Supply and demand forex strategy review

Supply and demand forex strategy reviewSupply and Demand Forex Strategy Review

The Supply and Demand indicator attracts area’s of provide (support) and demand (resistance) on the currency charts. It’s an excellent indicator to arrange for your next trade. Works on all time frame’s for all currency pairs. BUY: In uptrends. expect the currency combine to achieve the availability zone.

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These reversal points square measure necessary as a result of these zones will have an effect on the currency combine once more within the future. If you perceive wherever the combine is troubled, youll be able to change your commerce set up consequently.

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Supply and Demand Forex Strategy Review

The Supply and Demand indicator attracts area’s of provide (support) and demand (resistance) on the currency charts. It’s an excellent indicator to arrange for your next trade. Works on all time frame’s for all currency pairs. BUY: In uptrends. expect the currency combine to achieve the availability zone.

Click Here to Download A NEW Trading Tool and Strategy For FREE

These reversal points square measure necessary as a result of these zones will have an effect on the currency combine once more within the future. If you perceive wherever the combine is troubled, youll be able to change your commerce set up consequently.

Others Searched For

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Forex trading with supply and demand zones

Forex trading with supply and demand zonesHow to properly draw forex supply anddemand zones

Unfortunately, there are no hard rules in how to draw forex demand and supply zones. Think of drawing these zones as more of an art rather than science. A couple things you should keep in mind though:

Make sure the zone is significant: The smaller and short-lived the zone, the less significant or strong it becomes. You want to look for zones that held price for an extended period of time. What determines a period of time to be sufficient also changes based on the time-frame in which youre trading. For example, a demand zone on a 1-minute chart would not need to hold price as long as a demand zone on a 1-hour chart. Also understand that the higher the timeframe, the more significant the demand or supply zone becomes. In our EUR/USD example above, I would consider the third zone (the demand zone) to be more significant than the other two. Price was rejected by this zone several times over the course of many hours

Be careful of wicks: Wicks are a big part of the art over science when drawing your forex demand zones. I prefer to always stay conservative. That means, if Im holding a short position and looking for a demand zone as my price target, I would probably include wicks and target the upper boundary of the demand zone. However, if I was looking to initiate a position I probably would not encompass the wick in the supply or demand zone to ensure Im not entering too early.

The best way to become familiar with forex support and demand zones is to start recognizing them, drawing them out, and noticing how price reacts in real-time.

Forex supply and demand zones at work

Today provided a phenomenal opportunity for those versed and confident in trading support and demand zones. I currently spend most of my time trading GBP/JPY and had drawn the following three zones on the 4-hour chart. Youll notice there are two demand zones and one supply zone:

Last night, GBP/JPY fell through its consolidation range (through the blue line) allowing us to complete the future supply zone. As it fell, the pair tested (and was supported) by the first supply zone on two different attempts. Had I been at the computer, I would have been buying in this zone and targeting the supply zone, expecting to get short once we got there.

Sure enough, price ran up to a bit above 185.00 — just slightly into our supply zone — before reversing back lower again. At this point two things may happen: We may head lower and back into the first demand zone and potentially trade between the supply and demand zones as we consolidate. GBP/JPY may end up going higher, eventually breaking through the supply zone. However, we could also drive back down right through the bottom boundary of the demand zone. In this case our target would be the upper boundary of the second demand zone.

At this point Im favoring at least a retest of the first demand zone and a potential break down to the second demand zone. Markets are precarious right now and GBP/JPY tends to follow them. Overall, however, I expect the uptrend to continue. When that happens is anyones guess, but until then Ill be playing all the support and demand zones I find along the way.

I hope this was helpful. Please let me know if youd like to see more posts like this.

Supply and demand trading in anutshell

Supply and demand trading in anutshellThis is a private supply and demand trading community were we trade Forex, Shares, Stocks, Metals, CFDs and indexes. A monthly subscription fee is required . You must subscribe before you are allowed to contribute and benefit from the community. Watch this short 15 minutes video that shows how the community works, and how orders are planned way before they are triggered.

Watch this 20 minutes Weekly Live Analysis for Forex majors for the 5th of January 2015 it shows the kind of weekly video analysis that will be posted at the community each week together with a second video on cross pairs for about 20-25 pairs. The trade setups will be covered and updated in the community after that.

Watch this 10 minutes US shares live trade setups (14th July 2015) . it explains in detail the rationale behind for 3 live trades recently triggered on Apple, Schwab and TimeWarner Daily demand zones.

Watch this 2 hours live webinar analasyslasys on Indian Shares it shows how the basic supply and demand rules set are applies to Nifty, Bank Nifty, Marksans, Idea, Maruti, Coal India, Amara Jabat and other indian shares.

