Supply and demand in a nutshell by Alfonso Moreno | Page 351 | Forex Factory

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Supply and demand in a nutshell by Alfonso Moreno

  • #7,001
  • Feb 4, 2016 12:43pm Feb 4, 2016 12:43pm
Quoting panoramia
{quote} Rules say there is an uptrend on the daily, it seems you don't have a good understanding of how the uptrend is formed according to the rules then. I repeated that like 2-3 times in previous posts Read next post by dis01 and you will see as well Cheers, Alfonso
Dear Alfonso, I understand very well under which conditions new trend will be formed.
New trend is formed when:

  1. 2 opposing valid and tradable zones have been removed

OR

  1. we have a trendline and 1 opposing valid and tradable zone have been removed by the second leg of our trendline

That's all and it's simple.

We have a consolidation when:

  1. trendline is broken with at least 1 candle consolidated away

OR

  1. 1 opposing valid and tradable zone is removed

My question was not about how new trend can be formed. My question was about supply zones which have been removed.
In my analyses I pointed only one SZ which was removed. But that zone was not tradable = trend is not broken.
In addition I did not see 3 CPs in a row to draw aggressive descending TL which removal could broke the trend.

The problem was that you drew 3 SZ CPs and the second one was tradable and it was also removed by the second leg of the ascending TL and you got uptrend (I do not know if it's really so but there is no other way).

And the only thing I tried to understand and asked you to show was which SZ Cps you drew on your chart. Because I do not see 3 Cps there.... That's all.

  • #7,002
  • Feb 4, 2016 4:35pm Feb 4, 2016 4:35pm
Hello Everyone,

i just want share my opinion from dollar Index and USDJPY

dollar index
MN is UP
WK is break ascending TL and remove DZ. because there have 3 CPs. to go long again wait price hits MN DZ.
Attached Image (click to enlarge)
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USDJPY
MN is Consolidation ( 3 CPs) and break ascending TL and hits new SZ.
WK is consolidation (because price break ascending TL and remove 1 DZ)
Attached Image (click to enlarge)
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wait price remove MN DZ to short.

thanks.

Rio
from loser to be hero
  • #7,003
  • Feb 6, 2016 4:38am Feb 6, 2016 4:38am
can someone offer some advice on usdcad, i know monthly supply is causing the move down at the moment ..

But what caused the move up yesterday, I don't see it hitting anything of any significance..
  • #7,004
  • Feb 6, 2016 7:46am Feb 6, 2016 7:46am
Quoting n_aftab
can someone offer some advice on usdcad, i know monthly supply is causing the move down at the moment .. But what caused the move up yesterday, I don't see it hitting anything of any significance..
Hello there aftab.
If I may,

You will see on the daily chart that yesterday's move up was caused by price hitting daily demand zones. There is a level on top of level scenario on the daily chart and price predictably reacted to it.

I hope that helps

Best wishes
Be careful what you think because your thoughts run your life..Solomon
  • #7,005
  • Feb 6, 2016 7:49am Feb 6, 2016 7:49am
Appreciate your reply ... to me it looks like it removed the closest daily demand and was yet to reach the next one below?

I still consider this a short on rallies .. or am i mistaken?
  • #7,006
  • Feb 6, 2016 8:07am Feb 6, 2016 8:07am
Quoting n_aftab
Appreciate your reply ... to me it looks like it removed the closest daily demand and was yet to reach the next one below? I still consider this a short on rallies .. or am i mistaken?
​You are correct but think of it as the daily DZs still being in control. Yes there was a violation of the first one but price was in a general area that was likely to have buyers waiting

Regarding shorting on rallies, u can BUT u must consider them as counter trend and so any trade you take must have a format you have already set out in a trading plan.
The long term trade is still long since monthly is still up. The weekly has violated one DZ so it is now in consolidation. So there is some room to go to the long trade with weekly zones embedded in the monthly zone

Best wishes
Be careful what you think because your thoughts run your life..Solomon
  • #7,007
  • Feb 6, 2016 8:42am Feb 6, 2016 8:42am
Quoting Akt
{quote} ​You are correct but think of it as the daily DZs still being in control. Yes there was a violation of the first one but price was in a general area that was likely to have buyers waiting Regarding shorting on rallies, u can BUT u must consider them as counter trend and so any trade you take must have a format you have already set out in a trading plan. The long term trade is still long since monthly is still up. The weekly has violated one DZ so it is now in consolidation. So there is some room to go to the long trade with weekly...

