Supply and demand in a nutshell by Alfonso Moreno | Page 273 | Forex Factory

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Supply and demand in a nutshell by Alfonso Moreno

  • #5,441
  • Edited 7:08pm Mar 14, 2015 12:25pm | Edited 7:08pm
Hi Alfonso,

This is an excellent expansion on Sam S's material. I've spent a couple of days on the first post and videos and am unsure of my understanding of two points. I wonder if you would point me at any posts that expand on them.

Under 9 we have: We want that the potential imbalance consolidays away from the origin (base) at least with a full OCHL candle (Open, Close, High, Low) and provide us with a 2:1 imbalance (twice the width of the base)

And below you write: If the imbalance is great and price returns to the area shortly after, it's not a good sign either, price needs to consolidate away from the level and not return to it in the next couple of candles. Why is it not that important? Because we want to be riding that zone as soon as possible, those are accumulation/distribution periods, big imbalances can happen but not always.

I am guessing that the 9 section means that for a new zone to be usable it needs to have at least 1 bar width between its bottom and the top of the base zone. I'm not clear what the 2:1 imbalance means in this context (2:1 on what ratio).

I'm guessing the second that you might be suggesting that price should move away from a dz (say, for a long) and consolidate above it for a while before retesting it (for your long entry) rather than moving up and retesting almost immediately. If that's what's intended I don't understand the next sentence (about riding the zone).

Thanks.
  • #5,442
  • Mar 16, 2015 10:11am Mar 16, 2015 10:11am
Quoting kiwi_trader
Hi Alfonso, This is an excellent expansion on Sam S's material. I've spent a couple of days on the first post and videos and am unsure of my understanding of two points. I wonder if you would point me at any posts that expand on them. Under 9 we have: We want that the potential imbalance consolidays away from the origin (base) at least with a full OCHL candle (Open, Close, High, Low) and provide us with a 2:1 imbalance (twice the width of the base) And below you write: If the imbalance is great and price returns to the area shortly after, it's not...
Thanks for your kind words my friend, worked hard on tested the rules on post #1, hopefully it will help you a little bit on your trading.

Regarding the 2:1 imbalance and consolidation away of a level, let me explain to you. If the basing of a level is 50 pips, we need an imbalance of at least twice that number of pips to confirm there is a potential zone lieing at the basing zone. Then we need at least 1 full OCHL candle that consolidates away, that it does not touch the basing area before it retests the area. If that doesn't happen it won't be an imbalance, if price returns shortly after it created the imbalance and it does not consolidate away it will mean there are the same number of buyers and sellers in a very short span of time, we want to trade imbalances and not balances.

Hope it's a bit clearer!
Cheers,
Alfonso
Set and Forget supply and demand trading community
  • #5,443
  • Mar 16, 2015 10:48am Mar 16, 2015 10:48am
Quoting panoramia
{quote} Thanks for your kind words my friend, worked hard on tested the rules on post #1, hopefully it will help you a little bit on your trading. Regarding the 2:1 imbalance and consolidation away of a level, let me explain to you. If the basing of a level is 50 pips, we need an imbalance of at least twice that number of pips to confirm there is a potential zone lieing at the basing zone. Then we need at least 1 full OCHL candle that consolidates away, that it does not touch the basing area before it retests the area. If that doesn't happen it...

HI,

It's very difficult to understand.
Do you have a candle bar chart to iilustrate your explanation.
  • #5,444
  • Mar 16, 2015 1:19pm Mar 16, 2015 1:19pm
Quoting cnnewt61
{quote} HI, It's very difficult to understand. Do you have a candle bar chart to iilustrate your explanation.
It's easy to see.. Measure the distance in pips of the base you've drawn. We need twice that distance in pips to confirm imbalance with a nice departure, then we need at least 1 candle closing away of that basing. Nothing else.

Then there is the bigger picture trend to be analysis and other rules but a potential imbalance is measured like that, it's been described in the free webinars many many times. There are hundreds of examples.

Cheers,
Alfonso
Set and Forget supply and demand trading community
  • #5,445
  • Edited 6:29pm Mar 16, 2015 4:11pm | Edited 6:29pm
Thanks Alfonso. I'm pretty sure I've got it now. I'll add a chart later today showing it for my fellow students and for any corrections.

Attached Image



The second part of the second sentence is: Because we want to be riding that zone as soon as possible, those are accumulation/distribution periods, big imbalances can happen but not always.

Does this mean that we want a higher zone formed so that it protects your profits after your entry on return to the base zone and rise back above the newly formed 2nd zone?
  • #5,446
  • Mar 18, 2015 1:43am Mar 18, 2015 1:43am
Quoting kiwi_trader
Thanks Alfonso. I'm pretty sure I've got it now. I'll add a chart later today showing it for my fellow students and for any corrections. {image} The second part of the second sentence is: Because we want to be riding that zone as soon as possible, those are accumulation/distribution periods, big imbalances can happen but not always. Does this mean that we want a higher zone formed so that it protects your profits after your entry on return to the base zone and rise back above the newly formed 2nd zone?
Your explanatory graphic looks great my friend. That's exactly what I was trying to say by depicted and explained in a graphic .

The bottom part of your graphic is incorrect though, price departed strongly, consolidated away for 3 candles, and then returned strongly into the brand new potential deamand zone, that's what we want. It would be a correct long entry, however, we'd have to apply top down analysis, if the bigger picture is down on MN, WK and D1, we don't want to buy against it, we'd be looking at the same picture but opposite to short brand new supply zones.

