Supply and demand in a nutshell by Alfonso Moreno | Page 280 | Forex Factory

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Supply and demand in a nutshell by Alfonso Moreno

  • #5,581
  • May 6, 2015 8:22am May 6, 2015 8:22am
Hi Alfonso,
I am attaching W and 4H chart of EU
Is my Short setup correct per rules?

M is down
W is up but reached M supply with nested W supply (M supply is not very strong in this case)
D is up at nested D supply inside W supply inside M supply
4H at 4H supply which broke 4H up trendline

I am short expecting to take profit slightly abowe 1.1000 flipzone, 4H demand and D1 20 EMA
Attached Image(s) (click to enlarge)
Click to Enlarge Name: EU 4H.jpg Size: 472 KB
Click to Enlarge Name: EU W.jpg Size: 348 KB
  • #5,582
  • May 6, 2015 8:31am May 6, 2015 8:31am
Quoting digitalko
Hi Alfonso, I am attaching W and 4H chart of EU Is my Short setup correct per rules? M is down W is up but reached M supply with nested W supply (M supply is not very strong in this case) D is up at nested D supply inside W supply inside M supply 4H at 4H supply which broke 4H up trendline I am short expecting to take profit slightly abowe 1.1000 flipzone, 4H demand and D1 20 EMA {image} {image}
Weekly trend is clearly up. We have 2 consecutive higher highs and lows. So therefore it is best to wait for a fresh monthly area to short it - which comes around 1.21

The monthly supply zone that you pointed out is not supply since there was no consolidation away from it. Last month's candle actually closed within it.

I would probably short in this weekly zone as well. But would like to wait for some confirmation to do so, and will not be looking for more than 2:1 probably...
  • #5,583
  • Edited 10:41am May 7, 2015 10:16am | Edited 10:41am
Quoting panoramia
EUR/CAD has a clear Monthly and Weekly downtrend. Price has reacted to a counter-trend Monthly Demand Zone (against current trend) and rallied all the way up to a valid Weekly supply zone (red dash lines), with a nested Daily supply at the proximal line and reacting to it. Valid short since Monthly and Weekly are in a downtrend. Short bias {image}
Both Supply Zone (weekly & daily nested on the chart) were taken out last night.
Weekly and Monthly still remain downtrend, so how do we adjust the entire view on Daily chart?
Simple is powerful all the time.
  • #5,584
  • May 8, 2015 5:58am May 8, 2015 5:58am
Quoting RiverTrader
{quote} Both Supply Zone (weekly & daily nested on the chart) were taken out last night. Weekly and Monthly still remain downtrend, so how do we adjust the entire view on Daily chart?
We need new levels to be created to take shorts or short higher within a bigger timeframe supply zone.
Cheers,
Alfonso
Set and Forget supply and demand trading community
  • #5,585
  • May 8, 2015 6:04am May 8, 2015 6:04am
Quoting panoramia
{quote} We need new levels to be created to take shorts or short higher within a bigger timeframe supply zone. Cheers, Alfonso
Alfonso,

I have an interesting question about this exact situation. Obviously our zone has been taken out. However, since we added some wiggle room to our stop loss, it was not hit.

Now, once price gets back to your entry, do you close your trade? Since our zone is obviously no longer this strong, although we were not stopped out, will you let it run?

Thanks,

Boris
  • #5,586
  • May 10, 2015 2:13am May 10, 2015 2:13am
Quoting PacnyTuH0
{quote} Alfonso, I have an interesting question about this exact situation. Obviously our zone has been taken out. However, since we added some wiggle room to our stop loss, it was not hit. Now, once price gets back to your entry, do you close your trade? Since our zone is obviously no longer this strong, although we were not stopped out, will you let it run? Thanks, Boris
Boris, it will depend on the bigger picture. If you believe in the trade, let price do whatever it wants to do. I've had so many entries in the past that did just that. In the beginning I used to close them because I saw it like the markets was giving a "second opportunity" not to lose, and then what happened? Price continued to go in the initial direction I had taken, but I was out of the trade because of fear. Now I've changed my attitude to that sceneario.

It's a decision you have to make, if the bigger picture is with you, the reaction to the level you had taken was a bullish candlestick signal/pattern, hammer, shooting star, engulf, then you have to make the decision to hold it or not, you must have a rule for that.

Cheers,
Alfonso
Set and Forget supply and demand trading community
  • #5,587
  • May 10, 2015 5:09am May 10, 2015 5:09am
Hello,

Alfonso first of all thanks for sharing your experience and hard work with us. I'm still learning your supply and demand rules and testing my learning. and after a 7 months of learning i am getting positive results. i dont know if it is allowed here but i would like to share my 6 months results with you.