Please review my bid

Please review my bidPlease Review My Bid/Ask Strategy

Please Review My Bid/Ask Strategy

Please Review My Bid/Ask Strategy

Hello Traders,

Would some of you experienced traders please provide comments on my bid ask strategy that I have compiled using Excel.

Let me give you a brief explanation.

The strategies goal is to help me determine who the major players are at any given moment by looking at the bid/ask price and bid/ask size for the stocks of the DJIA.

The following caption was taken from tradetrek

Bid/ask prices are always posted with corresponding bid and ask sizes, which serve as measures of the strength and depth of the bid/ask prices. They tell us about the supply/demand pressures on a stock at a given moment. We can summarize important Bid/Ask size concerns as follows:

A large bid size indicates a strong demand for the stock.

A large ask size shows that there’s a large supply of the stock.

If the bid size is significantly larger than the ask size, then the demand for the stock is larger than the supply of the stock; therefore, the stock price is likely to go up.

If the ask size is significantly larger than the bid size, then the supply of the stock is larger than the demand for the stock; therefore, the stock price is likely to drop.

Because bid/ask prices and sizes change quickly in real-time, supply and demand also change quickly in real-time. Experienced traders always pay very close attention to the bid/ask sizes of a stock to monitor the supply-demand dynamic. Short-term traders usually buy a stock only when the demand is higher and sell a stock if demand suddenly becomes lower relative to supply.

With that said I have compiled a spreadsheet which does the following for each stock and makes a tally of the numbers.

The formula is as follows:

If bid prices for the majority of the stocks of the DJIA are greater than ask price and bid size is greater than ask size and the current prices are greater than previous prices for the majority of the stocks then the underlying sentiment is bullish.

For bearish sentiment the formula is as follows:

If the ask price for the majority of stocks of the DJIA are greater than the bid price and ask size is greater than the bid size and the current price is less than the previous price then the general sentiment is bearish.

The overall aim is to assess the bid/ask prices/sizes of the stocks of the DJIA to trade the mini-dow. So if I see large bidding in for the 30 stocks I will go long YM (mini-dow).

But there is one thing I haven't included in the formula which is volume.

Can someone please first comment on the strategy, secondly let me know if I should take volume into account (I think not because I'm already looking at bid / ask sizes, but would like you're suggestions.

Sorry for the bad grammar.

Core principles

Core principlesCore Principles

My strategy is based on pure supply and demand trading. After a long journey of searching for the holy grail, i realised, that it does not exists. Price action was the way to go and i studied different patterns for reversals and continuation of trends. Fortunately i found material from Sam Seiden from Online Trading Academy. He opened the door for learning supply and demand on a price chart. Why is it so interesting (i would rather say enlightening)? Because its real, undelayed and clear. You will see, how clean your charts are, when using this trading approach.

What is supply and demand?

Demand is, if you want something to buy. Supply is, when you are selling something. When supply and demand meet, price is in equilibrium. Nothing magical here.

How to apply supply and demand to trading?

Wen know, that price is in equilibrium when demand meets supply (or vice versa). What happens to price, if its in equilibrium? Guess what, nothing! If there is enough demand for the available supply, then we speak of a balance. Price stays the same. But it gets more interesting for us traders, when supply and demand are not in balance. In that case, either demand exceeds supply or supply exceeds demand. We speak of an imbalance. Lets see, how it looks on a picture you find in most economy books:

[picture supply demand price change]

As you can see, price changes when imbalance occurs. Not only it changes, it has to change. Why? Best example: ebay auction: You bid on something that you want to have by any means. Problem: competition. If someone other wants that item equally, he will also bid. You both are in a competitive fight, because there is only one item to sell. Demand exceeds supply. What happens to price? Right, it will raise until someone of you will stop bidding.

The other side of this illustration: if there are plenty of the items on ebay, you wont have the feel to miss the opportunity. So you dont bid, if someone else has bidden too much for your taste. You wait until you can get the item for your desired price. In this case, supply exceeds demand. Price drops or stays low, if nobody bids.

We as traders can only profit from imbalances. How do we do that? By identifying spots of price imbalances.

How to find imbalances on a price chart?

Basically we just need to look for big moves. If prices moves away in a strong fashion, like some big engulfing bars, we have an imbalance. If the price rallied up, demand exceeded supply at that level. If price dropped down, supply exceeded demand. Here are a few pictures of marked imbalances.

[pictures supply demand spots]

By the time you will notice, that not all supply and demand spots are tradeable, at least they are not very likely to result in a profit. Thats why you should use some common sense criteria to filter out bad spots. Sam Seiden calls them probability enhancers, which i will summerize now.

