Supply and demand in a nutshell by Alfonso Moreno | Page 295 | Forex Factory

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Supply and demand in a nutshell by Alfonso Moreno

  • #5,881
  • Aug 15, 2015 6:08pm Aug 15, 2015 6:08pm
Ah HA! Ok Alfonso, I found the rules...I think. I went back and re-watched some webinars. Luckily I stumbled on the right one from the start. At 11:23 of your video one year ago called "How to draw Trendlines and Supply and Demand imbalances webinar" you state the exact rules for drawing trend lines. For example, in an ascending trend line you need a drop, base, rally that is higher than the drop. Then you need another drop, base, rally that has a rally higher than the rally from the first. Only then can you draw a trend line. I have attached an example for you.
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  • #5,882
  • Aug 16, 2015 7:47am Aug 16, 2015 7:47am
Hello everybody,

I really like this method and I'm practicing now. Question: When you look at previous demand/supply can it be crossed by previous candles? In other words, if I look at a previous demand area, can I count this if it is taken out before by an other supply?

Thanks!
  • #5,883
  • Aug 16, 2015 1:35pm Aug 16, 2015 1:35pm
Hi everybody,

My first attempt to practice S/D. I welcome every feedback.

Still struggling which candles to include in the area. The idea is, if I understood correctly, if the open of the next candle is not further removed then the area of the first basing candle it's included. But sometimes the area grows. Do you use the first initial area to decide if a candle is part of the area or the new expanding area?

Greetings,

Richard
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  • #5,884
  • Aug 17, 2015 3:57pm Aug 17, 2015 3:57pm
Hey Alfonso. There has certainly still been one thing I have been struggling with. I have read post 1 a few times, but I still can't really differentiate between a CP and peak/valley. Do you have any tricks for separating the two? Some are obvious....sure, but many look like they could be either CP or valley/peaks. The best I have been able to do thus far is look to the move in the opposite direction and wait for a low or high to be broken. This gives me my peak or valley. Moves in the middle are considered CP patterns. I have an example below.
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  • #5,885
  • Aug 17, 2015 4:03pm Aug 17, 2015 4:03pm
Hey Alfonso. Let me add something to the last post. What I am trying to do is put some strict rules around what constitutes a "peak or valley." To simply draw the obvious ones still has me seeing them all over the place.
Thanks
  • #5,886
  • Aug 18, 2015 3:23pm Aug 18, 2015 3:23pm
Quoting Stockguy
Hey Alfonso. There has certainly still been one thing I have been struggling with. I have read post 1 a few times, but I still can't really differentiate between a CP and peak/valley. Do you have any tricks for separating the two? Some are obvious....sure, but many look like they could be either CP or valley/peaks. The best I have been able to do thus far is look to the move in the opposite direction and wait for a low or high to be broken. This gives me my peak or valley. Moves in the middle are considered CP patterns. I have an example below....
you must concentrate what is in the attach picture. its simple if you read it with full concentration.

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  • #5,887
  • Aug 19, 2015 9:31am Aug 19, 2015 9:31am
Quoting Solomon1a
{quote} you must concentrate what is in the attach picture. its simple if you read it with full concentration.
Thank you for replying Solomon1. I have been thinking about this for the past few days. I think I have the problem narrowed down to two things.
1. The term DBD means exciting candle drop in. Then the base candle that is less than 50% of its range, and finally a exciting candle rallying out. So if I read that closely price would already be in a trending state for the most part. So RBD means that price was in an uptrend or pullback as price rallied UP. This is my guess anyways.

2. Me! I have a tendency to over analyze things. I guess its just what makes me up. Making things too complicated is certainly not the answer.
  • #5,888
  • Aug 20, 2015 4:25am Aug 20, 2015 4:25am
Quoting Stockguy
{quote} Thank you for replying Solomon1. I have been thinking about this for the past few days. I think I have the problem narrowed down to two things. 1. The term DBD means exciting candle drop in. Then the base candle that is less than 50% of its range, and finally a exciting candle rallying out. So if I read that closely price would already be in a trending state for the most part. So RBD means that price was in an uptrend or pullback as price rallied UP. This is my guess anyways. 2. Me! I have a tendency to over analyze things. I guess its just...
DBD only happens in downtrend because this pattern is a bearish cp.its simple when price drops then based and then drops, base should be lower than the previous candle, if its not then it wont be DBD. and yes you are making it very complicated. its simple rally base drop and drop base drop are different. both are bearish pattern but one is cp.
  • #5,889
  • Aug 20, 2015 8:53am Aug 20, 2015 8:53am
Quoting Solomon1a
{quote} DBD only happens in downtrend because this pattern is a bearish cp.its simple when price drops then based and then drops, base should be lower than the previous candle, if its not then it wont be DBD. and yes you are making it very complicated. its simple rally base drop and drop base drop are different. both are bearish pattern but one is cp.
Solomon,
Thank you for your reply. If I could ask you to clarify one thing you said? What did you mean when you said the base of a DBD must be lower than the last candle? With little gaps in the FX market you will generally have the base be at least even with the last candle.
  • #5,890
  • Aug 21, 2015 2:24pm Aug 21, 2015 2:24pm
Hello alfonso, is it time to buy dow us30? its in a monthly demand with nested weekly demand and monthly trendline consensus