Attached Image (click to enlarge)
Click to Enlarge Name: chartsnd.png Size: 40 KB
  • #5,588
  • May 10, 2015 3:43pm May 10, 2015 3:43pm
Quoting Solomon1a
Hello, Alfonso first of all thanks for sharing your experience and hard work with us. I'm still learning your supply and demand rules and testing my learning. and after a 7 months of learning i am getting positive results. i dont know if it is allowed here but i would like to share my 6 months results with you. {image}
Glad to have helped a little bit at least my friend.

Thanks for sharing your results testing the rules my friend, it takes time to learn the insights of all the rules, but it's worth it because if focused on the same rules for months and months, at the end, you will get your reward. What happens is that most people switch from one strategy to another, they don't accept the reality, and that is that many strategies work if you devote the time needed, what doesn't work is ourselves trying to find the perfect set of rules, holy grail or whatever you want to call it.

Well done my friend!
Have a great week
Alfonso
Set and Forget supply and demand trading community
  • #5,589
  • May 10, 2015 11:38pm May 10, 2015 11:38pm
the NZDCAD on the may 6 and 7 set up a new supply area based on todays candle reaction i believe

cheers

travis
  • #5,590
  • May 11, 2015 7:18am May 11, 2015 7:18am
Hello Alfonso,
Is this daily setup of AUDNZD setup tradeable as set and forget or you would wait for confirmation to short?

M down (last imbalance is not 2:1 but it closed below all times low)
W up realigning inside M supply
D up but supply nested in W supply

Short is in confluence with M bearish trendline


Thanks in advance
Attached Image (click to enlarge)
Click to Enlarge Name: AUDNZD D short.jpg Size: 440 KB
  • #5,591
  • May 11, 2015 3:16pm May 11, 2015 3:16pm
Quoting Solomon1a
Hello, Alfonso first of all thanks for sharing your experience and hard work with us. I'm still learning your supply and demand rules and testing my learning. and after a 7 months of learning i am getting positive results. i dont know if it is allowed here but i would like to share my 6 months results with you. {image}

Well done

TSD
  • #5,592
  • Edited May 12, 2015 4:56pm May 11, 2015 6:10pm | Edited May 12, 2015 4:56pm
Quoting digitalko
Hello Alfonso, Is this daily setup of AUDNZD setup tradeable as set and forget or you would wait for confirmation to short? M down (last imbalance is not 2:1 but it closed below all times low) W up realigning inside M supply D up but supply nested in W supply Short is in confluence with M bearish trendline Thanks in advance {image}
AUD/NZD is not a set and forget short because Monthly supply zone was not a valid supply zone. A supply zone needs to make a 2:1 imbalance and consolidate away as per the rules. AUD/NZD monthly did not accomplish that.

 

  1. Monthly CP potential supply did not consolidate away (not a single full OHCL candle closing below the original imbalance)
  2. It did not produce a 2:1 imbalance

A level that does not follow the rules negates all lower timeframe zones nested within it, set and forget is negated, confirmation needed for shorts. Those are the rules.
Hope it's clear.
Cheers,
Alfonso

Attached Image
Set and Forget supply and demand trading community
  • #5,593
  • May 12, 2015 6:20am May 12, 2015 6:20am
Hi Alfonso,

In the GBPCHF the overall trend is down and we hit a daily supply level yesterday. Is this a valid short actually? I can't seem to find a reason not to short at this level.

Could you please comment on that?

Thanks,
Boris
Attached Image (click to enlarge)
Click to Enlarge Name: Screenshot1.png Size: 53 KB
  • #5,594
  • May 12, 2015 10:13am May 12, 2015 10:13am
Hello Alfonso,
I backtested EURCAD on FT2 and in my oppinion the pair is crazy or in other words very hard to trade. Do you ever consider to eliminate pairs that act very wicky and change trend dirrection very often from your portfolio?
  • #5,595
  • May 12, 2015 4:55pm May 12, 2015 4:55pm
Quoting panoramia
{quote} AUD/NZD is not a set and forget short because Monthly supply zone was not a valid supply zone. A supply zone needs to make a 2:1 imbalance and consolidate away as per the rules. AUD/NZD monthly did not accomplish that. MN CP did not consolidate away (not a single full OHCL candle closing below the original imbalance) It did not produce a 2:1 imbalance A level that does not follow the rules negates all lower timeframe zones nested within it, set and forget is negated, confirmation needed for shorts. Those are the rules. Hope it's clear. Cheers,...
AUD/NZD non-tradable Monthly supply zone has been taken out as expected and explained in the previous post. Rules did not allow to set and forget shorts within the zone because the imbalance was not tradable as per the rules, not a 2:1 imbalance, even with a clear downtrend, the score of a supply zone has to be respected.

