Supply and demand in a nutshell by Alfonso Moreno | Page 345 | Forex Factory

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Supply and demand in a nutshell by Alfonso Moreno

  • #6,881
  • Jan 23, 2016 3:29am Jan 23, 2016 3:29am
Quoting Agafon79
Hello everyone!! My LOSSSS(((((( {image}
Doji against Monthly Supply. Мало шансов
  • #6,882
  • Jan 23, 2016 3:48am Jan 23, 2016 3:48am
Sharing my analysis on indian Nifty Index.
1. Monthly down (CP taken out)
2. Weekly consolidating.(Band new supply created by removing monthly CP demand, now weak weekly demand reacting)
3. daily down
4. H4 UP. (TL broken and demand in control) approaching brand new supply zone.

Please correct me if am wrong.Comments are always welcome.
Attached Image(s) (click to enlarge)
Click to Enlarge Name: NSE_NiftyMonthly.png Size: 46 KB
Click to Enlarge Name: NSE_NiftyWeekly.png Size: 42 KB
Click to Enlarge Name: NSE_NiftyDaily.png Size: 37 KB
Click to Enlarge Name: NSE_NiftyH4.png Size: 42 KB
  • #6,883
  • Jan 23, 2016 8:46am Jan 23, 2016 8:46am
Hi server. Thank you for sharing ur idea.
As far as the rules go. Shorting that 4hr zone is a bit low on the curve.
It would have been better if weekly demand had been violated before price returned.
For now, that 4hr supply is coming up against weekly demand.

Thank you for allowing me comment.

Oh by the way, as well, the daily supply does not have a 2 to 1 imbalance Best wishes
Be careful what you think because your thoughts run your life..Solomon
  • #6,884
  • Edited 9:52am Jan 23, 2016 9:24am | Edited 9:52am
Quoting server2712
Sharing my analysis on indian Nifty Index. 1. Monthly down (CP taken out) 2. Weekly consolidating.(Band new supply created by removing monthly CP demand, now weak weekly demand reacting) 3. daily down 4. H4 UP. (TL broken and demand in control) approaching brand new supply zone. Please correct me if am wrong.Comments are always welcome. {image} {image} {image} {image}

Weekly Demand in control and we have pinbar here, dont sell. Yuo can look for a confirmation to go long
  • #6,885
  • Jan 23, 2016 10:12am Jan 23, 2016 10:12am
Thank you Akt and conom589.
  • #6,886
  • Jan 23, 2016 4:36pm Jan 23, 2016 4:36pm
Could anybody post an analysis of the S&P 500? Thanks a lot.
  • #6,887
  • Jan 23, 2016 11:08pm Jan 23, 2016 11:08pm
​Hello everyone,
Please allow me to share a summary of a part of the S&D methodology that I have noticed is often alluded to and mentioned but not actually really described in our posts.

Alfonso talks about them all the time in his videos.

Please note this information is obtained from my years of study and effort, as well as knowledge gleaned from other supply demand traders I have had the
opportunity to learn from, notably alfonso Moreno, the Sams (seiden and evans). I did not create this, I just learnt it and then practiced till I mastered it.

Step I - (for this part there's only this step so don't worry)
Zone Identification: always start with current price - look down from current price and left for buy zones and look up and left for sell zones
What are you looking for?

You are looking for a large move in price, (a move up for DZs and a move down for SZs).
Once u find this large move, trace it down to its origin and you will find the "zone" where the large move started. Don't look for the origin first, it will mislead you. Always look for the imbalances first then trace them back to where they started from.

Scenario: So, you have done your top-down analysis, come up with a trade idea and think you've found a zone to trade off of. Check the quality of your proposed entry zone

Zone quality assessment - to assess the quality of a supply or demand zone.

1. Evidence of imbalance: a gap away from a level is the biggest indication of an imbalance(not so common in FX), followed by LRCs (large range candles) away from the zone
2. Extent of imbalance: A minimum move of 2x the size of the zone is required. This is indicative of the initial profit potential. The more the distance travelled away from the zone before returning the better
3.Zone location: Referencing whatever chart is your higher timeframe, look at where you proposed entry zone is located relative to the HTF zones. For buying, is the DZ low on the curve? - then it is higher probability. Is it close to or in the HTF opposing zone? if yes then it is lower probability. Same thought process applies to a SZ
4. How much trading occurred in the zone: A recommendation Is this should be no more than 6 periods. Remember, with the supply-demand strategy, less time is good
5. How many times has price retraced to the level? this determines "freshness" as you often hear. Look to the right of your zone for this. The fewer times the better. A fresh zone is one that price has not returned to since the zone was formed.