Agree monthly is up, I only go against the main trend when I see higher time frame monthly or weekly being out of alignment as it usually leads to a reasonable counter trend move.
  • #7,008
  • Feb 6, 2016 11:42am Feb 6, 2016 11:42am
Quoting John.
{quote} Dear Alfonso, I understand very well under which conditions new trend will be formed. New trend is formed when: 2 opposing valid and tradable zones have been removed OR we have a trendline and 1 opposing valid and tradable zone have been removed by the second leg of our trendline That's all and it's simple. We have a consolidation when: trendline is broken with at least 1 candle consolidated away OR 1 opposing valid and tradable zone is removed My question was not about how new trend can be formed. My question was about supply zones which...
hey john,
if i may:
dont try to understand every little scenerio. Looking for perfection in trading or following a trader (like Alfosno with many years of experience in this case) justs upsets you. The most important thing alfonso said its the marathon. try it and test it yourself. you probably understand most of the rules correctly, than just test it. if in profit good else try to improve it, even that means to change some rules. nevertheless my opinion about AUSUSD chart. i marked 4 cps, maybe you take the last three for one (could also be different by brokers) then this would not be valid and there would not be a trendline. So you could get a loss at the first cp. But you know about the whole picture so after this one loss its quite the same. I saw it like you. Hope it helps. But i'm for sure appreciate ALFONSOS opinion or others.

Greets
Joe
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  • #7,009
  • Feb 7, 2016 5:51am Feb 7, 2016 5:51am
Quoting JoeMcCool
{quote} hey john, if i may: dont try to understand every little scenerio. Looking for perfection in trading or following a trader (like Alfosno with many years of experience in this case) justs upsets you. The most important thing alfonso said its the marathon. try it and test it yourself. you probably understand most of the rules correctly, than just test it. if in profit good else try to improve it, even that means to change some rules. nevertheless my opinion about AUSUSD chart. i marked 4 cps, maybe you take the last three for one (could also...
Hi Joe,
Thanks for your post! I agree with you that different quotes from different brokers can draw a different picture, that's true. May be that's the case. I still hope that Alfonso will show his chart and his zones.
I did not have any trade at the first CP because I needed a confirmation for shorting there but I did not get any kind of confirmation. So everything is OK
The more I trade the more I understand that nothing can be perfect and we have many signals which say "stop! or wait for confirmation". That CP was not good for me for set and forget even if I defined a downtrend.
  • #7,010
  • Feb 7, 2016 5:59am Feb 7, 2016 5:59am
I want to ask Alfonso one more question.
An example:
- my entry TF is Daily
- my HTFs are MN and WK
Let's say that MN is up and price hits MN fresh and strong demand - so we can buy here. But sometimes I see situations when we do not have any good nested D1 demand zone there but we can find a good and strong nested WK demand zone. Can we trade from WK zone?
  • #7,011
  • Edited 7:15am Feb 7, 2016 6:43am | Edited 7:15am
Quoting John.
I want to ask Alfonso one more question. An example: - my entry TF is Daily - my HTFs are MN and WK Let's say that MN is up and price hits MN fresh and strong demand - so we can buy here. But sometimes I see situations when we do not have any good nested D1 demand zone there but we can find a good and strong nested WK demand zone. Can we trade from WK zone?
Here is the answer to a similar question

Quoting panoramia
{quote} Not sure which trade to take on USD/CAD? D1 or H4? That will depend on your entry timeframe. If your trading plan states the D1 should be your entry timeframe, then that should be your entry timeframe, else H4. If your entry timeframe is H4 but level does not look good on H4 but it looks great on D1, then you'd need to wait for confirmation on H4 or take the whole Daily level. But like I said, you need to have that on your trading plan, so you always do the same thing. Hope it makes sense. Cheers, Alfonso
  • #7,012
  • Feb 7, 2016 7:52am Feb 7, 2016 7:52am
Quoting conom589
{quote} Here is the answer to a similar question {quote}
Yes, that's the answer. Thank you!
  • #7,013
  • Feb 7, 2016 8:12am Feb 7, 2016 8:12am
Who is going to sell AUDCHF on H4?
WK:

  1. down,
  2. supply in control

D1:

  1. conso,
  2. supply in control,
  3. re-aligned with Wk downtrend

H4:

  1. down,
  2. high on the Daily Curve
  3. price is now in the opposing CP DZ which is not fresh and against the trend

Attached Image (click to enlarge)
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Attached Image (click to enlarge)
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Attached Image (click to enlarge)
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  • #7,014
  • Feb 7, 2016 9:22am Feb 7, 2016 9:22am
Quoting John.
Who is going to sell AUDCHF on H4? WK: down, supply in control D1: conso, supply in control, re-aligned with Wk downtrend H4: down, high on the Daily Curve price is now in the opposing CP DZ which is not fresh and against the trend {image} {image} {image}
​Hello John
I have the same analysis and zone to sell.
Only note of caution is that monthly downtrend line is broken. So I am going to cap my targets

Best wishes
Be careful what you think because your thoughts run your life..Solomon
  • #7,015
  • Feb 8, 2016 1:54am Feb 8, 2016 1:54am
Quoting John.
Who is going to sell AUDCHF on H4? WK: down, supply in control D1: conso, supply in control, re-aligned with Wk downtrend H4: down, high on the Daily Curve price is now in the opposing CP DZ which is not fresh and against the trend {image} {image} {image}
Great analysis John. AUDCHF new H4 supply zones being created, D1 supply as well. H4 supply at the very top of the H4 chart (not drawn) is the one playing out.

Cheers,
Alfonso
Set and Forget supply and demand trading community
  • #7,016
  • Feb 8, 2016 1:55am Feb 8, 2016 1:55am
Quoting John.
I want to ask Alfonso one more question. An example: - my entry TF is Daily - my HTFs are MN and WK Let's say that MN is up and price hits MN fresh and strong demand - so we can buy here. But sometimes I see situations when we do not have any good nested D1 demand zone there but we can find a good and strong nested WK demand zone. Can we trade from WK zone?
Yes, you can take the full weekly demand zone. If your trading plan does not allow you to take full weekly imbalances, then you must wait for confirmation, that is, brand new level of demand on your entry timeframe.

Cheers,
Alfonso
Set and Forget supply and demand trading community
  • #7,017
  • Feb 8, 2016 1:57am Feb 8, 2016 1:57am
Quoting n_aftab
can someone offer some advice on usdcad, i know monthly supply is causing the move down at the moment .. But what caused the move up yesterday, I don't see it hitting anything of any significance..
Nobody knows why price rallies and drops at every moment in time, it can for many reasons, news, speculation, take profits, anything. Lean on your trading plan and strategy and forget about knowing why price rallies or drops if there is nothing where the reaction happened.

Cheers,
Alfonso
Set and Forget supply and demand trading community
  • #7,018
  • Feb 8, 2016 2:09am Feb 8, 2016 2:09am
Price fell short of hitting D1 supply zone at 0.6829 on NZDUSD. D1 engulfing pattern created resistance, potential D1 and H4 supply zones could be created on the way down. Short bias

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Set and Forget supply and demand trading community
  • #7,019
  • Feb 8, 2016 2:10am Feb 8, 2016 2:10am
Price pulled back into Weekly Supply zone on AUDUSD, with monthly and weekly timeframes in a downtrend. Price fell short of hitting nested Daily supply at 0.7263 for an entry and engulfed on Daily. Short bias on new H4 and D1 supply zones.

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Set and Forget supply and demand trading community
  • #7,020
  • Feb 8, 2016 10:59am Feb 8, 2016 10:59am
EJ Bigger picture is down, Weekly suppy in control after daily tf realigned with the bigger picture. price dropped and creacted a supply level in 4hr tf that was triggered..Shorts is the way.
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