Hope it makes sense!
Cheers,
Alfonso
Set and Forget supply and demand trading community
  • #5,447
  • Mar 18, 2015 10:12am Mar 18, 2015 10:12am
Hi Mr alfonso and mates

Im not sure if this trade was valid, im short in a new supply zone in h4, monthly and weekly are down, daily is consolitating and h4 is down.
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passion and discipline
  • #5,448
  • Mar 18, 2015 6:57pm Mar 18, 2015 6:57pm
Quoting rohule
Hi Mr alfonso and mates Im not sure if this trade was valid, im short in a new supply zone in h4, monthly and weekly are down, daily is consolitating and h4 is down. {image} {image} {image}
Brand new D1 Demand zone in control on AUD/NZD Roberto, it was the D1 DZ that caused the break of the descending trendline. Taking H4 shorts against valid D1 DZ in control is not a good idea, odds are lower.

Cheers,
Alfonso
Set and Forget supply and demand trading community
  • #5,449
  • Mar 18, 2015 10:45pm Mar 18, 2015 10:45pm
Quoting panoramia
{quote} Brand new D1 Demand zone in control on AUD/NZD Roberto, it was the D1 DZ that caused the break of the descending trendline. Taking H4 shorts against valid D1 DZ in control is not a good idea, odds are lower. Cheers, Alfonso
thank you so much alfonso, have a good one.
passion and discipline
  • #5,450
  • Mar 19, 2015 1:56pm Mar 19, 2015 1:56pm
Hi Mr Alfonso and fellow traders,

i just got triggered in a new supply level. Monthly, weekly and daily are down.
the only thing that im worry abouth is that there is a engunfing Pattern on w1 but the candle closes tomorrow.
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passion and discipline
  • #5,451
  • Mar 19, 2015 2:15pm Mar 19, 2015 2:15pm
Hi again Mr Alfonso and mates

I have annother short at a new supply level. weekly and daily are down.
the level on daily is the one that causes the brake of an up trend and it is in a new flip zone.
Attached Image(s) (click to enlarge)
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passion and discipline
  • #5,452
  • Mar 19, 2015 2:40pm Mar 19, 2015 2:40pm
Quoting rohule
Hi Mr Alfonso and fellow traders, i just got triggered in a new supply level. Monthly, weekly and daily are down. the only thing that im worry abouth is that there is a engunfing Pattern on w1 but the candle closes tomorrow. {image} {image} {image}
Fresh and original Monthly Demand Zone in control, not a good idea to set and forget shorts so low my friend.

Cheers,
Alfonso
Set and Forget supply and demand trading community
  • #5,453
  • Mar 21, 2015 12:29am Mar 21, 2015 12:29am
Hello all, Im currently trying this out and i can not get the supportandresistance indicator to work? Any ideas..? I see most of you use it
  • #5,454
  • Mar 21, 2015 2:52am Mar 21, 2015 2:52am
Quoting jeddyjed
Hello all, Im currently trying this out and i can not get the supportandresistance indicator to work? Any ideas..? I see most of you use it
If you downloaded the indicators after filling in the form at www.set-and-forget.com then you will be using/installing the latest stable and tested indicators, the same ones that I use and everybody uses.

Maybe you have not dragged the indicators in the right place, just thinking out loud. I didn't have a single comment on not being able to use that indicator, I can't think of a reason for it not to work, just those that I mentioned above

Have a great weekend
Alfonso
Set and Forget supply and demand trading community
  • #5,455
  • Mar 22, 2015 8:22pm Mar 22, 2015 8:22pm
Quoting rickyfx
@alfonso kindly clear this {image}
hi rifkyfx,

I saw your template looks nice. may I have?

thanks,
sonigl
  • #5,456
  • Mar 23, 2015 2:45am Mar 23, 2015 2:45am
Hello Alfonso,
Is this valid CP in control
Attached Image (click to enlarge)
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  • #5,457
  • Mar 23, 2015 8:33am Mar 23, 2015 8:33am
Am I right guys? Look at my picture pls, thanks.
Attached Image (click to enlarge)
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  • #5,458
  • Mar 23, 2015 7:16pm Mar 23, 2015 7:16pm
Quoting yaso2008
Hello Alfonso, Is this valid CP in control {image}
Yes Yaso, it's a valid continuation supply pattern in control. An opposing demand area is also in control, price is ranging between 2 opposing supply and demand zones now.

Cheers,
Alfonso
Set and Forget supply and demand trading community
  • #5,459
  • Mar 23, 2015 7:18pm Mar 23, 2015 7:18pm
Quoting Alehandro
Am I right guys? Look at my picture pls, thanks. {image}
Yes, that weekly supply area on eurusd is a place where we should be looking for a signal/trade to short the market Alehandro.

Monthly is down, weekly is down, Daily is out of alignment, bigger pullback into Weekly supply zone is likely to happen.
Cheers,
Alfonso
Set and Forget supply and demand trading community
  • #5,460
  • Edited 9:07am Mar 24, 2015 8:37am | Edited 9:07am
hello, just wanna make sure...there r S/D zones in 15M, 5M or even 1M TF right? and lets say if i wanna take the 1M TF for my execution then i'll take H1 for my bigger TF?
thanks
regarding my (still learning) curve......D1 demand in control, up-trend (broke descending TL). H1 uptrend...one trade got activated.
am i drawing the curve right?
https://charts.mql5.com/7/353/eurusd...ness-ltd-2.png
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