Supply and demand in a nutshell by Alfonso Moreno | Page 269 | Forex Factory

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Supply and demand in a nutshell by Alfonso Moreno

  • #5,361
  • Feb 18, 2015 7:47am Feb 18, 2015 7:47am
Hello Traders -any comments on my analysis on XAUUSD are Welcome as I need all the advice I can get
Monthly down , daily down, and 4Hr down - Weekly appears to be out of alignment but overall the bias is down so can a short be considered higher probability and more importantly Valid , the CP on the 4 Hr is 3:1 and not against the trend - so would this be a valid trade? - I understand I may be low in the curve and it might be aggressive but would it be considered valid?
Monthly
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Weekly
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  • #5,362
  • Feb 18, 2015 8:02am Feb 18, 2015 8:02am
Quoting Fatyflathead
Hello Traders -any comments on my analysis on XAUUSD are Welcome as I need all the advice I can get Monthly down , daily down, and 4Hr down - Weekly appears to be out of alignment but overall the bias is down so can a short be considered higher probability and more importantly Valid , the CP on the 4 Hr is 3:1 and not against the trend - so would this be a valid trade? - I understand I may be low in the curve and it might be aggressive but would it be considered valid? Monthly {image} Weekly {image} Daily {image} 4 hr {image}
Bigger picture trend on gold is down, Monthly supply in control in Gold. Weekly is out of alignment with a new WK demand zone lower which could produce some longs. Bias is shorts though unless WK demand zone gains control. WK ascending TL in control, going short against it normally produces low odds trades.

Hope it makes sense, you have to have a plan for each of these scenarios.
Cheers,
Alfonso
Set and Forget supply and demand trading community
  • #5,363
  • Feb 18, 2015 8:05am Feb 18, 2015 8:05am
Quoting rickyfx
{quote} cant we trade the daily fresh demand level nested within monthly area of demand ? that level has 2:1 imabalance and broke trendline.
You can if you are a counter-trend trader and want to go against a clear downtrend on the euro. I am not taking any longs on the euro, bigger picture is down, I will wait for the best opportunity to short because by doing so I will set my trade and forget about it, why? Trend is down, if I take a long I will have my mind thinking on that long because I won't expect it to be long-lived. But it all has to do with your trading plan after all.

Cheers,
Alfonso
Set and Forget supply and demand trading community
  • #5,364
  • Edited 8:45am Feb 18, 2015 8:35am | Edited 8:45am
Quoting panoramia
{quote} Bigger picture trend on gold is down, Monthly supply in control in Gold. Weekly is out of alignment with a new WK demand zone lower which could produce some longs. Bias is shorts though unless WK demand zone gains control. WK ascending TL in control, going short against it normally produces low odds trades. Hope it makes sense, you have to have a plan for each of these scenarios. Cheers, Alfonso
Thanks Alfonso ,
my thinking was that the long ERC red candle falling to the monthly DZ would have little resistance from the previous rising ERC candle and that this would override the WK ascending TL in control if my entry was hit, as both the 4 Hr and daily were with me.( I was trying to think in terms of probabilities)- as I would like to be able to follow the rules in a green light/ red light way.

So would you wait for price to hit the WK demand zone and take longs once the LTF align?
  • #5,365
  • Feb 18, 2015 9:17am Feb 18, 2015 9:17am
Quoting rickyfx
{quote} on the left those are compressed supply but supply. {image}
Hello, Ricky.

