Supply and demand in a nutshell by Alfonso Moreno | Page 281 | Forex Factory

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Supply and demand in a nutshell by Alfonso Moreno

  • #5,601
  • May 13, 2015 3:00am May 13, 2015 3:00am
Quoting panoramia
{quote} 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
Monthly supply is in control
Attached Image (click to enlarge)
Click to Enlarge Name: gbpchf-kar-mn1-karoll-jsc.png Size: 48 KB


Weekly - new lower low. I'm not sure how to interpret the weekly here since we don't have any weekly zone in control
Attached Image (click to enlarge)
Click to Enlarge Name: gbpchf-kar-w1-karoll-jsc.png Size: 47 KB


So, overall trend is down and looking on the daily to short.

Daily - we have a fresh supply zone formed recently and looking to short there.
Attached Image (click to enlarge)
Click to Enlarge Name: Screenshot1.png Size: 53 KB


I hope this analysis makes sense. Let me know if I'm missing something.

Boris
  • #5,602
  • May 13, 2015 6:20am May 13, 2015 6:20am
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}
Hi Solomon1a,
Well done on your results! What kind of strategy are you using (which time frames are you using) ?
1. Swing trading M, W, Daily +4hr
2. Position Trading M, W, D
3. Intraday D, H
  • #5,603
  • May 14, 2015 9:14am May 14, 2015 9:14am
Quoting PacnyTuH0
{quote} Monthly supply is in control {image} Weekly - new lower low. I'm not sure how to interpret the weekly here since we don't have any weekly zone in control {image} So, overall trend is down and looking on the daily to short. Daily - we have a fresh supply zone formed recently and looking to short there. {image} I hope this analysis makes sense. Let me know if I'm missing something. Boris
Your analysis on GBP/CHF makes sense now that you have uploaded your charts. I don't trade CHF pairs way before the Swiss National bank interest rate announcement a couple of months ago. Trading GBP/CHF was like trading EUR/GBP but inverse, no need to double my risk.

Thanks for sharing
Cheers,
Alfonso
Set and Forget supply and demand trading community
  • #5,604
  • May 15, 2015 2:46am May 15, 2015 2:46am
Hi guys, I came across the AU chart on daily and I cant decide how to draw a TL. Daily is up creating nice valleys but I see I two possible TLs and both would make sense to me - both are connecting valleys where the second leg made a higher high. Which one is right?
Attached Image (click to enlarge)
Click to Enlarge Name: AU D.png Size: 21 KB
  • #5,605
  • May 15, 2015 3:13am May 15, 2015 3:13am
Quoting Carousel46
Hi guys, I came across the AU chart on daily and I cant decide how to draw a TL. Daily is up creating nice valleys but I see I two possible TLs and both would make sense to me - both are connecting valleys where the second leg made a higher high. Which one is right? {image}
I would go for the red line. It's an obvious valley, so that's a good enough reason for me.

Would be interesting to see what Alfonso will say about it though...
  • #5,606
  • May 15, 2015 4:46am May 15, 2015 4:46am
Quoting PacnyTuH0
{quote} I would go for the red line. It's an obvious valley, so that's a good enough reason for me. Would be interesting to see what Alfonso will say about it though...
The red ascending TL is the valid one connecting the latest 2 valleys as per the rules. There are many ways to draw trendlines, but only this by using our methodolody, so there are no second thoughts.

Cheers,
Alfonso
Set and Forget supply and demand trading community
  • #5,607
  • May 17, 2015 11:07am May 17, 2015 11:07am
Quoting forexchiq
{quote} Hi Solomon1a, Well done on your results! What kind of strategy are you using (which time frames are you using) ? 1. Swing trading M, W, Daily +4hr 2. Position Trading M, W, D 3. Intraday D, H

thanks Forexchiq,

i am using position Trading. i feel its best because it gives you more time for your life events, it erases your stress, and its also erase the noise of trading, because the more you goto lower tf the more you will get noise. for Position Trading you only need to control your patience, when you controlled your patience you will be profitable. i am keep testing my patience. i hope i will get on over it soon.
  • #5,608
  • May 17, 2015 1:39pm May 17, 2015 1:39pm
Hi Alfonso,

Am I drawing this monthly demand zone correctly in the USDNOK.

It seems to me that it is a valid zone since it took out previous supply zone

Attached Image (click to enlarge)
Click to Enlarge Name: usdnok.png Size: 95 KB


Thanks,
Boris
  • #5,609
  • May 17, 2015 4:48pm May 17, 2015 4:48pm
Hello Alfonso and all,
I am attaching FT2 printscreen of my GU 4H setup which did not work.

I discovered that this breakout CP setups are rather less probable to work.
4H trend in the direction of D and W trend
4H CP broke daily and weekly supply zone
good imbalance and good departure

The CP actually was overshot firstly by too many pips and then price moved in the direction, but could not remove supply and 4H trend changed from UP to DOWNtrend. I am getting losses in 80% of this setups.