How to quantify supply and demand zones?

how strong was the imbalance (how far price went away from the zone)? this is the initial profit margin, should be multiple times the zone (like 3R+)

how much time did price spend in the zone before moving away? good zones have 2-6 candles

is the zone high/low on the curve or is it inside (continuation pattern)? extremes over CPs

how often did price retraced to the zone? best, if first time on entry

how did price approach the zone (how it is retracing to the zone)? fast arrival = fast departure

did price gapped into the zone? best form of arrival

did price gapped away from the zone (creating imbalance)? yes = zone is very strong

did the zone take out any other zones? good for trending markets

does the zone have the potential to be a trap? look for support/resistance levels, trendline breaks, double bottoms/tops, etc. where novice trades might have their stops

how much time passed since retrace? usually more is better

was the zone created in a time of high activity trading? be aware of currency related sessions, especially when trading lower timeframes

how are the candle wicks in the zone? smaller = better (according to trade direction)

Do other correlated currencies have also zones formed? Also check US Index if trading USD pairs

Supply and demand

Supply and demandSupply and Demand

As part of your evolution as a trader, one thing you may want to look at is trading simply with supply and demand zones meaning..no macd, no stochs, no fibs..just one moving average for an objective view of trend. That may go the way of all indicators as well as I progress. This is something that I have undertaken a while back and am quite happy with the strides I have made. Ive taken a few trades, some I shared with a few close blog viewers but this is the first time I recorded one.

There are many ways to define supply and demand levels. What may be a level for you may not be one for me. It is really how you determine what a level is. Regardless, trading supply and demand levels can truly give you high reward, high probability and low risk type trades. It is not unusual to see a 20 pip stop and gains 3-5 times that. Sometimes, much more.

The trade you are about to see is a short on the EURUSD during a strong up move. Some may say that is crazy and many of the trading books say that as well. The problem is, most traders fail. Most traders do what most other traders do. They do what the books say. Let this thought sit. if most traders fail and you are doing what the most do, what is likely to happen to you? My post trade analysis of this wasthe higher time frame level, especially on the daily chart, have been met before which can lower the probability that it will hold. The weekly chart was not a stunning supply area. It was more of a drop in price..to some basing action and another drop. Not the best action for a level.

[flowplayer src=eusdoct510.flv width=450 height=300 splash=eusdcov. jpg]

Live Daytrading Strategy Demo this Friday Oct 8 9:30 New York Time!

Supply and Demand

The price of agricultural commodities fluctuates, foreign exchange rates change from minute to minute, interest rates and equity indexes rise and fall. Nothing stays the same. And thats why futures are so useful and so essential to business operations all over the world.

Supply is defined as the quantity of a product that sellers are willing to provide to the market at a given price. When prices are high, sellers are willing to provide larger amounts of their products to the market. It’s human nature. When prices are low, sellers are willing to provide smaller amounts to the market. This relationship between product supply and its price is called the law of supply.

Many economic factors can cause supply to increase or decrease, and that causes the supply curve to shift. But let’s talk real life. When cattle prices are low, there’s not much incentive for cattle producers to provide cattle to the market. If cattle prices rise, so does the incentive to provide more cattle. Other things can happen to affect supply. The price of feed may be low, encouraging more cattle production, or too high, causing producers to cut back on production. Each commodity has its own supply factors, even currency, interest rate and equity stock index products. How much does it cost to borrow money? What are stock prices doing? But supply is only half the story.

Demand is defined as the quantity of a product that buyers are willing to purchase from the market at a given price. When prices are high, buyers are willing to buy less of the product. When prices are low, buyers are willing to buy greater quantities of the product. This relationship between product demand and its price is called the law of demand.

Many economic factors can cause demand for a product to increase or decrease, causing the demand curve to shift. You can imagine how the demand for beef can change depending on its supermarket price or how people feel about eating beef. And it’s fairly easy to see how economic conditions could change the demand for credit or the demand for a foreign currency. Each commodity has its own demand factors.

And the market price?

The price of a product or a commodity depends on the relationship between supply and demand. If the supply and demand curves are placed on the same graph, the point where they intersect is the product’s market price. Based on all the supply and demand factors, this is the price discovered as people buy and sell the commodity or trade futures.

Sam seiden-s supply and demand review

Sam seiden-s supply and demand reviewSam Seidens Supply and Demand Review

Sam Seiden provides more than 15 many years connection with equities, foreign exchange, choices as well as futures buying and selling that started whenever he or she had been on the ground from the Chi town Mercantile Trade exactly where he or she caused institutional order flow. Hes exchanged equities, futures, rate of interest marketplaces, foreign exchange, options, as well as goods with regard to their individual pursuits for a long time and it has informed countless investors as well as traders via workshops as well as every day advisory providers each locally as well as worldwide.

