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Price is everything

  • #30,341
  • May 13, 2015 6:37am May 13, 2015 6:37am
Quoting Winston Reed
Some levels on GBPUSD I'm watching. {image}
Well it was definitely worth the wait...
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  • #30,342
  • May 13, 2015 9:13am May 13, 2015 9:13am
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  • #30,343
  • May 13, 2015 10:36am May 13, 2015 10:36am
Engulfing PA with return to new demand.

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  • #30,344
  • May 13, 2015 12:01pm May 13, 2015 12:01pm
Quoting Winston Reed
{quote} Hello Andre, I recommend "VSA with Malcomb". Also look into Hidden Gaps posts. I am not an expert in VSA but I do believe it can be helpful.
Hi W.R. Yes, VSA is good technique but the Richard Wyckoff developed the VSA for any stock market. Need adaptation for currency markets. What do you think about my opinion?
  • #30,345
  • May 13, 2015 12:39pm May 13, 2015 12:39pm
Quoting 4rXal-ghul
{quote} Well it was definitely worth the wait... {image}
It is such a good chance to receive some prifit!
  • #30,346
  • May 13, 2015 12:49pm May 13, 2015 12:49pm
Quoting Andrej07
{quote} Hi W.R. Yes, VSA is good technique but the Richard Wyckoff developed the VSA for any stock market. Need adaptation for currency markets. What do you think about my opinion?
You are right Andre. I use VSA with futures of which volume is centralized. Some do question the value of volume in FOREX however there are some very good traders over in the "VSA with Malcomb" thread not worrying about that.
  • #30,347
  • May 13, 2015 5:40pm May 13, 2015 5:40pm
AUDUSD H4 chart showing H4 supply. Higher time frame zones are often valued more but we should keep an open mind as to what price might do. The large bullish candles in and of themselves represents demand. If we are to trade into this demand there must be clear evidence that supply is coming into the market.

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The 5 minute chart shows little to no evidence that supply has come into the market in the larger H4 supply area. If price "engulfs" south and forms new supply within or near the H4 supply zone then selling becomes a consideration. However demand is CLEARLY just below and IMHO until the lower demand is engulfed I would still be a buyer at the demand.

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The point is to not be overly biased to sell just because we have entered into a juicy looking H4 zone. Let price show its' hand first.
  • #30,348
  • May 13, 2015 6:21pm May 13, 2015 6:21pm
Quoting Winston Reed
{quote} You are right Andre. I use VSA with futures of which volume is centralized. Some do question the value of volume in FOREX however there are some very good traders over in the "VSA with Malcomb" thread not worrying about that.
I learned something last week that made me think about using volume on forex. I exchanged some messages with one the the support guys from FXCM. My initial question was why their directional real volume indicator didn't quite agree with the price direction. He replied something that opened my eyes and even though is kind of logic, I had never thought about: the volume shown by any broker is their own volume. That is, mostly retail traders. As we all know, we retail traders are a tiny part on the actual FX volume, so that volume is not quite representative, and mostly it's wrong as most retail traders are wrong and against the smart money moving the markets.
Good food for thought, isn't it.
  • #30,349
  • May 13, 2015 8:21pm May 13, 2015 8:21pm
Quoting keen246
{quote} I learned something last week that made me think about using volume on forex. I exchanged some messages with one the the support guys from FXCM. My initial question was why their directional real volume indicator didn't quite agree with the price direction. He replied something that opened my eyes and even though is kind of logic, I had never thought about: the volume shown by any broker is their own volume. That is, mostly retail traders. As we all know, we retail traders are a tiny part on the actual FX volume, so that volume is not quite...
It is not uncommon for "volume" to "disagree" with PA. Such divergence can be valuable but I digress....

The oft cited "volume in FOREX is invalid" is invalid. Even though the statement has been recycled probably thousands of times in these forums it doesn't make it true. Having said that I would agree that volume from many brokers especially smaller ones is probably not accurate. Several traders (you can find them in the "VSA with Malcomb" thread) have disproven the notion that the use of volume in FOREX is not worthy of consideration. Of course these traders have spent many hours testing and comparing volume with different brokers. Their research and hard work has been rewarded.

In trading successful traders have arrived at profitable methods not by taking the word of others but by testing what they feel might be favorable methods for themselves. Trade from what you have tested or experienced for yourself and not from what you have heard or read.
  • #30,350
  • May 13, 2015 8:30pm May 13, 2015 8:30pm
Quoting Winston Reed
AUDUSD H4 chart showing H4 supply. Higher time frame zones are often valued more but we should keep an open mind as to what price might do. The large bullish candles in and of themselves represents demand. If we are to trade into this demand there must be clear evidence that supply is coming into the market. {image} The 5 minute chart shows little to no evidence that supply has come into the market in the larger H4 supply area. If price "engulfs" south and forms new supply within or near the H4 supply zone then selling becomes a consideration. However...
Price is solidly in a H4 supply area and yet new demand is being created and respected.