I found out that the most reliable setups on 4H timeframe are in the areas when price bounces of the weekly or daily trendline. If there is demand zone area I use it, but if not I wait for confirmation. Both setups are very profitable, but they are very rare.
Attached Image (click to enlarge)
Click to Enlarge Name: GU.jpg Size: 437 KB
  • #5,610
  • May 17, 2015 5:07pm May 17, 2015 5:07pm
Hello Alfonso,
In reference to my previous post the D setup is working out as expected even it broke the trendline by full OHLC daily candle,
W trend is respected as seen on chart to the right.

I tryed the D demand in the green circle but it was loss as well.
Basically this are the settups that grow my equity and in the mean time while the setup forms I am loosing money on CPs and SD levels (I am trading only in the direction of HT trend) with around 25% success rate.

Could you please give me some comment?

Cheers
Viktor
Attached Image (click to enlarge)
Click to Enlarge Name: GU2.jpg Size: 510 KB
  • #5,611
  • May 18, 2015 3:30am May 18, 2015 3:30am
Quoting digitalko
Hello Alfonso, In reference to my previous post the D setup is working out as expected even it broke the trendline by full OHLC daily candle, W trend is respected as seen on chart to the right. I tryed the D demand in the green circle but it was loss as well. Basically this are the settups that grow my equity and in the mean time while the setup forms I am loosing money on CPs and SD levels (I am trading only in the direction of HT trend) with around 25% success rate. Could you please give me some comment? Cheers Viktor {image}

When your Daily demand zone is taken out and you are stopped out, are you sure a weekly/monthly supply level is not in control? This may be the one and only reason why a daily level doesn't work out. I have failed this way before.

Check if a higher timeframe supply is in control, and if it is - then don't take that daily demand level, since it's not high odds
  • #5,612
  • May 18, 2015 5:54am May 18, 2015 5:54am
Hi PacnyTuH0
thank you for your reply.
as you can see in attached charts W is in uptrend, D was in uprend as well as 4H
I first took 4H CP pattern long as it broke D and W high and it was a loss as most of the times.
Then I took D CP long as the price pulled down. It was in confluence with D and W trendline.
It was another loss.
Then the price pulled all the way to W demand and that one was finally the winer.

What I was trying to say is that in my experience during live and testing perriod I am getting many losses on those 4H and D CP patterns. Lot more than winners. I am using only CPs which broke HT levels in confluence with HT trend.
I must make some kind of mistake when they work for you But not for me.

I tested 5 years of data in FT2 for EU, GU, AU, UC at 4H and D entry TF averaging 60 trades per pair per period so around 1 trade per month on each pair. I ended up in 50% to 150% profit per pair per period using fixed 0.1 lot.
My average winrate was as low as 25%
Most of my losses happened on CPs and SD levels far away from HT trendline.
Most of my winers were taken exactly as you can see on py posted chart at D TF at W trendline in comfluence with W level. Those winners are usually reacting very strong and raley up to the last peak providing huge reward to risk.

I am sharing this not to argue against working strategy, but rather to share my experience.
If anybody sees the pattern why am I not successfull in CPs please share your point of view and If my explanation of High probbability setup helps then I am happy to contribute to others success.
  • #5,613
  • May 18, 2015 9:35am May 18, 2015 9:35am
I just went through your introductary post and also browsed through your website and I must say that I am impressed by what you put together!

Although I am not a complete beginner, I am still trying to figure out how this all works. I am trying to learn technical analysis and believe that your method can be combined nicely with regular technical analysis. On Fxstreet I watched some supply&demand videos and after browsing Forexfactory, I found your thread.

I subscribed to the thread and will take a closer look at your videos and your content. Looking forward to learning about your style!

Rex
  • #5,614
  • May 18, 2015 9:48am May 18, 2015 9:48am
Just some nuggets of wisdom from what I have seen.

Support and resistance should not be just analysed on one pair.
The currency index should be taken into account and support/resistance on other pairs. I have seen this happen many times, where you hit a level on one pair and the other pair also reacts due to the high correlation.
  • #5,615
  • May 19, 2015 1:54am May 19, 2015 1:54am
Quoting PacnyTuH0
Hi Alfonso, Am I drawing this monthly demand zone correctly in the USDNOK. It seems to me that it is a valid zone since it took out previous supply zone {image} Thanks, Boris
Yes, that monthly demand on USD/NOK is correct. It's a marubozu candle demand zone that took out opposing monthly supply zone. Now with the bearish engulf on monthly chart, price looks like it wants to pullback to that demand zone. Well done!