Click Here to Download A NEW Trading Tool and Strategy For FREE

Im some of those individuals who educated along with Sam as well as OTA as well as I personally use supply and demand in most my personal buying and selling, foreign exchange, futures, gives as well as goods. This required me personally some time to obtain regularly lucrative, however happen to be going back 2-3 many years right now utilizing it. I will not state its simple, this seems easy, however its a really delicate method of buying and selling. When you obtain the suspend from it, you will discover this priceless. Among the aha times Id by using it wasnt to visit for that apparent amounts (mainly pivot levels as well as lows) however discover the not apparent types. If its choosing the actual pattern which is commonly the amount created like a move bottom move simply over the actual pivot reduced. If its the switching pattern stage after that to visit 1 degree greater than the pivot higher (price is usually worn out at that time and a lot of halts obtain triggered).

Trading price with supply demand strategy

Trading price with supply demand strategyTrading Price With Supply Demand Strategy

Trading price with supply demand curve is very nice to learning. Basic concept of this supply demand strategy is how we look supply demand area with two line nearest based two lower low or two higher high. We just buy or sell on every low or high from supply demand area in control from smaller time frame like one hour time frame for intraday traders and four hour time frame for swing traders. Here we go some supply demand in control that we can learn together here. Remember strict to the rules on which way kind of traders you are. Swing traders. or intraday traders. Just see details of multiple time frame analysis. so you can know what kind trader you are.

SUPPLY AND DEMAND IN CONTROL

WHAT DEFINES AN UPTREND OR A DOWNTREND AT ANY GIVEN TIMEFRAME?

Each timeframe can have a different trend. Let me define my idea of a trend. Remember it’s just my idea of a trend, it makes sense to me so I’m using it. Does it make sense to you? Use it then. Since we are primarily working with supply and demand imbalances, making a higher higher or a lower low does not necessarily mean we continue on the existing trend.

UPTREND: demand areas are being respected, supply areas are being taken out.

A higher high SHOULD remove previous supply to validate the demand zone You must ask yourself: has the previous supply being removed?

If previous supply is not taken out, I won’t validate the origin of a higher high as demand

DOWNTREND: supply areas are being respected, demand areas are being taken out.

A lower low SHOULD remove previous demand to validate the supply zone You must ask yourself: has the previous demand being removed?

If previous demand is not taken out, I won’t validate the origin of a lower low as supply.

You can use trendlines (these can help to assess trend if you have the right rules). I am not using any lagging indicator to assess the trend, since the only non-lagging indicator I know of is Price itself. I’m doing something much much simpler than that. Ask yourself this question: what type of trading are we doing? Aren’t you trading the supply and demand imbalances you see on a price chart? We want to trade at those areas where the institutions left a trace, where smart money is lurking to hunt you. So if we’re trading Supply/Demand (SD) imbalances, shouldn’t we use the higher timeframe’s SD areas to assess our trend? Remember, buy low in and sell high.

What defines a downtrend or an uptrend?

In a downtrend: supply areas are consistently being respected and demand areas are being taken out

In an uptrend: supply areas are taken out, while demand areas are being respected

THAT SIMPLE. Just look at your D1 or your WK chart and see what is going on with the SD areas in control and decide which direction to trade. Once you know what direction you want to go, locate lower timeframe SD areas with a strong departure, little time at the level, fresh zones, and a minimum of 3:1 profit margin (3 times or more the risk in pips of the zone you’ve taken)

What tells you if a downtrend or an uptrend has started to change or even consider there might be a reversal?

Since we’re doing SD trading, once you supply or demand in control is taken out, it will be showing weakness in that currency pair’s timeframe.

We will consider a trend at any given timeframe has ended IF the trendline that connected the last 2 obvious valleys (uptrend) or peaks (downtrend) has been broken.

If 2 SD zones have been taken out, then we will most likely have the possibility of drawing a brand new trendline for our new direction, thus looking for trades in this new direction, only if there is enough room to the opposing higher timeframe SD area and we are not too high/low in the curve

The break of a trendline does not necessarily mean that retest of a SD zone near or at the retest of the broken trendline will be valid. We need to make sure that price has arrived or is very close to a higher timeframe area, ELSE we’ll have to make for a brand new direction to the opposite side

Do not trade the break of a trendline just because it’s just been broken, we need to assess location in the curve

HOW TO VALIDATE A LEVEL

T he only reason why price moves in any and all markets is because of an imbalance in supply and demand. The greater the imbalance, the greater the move.

A strong move in price away from a level indicates that not all orders were filled. For example, at the origin of a demand level, there are not enough sell orders to fulfil the total amount of buy orders. This is why price moves away in such a strong fashion. When price returns to these levels, the novice traders (those who don’t know about supply and demand) are selling into an area where institutions (professionals) have their buy orders. Institutions and professionals buy to the novices, then there are no more sell orders so price must rise again. The opposite holds true for supply levels. In both cases, the novice traders provide the liquidity the institutions need to get their orders out in the market.

