Supply and demand in a nutshell by Alfonso Moreno | Page 366 | Forex Factory

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Supply and demand in a nutshell by Alfonso Moreno

  • #7,301
  • Mar 18, 2016 9:45am Mar 18, 2016 9:45am
Quoting Akt
{quote} Hello aftab. It doesn't really matter. I could give you the usual cliche answer that most give which is "do what suits your personality". I never found that advice useful for me personally because as a beginner trader, I had no clue what my trading personality was (i didn't even know i had a trading personality ) So I will tell you what I do. I look to put all my position in at the lowest price possible for buys and the highest price possible for sells, meaning I enter all my position together. The reason is, if price is going to go my...

thanks you for the reply though .. take on board what you say but still interesting point of view,
  • #7,302
  • Mar 18, 2016 10:11am Mar 18, 2016 10:11am
Hello everyone,
AUD/USD analysis with my view and some food for thought

best wishes
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Be careful what you think because your thoughts run your life..Solomon
  • #7,303
  • Mar 18, 2016 11:21am Mar 18, 2016 11:21am
just a question Akt,

Quoting Akt
You are seeking to identify the nearest FRESH Demand zone below current price and the nearest Supply zone above current price. This represents the CURRENT S/D curve
Quoting panoramia
THE CURVE or THE RANGE
Let me show you a couple of examples of supply and demand in control in higher timeframes, what it's called the curve.
...
There are rules for the curve. ... In a trending market the closes valley/peak/CP will be one extreme of the curve... The opposing zone should be a peak/valley since CPs are not used as part of the curve if it goes against a trend.
You say nearest FRESH SD and Alfonso says SD in control and against the trend no CP for the Curve. Which one is true?

Greets
Joe
  • #7,304
  • Mar 18, 2016 11:52am Mar 18, 2016 11:52am
Quoting JoeMcCool
just a question Akt, {quote} {quote} You say nearest FRESH SD and Alfonso says SD in control and against the trend no CP for the Curve. Which one is true? Greets Joe
Hello Joe.
Thank you for the question.

To clarify for you, the nearest Supply and nearest DZs are not the same thing as Supply or demand in control.

"Control" is a term used in the methodology once price reaches a level.
In the chart of the AUDUSD i posted the monthly SZ "is now in control" because price has reached there.
The demand zone from where price rallied "was" in control when prices were down there. Now that price has reached the monthly supply, the SZ is now in control.
I hope that makes it clearer for you

With regards to whether or not a CP can be used in curve analysis, as i stated in my post, i use them because they represent one of the 2 pictures of demand we have. More importantly, I have tested them.

Not knowing the context in which you have quoted Alfonso, I think what can be said of CPs is that they are Trend "continuation" patterns and so are not best used when anticipating trend "reversals".
The exception to that rule is when the CP is located inside a larger timeframe DBR OR RBD reversal pattern.

For example, price is in a downtrend on the monthly.
Price reaches a monthly demand zone
You are looking to buy albeit counter-trend
You take an "X-Ray" of the monthly demand zone using the daily chart
You find a fresh RBR daily DZ inside the monthly DZ. It is fresh AND it is authentic (being a RBR pattern)
So you now have fresh daily demand inside fresh monthly demand
I wouldn't ignore such a zone.

I hope that helps

best wishes
Be careful what you think because your thoughts run your life..Solomon
  • #7,305
  • Mar 18, 2016 12:15pm Mar 18, 2016 12:15pm
Hi again Joe,
A pictorial to elaborate on the point

best wishes
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Be careful what you think because your thoughts run your life..Solomon
  • #7,306
  • Mar 18, 2016 12:25pm Mar 18, 2016 12:25pm
I love the thread and the concept being taught however I find one thing that eludes me and that is pairing the SD concept with support and resistance. I find many times I have orders placed in or just above the zones (front running) only for the price to reach near the area and reverse at nearest pivot high or low and never actually coming into the supply and demand zone. This problem is especially apparent when trying to get in on a trend, waiting for the pullback only to miss it by a few pips despite having the buffer.