These are the basic ones I use and find to be enough. There are others you can add depending on the market, such as the time the zone was created, correlations etc. Do not try to use too many, it can become counter-productive.

I hope this helps.

Thank you for mentoring us all these years Alfonso....you are an inspiration. I hope to meet you one day.

Best wishes
Be careful what you think because your thoughts run your life..Solomon
  • #6,888
  • Jan 23, 2016 11:31pm Jan 23, 2016 11:31pm
Nice rules to follow.. I am also familiar with all those other teachers of supply n demand trading.. but I must add to that list .. one important factor. .
The zones must take out opposing levels..I found that if that's not in play yr zones are 50/50 at best. For success. . I hate those odds..I know everyone says in forex a 50/50 trader with good money management is a successful trader. .but I am sorry I hate those odds I would never attempt anything in life and feel good about a 50/50 odds of success. .you can be happy with that if you want to..it messes with me mentally. Lol . In my testing n trading .the levels that take out opposing levels work 70% of the time. .I can live with those odds
  • #6,889
  • Jan 24, 2016 12:59am Jan 24, 2016 12:59am
Hey traders ,

Just imagine , their is a trade that M - is up trend W- is out of alignment ....

Since weekly is out of alignment we cannot buy ( set and forget)D1 until price is reach monthly demand zone..
Their for weekly trend must b realingment with monthly uptrnd.. according to realingment rules monthly demand zone is now act as a magnet for weekly trend on the purpose og weekly realingment..

Coudn't be weekly trnd realignment with monthly up trend before reaching monthly demand zone ??

coudn't it b happen at lawer monthly flip zone or at monthly up trnd line confluenses or at monthly 20 ema conflueces or at clear weekly demand levale it self withot involving monthly confluenses ???
  • #6,890
  • Jan 24, 2016 1:23am Jan 24, 2016 1:23am
Quoting ideal77
Nice rules to follow.. I am also familiar with all those other teachers of supply n demand trading.. but I must add to that list .. one important factor. . The zones must take out opposing levels..I found that if that's not in play yr zones are 50/50 at best. For success. . I hate those odds..I know everyone says in forex a 50/50 trader with good money management is a successful trader. .but I am sorry I hate those odds I would never attempt anything in life and feel good about a 50/50 odds of success. .you can be happy with that if you want to..it...
​Hi ideal. Thank you for your post.
I did not include the need to take out a zone because it goes without saying.
The criteria for a zone to even be called a zone must be fulfilled before you consider the quality of the zone
Remember, as you will see in my post, I preface things with a scenario that the zone has already been identified
The assessment tool is to be used after the zone has been identified otherwise there is no point applying them to a non-validated zone

Best wishes

By the way, any singular trade you take will have generally two possible outcomes....a win or a loss. A 50:50 Chance.
The strategy as a whole may have a higher probability overall but within that strategy, any singular trade will still have a 50:50 chance
Be careful what you think because your thoughts run your life..Solomon
  • #6,891
  • Jan 24, 2016 1:30am Jan 24, 2016 1:30am
Quoting sandunn
Hey traders , Just imagine , their is a trade that M - is up trend W- is out of alignment .... Since weekly is out of alignment we cannot buy ( set and forget)D1 until price is reach monthly demand zone.. Their for weekly trend must b realingment with monthly uptrnd.. according to realingment rules monthly demand zone is now act as a magnet for weekly trend on the purpose og weekly realingment.. Coudn't be weekly trnd realignment with monthly up trend before reaching monthly demand zone ?? coudn't it b happen at lawer monthly flip zone or at monthly...
​Hello Sandunn
Remember, in the markets, anything can happen at any time.. u don't want to base your trading on that philosophy though.
U want a repeatable consistent approach hence the rules and their application
Considering all the possible outcomes in the market is impossible
You can control however, your approach and response to these scenarios
Establish your rules and follow them
Repeat them over and over again till you get to that stage of top traders who always refer to their trading as "boring" because all they do is the same thing over and over again. Its like ground-hog day for them

Best wishes
Be careful what you think because your thoughts run your life..Solomon
  • #6,892
  • Jan 24, 2016 3:47am Jan 24, 2016 3:47am
EURCAD

Hello Fellow Traders
This is definitely my First Post ForexFactory and i am open to constructive criticism
Please take a look at my Post and analysis on EURCAD

On MONTHLy price is coming off a Supply ZONE
DAILY/H4 TL Broken
NEW SUPPLY Created

THIS IS A VALID SETUP?
YES OR NO
Thanks
Attached Image (click to enlarge)
Click to Enlarge Name: EURCADMonthly.png Size: 97 KB

Attached Image (click to enlarge)
Click to Enlarge Name: EURCADWeekly.png Size: 77 KB

Attached Image (click to enlarge)
Click to Enlarge Name: EURCADDaily.png Size: 70 KB

Attached Image (click to enlarge)
Click to Enlarge Name: EURCADH4.png Size: 69 KB
FRK
  • #6,893
  • Jan 24, 2016 4:43am Jan 24, 2016 4:43am
Hi frank. Thank you for your idea.
If I could comment pls...

