Supply and demand in a nutshell by Alfonso Moreno | Page 343 | Forex Factory

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Supply and demand in a nutshell by Alfonso Moreno

  • #6,841
  • Jan 18, 2016 9:10pm Jan 18, 2016 9:10pm
Quoting JoeMcCool
Hello Alfonso and erveryone, 1. do you choose a fix(final) target for your trades, for example the next opposite HTF zone or what?. I think if trading a daily demand within a monthly on set and forget, and we would put our stops below new daily zones we get stoped out early, maybe because of a reaction to weekly supply. So if trading of a monthly zone, should the goal also be an opposite monthly zone or maybe a HTF zone because they will stop trend. I like to take half of anyway. 2. if waiting for conformation at HTF zone, the first one fails and...
​Hi Joe, no fixed rules around this in supply-demand trading.
Your mind plays a part in it all.
A fixed 3:1 take profit strategy for example allows for a consistent approach, not caring how far price then goes after that target is hit
Another trader may find it too painful to see all the additional profit they "could have made" if they had not exited at 3:1 and will look to trail their stops technically either using newly formed zones in the direction of their trade, or indicators like a moving average or ATR e.t.c. to trail stops.
Any approach will have its pros and cons, no perfect solution
Of note also regarding targets is where on the curve you enter. if entry for example is in a monthly zone (using newly formed daily areas near or in that zone) then your targets should be larger since you can expect a bigger move (if your mind can deal with inevitable pullbacks that will happen along the way)

Best wishes
Be careful what you think because your thoughts run your life..Solomon
  • #6,842
  • Jan 19, 2016 12:16am Jan 19, 2016 12:16am
Quoting JoeMcCool
Hello Alfonso and erveryone, 1. do you choose a fix(final) target for your trades, for example the next opposite HTF zone or what?. I think if trading a daily demand within a monthly on set and forget, and we would put our stops below new daily zones we get stoped out early, maybe because of a reaction to weekly supply. So if trading of a monthly zone, should the goal also be an opposite monthly zone or maybe a HTF zone because they will stop trend. I like to take half of anyway. 2. if waiting for conformation at HTF zone, the first one fails and...
Pulling the trigger to open a trade is very easy, very easy. The key to success is to manage your exits and take profit correctly. There is information about that in the 3:1 challenge, there is a variety of strategies for an exit, you have to choose yours for your trading plan, that depends on your personality, your expectancy regarding monthly account growth, etc. It's the SAME thing on every strategy, you must decide if you are happy with 3:1 exit, 4:1, 10:1, exit at the opposing valid imbalance, trailing your stop loss, etc. You must decide what is best for you, your target and personality.

If one area of demand fails and it's a loss, I will next the next valid one as per the rules. We have realignment and trendline rules Joe, we must apply them and you will get your answer.

Cheers,
Alfonso
Set and Forget supply and demand trading community
  • #6,843
  • Jan 19, 2016 1:12am Jan 19, 2016 1:12am
HI Mr Alfonso. in this video you explain cp demand monthy break flipzone i see. but you said monthy in uptrend i still not understand because not supply to remove and no acending trendline create. please explain me
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  • #6,844
  • Jan 19, 2016 2:36am Jan 19, 2016 2:36am
Quoting baolong610
HI Mr Alfonso. in this video you explain cp demand monthy break flipzone i see. but you said monthy in uptrend i still not understand because not supply to remove and no acending trendline create. please explain me {image}
If I said monthly was up, I made a mistake there for sure. Monthly is not up, it's clear it's not up. If I said that then I was completely wrong! At the time I had a rule that said that if 3:1 is available before opposing then potential zones are valid, that rule is no longer there, so maybe that's why I said that, but I'm not sure, that was long time ago.
Alfonso
Set and Forget supply and demand trading community
  • #6,845
  • Jan 19, 2016 3:05am Jan 19, 2016 3:05am
Quoting panoramia
{quote} If I said monthly was up, I made a mistake there for sure. Monthly is not up, it's clear it's not up. If I said that then I was completely wrong! At the time I had a rule that said that if 3:1 is available before opposing then potential zones are valid, that rule is no longer there, so maybe that's why I said that, but I'm not sure, that was long time ago. Alfonso
thanks Alfonso.i watch this video for 3 times. you said monthy up and weekly up so when monthy supply control we also can buy at demand weekly. when price rally from demand weekly we can buy and buy on daily when price reach a frh and original daily supply at the extreme nested in monthy supply, at there we short and my target is monthy demand cause break trendline. this is very powerful lesson video. so want to understand it clearly!
cheers
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  • #6,846
  • Jan 19, 2016 7:35pm Jan 19, 2016 7:35pm
Hello, Alfonso and everybody!