The best opportunities are where we can buy at the cheapest price possible and sell and the most expensive price possible. This is the same in any market. Supply and demand levels on a price chart show all these levels, you just have to learn how to draw them.

Open a price chart, you will see a multitude of supply and demand levels on every timeframe. That doesn’t mean we are interested in trading all of them. Certain levels are more likely to hold than others, you need to have a rules based mechanical methodology as well as making a top down multiple timeframe analysis before you choose the levels you want to trade.

Here some sample pictures below from broken supply demand zone.

Market timing in the extended learning track(xlt)course

Market timing in the extended learning track(xlt)courseMarket Timing in the Extended Learning Track (XLT) Course

There is a brand new format in the Extended Learning Track-Momentum Intraday Trading course. This new format allows us to work together with our students to identify and capture high probability trading opportunities in equities.

Having the opportunity to provide leadership and direction for the XLT program going forward, I would like to share how we have modified the XLT-Momentum Intraday Trading course in order to better prepare our XLT students for each trading day before the market opens.

New Session Times

Previously, XLT-Momentum Intraday Trading sessions started after the stock market opened, which was fine and safe for new traders. With our new format, trading and analysis sessions start thirty minutes before the stock market opens and here is why. It is VERY important that our student-traders set up as many of their day trades in advance as they can. The process that leads to low risk and high probability trading is to first identify support (demand), resistance (supply), and the trend in the SP and the NASDAQ. Once we know where these high probability turning points are in the governing markets (SP and NASDAQ), we then scan for stocks with demand and supply levels that line up with the SP and NASDAQ to help stack the odds in our favor.

Finding Market Turning Points

Step one is to identify high probability demand and supply levels in the governing markets. Let’s take a look at a day last week in the XLT-Momentum Intraday Trading. During a recent session on January 21st, we identified that the SP was going to open just below a supply level. We marked the level with two lines to create a “supply zone”. Given that we now knew where the high probability turning point was in the SP, our next task was to look for stocks with supply levels that also lined up with the SP supply level.

Finding the High Odds Candidates

Below is a chart of Google. After identifying the SP supply level, we found that Google had a supply level that lined up with the SP area. Google was opening well below its supply level but that’s okay. The Google supply level was very ideal. Notice how price initially collapsed from the level. This rapid decline suggests a major supply and demand imbalance at that level meaning many more willing sellers than buyers. In the XLT, we pay close attention to the demand and supply levels that have a rapid move away from them as that means very high probability.

RIMM was another shorting opportunity that lined up with our SP supply. For those who wanted the same opportunity as Google but in a much cheaper stock, RIMM was a perfect choice. RIMM also had a nice profit margin as demand was around $1.50 below our entry point to sell short. Risking $0.50 to make at least $1.50 to our first target gave us an ideal reward to risk of 3:1. The probability of this trade working out was huge because this supply level lined up with SP supply.

Learn, Trade, Learn, Trade…

If you have any questions about this new and exciting program, email me or your Education Counselor. Have a great day.

The two most important pictures on achart

The two most important pictures on achartThe Two Most Important Pictures On A Chart

Online Trading Academy Article of the Week

The goal for most traders is consistent profits, life-long income from speculating in markets. The key word in that sentence is consistent . Anyone can have profitable trades here and there, but do they produce consistent income and profits from trading? I have a friend who day trades the SP Mini and has a winning percentage of around 80% but the problem is, he doesnt make consistent income from trading. Sounds crazy I know, but one loss for him tends to wipe out all of the profits ( hope he doesnt read this article )

Follow up:

In the Extended Learning Track (XLT), one of the Odds Enhancers we focus on for every short term and long term trading opportunity is Profit Zone. Without a path for price to move after we enter a position on the chart, there is no trading opportunity. What we are looking for are supply and demand levels with very little activity between them. There are many supply and demand levels on a chart. Often, there is a very quality supply and demand level on a chart but the problem is, they are too close to each other or there is too much trading activity between them which again means no trade. Typically, we are looking for opportunities on the chart that offer us at least 3:1 reward to risk to the first target. Often we are looking for more but this is a safe minimum to make a trade acceptable to take.

At this point, youre probably wondering what any of this has to do with the title of the article. Let me explain through a trade we took that we found in the Extended Learning Track (XLT). This was a trade in the Russell (TF). Notice the supply level on the chart, shaded in yellow. The supply level is the origin of a strong decline in price and has with it some very key Odds Enhancers that make this a significant level where institutions are likely selling, where supply greatly exceeds demand. The trade was to bet on a downside move, selling short at the supply level to a novice buyer for a potential move down in price. What made this trade work well are two specific things. First was the quality supply level. Second, notice the rally that brought price up to the supply level where we sold short. There was good news, people started buying in a hurry, and price shot up quickly. Notice specifically the big green candles. There is no picture of demand in that rally. This means that when price reached the supply level where we sold short, price was likely to fall just as fast as it rallied because there was no significant demand to stop it from falling. Lets go over these two most important pictures on a chart so that you can start seeing this picture of opportunity also:

Quality Supply and Demand Levels: To identify market turning points and market moves in advance with a high degree of accuracy, you need to be able to know where institutions and banks are buying and selling in the markets. To accomplish this, you must be able to quantify real supply and demand in a market. For this, a solid understanding of the Odds Enhancers is key. To summarize One of the two most important pictures on a price chart is a quality supply or demand level.