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  • #5,891
  • Aug 24, 2015 6:30am Aug 24, 2015 6:30am
The importance of NOT ASSUMING ANYTHING just apply the rules comes out today!!
what is happening today is amazing!!
Good work to all Thanks again Alfonso
  • #5,892
  • Aug 24, 2015 9:56am Aug 24, 2015 9:56am
Quoting alegargano
The importance of NOT ASSUMING ANYTHING just apply the rules comes out today!! what is happening today is amazing!! Good work to all Thanks again Alfonso
Would you mind attaching a chart? I am still studying his method and would like to see some more current examples. The fall in the U.S. markets is so big that I am not sure how you pick a monthly level? Does anyone know how you really look at a time frame larger than the monthly? Thanks
  • #5,893
  • Aug 25, 2015 1:33am Aug 25, 2015 1:33am
Quoting Stockguy
{quote} Would you mind attaching a chart? I am still studying his method and would like to see some more current examples. The fall in the U.S. markets is so big that I am not sure how you pick a monthly level? Does anyone know how you really look at a time frame larger than the monthly? Thanks
Yes for sure, for example the s&p 500 all time high scenario:
MN and wk chart in the pictures.


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  • #5,894
  • Aug 25, 2015 6:50am Aug 25, 2015 6:50am
now , candles closed with super long wicks after the madness happened yesterday . how can i draw supply and demand zones ? as one candle with super super wick deleted all the supply and demands behind it , what we can do in this special cases ?
  • #5,895
  • Aug 25, 2015 8:23am Aug 25, 2015 8:23am
Quoting alegargano
{quote} Yes for sure, for example the s&p 500 all time high scenario: MN and wk chart in the pictures.
Thank you very much for your reply alegargano. I have two questions though. On your monthly chart, why did you not pick the monthly candle with the very large bottom wick? Was it because it was a retest to the level you did pick? This means the candle I am talking about is fresh, but not original.

2. On your weekly chart you talk about the trend line being broken, but not the weekly support level. So you are saying you would not short the green level? I thought when a trend line is broken you could short the level that broke it and you don't go long until 1 time frame higher? So that means this drop would have been missed until the monthly zone below. The one that it sprung up from.

Thanks
  • #5,896
  • Aug 25, 2015 8:57am Aug 25, 2015 8:57am
Quoting Stockguy
{quote} Thank you very much for your reply alegargano. I have two questions though. On your monthly chart, why did you not pick the monthly candle with the very large bottom wick? Was it because it was a retest to the level you did pick? This means the candle I am talking about is fresh, but not original. 2. On your weekly chart you talk about the trend line being broken, but not the weekly support level. So you are saying you would not short the green level? I thought when a trend line is broken you could short the level that broke it and you don't...
I don't understand at which level are you referring to, if you share with us your chart would be better.
That long wick is a test of a cp that i've draw nothing else. Is the cp that cause the rally. To be more clear try to compare the level with the long wick with the level above, could you see something different?

The Green level is a level of supply because broke the ascending TL, but, into the picture i've drawed also a blue rectangle where i said that in that zone we have a balance in price and we want to trade Imbalances so to increase our odds we want a close below that red line. We want also a removal of one opposite zone of demand that didn't happen at that time.
You could take that green zone waiting for confirmation on lower TF that is the D1 ----> brand new level of supply that coast the break of TL and remove one opposite zone of demand.

In my first post i wanted to underline the fact that with this strategy you can avoid unnecessary losses understanding an learning the strategy and respecting the markets not outsmarting it
  • #5,897
  • Aug 25, 2015 8:58am Aug 25, 2015 8:58am
Quoting bassemJ
now , candles closed with super long wicks after the madness happened yesterday . how can i draw supply and demand zones ? as one candle with super super wick deleted all the supply and demands behind it , what we can do in this special cases ?

If you are referring to at the wk candle you shouldn't look at the wk chart until friday
  • #5,898
  • Aug 25, 2015 9:48am Aug 25, 2015 9:48am
Quoting alegargano
{quote} I don't understand at which level are you referring to, if you share with us your chart would be better.
You are right, charts are always better. My question was why you did not pick the candle that has the red arrow by it? I see that you picked the area marked by my blue rectangle. I just don't know why that is the area that started the rally? I thought the monthly candle with the red arrow was the monthly demand zone. It's fresh, but I think not original.
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  • #5,899
  • Aug 25, 2015 10:00am Aug 25, 2015 10:00am
Quoting alegargano
{quote} I don't understand at which level are you referring to, if you share with us your chart would be better. That long wick is a test of a cp that i've draw nothing else. Is the cp that cause the rally. To be more clear try to compare the level with the long wick with the level above, could you see something different?
I put my answer to this question on the chart. Am I right?

Thank you very much for your time. I am trying to learn this method here until I can scrape up the money for a three month subscription to the private site. I am not exactly showered with money right now.
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  • #5,900
  • Edited 10:54am Aug 25, 2015 10:23am | Edited 10:54am
So.....Sorry to make so many posts guys, but I need help and am still learning. The chat I have been having has me thinking. The debate about not fresh, but original zones. Really all RBD/DBR are just pullbacks to other CP/RBR/DBD zones? Right? I mean.....a RBD/DBR is going to be just a pullback to another zone. So while it might be the origin of a rally/drop, it still is just a pullback to a zone to the left. The problem with this thought is why we ever take the RBD/DBR as trades then. Thoughts anyone? Please help!

lol....ok, after writing this post I went back and read post #1. He even states there that RBD/DBR are reactions to RBR/DBD. This still for the time being leaves me confused as to when we are supposed to trade 1 over the other. It would seem that we still would only want to trade RBR/DBD as those would most likely be fresh and authentic.

Thanks
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