I have a question about GBPUSD. My analisys is: MN down (in control), WK DOWN, D1 DOWN and overextended. I drow 3 supply zone in D1 TF to go short, but one of them nested in WEEKLY SUPPLY zone. The price is overextended, and we need a confirmation to go short.
The question's are:
1. Can I set and forget (short) from the zone nested in higher TF(WEEKLY)?
2. For the confirmation should I go to H4 TF (my enter TF is D1)?


Gracias, Maestro!
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  • #6,847
  • Jan 19, 2016 8:14pm Jan 19, 2016 8:14pm
Another question about levels.
CADCHF analysys:
MN DOWN
WK DOWN
D1 DOWN
Base on the D1 TF took out WEKKLY Demand Zone BUT it didn't make 2:1 RR.
1. Is this valid zone of supply? (as per the rules IT IS a supply, but i heard many times in your video about 2:1 RR)
2. Can I Set and Forget or I have to wait a confirmation?

Thank's a lot!
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  • #6,848
  • Edited 9:56pm Jan 19, 2016 9:31pm | Edited 9:56pm
Hello agafon, if I may comment pls, on GBPUSD,
The issue with shorting now is as you said, price is quite overextended and in those situations one wouls expect a bigger pullback
Plus in this case you are in a monthly demand zone which if it starts to hold will put all those daily supply zones under threat
thank you for sharing your idea
Be careful what you think because your thoughts run your life..Solomon
  • #6,849
  • Jan 19, 2016 9:43pm Jan 19, 2016 9:43pm
Quoting Agafon79
Another question about levels. CADCHF analysys: MN DOWN WK DOWN D1 DOWN Base on the D1 TF took out WEKKLY Demand Zone BUT it didn't make 2:1 RR. 1. Is this valid zone of supply? (as per the rules IT IS a supply, but i heard many times in your video about 2:1 RR) 2. Can I Set and Forget or I have to wait a confirmation? Thank's a lot! {image}
​Hi again Agafon, on CADCHF please allow me to add my thoughts...

Minimum requirements to validate a zone are:
1. What it achieved - it must take out another opposing zone or be the zone that caused the break of a trendline
2. It must have a minimum of a 2:1 imbalance - price must have moved away at least twice the size of the zone before returning to the zone (if this isnot the case then you will need confirmation to take the zone
3. Price must consolidate away from the zone before returning - after leaving the zone price must trade away from the zone for at least one period before returning
These are minimum requirements to check any zone with
There are some other odds enhancers I have learnt and use other than these but I don't even bother applying them if I don't have these 3 first.

All the best
Be careful what you think because your thoughts run your life..Solomon
  • #6,850
  • Jan 19, 2016 9:53pm Jan 19, 2016 9:53pm
​Just a note on minimum imbalances before price returns to a zone.....
We trade supply and demand imbalances. As we all know and agree with, the only things that causes price to move are these 2 forces of supply and demand

Take a scenario where price is dropping in a downtrend and a zone is formed, meaning a period of price pause (basing) and then a fall (ERC candles or a gap down). the distance price moves from the basing indicates that there can be no buy orders left for that distance otherwise price would not have been able to travel down that distance.
So when price returns to our level for a short entry, we can be confident that our profit potential is at least the distance that price travelled before returning to the level

A zone may look good structurally i.e. tight base, good location on the curve etc, however, without a large enough profit potential (what we call minimum imbalance, which by Alfonso's rules is a minimum of 2:1), we have no trade

Best wishes
Be careful what you think because your thoughts run your life..Solomon
  • #6,851
  • Jan 20, 2016 12:55am Jan 20, 2016 12:55am
Quoting Agafon79
Another question about levels. CADCHF analysys: MN DOWN WK DOWN D1 DOWN Base on the D1 TF took out WEKKLY Demand Zone BUT it didn't make 2:1 RR. 1. Is this valid zone of supply? (as per the rules IT IS a supply, but i heard many times in your video about 2:1 RR) 2. Can I Set and Forget or I have to wait a confirmation? Thank's a lot! {image}
You tell me if it's set and forget or confirmation is required, tell me why one or the other would be needed as per your analysis.
Cheers,
Alfonso
Set and Forget supply and demand trading community
  • #6,852
  • Jan 20, 2016 12:56am Jan 20, 2016 12:56am
Quoting Agafon79
Hello, Alfonso and everybody! I have a question about GBPUSD. My analisys is: MN down (in control), WK DOWN, D1 DOWN and overextended. I drow 3 supply zone in D1 TF to go short, but one of them nested in WEEKLY SUPPLY zone. The price is overextended, and we need a confirmation to go short. The question's are: 1. Can I set and forget (short) from the zone nested in higher TF(WEEKLY)? 2. For the confirmation should I go to H4 TF (my enter TF is D1)? Gracias, Maestro! {image}
Same thing, why would we need confirmation or set and forget on the imbalances you drew for GBP/USD? Asking for the answer is the easy way, you need to make your own decision.