A Clear Profit Zone: Just as it is important to identify strong supply and demand levels on a chart. It is equally important to be able to identify areas on the price chart where there is very little supply or demand. These are the areas where price will move quickly through.

Everything you need to see is on the price charts, if you know what youre looking for. If you have been schooled in the theories of conventional technical analysis, you may be blinded by illusions of chart patterns that never really worked for anyone. Have no fear, there is a cure. Remove everything from your charts but price and price alone. Next, read next weeks article and I will take things back to basics and help you identify real demand and supply on price charts. My hope is that todays little nugget of information helps you achieve the consistency youre looking for.

Have a great day.

Related Articles

Supply,demand and time

Supply,demand and timeSupply, Demand and Time

Online Trading Academy, Chief Education, Products, and Services Officer

One thing I have paid close attention to in my many years of writing articles is making sure I did not spend much time writing about concepts and strategies that everyone else writes and talks about. If I did, there would be no point in reading the article. To accomplish this, however, means suggesting ideas, concepts and strategies that sometimes fly in the face of conventional wisdom. What I have found over the years is that simply questioning anything conventional often exposes a flaw and most importantly, opens the door of opportunity you never would have found had you not questioned the conventional thought or idea.

In this piece, lets take a look at the way conventional Technical Analysis teaches everyone to identify key support and resistance levels for the purposes of timing the markets turning points, in advance. Technical Analysis books tell us when looking for key support (demand) and resistance (supply) levels, we should look for areas on the chart that have plenty of trading activity and heavy volume. They strongly suggest we should look for support and resistance levels that have many candles in the area and above average volume. This type of level on a chart to the eye does look attractive, but is this the best answer when attempting to identify key support (demand) and resistance (supply) levels? Does this logic lead us to the best and most consistent turns in the market? To begin to answer this question, lets think the simple logic through for a moment and then come back to conventional thought.

To make a long story short, markets turn at price levels where supply and demand are most out-of-balance. In other words, the more out-of-balance supply and demand is at a price level, the stronger and quicker the turn in price. So, how do we identify these big levels of imbalance on a chart? When you think the simple logic through, I think you will find that actually, conventional Technical Analysis has it wrong and the real answer is actually the opposite. We just concluded that the most significant turns in price will happen at price levels where supply and demand are most out-of-balance. Think about it, at price levels where supply and demand are most out-of-balance, will you see lots of trading activity or very little trading activity? If you said very little, you are correct. This is because of the big supply and demand imbalance. At that same price level, you have the potential for the most activity, but the reason you dont get much trading activity is because all that potential is on one side of the market, the buy (demand) or sell (supply) side. So, what does this picture look like on a price chart? Its not many candles on a screen like conventional Technical Analysis suggests, its actually very few. Furthermore, this picture is not typically going to include above average volume, its going to be very low volume most of the time.

The example below shows exactly what I am suggesting in this piece. Lets begin with Supply level 2. This is a level with many candles in it that appears to be very attractive because its such a big level with many candles in it. Price also falls sharply from that area, suggesting its a strong supply level. Conventional Technical Analysis loves levels like this for turning points. Next, notice that when price revisits this level over to the right, it doesnt turn and fall from the level like we would expect. Instead, it bases sideways for a bit and then breaks up through it. How can this happen if this is such a great supply (resistance) level? Well, whether this is a great level or not depends on your point of view. In the Extended Learning Track (XLT), we would never expect prices to fall from this level. In fact, our rules have us ignoring a level like this. To us, this is not a supply level at all. The reason is because price spent too much time which means supply and demand are not likely that out-of-balance. Again, if the supply and demand equation was that out-of-balance at supply level 2, would price be able to spend so much time at that level? Shortly after that breakout and failure of supply level 2, price reaches supply level 1. Most people would ignore this level because it only has a few candles in it; its hardly even noticeable. They would also ignore it because conventional Technical Analysis conditions people to ignore these levels (which is good for us). Ask yourself why price could only spend such a short amount of time at that level. The answer is because supply and demand were out-of-balance in a very big way. If supply and demand were not so out-of-balance at that level 1, price would have spent more time at level 1. Given that price spent so little time at that level, we conclude that there is a big imbalance and sell short when price retraces back up to that supply level (circled area on chart). When you do sell short at supply level 1 like I promote so often in the articles, youre selling to a buyer who thinks this market is worth buying at that supply level. Maybe that buyer read the trading books and ignored that supply level because the books say its not a key level due to such little activity. As you can hopefully now understand, that lack of activity is what makes it such a strong supply level.