Cheers,
Alfonso
Set and Forget supply and demand trading community
  • #5,616
  • May 19, 2015 1:59am May 19, 2015 1:59am
Quoting digitalko
Hello Alfonso and all, I am attaching FT2 printscreen of my GU 4H setup which did not work. I discovered that this breakout CP setups are rather less probable to work. 4H trend in the direction of D and W trend 4H CP broke daily and weekly supply zone good imbalance and good departure The CP actually was overshot firstly by too many pips and then price moved in the direction, but could not remove supply and 4H trend changed from UP to DOWNtrend. I am getting losses in 80% of this setups. I found out that the most reliable setups on 4H timeframe...
Hey there my friend,

The H4 demand zone on gbp/usd was invalidated by the rules because the ascending trendline was broken.
An aggresive trendline is drawn whenever we have 3 or more consecutive CPs, if the trendline is broken by one full OHCL candle, all demand zones on H4 are negated.
Daily trendline not drawn correctly, why? We always connect the latest 2 valleys or peaks, you ignored the latest valley.

There is a daily/weekly demand lower where realignment is likely to happen as per the rules.

See the attached screenshot.
Cheers,
Alfonso

Attached Image (click to enlarge)
Click to Enlarge Name: Screenshot1.png Size: 373 KB
Set and Forget supply and demand trading community
  • #5,617
  • May 19, 2015 2:06am May 19, 2015 2:06am
Quoting digitalko
Hello Alfonso, In reference to my previous post the D setup is working out as expected even it broke the trendline by full OHLC daily candle, W trend is respected as seen on chart to the right. I tryed the D demand in the green circle but it was loss as well. Basically this are the settups that grow my equity and in the mean time while the setup forms I am loosing money on CPs and SD levels (I am trading only in the direction of HT trend) with around 25% success rate. Could you please give me some comment? Cheers Viktor {image}
Hello Viktor,

The Daily demand you drew in the circle is not correctly formed, the base is not clean and well formed, imbalance great but base not good. However imbalance was great so it was worth the risk.

Then price kept on dropping and reacted the Dail demand zone within Weekly demand zone and worked, the extreme D1 demand zone took control and price realigned. The lower Daily demand was a valid long as per the rules, why? The D1 trendline you drew was not correct, refer to my previous post for the valid one.

If a Daily trendline is broken, it invalidates all D1 zones unless the zone is nested within a weekly SD zone and Weekly chart is in the direction you want to trade, those are the realignment rules. You were just looking at the Daily chart to locate zones, you have to make a top down analysis of at least 3 timeframes and locate the next valid timeframe stil line a trend and locate potential trades on your entry timeframe, else wait for confirmation.

Hope it makes sense Viktor.
Cheers,
Alfonso
Set and Forget supply and demand trading community
  • #5,618
  • May 19, 2015 2:10am May 19, 2015 2:10am
Quoting digitalko
Hi PacnyTuH0 thank you for your reply. as you can see in attached charts W is in uptrend, D was in uprend as well as 4H I first took 4H CP pattern long as it broke D and W high and it was a loss as most of the times. Then I took D CP long as the price pulled down. It was in confluence with D and W trendline. It was another loss. Then the price pulled all the way to W demand and that one was finally the winer. What I was trying to say is that in my experience during live and testing perriod I am getting many losses on those 4H and D CP patterns....
As far as I can see on his charts, he may be getting more losses because he is not following the rules. In the last posts I could see trendlines are not being drawn correctly, that will influence a LOT your results. I don't know about the other trades, but I guess these things are common in the way the zones and trendlines are drawn, so they are causing more losses than winners. That's all I can say by the little I have seen.

It may be happening to you as well, it's very important to draw the trendlines correctly and apply the realignment rules, they are the core of the set of rules, else you will experience a low win/loss ratio, which is completely normal if the rules are not followed.

Cheers,
Alfonso
Set and Forget supply and demand trading community
  • #5,619
  • May 19, 2015 2:14am May 19, 2015 2:14am
Quoting RexTexas
I just went through your introductary post and also browsed through your website and I must say that I am impressed by what you put together! Although I am not a complete beginner, I am still trying to figure out how this all works. I am trying to learn technical analysis and believe that your method can be combined nicely with regular technical analysis. On Fxstreet I watched some supply&demand videos and after browsing Forexfactory, I found your thread. I subscribed to the thread and will take a closer look at your videos and your content. Looking...
Glad to have you here Rex, welcome! Take your time to go through the rules and posts, there is a lot of information. There is a complete set of rules that need to be practiced over and over so you gain confidence. There are many traders that draw trendlines in a different way, even zones, but there are specific rules for each thing.

Thanks for your introductory post and your kind words.
Cheers,
Alfonso
Set and Forget supply and demand trading community
  • #5,620
  • May 19, 2015 2:59pm May 19, 2015 2:59pm
Hi Alfonso,

First of all, I really thankful to you for sharing mind blowing information and real approach to the forex market without BS. I can see your YT videos from post 1 but unfortunately I am unable to watch other videos beside post 1.

Here is screenshot:
Attached Image (click to enlarge)
Click to Enlarge Name: Video.PNG Size: 15 KB


I will be glad, if you will allow me to watch other videos for clearing more concepts.

Thanks.
Umair (Umee)
I Win, I Lose, It's my Job... And I Love it!
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