i saw your chart, all good. but in your chart level 4 is not a valid DZ as it did not took out any supply. the level 5 took out level 6 so thats a valid DZ, then TL formed the new supply and that supply only took out that level 5 DZ. thats why we have only 1 DZ took out. so we dont have 2 DZ took out but we have 2 peaks so thats why its a bullish consolidation. i would like that if Alfonso explain this weekly chart of EURAUD with more insight.
  • #5,366
  • Feb 18, 2015 9:40am Feb 18, 2015 9:40am
Quoting Solomon1a
{quote} Hello, Ricky. i saw your chart, all good. but in your chart level 4 is not a valid DZ as it did not took out any supply. the level 5 took out level 6 so thats a valid DZ, then TL formed the new supply and that supply only took out that level 5 DZ. thats why we have only 1 DZ took out. so we dont have 2 DZ took out but we have 2 peaks so thats why its a bullish consolidation. i would like that if Alfonso explain this weekly chart of EURAUD with more insight.
yes technically thats not a valid demand because its failed to remove its opposing zone but there is a rule of Inherited which is i guess little bit advance and i came to know about this from a webiner where alfonso said:

" If in an uptrend a level failed to break any supply level that level will not consider as demand level but if next level able to remove supply or create all time high then the all inherited level will be valid demand level but that doesn’t mean we can trade all the level down there, we will use trendline filter to find the best level to trade. "

so as per this statement Level 4 was a Valid Demand level. I dont know much about this rule so i can be wrong here. I also hope to get Alfonso insight here.
  • #5,367
  • Feb 18, 2015 11:37am Feb 18, 2015 11:37am
Quoting Fatyflathead
{quote} Thanks Alfonso , my thinking was that the long ERC red candle falling to the monthly DZ would have little resistance from the previous rising ERC candle and that this would override the WK ascending TL in control if my entry was hit, as both the 4 Hr and daily were with me.( I was trying to think in terms of probabilities)- as I would like to be able to follow the rules in a green light/ red light way. So would you wait for price to hit the WK demand zone and take longs once the LTF align?
Bigger picture trend is down, any longs requite confirmation, even within the WK DZ. That's what the rules say, the biggest TF is the monthly, it's down, short is the way to go. Right into WK DZ? Then no more shorts until removed or wait for bigger retracement. That does not mean that longs are allowed, they will if your trading plan allows you to take longs on WK DZ with a clear Monthly downtrend.

Cheers,
Alfonso
Set and Forget supply and demand trading community
  • #5,368
  • Feb 18, 2015 12:37pm Feb 18, 2015 12:37pm
Quoting panoramia
{quote} Bigger picture trend is down, any longs requite confirmation, even within the WK DZ. That's what the rules say, the biggest TF is the monthly, it's down, short is the way to go. Right into WK DZ? Then no more shorts until removed or wait for bigger retracement. That does not mean that longs are allowed, they will if your trading plan allows you to take longs on WK DZ with a clear Monthly downtrend. Cheers, Alfonso
thanks Alfonso for the clarification , I don't want to be a counter trend trader or an aggressive one shorting into the WK DZ , I'm just want to get my logic straight and trade the higher probabilities. It might take a few more questions before it eventually sinks in.

So thank you for taking the time and patience.
Steve.
  • #5,369
  • Feb 19, 2015 3:50am Feb 19, 2015 3:50am
Hello Everybody,
analysis on GBPUSD for a trade I set , any comments welcome .

4 Hr up and SL placed below what appears to be a flipzone. 4 Hr is nested within the Daily and is minimum 2:1 with room to target at 3:1
Daily up ,Weekly descending TL broken , Monthly bouncing from non fresh demand in control with low resistance ERC candle on the left.
Also Dollar index high in the curve and has broke Ascending Daily TL
4 Hr.
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Daily
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Weekly
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Monthly
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  • #5,370
  • Feb 19, 2015 9:16am Feb 19, 2015 9:16am
Hi Mr Alfonso and fellow traders,

I am long on Nasdaq 100 in a PCP, all time frames are pointing north.
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passion and discipline
  • #5,371
  • Feb 20, 2015 5:28am Feb 20, 2015 5:28am
Hello fellow traders,

On today's webinar we went again through the basics of supply and demand's core rules at Set and Forget. The Realignment/Sequence rules are at the core of the rules set.

