistance or resistance level indicates that the stock or index is finding it difficult to break through it, and may head lower in the near term. The more times that the stock or index has tried unsuccessfully to break through the resistance level, the more formidable that area of resistance becomes.
Support = The price level which, historically, a stock has had difficulty falling below. It is thought of as the level at which a lot of buyers tend to enter the stock.
  • #26
  • Apr 19, 2015 12:43pm Apr 19, 2015 12:43pm
Quoting Unabletrader
A support/resistance level could be without any desquilibrium. A supply/demand level needs it to be create. It's really different from a trading's perspective,
I am agree with you (y)
astroganndotcom
  • #27
  • Apr 19, 2015 12:51pm Apr 19, 2015 12:51pm
support&resistance is the edge of supply&demand.
  • #28
  • Apr 19, 2015 11:52pm Apr 19, 2015 11:52pm
Quoting keroro0o0o
My take: Supply/Demand: A zone, where we assume there are sell/buy orders stacked. Support/Resistance: A level, where price tested a few times and failed to breakthrough. Chart: {image}
http://www.forexfactory.com/attachme...2&d=1365047645


Quoting pjameslamar
.....I didn't read the entire thread so don't know if you did or did not but I would like to offer an answer. supply/demand are real orders to sell and buy a particular commodity at a specified price. Large orders can sometimes be seen on our charts as consolidations. The consolidations are known to be an area of equilibrium as both buy orders and sell orders are easily matched there. Support/resistance are simply the result...
Great explanation.Thank you.
The Market pays you to be disciplined
  • #29
  • Apr 20, 2015 12:01am Apr 20, 2015 12:01am
Quoting pjameslamar
.... I'll try and attach an example. https://www.tradingview.com/x/UQ5NNzD3 i tried to upload a chart for you but best I can do is this link. .....

Why red circles represent demand?
The Market pays you to be disciplined
  • #30
  • Apr 20, 2015 12:19pm Apr 20, 2015 12:19pm
IMHO, it is the same thing described by different context defining terminology. Resistance is created by supply. Support is created by demand.
  • #31
  • Apr 20, 2015 2:04pm Apr 20, 2015 2:04pm
I can't explain it in detail here but can tell you that there is a clear difference between 'supply/demand' and 'support/resistance' (although they might seem very similar to each other)

To keep it simple, the context 'support/resistance' is generally used for Technical Analysis and provides a crucial idea of how next price movements of an asset will be whereas the term 'supply/demand' is normally used in economic sense.

The main difference is that 'support/resistance' can be interchangeable, meaning that a support can become a new resistance once the support is breached. Similarly, a resistance can become a new support as well.
Forex? Futures?
Jeremy Jongsuk Oh All Time Return: 599.2%
  • #32
  • Apr 20, 2015 2:38pm Apr 20, 2015 2:38pm
market not moves on our fings but hope so
  • #33
  • Apr 20, 2015 3:29pm Apr 20, 2015 3:29pm
Quoting GnarlyPips
To me, I'd say that S/D is like a breakout, where you see a large, large candle in either direction. S/R are simply levels that are everywhere on all time frames, like when a price "fails" to break a "level" and retreats to another "level," only to "bounce" off of it. I'd say that S/D would take time into account, while S/R just takes price only. If you want a chart with some examples, I can do that.
Hello GnarlyPips Joine, it is a very old post, if you do not mind when you get a bit of time can you give some examples with chart to understand me, about the Support/Resistance vs. Supply/Demand. As I am newbie will be a great help of you.

Regards,
Moti
  • #34
  • Apr 30, 2015 1:17am Apr 30, 2015 1:17am
support resistance is a temporary thing that shouldn't be derived from past prices but from current liquidity. this is more of an equities thing since stock markets differ from forex. supply demand is more so about the actual economy. probably completely different from what i originally posted but yeah.
Play the players, not the cards.
  • #35
  • May 1, 2015 10:32am May 1, 2015 10:32am
Fast forward through the first 9 minutes.

Inserted Video
Without VSA, you're playing checkers while the Smart Money plays chess.
  • #36
  • May 2, 2015 8:45am May 2, 2015 8:45am
Quoting GnarlyPips
support resistance is a temporary thing that shouldn't be derived from past prices but from current liquidity. this is more of an equities thing since stock markets differ from forex. supply demand is more so about the actual economy. probably completely different from what i originally posted but yeah.
Hello GnarlyPips, I appreciate you for your replay thank you
Regards,
Moti
  • #37
  • May 2, 2015 8:46am May 2, 2015 8:46am
Quoting HiddenGap
Fast forward through the first 9 minutes. https://www.youtube.com/watch?v=VMrVUar-h14
Hello HiddenGap, thank you for the video tutorial it has made things clearer and easier to understand very nice I appreciate a lot for your help
Regards,
Moti
  • #38
  • May 2, 2015 8:49am May 2, 2015 8:49am
it is very different
  • #39
  • May 2, 2015 8:58am May 2, 2015 8:58am
Quoting Nfp
it is very different
Hello Nfp

Could you explain what is different please?

Regards,
Moti
  • #40
  • May 2, 2015 4:00pm May 2, 2015 4:00pm
Normally ,

on Support and resistance levels , we trade the bounce or the breakout from the 2nd visit to the line .
Otherwise , on S/D levels , we trade within the 1st visit to the zone .

this is only a small difference , there are a lot to discover by time ...
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