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  • #30,351
  • May 13, 2015 9:18pm May 13, 2015 9:18pm
Quoting Winston Reed
{quote} Price is solidly in a H4 supply area and yet new demand is being created and respected. {image}

Any comments?
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  • #30,352
  • May 14, 2015 4:47am May 14, 2015 4:47am
Quoting keen246
{quote} I learned something last week that made me think about using volume on forex. I exchanged some messages with one the the support guys from FXCM. My initial question was why their directional real volume indicator didn't quite agree with the price direction. He replied something that opened my eyes and even though is kind of logic, I had never thought about: the volume shown by any broker is their own volume. That is, mostly retail traders. As we all know, we retail traders are a tiny part on the actual FX volume, so that volume is not quite...
Yes, we are blind on the forex. We can work with the volume of CME.
  • #30,353
  • Edited 5:35am May 14, 2015 5:14am | Edited 5:35am
Quoting Winston Reed
{quote} Any comments?
Thanx Winston.
My observation is that from where I am standing this doesn't seem to look like a very very very fresh supply zone, hence the reason why the price penetration is deep.

I am looking at it on a 1H and I see what looks like a potential supply zone (?) forming inside the larger 4H supply zone. Is there hope that there is enough supply left in there? I agree with you that trade is still developing.
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  • #30,354
  • May 14, 2015 7:46am May 14, 2015 7:46am
The blue area represents H4 demand. Supply finally comes into the market at the top and breaks down the first demand. Price comes back but doesn't make it back to the broken demand. When it descends it creates new supply and breaks down (engulfs) another demand area. It returns to the newly formed supply and this is IMO the first entry short in this larger H4 supply area.

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  • #30,355
  • May 14, 2015 10:01am May 14, 2015 10:01am
Quoting Winston Reed
The blue area represents H4 demand. Supply finally comes into the market at the top and breaks down the first demand. Price comes back but doesn't make it back to the broken demand. When it descends it creates new supply and breaks down (engulfs) another demand area. It returns to the newly formed supply and this is IMO the first entry short in this larger H4 supply area. {image}
Very interesting! How far do you look to the left? I mean all those levels and zones are not really "fresh". They say the market has a long memory but how long? I'd like to be able to explain all turns in price i.e. previous S&Ds.
  • #30,356
  • May 14, 2015 12:16pm May 14, 2015 12:16pm
Took more than a month for me to find this thread. Now I've found it am so happy I can discuss Supply and Demand exclusively from the perspectives of other traders.
  • #30,357
  • May 14, 2015 2:08pm May 14, 2015 2:08pm
Quoting Verbal
{quote} Very interesting! How far do you look to the left? I mean all those levels and zones are not really "fresh". They say the market has a long memory but how long? I'd like to be able to explain all turns in price i.e. previous S&Ds.
Hi V,
Once a zone has been "engulfed" it generally is done. However a fresh engulf often provides opportunity on the first return to the engulfed area.

Looking left helps to find the nearest zones above or below current price.

It takes a little screen time to become acquainted with supply and demand zones. I recommend reading Kenneth Lee's thread. He has an excellent PDF.
  • #30,358
  • May 14, 2015 2:26pm May 14, 2015 2:26pm
Quoting Winston Reed
The blue area represents H4 demand. Supply finally comes into the market at the top and breaks down the first demand. Price comes back but doesn't make it back to the broken demand. When it descends it creates new supply and breaks down (engulfs) another demand area. It returns to the newly formed supply and this is IMO the first entry short in this larger H4 supply area. {image}
No doubt supply has come into the market. Price approached the upper supply area compressing as it do so. It exited dramatically. Some may trade this for example at the close of the first candle or the break of the low of the first huge bearish candle. However trading this way makes setting your SL tricky. I prefer waiting for a retracement. Price breaks through demand and continues down without revisiting the broken demand (although it may still do so later). It finally retraces a bit and forms new supply. When price returns to the new supply area a perfect sell opportunity presents.

This is just my style. Others may see it differently.

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  • #30,359
  • May 14, 2015 4:01pm May 14, 2015 4:01pm
Quoting Winston Reed
{quote} Hi V, Once a zone has been "engulfed" it generally is done. However a fresh engulf often provides opportunity on the first return to the engulfed area. Looking left helps to find the nearest zones above or below current price. It takes a little screen time to become acquainted with supply and demand zones. I recommend reading Kenneth Lee's thread. He has an excellent PDF.
Hi Winston, I've read his PDF (once). Maybe I should read it again. Also I have watched Readthemarket videos on youtube many times. I can locate demand and supply quite well but lack a concrete entry rule.
How did you choose your TP for the AUDUSD trade from this morning?
  • #30,360
  • May 14, 2015 6:15pm May 14, 2015 6:15pm
Quoting Winston Reed
{quote} Hi V, Once a zone has been "engulfed" it generally is done. However a fresh engulf often provides opportunity on the first return to the engulfed area. Looking left helps to find the nearest zones above or below current price. It takes a little screen time to become acquainted with supply and demand zones. I recommend reading Kenneth Lee's thread. He has an excellent PDF.
Can you post the pdf here, please.

I tried to download from his website , but it was riddled with spam, including interference with the Chrome browser.
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