Supply and demand in a nutshell by Alfonso Moreno | Page 286 | Forex Factory

Options

Go to
Permalinks
Print Thread

Similar Threads

Supply and Demand Zones 57 replies

Price movement as a function of Supply and Demand 43 replies

Supply and demand zones and EW principles 1 reply

How Markets Work, in a Nutshell! 32 replies

Demand and Supply 1 reply

Attachments: Supply and demand in a nutshell by Alfonso Moreno
Exit Attachments

Supply and demand in a nutshell by Alfonso Moreno

  • #5,701
  • Edited 2:40pm Jun 8, 2015 2:24pm | Edited 2:40pm
Quoting panoramia
This is an exoctic pair, Dollar versus Turkish Lira, I've taken quite a few longs on this currency pairs while bouncing off Monthly and Weekly demand. Now USD/TRY broke high above all time highs with a gap up and strong potential Daily demand zone, consolidation away is needed Long bias at valid Daily demand zones or lower at Weekly demand zones Cheers, Alfonso {image}
1. Alfonso, why do you say to go long only from WK demand zone? What about momentum trades like this CP daily demand zone?
2. When price break higher above all time highs should we wait for close above previous high before go long? What timeframe is recommended to be closed above? Weekly or daily? How do you personally do?
  • #5,702
  • Jun 9, 2015 8:25am Jun 9, 2015 8:25am
Quoting John.
{quote} 1. Alfonso, why do you say to go long only from WK demand zone? What about momentum trades like this CP daily demand zone? 2. When price break higher above all time highs should we wait for close above previous high before go long? What timeframe is recommended to be closed above? Weekly or daily? How do you personally do?
You will take trades as suggested by the sequence and depending on realignments. If D1 is broken the WK, that's what I meant... since bigger picture trend is bullish.

CPs at all time highs are lower odds, waiting for valleys is better. Also waiting for a bigger timeframe close above all time highs, minimum a Weekly candle close above the bigger timeframe supply.

Cheers,
Alfonso
Set and Forget supply and demand trading community
  • #5,703
  • Jun 9, 2015 8:28am Jun 9, 2015 8:28am
Quoting John.
A possible long setup: HKDJPY MN, Wk and D trends are up. Daily DZ needs to consolidate away. Any opinions? {image} {image} {image}
Never traded HKD/JPY, but I believe it should be a clone of EUR/JPY, so if it's a clone, I would suggest you to trade EUR/JPY instead because the HKD one has less liquidity.

Long bias on that one as you suggested.
Cheers,
Alfonso
Set and Forget supply and demand trading community
  • #5,704
  • Jun 9, 2015 8:32am Jun 9, 2015 8:32am
Quoting John.
{quote} As I understand from your answer, MN SZ is valid supply (because it removed valid demand) but not tradable yet. If you do not mind I will try explain how I understand the rules about validity and tradability of a zone. Please say if I'm wrong or right, your answer will make everything clear I hope. VALID ZONE 1. Valid zone - is a zone which removed opposing valid zone or broke a TL but has no 2:1 imbalance and no consolidation with 1 OHLC candle away. 2. We can use such valid zones only to confirm other zones. 3. We do not trade from such...
It makes sense more or less, but I think you confused some terms on the valid zones. A valid zone needs 2:1 and consolidation away, you say it won't need, or at least I understood that.

A zone is a confirmed imbalance by itself when it breaks a trendline or takes out an opposing zone. Tradability of the zone will depend on the bigger picture's trend, if a bigger timeframe is in control, if price is over-extended and no good/valid opposing level to the left, compression, etc. There is a lot to take into account for a countre-trend. For a trend trade it's easier, you just trade the sequence, Daily out of alignment? You trade levels within the Weekly.

Cheers,
Alfonso
Set and Forget supply and demand trading community
  • #5,705
  • Jun 9, 2015 11:19am Jun 9, 2015 11:19am
Quoting panoramia
{quote} It makes sense more or less, but I think you confused some terms on the valid zones. A valid zone needs 2:1 and consolidation away, you say it won't need, or at least I understood that. A zone is a confirmed imbalance by itself when it breaks a trendline or takes out an opposing zone. Tradability of the zone will depend on the bigger picture's trend, if a bigger timeframe is in control, if price is over-extended and no good/valid opposing level to the left, compression, etc. There is a lot to take into account for a countre-trend. For a...
Thank you! You are right. It is difficult to understand the difference between some terms. Let me try to continue efforts to understand it better. Let's start from the beginning.
1. First of all we can identify disbalance in price. It's our starting point.
2. If this disballance removes opposing SD (supply or demand) or TL it becomes a supply or demand. Let's call it just "a zone". At this stage zones are used only to confirm other disbalances as zones.
3. If a zone is 2:1 and has 1 OHLC candle consolidated away - a zone becomes a level. We use levels to identify trends.
4. Finally we score levels and chose high score levels to trade. At this stage we should take into account different scenarios, realignment, bigger picture etc.