How do you incorporate SR lines(zones) into your trading? Would you be able to offer an entry example?
  • #7,307
  • Mar 18, 2016 12:33pm Mar 18, 2016 12:33pm
Quoting Denden2012
I love the thread and the concept being taught however I find one thing that eludes me and that is pairing the SD concept with support and resistance. I find many times I have orders placed in or just above the zones (front running) only for the price to reach near the area and reverse at nearest pivot high or low and never actually coming into the supply and demand zone. This problem is especially apparent when trying to get in on a trend, waiting for the pullback only to miss it by a few pips despite having the buffer. How do you incorporate SR...
Hi Denden
If i may please,

We are SAD traders on the thread (supply and demand traders).
We use only supply and demand zones

SURE traders (support and resistance traders) use support and resistance lines

There is no pairing the two Denden. They are very different concepts.
Please note i am not saying one is better than the other, they are just different

I am afraid I do not have a clue about support and resistance lines. I also doubt any SAD trader would.

best wishes
Be careful what you think because your thoughts run your life..Solomon
  • #7,308
  • Mar 18, 2016 12:37pm Mar 18, 2016 12:37pm
Hello everyone

Update on the EURGBP trade

the before and after

best wishes

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Be careful what you think because your thoughts run your life..Solomon
  • #7,309
  • Mar 18, 2016 3:25pm Mar 18, 2016 3:25pm
Quoting Akt
Hello everyone Please allow me to share my entry and plan for AUD/JPY M - down. Monthly DZ removed by this month's action W - down D - up Plan of action: Short at or near weekly supply. If short entry is to be taken before weekly SZ is reached then the entry SZ must be high on the weekly curve and score high on odds enhancers Please refer to my daily chart posted below. This is aggressive for me because I would usually prefer for the zone to be within the weekly one but this zone fulfilled all my rules so always I have to take it. Outcome irrelevant.{image}...

Why your entry is 85.617, not 85.213 at proximal line, And Why target is (83.513) less than 2R?
  • #7,310
  • Mar 18, 2016 3:53pm Mar 18, 2016 3:53pm
Quoting Akt
​ If the monthly trend is up and the weekly trend is up but the daily is down then we have to wait for the daily trend to reach the weekly supply zone to "realign" with the trends of the other timeframes before we can short. so no lower intraday timeframe shorts until price reaches one higher timeframe up, regardless of how juicy the zone looks on the lower timeframe. I broke this rule in one of my trades this week and paid for it. lesson learnt. Best wishes
Why do we have to reach the weekly supply to short if d1 is down, W1 is up? Maybe you wanted to say "Daily is down, we have to reach the weekly demand zone to buy." Or I not correctly understood you.
  • #7,311
  • Mar 18, 2016 3:57pm Mar 18, 2016 3:57pm
Quoting conom589
{quote} Why your entry is 85.617, not 85.213 at proximal line, And Why target is (83.513) less than 2R?
Hi conom. I am still in the trade. Just updating everyone.
Be careful what you think because your thoughts run your life..Solomon
  • #7,312
  • Mar 18, 2016 4:03pm Mar 18, 2016 4:03pm
Quoting Akt
Hi again Joe, A pictorial to elaborate on the point best wishes{image}
Thanks answering the question but i like to get sure about it,
i knew about the terms in control and fresh. For sure we cant ignore any zone (especially located in HTF Zones). I dont have HTFs like 4MNs or higher right now. Your RBR is in control and if we get an OHLC candle above it than its not fresh and DBR would be the curve, right? There is probably not much difference in trading at this case. But here
Quoting Akt
{image}
we would be very high considering just DBR for curve and this put us more aggressiv in a sell direction.
Hope you get my point. appreciate your testing and also Alfonsos. Just confussed you telling different things than Alfonso. At the end i have to test is by myself
Maybe Alfonso want to comment.

Greets
Joe
  • #7,313
  • Mar 18, 2016 6:06pm Mar 18, 2016 6:06pm
Quoting conom589
{quote} Why your entry is 85.617, not 85.213 at proximal line, And Why target is (83.513) less than 2R?
Hello Conom
Not sure where those numbers came from

My entry was at the proximal line, @0.78701.
As stated, i am still in the trade but managing it as per my exit strategy
That's a topic for another day

best wishes
Be careful what you think because your thoughts run your life..Solomon
  • #7,314
  • Mar 18, 2016 6:13pm Mar 18, 2016 6:13pm
Quoting conom589
{quote} Why do we have to reach the weekly supply to short if d1 is down, W1 is up? Maybe you wanted to say "Daily is down, we have to reach the weekly demand zone to buy." Or I not correctly understood you.
To answer your question Conom,
it is the rule of realignment that is at play in the context I described in your quote
Alfonso does a fantastic job outlining this rule in his videos