This edge building nugget is one we pay close attention to at Online Trading Academy. While there are other important Odds Enhancers that make a supply or demand level quality or not, the Odds Enhancer we call Time is important enough to deserve an article all to itself. As I have said before, dont be afraid to question something everyone believes to be true. If something doesnt make logical sense, there is probably a better answer that does. By thinking the simple logic through, you will always arrive at truth.

Hope this piece was helpful, have a great day.

What is trading

What is tradingWhat is trading?

Everybody is familiar with the term “trading”. Most of us have traded in our everyday life, although we may not even know that we have done so. Essentially, everything you buy in a store is trading money for the goods you want.

At tradimo you will learn how to trade the financial markets online – but exactly what is online trading? This article will give you an understanding of how trading can be defined and how online trading works.

The principles of trading

The term “trading” simply means “exchanging one item for another”. We usually understand this to be the exchanging of goods for money or in other words, simply buying something.

When we talk about trading in the financial markets, it is the same principle. Think about someone who trades shares. What they are actually doing is buying shares (or a small part) of a company. If the value of those shares increases, then they make money by selling them again at a higher price. This is trading. You buy something for one price and sell it again for another — hopefully at a higher price, thus making a profit and vice versa.

But why would the value of the shares go up? The answer is simple: the value changes due to supply and demand – the more demand there is for something, the more people are willing to pay for it.

Increase in demand means an increase in price

Now let's say that fifteen people enter the market and they all want apples. To make sure that they will actually get them before the others do, they are willing to pay more for them. Hence, the market stall owner can put the price up, because he knows that there is more demand for the apples than supply of them.

Futures trading course-online trading academy xlt

Futures trading course-online trading academy xltFUTURES TRADING COURSE - ONLINE TRADING ACADEMY XLT

The XLT – Futures Trading course blends two types of sessions in a very structured environment. Lesson sessions make up approximately 40% of the course curriculum. Each lesson focuses on teaching a specific concept that continues your trading education. Trading and Analysis sessions make up the remaining 60% of the course curriculum and apply the knowledge you have gained in live market conditions. Trading and Analysis sessions are conducted during active market hours with the purpose of identifying real trading opportunities using a very objective rule-based strategy.

Forty-two sessions are delivered over a 12-week period, with each session lasting approximately 2 hours in length. Lesson sessions repeat every 12-weeks, providing solid learning reinforcement. Each Trading and Analysis session is unique as the instructor and students, together, proactively and dynamically respond to live-market conditions.

Understanding Who is on the Other Side of Your Trade

Psychology

Week 2: Odds Enhancers: Identifying High Probability Turning Points

Strength of a Level

Stock / Bond Relationship

Supply and Demand Curve Extremes

The “Trigger”

System Building Traps

Week 10: Indicators and Oscillators and Candlestick Patterns

Identifying Turning Points with Oscillators

Adapting Oscillators for Trends

Use of Oscillators to Confirm Supply and Demand Entry Points

Use of Indicators to Confirm Supply and Demand

Moving Averages as Demand and Supply

Trading the Trend with Moving Averages

High quality forex trading

High quality forex tradingMy SDH1 trading system - part 1

Supply Demand trading system based on hourly timeframe

I call this SDH1 system

SD stands for Supply Demand and H1 for hourly timeframe. This is one of the two systems I trade.

I developed this system based on the following resources, and here I'd like to give credit and say thank you to people who shared their knowledge and materials for free:

Sam Seiden from Online Trading Academy. He is featured on fx street education here .

His very good webinar on Supply and Demand here .

Kenneth Lee member of forex factory.

His thread with free supply demand ebook with tens of charts examples (exactly how trading courses and system descriptions should be), here on his thread .

Alfonso Moreno member of forex factory.

His thread on supply demand set forget trading, which was an inspiration for my method for trading end-of-day as I have a full time job, can be found here .

PhAnTi member of forex factory.

His thread and ebook is here .

There are many others who directly or indirectly contributed to my trading system development, including Mike and others from james16 thread and others. Thank you.

Trading System

First, let me clarify what I mean by a trading system . I could also call it a trading method, or approach, or strategy, or "my way". It is not a mechanical algorithmic system. It is a system (method) that requires discretion and flexibility. I will continue calling it a "system".

The flexibility is primarily with an assessment whether or not to trade the setup.

The hard-coded non-discretionary elements of my system include initial stop loss placement, position sizing method, entry method (order type), entry setup (what triggers the order entry and order fill).