Am I right now?
  • #5,706
  • Jun 10, 2015 3:17am Jun 10, 2015 3:17am
Quoting John.
{quote} Thank you! You are right. It is difficult to understand the difference between some terms. Let me try to continue efforts to understand it better. Let's start from the beginning. 1. First of all we can identify disbalance in price. It's our starting point. 2. If this disballance removes opposing SD (supply or demand) or TL it becomes a supply or demand. Let's call it just "a zone". At this stage zones are used only to confirm other disbalances as zones. 3. If a zone is 2:1 and has 1 OHLC candle consolidated away - a zone becomes a level....
Yep, you are right now John Makes sense

Cheers,
Alfonso
Set and Forget supply and demand trading community
  • #5,707
  • Jun 10, 2015 3:24am Jun 10, 2015 3:24am
USD/CAD bouncing nicely off D1 supply nested within brand new Weekly supply.

D1 and Weekly are out of alignment,, Monthly still up, temporary counter-trend shorts because price is out of alignment and demand zones are being taken out

I forgot to attache the USD/CAD analysis I had made at the beginning of the week, all those that subscribed to the webinars must have received that screenshot and analysis on USD/CAD, but I completely forgot to upload it, find below the attachment I should have added in white. I am holding a short from the top as described in that screenshot.

Hope the USD/CAD supply and demand analysis makes sense. If you don't see the brand weekly supply zone, please upload the Weekly chart with your question, will be happy to answer.

Cheers,
Alfonso

Attached Image (click to enlarge)
Click to Enlarge Name: Screenshot1.png Size: 141 KB


Attached Image (click to enlarge)
Click to Enlarge Name: usdcad.png Size: 80 KB
Set and Forget supply and demand trading community
  • #5,708
  • Jun 10, 2015 4:07am Jun 10, 2015 4:07am
USDMXN Long Loss
MN, WK and D are up.
WK closed above all time high.
Long from tradable D demand CP.
Attached Image (click to enlarge)
Click to Enlarge Name: 1-USDMXNMonthly.png Size: 59 KB


Attached Image (click to enlarge)
Click to Enlarge Name: 2-USDMXNWeekly.png Size: 53 KB


Attached Image (click to enlarge)
Click to Enlarge Name: 3-USDMXNDaily.png Size: 64 KB
  • #5,709
  • Jun 10, 2015 4:20am Jun 10, 2015 4:20am
Quoting John.
USDMXN Long Loss MN, WK and D are up. WK closed above all time high. Long from tradable D demand CP. {image} {image} {image}
All time highs scenarios, D1 over-extended with 3 consecutive CPs, low odds for longs, most of the time they are bull traps. US weakening across the board, longs not allowed.

Cheers,
Alfonso
Set and Forget supply and demand trading community
  • #5,710
  • Jun 10, 2015 4:21am Jun 10, 2015 4:21am
USD/SEK potential monthly demand zone that did not consolidated away (low odds) is holding, but being under attack again.

WK and D1 demand zones are nested at the distal line. Potential shorts if demand is taken out.

Cheers,
Alfonso

Attached Image (click to enlarge)
Click to Enlarge Name: usdsek.png Size: 56 KB
Set and Forget supply and demand trading community
  • #5,711
  • Jun 10, 2015 8:39am Jun 10, 2015 8:39am
Hello traders,
I am attaching D1 and W chart of NZDUSD
M is down
W is down with nice imbalance (I do not like the shooting star CP - but as Alfonso sais it is not a woman)
W demand the price is bouncing from at this moment is in the zone of compressed W demand zones area.
W 20EMA will be just below the supply zone what adds confluence.
D1 is out of alignment so shorts are allowed from nested D1,W supply zones, there is D1 supply sitting on W proximal line.