Simply put,
Monthly up
Weekly up
Daily down - meaning the daily trend is out of alignment with the other larger trends

We can short daily supply zones until we get low on the weekly and monthly curves where we then expect the demand zones in these time-frames to start acting against the selling on the daily and eventually over power the daily sellers with buying from the weekly and/or monthly buyers

I hope that makes it clearer

best wishes
Be careful what you think because your thoughts run your life..Solomon
  • #7,315
  • Mar 18, 2016 6:17pm Mar 18, 2016 6:17pm
Quoting JoeMcCool
{quote} Thanks answering the question but i like to get sure about it, i knew about the terms in control and fresh. For sure we cant ignore any zone (especially located in HTF Zones). I dont have HTFs like 4MNs or higher right now. Your RBR is in control and if we get an OHLC candle above it than its not fresh and DBR would be the curve, right? There is probably not much difference in trading at this case. But here {quote} we would be very high considering just DBR for curve and this put us more aggressiv in a sell direction. Hope you get my point....
Hi Joe, i am not sure I understand your question. So to be sure can you post a picture describing your question
I would be glad to give you my view if it helps clarify things for you.
As i have said, my intention is not to confuse anyone, God no.

best wishes
Be careful what you think because your thoughts run your life..Solomon
  • #7,316
  • Mar 19, 2016 7:01am Mar 19, 2016 7:01am
Quoting Akt
The Curve{image}
Hi Akt,
I think it is a very good idea from you, to summarize again the hole concept of the S & D strategy, from the Identifying of the Zones, the Planning of the Trade, until the Execution and Take Profit.
You should maybe add between the D-Proximal Line (PL) and the S-PL
Many wishes
  • #7,317
  • Mar 19, 2016 7:13am Mar 19, 2016 7:13am
Quoting Akt
Hello everyone, continuing on Top down analysis.... Continuing on the Curve for a little bit longer. Once you have identified the nearest fresh demand below price and the nearest fresh supply above price the next step is to decide what the most appropriate action is for you as a trader to take. To be able to make this judgement, you need 2 things First where is price relative to the SZ above and demand zone below on this curve chart? Close to or at Supply most appropriate action (which will be taken on the lower timeframes) is to exit longs and...
I cannot see where the price is on your charts
  • #7,318
  • Mar 19, 2016 7:50am Mar 19, 2016 7:50am
Quoting Akt
Hello everyone, AUD/USD analysis with my view and some food for thought best wishes {image}{image}{image}
On the MN chart first

  1. First of all your SZ is not qualified because of the infringe of the Rule: Zone-Width > at least 1:2 Departure Leg until turned up

If I am wrong, please explain me why. I am here to learn, not to criticize. I will come later back with the other TFs and with my charts

  • #7,319
  • Mar 19, 2016 8:00am Mar 19, 2016 8:00am
Quoting Akt
Hello everyone, AUD/USD analysis with my view and some food for thought best wishes {image}{image}{image}
Please, draw exactly your 2 S-Zones taken out on the W1 chart. I think the second S-Zone is not a valid one
  • #7,320
  • Mar 19, 2016 8:24am Mar 19, 2016 8:24am
Quoting lakis071051
{quote} On the MN chart first First of all your SZ is not qualified because of the infringe of the Rule: Zone-Width > at least 1:2 Departure Leg until turned up If I am wrong, please explain me why. I am here to learn, not to criticize. I will come later back with the other TFs and with my charts
Hello Lakis
Thanks for the question.

This is one of the nuances of the methodology.

On the curve time frame, the need for a 2:1 drop is not an absolute requirement as it is on the trading time frames. It is good to have but not a "must" have on the curve time frame.
Your main interest on the curve time frame is to identify a large drop in price above current price and trace it back to its origin to get your SZ

If this same zone were on your entry time frame then yes, you need to be more strict with the minimum 2:1 rule.

With this nuance, all it means is you should not set and forget in the zone, these type of zones that do not meet the minimum 2:1 requirement must be taken as confirmation entries (more on confirmation entries at a later date).

Let me show you another example on the same AUDUSD of where a SZ did not meet 2:1 and you'll see what happened.
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Best wishes
Be careful what you think because your thoughts run your life..Solomon
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