We analyzed a bunch of few instruments in detail with the supply and demand glasses on:

  1. DOLLAR INDEX, strong bullish trend
  2. GOLD, clear monthly downtrend
  3. GBP/JPY, monthly uptrend, some longs playing out
  4. CAD/JPY, monthly demand in control
  5. AUD/NZD, monthly downtrend at all time lows
  6. EUR/GBP, monthly downtrend with lots of room to drop
  7. GBP/AUD, bigger picture uptrend but no levels to lean on for longs
  8. NZD/USD, monthly consolidating bouncing off 6 months demand zone

Things we always need to have in mind and take into account, we covered this in today's webinar

  1. Defining the trend is crucial, it will determine which is your bias. We have to pay very close attention to it
  2. How to mechanically define a trend using supply and demand imbalances
  3. A level of demand is valid IF A) it removes an opposing zone and/or B) it breaks a trendline in the timeframe you are looking at C) It has no opposing area to take out and 3:1 or more profit margin
  4. How the curve is defined. Continuation patterns are not used to measure the curve if against the trend
  5. Bull and bear traps
  6. Non conventional continuation patterns, see GBP/JPY and GOLD monthly supply zones
  7. Continuation Patterns and marubozu candles
  8. Flip zones and bigger timeframe trendline confluences, don't go against them

Hope that you like the webinar and some of the concepts are a bit clearer to you.

Have a great weekend!
Cheers,
Alfonso

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  • #5,372
  • Feb 20, 2015 6:30am Feb 20, 2015 6:30am
Thanks you very much, Alfonso
Newbie trader
  • #5,373
  • Feb 20, 2015 2:45pm Feb 20, 2015 2:45pm
Hi Mr Alfonso and fellow traders,

i have a set up on NZDJPY but i miss it by a few pips:

Monthly: is in a up trend and facing a tested supply area.

Weekly: up and demand in control.

Daily: reacting from a strong demand zone and we have the firts cp.
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passion and discipline
  • #5,374
  • Feb 20, 2015 7:16pm Feb 20, 2015 7:16pm
Hi Alfonso.

When I want to download your supply and demand indicator, I am forced . Could you please put the indicator visible place where everyone can reach easily.
  • #5,375
  • Feb 21, 2015 1:11am Feb 21, 2015 1:11am
Alfonso,

Thanks again for the video: Longer term Forex Supply and Demand live trade analysis, 20th February 2015.
The Dollar Index symbol you showed one the chart is: USDIndex which I can't find on FXCM MT4.

Is DXY the same? How about any other Dollar Index that works the same as USDIndex?
Simple is powerful all the time.
  • #5,376
  • Feb 21, 2015 5:21am Feb 21, 2015 5:21am
Quoting RiverTrader
Alfonso, Thanks again for the video: Longer term Forex Supply and Demand live trade analysis, 20th February 2015. The Dollar Index symbol you showed one the chart is: USDIndex which I can't find on FXCM MT4. Is DXY the same? How about any other Dollar Index that works the same as USDIndex?
I think the DXY is the same, but I can't tell you 100% sorry. I use HotForex for Dollar Index, you should ask FXCM about it to make sure if it's the same instrument.

Cheers,
Alfonso
Set and Forget supply and demand trading community
  • #5,377
  • Feb 21, 2015 5:22am Feb 21, 2015 5:22am
Quoting rohule
Hi Mr Alfonso and fellow traders, i have a set up on NZDJPY but i miss it by a few pips: Monthly: is in a up trend and facing a tested supply area. Weekly: up and demand in control. Daily: reacting from a strong demand zone and we have the firts cp. {image} {image}
Pity you missed that one my friend! Bias is longs on NZD/JPY, the same on many Yen pairs like EUR/JPY, AUD/JPY, GBP/JPY and so on. Nikkei broke out above a Monthly and 3 Months area of supply, long bias on Yen cross pairs.