I will give it a shot if price retraces to that zone.
The question is, should we extend the daily supply zone to last months low (dotted support line cutting the tested marubosu candle below W supply zone on D1 chart)?
Thanks in advance for insights thoughts Alfonso.
Attached Image(s) (click to enlarge)
Click to Enlarge Name: NZDUSD D.jpg Size: 452 KB
Click to Enlarge Name: NZDUSD W.jpg Size: 520 KB
  • #5,712
  • Jun 10, 2015 2:44pm Jun 10, 2015 2:44pm
Alfonso, thank you, you helped me a lot!
I want to ask about USDJPY WK DZ. Is it drawn correctly or we must include all candles to the left into the zone? If it is drawn correctly it is tradable and we can buy there. If we include all candles into the base it will be not tradable...
Attached Image (click to enlarge)
Click to Enlarge Name: USDJPYWeekly.png Size: 27 KB
  • #5,713
  • Jun 10, 2015 3:30pm Jun 10, 2015 3:30pm
Quoting John.
Alfonso, thank you, you helped me a lot! I want to ask about USDJPY WK DZ. Is it drawn correctly or we must include all candles to the left into the zone? If it is drawn correctly it is tradable and we can buy there. If we include all candles into the base it will be not tradable... {image}
3 DZ in one big DZ
Attached Image (click to enlarge)
Click to Enlarge Name: USDJPYWeekly.png Size: 39 KB
  • #5,714
  • Edited 4:17pm Jun 10, 2015 3:51pm | Edited 4:17pm
Quoting panoramia
USD/CAD bouncing nicely off D1 supply nested within brand new Weekly supply. D1 and Weekly are out of alignment,, Monthly still up, temporary counter-trend shorts because price is out of alignment and demand zones are being taken out I forgot to attache the USD/CAD analysis I had made at the beginning of the week, all those that subscribed to the webinars must have received that screenshot and analysis on USD/CAD, but I completely forgot to upload it, find below the attachment I should have added in white. I am holding a short from the top as described...
I can not understand why did you take that trade by set and forget? Price droped from WK SZ to WK DZ so we must cancel our sell orders and wait for confirmation...?
  • #5,715
  • Jun 11, 2015 2:33am Jun 11, 2015 2:33am
Hello Traders,
I have another TL example.
In my opinion TL 2 is not correct as it is drawn using CP
The issue is that this CP looks like valley.
Do you agree? Or am I wrong?
Attached Image (click to enlarge)
Click to Enlarge Name: EURAUD D.jpg Size: 494 KB
  • #5,716
  • Jun 11, 2015 6:31am Jun 11, 2015 6:31am
Quoting John.
{quote} I can not understand why did you take that trade by set and forget? Price droped from WK SZ to WK DZ so we must cancel our sell orders and wait for confirmation...?
There are rules for that John, price too high, brand new fresh WK SZ after weekly trendline break, nested D1 supply zone taken. Weekly supply nested at Monthly supply. All valid for a counter-trend shrot on USD/CAD. Out last night at D1 demand.

You have to make a top down analysis and see if you are high or low in the curve, USD/CAD was very high on the monthly and weekly curve with new supply in control, longs? Not possible. Shorts? Yes, possible.

Hope it makes sense.

Take a look where price was within the monthly chart.

Attached Image (click to enlarge)
Click to Enlarge Name: Screenshot1.png Size: 127 KB
Set and Forget supply and demand trading community
  • #5,717
  • Jun 11, 2015 6:33am Jun 11, 2015 6:33am
Quoting digitalko
Hello Traders, I have another TL example. In my opinion TL 2 is not correct as it is drawn using CP The issue is that this CP looks like valley. Do you agree? Or am I wrong? {image}
Daily ascending trendline is not correct. You are breaking a rule by using a CP to connect a trendline, CPs are not used to connect trendlines, they are supply and demand continuation patterns, only if 3 or more CPs in a row are available.

Cheers,
Alfonso
Set and Forget supply and demand trading community
  • #5,718
  • Jun 11, 2015 6:35am Jun 11, 2015 6:35am
Quoting Alehandro
{quote} 3 DZ in one big DZ {image}
Hola Alehandro,

There are not 3 demand zones in a big demand zone on the weekly chart you drew for USD/JPY. There is just one zone, the candles are just basing. In order to have 3 demand zones we need 3 supply zones to be taken out, that didn't happen

Cheers,
Alfonso
Set and Forget supply and demand trading community
  • #5,719
  • Jun 11, 2015 6:36am Jun 11, 2015 6:36am
Quoting John.
Alfonso, thank you, you helped me a lot! I want to ask about USDJPY WK DZ. Is it drawn correctly or we must include all candles to the left into the zone? If it is drawn correctly it is tradable and we can buy there. If we include all candles into the base it will be not tradable... {image}
Joghn, you should include the lowest low of the basing candles. That weekly demand zone is also a monthly demand zone I believe, you can confirm by looking at the Monthly chart. No shorts against it, long bias.

Cheers,
Alfonso
Set and Forget supply and demand trading community
  • #5,720
  • Jun 11, 2015 7:26am Jun 11, 2015 7:26am
Quoting panoramia
{quote} Daily ascending trendline is not correct. You are breaking a rule by using a CP to connect a trendline, CPs are not used to connect trendlines, they are supply and demand continuation patterns, only if 3 or more CPs in a row are available. Cheers, Alfonso
Thank you for quick answer. So you did confirm my opinion on TL 2. That means that TL 1 is correct one.

Could you please also coment my analisys of NZDUSD D1 short setup from june 10th?
Thank you in advance.
0 traders viewing now