Monthly trend is up. As u can see, monthly supply is being taken out and demand being respected.

Weekly trend is up but that demand zone u highlighted is not a valid zone cuz of one rule, price did not consolidate away before returning.

Therefore any daily or 4hr zones in that weekly area are not valid.

Thank u for allowing me to comment on ur idea.

Best wishes
Be careful what you think because your thoughts run your life..Solomon
  • #6,894
  • Jan 24, 2016 5:08am Jan 24, 2016 5:08am
Quoting Akt
Hi frank. Thank you for your idea. If I could comment pls... Monthly trend is up. As u can see, monthly supply is being taken out and demand being respected. Weekly trend is up but that demand zone u highlighted is not a valid zone cuz of one rule, price did not consolidate away before returning. Therefore any daily or 4hr zones in that weekly area are not valid. Thank u for allowing me to comment on ur idea. Best wishes

Thanks for the Response,
we are all Learning
FRK
  • #6,895
  • Jan 24, 2016 6:50am Jan 24, 2016 6:50am
Quoting Akt
Hi frank. Thank you for your idea. If I could comment pls... Monthly trend is up. As u can see, monthly supply is being taken out and demand being respected. Weekly trend is up but that demand zone u highlighted is not a valid zone cuz of one rule, price did not consolidate away before returning. Therefore any daily or 4hr zones in that weekly area are not valid. Thank u for allowing me to comment on ur idea. Best wishes
Frank Weekly Demand Zone is valid so you can trade it
Attached Image (click to enlarge)
Click to Enlarge Name: 2016-01-24_17-41-09.png Size: 77 KB
  • #6,896
  • Jan 24, 2016 7:33am Jan 24, 2016 7:33am
Quoting conom589
{quote} Frank Weekly Demand Zone is valid so you can trade it {image}
​The beauty of trading.
We look at the same chart and see different things. Gotta love it.

The OHLC candle you highlight in the picture is part of the rally, part of the imbalance and as far as I can see, not a period spent away from the zone.
Consider for a second that it is the consolidation away, that zone would then only have the first LRC as the imbalance in which case it is not a 2:1 imbalance, thus making the zone suspect.

Just my assessment.

Best wishes
Be careful what you think because your thoughts run your life..Solomon
  • #6,897
  • Jan 24, 2016 9:52am Jan 24, 2016 9:52am
Quoting Akt
{quote} ​Hello Sandunn Remember, in the markets, anything can happen at any time.. u don't want to base your trading on that philosophy though. U want a repeatable consistent approach hence the rules and their application Considering all the possible outcomes in the market is impossible You can control however, your approach and response to these scenarios Establish your rules and follow them Repeat them over and over again till you get to that stage of top traders who always refer to their trading as "boring" because all they do...
"Sean.mortlock" add me.. bcuz I am a new member can't send more than 3 msg a day
  • #6,898
  • Jan 24, 2016 1:10pm Jan 24, 2016 1:10pm
nice setup on the nzd/usd 4hr chart.. this is before market open I don't like weekend gaps price could have traded rite thru this level by now.. but if not looks legit
Attached Image (click to enlarge)
Click to Enlarge Name: NZDUSD H4 (01-24-2016 1607).png Size: 38 KB
  • #6,899
  • Jan 24, 2016 11:31pm Jan 24, 2016 11:31pm
Quoting ideal77
nice setup on the nzd/usd 4hr chart.. this is before market open I don't like weekend gaps price could have traded rite thru this level by now.. but if not looks legit {image}
I guess its because of your trading platform and you display not only H4 imbalances on that chart. The trendline that you drew is incorrect if that one belongs to the H4 chart.

Cheers,
Alfonso
Set and Forget supply and demand trading community
  • #6,900
  • Jan 25, 2016 4:34am Jan 25, 2016 4:34am
Quoting panoramia
{quote} I guess its because of your trading platform and you display not only H4 imbalances on that chart. The trendline that you drew is incorrect if that one belongs to the H4 chart. Cheers, Alfonso
Yr correct. .that's a daily trendline..not 4h..thanks for the response
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