Cheers,
Alfonso
Set and Forget supply and demand trading community
  • #5,378
  • Feb 21, 2015 6:12am Feb 21, 2015 6:12am
Quoting RiverTrader
Alfonso, Thanks again for the video: Longer term Forex Supply and Demand live trade analysis, 20th February 2015. The Dollar Index symbol you showed one the chart is: USDIndex which I can't find on FXCM MT4. Is DXY the same? How about any other Dollar Index that works the same as USDIndex?
USDOLLAR and DXY are different indices.


http://www.fxcm.com/uk/markets/dolla.../how-it-works/
How it Works
The Dow Jones FXCM Dollar Index Basket (USDOLLAR) was developed by traders for traders allowing you to take advantage of US Dollar appreciation or depreciation with precise tracking and maximum liquidity.
THE INDEX BASKET
The index basket is designed to be as easy to understand as it is to trade. It reflects the change in value of the US dollar measured against a basket of the most liquid currencies in the world:
http://www.fxcm.com/uk/assets/img/pa...ndex-graph.jpg

  1. Euro: The EUR/USD is the most heavily traded currency pair in the world.
  2. British Pound: Highly liquid and popular with forex traders, the pound retains great significance as the UK remains an important global financial hub.
  3. Japanese Yen: A mainstay of the forex carry trade, the yen represents the third-largest economy in the world.
  4. Australian Dollar: A titan in the fast-growing Asia/Pacific region, the AUD gives our index high yields and a link to commodity markets.

The Dow Jones FXCM Dollar Index began on January 1, 2011, at a value of 10,000.00. It represents an equivalent $10,000 position in each of the currencies that make it up. It rises when the Dollar rises against the Euro, the British Pound, and the Australian Dollar and falls as the Dollar depreciates compared to these currencies. For example, if the US dollar rallies 100 pips against each the EUR, GBP, JPY, and AUD, the index will appreciate by approximately 100 points. It's that simple.

DXY / USDX
U.S. Dollar Index
From Wikipedia, the free encyclopedia
http://en.wikipedia.org/wiki/U.S._Dollar_Index

http://upload.wikimedia.org/wikipedi...llar_Index.png
U.S. Dollar Index 19662012
The US Dollar Index (USDX) is an index (or measure) of the value of the United States dollar relative to a basket of foreign currencies.[1]
It is a weighted geometric mean of the dollar's value relative to other select currencies:[2]

  1. Euro (EUR), 57.6% weight
  2. Japanese yen (JPY) 13.6% weight
  3. Pound sterling (GBP), 11.9% weight
  4. Canadian dollar (CAD), 9.1% weight
  5. Swedish krona (SEK), 4.2% weight
  6. Swiss franc (CHF) 3.6% weight

  • #5,379
  • Feb 21, 2015 6:30am Feb 21, 2015 6:30am
Quoting RiverTrader
Alfonso, Thanks again for the video: Longer term Forex Supply and Demand live trade analysis, 20th February 2015. The Dollar Index symbol you showed one the chart is: USDIndex which I can't find on FXCM MT4. Is DXY the same? How about any other Dollar Index that works the same as USDIndex?
FXCM has a different dollar index; The Dow Jones FXCM Dollar Index (USDOLLAR)Its not the same as what we normally refer to as DXY.

For the "regular" DXY dollar index chart you can check out...
FOREXLTD: http://www.forexltd.co.uk/trade/mt4 (GMT based, 6 daily candles)
HOTFOREX: https://www.hotforex.com/en/mt4-term...-terminal.html (5 daily candles)
Tradingview: https://www.tradingview.com/e/?symbol=DXY
  • #5,380
  • Feb 23, 2015 2:49am Feb 23, 2015 2:49am
I wanted to share a motivational video with you, I just watched it and I really loved it. Maybe you think it has nothing to do with trading, but it has EVERYTHING to do with trading since trading is about controlling your emotions, control them and you will be paving your road to sucess.

  1. Failure is not a step backward, it's a step forward
  2. If you help enough people to get what they want, you can have everything you want
  3. You don't get in life what you want, you get what you are!

Enjoy it!
Cheers,
Alfonso

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