System foundation

I am using the Supply Demand zones . These are places where there was a supply vs. demand imbalance, which we see on chart by the price moving away fast and far from the level, after a brief consolidation. (I will not repeat others who explained it very well, please refer to links in the credits section)

I trade after hours, end-of-day only . I spend 1-2 hours on forex between 20.00 and 23.00 CET (Central European Time, i. e. 6 hours later than U. S. EST, a NY close at 6 pm local time is my midnight).

I identify supply and demand zones on D1 chart and on H1 chart . Please refer to Supply Demand materials to learn more on how to do this. I plan to provide chart examples, too.

I trade forex majors . About top 10 pairs.

Risk management principles . I always set a hard stop loss order at a broker. Stop loss distance is driven by the setup chart structure (more on that later). Position size is driven by how much money I am willing to lose on this trade (about 1% of my trading account). I never move the stop loss against my position. I never average, i. e. never add to a losing trade. I never hedge my positions. [I am not saying these things are bad. I know people claim to be successful using them. But I choose not to.]

This completes the foundation part.

In my next post I will cover the trade setup . entry criteria and entry method (order type) and exit criteria.

To be upfront I will share a very short summary already now . my entry method is a limit order just above the demand zone on H1 (so entry setup is price touching the demand zone), stop loss is just below the other edge of the zone, and take profit is around two times stop distance (2R). [reverse for short, i. e. entry sell limit just before the zone's low, SL above the zone high]

EDIT: here is a link to part 2.

Xlt odds enhancers-the key to finding turning points

Xlt odds enhancers-the key to finding turning pointsXLT Odds Enhancers - The Key to Finding Turning Points

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The key to low risk consistent profits in trading and investing is knowing where the next turn and move in a market is going to be, before it happens. Those who can do this with a very high degree of accuracy own a skill set that allows them to attain low risk profits in any market and any time frame. So, how can we predict where the next big move in a market is going to begin? The answer is not that difficult if you use simple logic. Every turn in a market happens because of a supply and demand imbalance at a specific price level. The greater the imbalance, the stronger the turn in price. So, to find the next big turn in price and market move, we must figure out where the greatest supply and demand imbalances are in the market. If you agree with this, then there is one question left. What does the picture of a supply and demand imbalance look like on a price chart?

You see, this is where most people stumble. They don't go down the simple logic path we just went through. Instead, they buy a trading book that teaches them conventional Technical Analysis which is a very flawed school of thought. Or, they dive into the world of conventional Fundamental Analysis which has you buying when the news is good (at a high price) and selling when the news is bad (at a low price) which is a disaster for you, but a gift for those on the other side of your trades and investments. Let's get back to a proven path to profits which is the simple logic behind how you make money buying and selling anything which is buying low (at demand or wholesale) and selling high (at supply or retail). To find these low risk turning points at price levels where supply and demand are out-of-balance, we must know precisely what the picture of an imbalance looks like on a chart. I have written about this many times before in prior articles, but after writing about this for years, I still receive one common question which is: "I understand why you chose the supply or demand level in your chart, but why did you ignore the others?" Knowing the difference between a real demand or supply level and one that is not is the most important part of the trading puzzle. To us at Online Trading Academy, we have a simple, yet very specific set of criteria that helps us determine a quality demand or supply level vs one that is not. We call this set of criteria "Odds Enhancers." In the articles I write, I typically go over two of them on a regular basis. In the Professional Trader class, we go over four "Odds Enhancers." In the Extended Learning Track (XLT) class, we go over the remaining four and that completes the list. The Odds Enhancers have one purpose: To train your eye to identify a key demand or supply level (market turning point) and train your eye to know the difference between a key level and one that is not a level at all.

Let's take a look at an XLT trade from last week that illustrates what I am talking about. The chart below is a five minute chart of the SP. In the early morning, price began to decline. When I looked to the left, I saw what would appear to many people to be many demand levels on top of each other (circled areas on chart). Many people would look at those circled areas and call them demand (support) levels and likely buy when price revisited them on the decline. This depends on your definition of demand (support). To us, those are not demand levels; they don't meet the criteria for a quality demand level based on our "Odds Enhancers." Therefore, I would not even call them demand. However, the level at the bottom had enough "Odds Enhancers" to qualify it as strong demand. Which Odds Enhancers and why are beyond the scope of this article. And, when I go too deep into Odds Enhancers in articles, XLT members send angry emails as they feel I may be giving away their edge which I certainly understand and respect that.

If you can clearly see the difference between the demand level I bought at vs the other areas I have circled, you're doing very well and have an edge needed to succeed in this ever competitive game of trading. If you don't, be careful putting your hard-earned money at risk in the markets. Below are some Odds Enhancers to consider that helped qualify the demand level in the chart for your review and benefit.

Some Odds Enhancers:

1. How did price leave the level

2. Time at the level

3. Levels on top of level