Hope it makes sense.
Cheers,
Alfonso
Set and Forget supply and demand trading community
  • #5,596
  • May 12, 2015 4:57pm May 12, 2015 4:57pm
Quoting PacnyTuH0
Hi Alfonso, In the GBPCHF the overall trend is down and we hit a daily supply level yesterday. Is this a valid short actually? I can't seem to find a reason not to short at this level. Could you please comment on that? Thanks, Boris {image}
Boris, a trading decision cannot be made by just looking at one chart, rules require multiple timeframe analysis, a sequence, so the realignment rules can be applied. You just uploaded a Daily chart, a decision cannot be made and I can't give you any feedback without the proper multiple charts, sorry.

Cheers,
Alfonso
Set and Forget supply and demand trading community
  • #5,597
  • May 12, 2015 4:59pm May 12, 2015 4:59pm
Quoting digitalko
Hello Alfonso, I backtested EURCAD on FT2 and in my oppinion the pair is crazy or in other words very hard to trade. Do you ever consider to eliminate pairs that act very wicky and change trend dirrection very often from your portfolio?
There must have been lots of opportunities, it's true that EUR/CAD and EUR/GBP are pairs that range a lot, but trading in ranges with confirmation type of trades, short high in the curve (trading range) and longs low in the curve, work pretty well.

If you can upload a Daily chart that covers a few months, together with a Weekly chart, we can take a look at it and see what those charts have to see with the supply and demand glasses on.

Cheers,
Alfonso
Set and Forget supply and demand trading community
  • #5,598
  • May 13, 2015 12:58am May 13, 2015 12:58am
Hi Alfonso and all,
I just noticed (this maybe normal to you guys) that the GBPCAD and GBPUSD daily charts during last week's UK election differ a lot between a Market Maker and an ECN broker's charts. Between Thursday and Friday, an ECN broker chart showed a gap of 150 pips on both pairs (probably on other GBP cross pairs as well).
Do you guys consider this normal and ok?
Does it bother your trading plan?
Does Alfonso's method/rules on S/D work better with true ECN, or MM broker's charts? Or it doesn't really matter as long as you're applying the rules on the charts that you are trading?
Here's the 2 charts
Attached Image (click to enlarge)
Click to Enlarge Name: GBPCAD Daily 1.png Size: 66 KB

Attached Image (click to enlarge)
Click to Enlarge Name: GBPCAD Daily.png Size: 75 KB
  • #5,599
  • May 13, 2015 2:08am May 13, 2015 2:08am
Quoting ws121
Hi Alfonso and all, I just noticed (this maybe normal to you guys) that the GBPCAD and GBPUSD daily charts during last week's UK election differ a lot between a Market Maker and an ECN broker's charts. Between Thursday and Friday, an ECN broker chart showed a gap of 150 pips on both pairs (probably on other GBP cross pairs as well). Do you guys consider this normal and ok? Does it bother your trading plan? Does Alfonso's method/rules on S/D work better with true ECN, or MM broker's charts? Or it doesn't really matter as long as you're applying the...
Hey there!

The rule with this supply and demand methodoly or ANY other strategy is that you trade what you see on your charts, as simple as that. ECN, non-ECN, that does NOT matter at all. You just trade a set of rules, be it supply and demand, ema crosses, CCI overbought/oversold, any set of rules, you trade them based on what you see on your charts, why should look at your neighbour's charts? Are they better? Who says so? Your neighbour?

You are happily married with your wife, you have many friends happily married with their wifes, are your friend's women better than yours? No, they are all women, each of them awesome by themselves, try to have a sane relationship with your wife without looking at your friend's women, your life will be better

The same applies to trading, trade what you see, don't look at other broker's charts, your broker offered you a price feed, trade it! That's all, as simple as that.

Hope that these analogies help.
Cheers,
Alfonso

P.S. By the way, the only difference is a gap, not much, you said it was very different. A gap can be considered a super strong ERC candle. Mind the gap
Set and Forget supply and demand trading community
  • #5,600
  • May 13, 2015 2:42am May 13, 2015 2:42am
Hi Alfonso & Friends,


I have 2 questions.

1.)May i know how do you exit a trade? Or i should ask where and how do you set your Take Profit (TP) price at?
I am not sure if i understand you correctly in what were written in the 1st page.
Besides the nearest Supply and Demand zones, I have been using the Confluences as what were mentioned in the 1st page such as Support&Resistance and EMA to set my TP price and thus to calculate my Risk Reward Ratio.


2.)What kind of position sizing are you using?
Do you trade in Fixed Lot, Variable Lot based on desired risk or other methods?


Thank you.
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