Cheers,
Alfonso
Set and Forget supply and demand trading community
  • #6,853
  • Jan 20, 2016 1:48am Jan 20, 2016 1:48am
Triggered longs on EA with the bigger picture UP. D1 chart creacted a demand level that complets its task by removing an opposing supply level. Bias is aggressive LONGS because price is getting closer to an opposing tested MN demand level.
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  • #6,854
  • Jan 20, 2016 2:28am Jan 20, 2016 2:28am
Quoting sympathy
Triggered longs on EA with the bigger picture UP. D1 chart creacted a demand level that complets its task by removing an opposing supply level. Bias is aggressive LONGS because price is getting closer to an opposing tested MN demand level. {image}
Nice long on EURAUD, well done
Cheers,
Alfonso
Set and Forget supply and demand trading community
  • #6,855
  • Jan 20, 2016 2:40am Jan 20, 2016 2:40am
Quoting panoramia
{quote} Nice long on EURAUD, well done Cheers, Alfonso
Thanks BOSS
  • #6,856
  • Jan 20, 2016 2:52am Jan 20, 2016 2:52am
UJ MN is down creating a potential supply zone that removes a usedup demand level but not yet 2:1.
W1 is down reacting to weekly tested Marubuzzo demand level [ alfonso please check if am right on that base].
H4 creacted a supply level nested within a valid daily supply zone. Bias is SHORTS. Shorts already playingout.
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  • #6,857
  • Jan 20, 2016 3:00am Jan 20, 2016 3:00am
Quoting sympathy
UJ MN is down creating a potential supply zone that removes a usedup demand level but not yet 2:1. W1 is down reacting to weekly tested Marubuzzo demand level [ alfonso please check if am right on that base]. H4 creacted a supply level nested within a valid daily supply zone. Bias is SHORTS. Shorts already playingout. {image} {image}
Hi Sympathy,

Can you please provide me with the latest rectangle reader indicator which you are using?
  • #6,858
  • Jan 20, 2016 3:29am Jan 20, 2016 3:29am
Quoting bedayan
{quote} Hi Sympathy, Can you please provide me with the latest rectangle reader indicator which you are using?
Hahahaha my friend, Am using the oldest rectangle indicator ok. The latest one is meant for the community, so if you need more info you can pm Alfonso.
  • #6,859
  • Jan 20, 2016 6:04am Jan 20, 2016 6:04am
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Quoting sympathy
UJ MN is down creating a potential supply zone that removes a usedup demand level but not yet 2:1. W1 is down reacting to weekly tested Marubuzzo demand level [ alfonso please check if am right on that base]. H4 creacted a supply level nested within a valid daily supply zone. Bias is SHORTS. Shorts already playingout. {image} {image}
Hello sympathy and everyone
I need your help with USDJPY.

I need to understand the analysis for the 4hr short.
I would please like some clarity on the daily supply zone and how it was validated as a supply zone.
As far as I can see, the daily zone does not meet at least 2 of the minimum requirements for a zone i.e a minimum of a 2:1 imbalance + the fact that it did not achieve anything before price returned to it.

Please see attached picture
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The 4hr trade worked but I would like help in understanding the thinking behind taking the short

many thanks for your help.

Best wishes
Be careful what you think because your thoughts run your life..Solomon
  • #6,860
  • Jan 20, 2016 11:01am Jan 20, 2016 11:01am
Quoting Akt
{image} {quote} Hello sympathy and everyone I need your help with USDJPY. I need to understand the analysis for the 4hr short. I would please like some clarity on the daily supply zone and how it was validated as a supply zone. As far as I can see, the daily zone does not meet at least 2 of the minimum requirements for a zone i.e a minimum of a 2:1 imbalance + the fact that it did not achieve anything before price returned to it. Please see attached picture{image} The 4hr trade worked but I would like help in understanding the thinking behind taking...
Sorry for late reply Akt, actually when i checked it at first time, i taught it was 2:1 due to my rectangle pips value but am wrong, Thanks so much for that.
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