Quick question about supply and demand entries

[ash2w]

Hi guys

Supply and demand zone question."
if you look at the picture the second black circle shows that it only touched inside the zone before ralllying up!
. the question was how would i know to trade that zone as it touched inside and now wait for it to enter like the previous cirlce? thanks in advance

 

[bbmac]

there is no pic attached to your post ?

 

[ash2w]

there is no pic attached to your post ?

whoops my mistake!
sorry for the big picture im new to this lol. just uploaded it now.

 

[bbmac]

A previous swing lo zone was where the 1st circle is located on your chart is generally the difference between the lowest candle open/close and the lowest candle wick of the fractal swing that creates the previous swing lo zone or previous price pivot as others call it...ie a potential support zone if tested again from the topside in the near future. If tested in the near-future (ie for me whilst you can still see from where it began on the chart, ie the initial swing lo/lo's that created it on that t/f, ) it may see residual demand ie a further imbalance of demand/supply that results in a price rise again from it...this is basically what happened here.

Price has a tendency to test deep in these zones although no always so if you get a set-up in a shallower part of the zone, as you describe, ie price just skirts the top of it, and the set-up is good - ie what you require - then trade it...the importnat thing being your stop which should probably initially be under the potentialk support zone - you can then move it up as you see fit should price indeed rise from the zone.

Where a near-term previous swing lo zone co-exists with such on a higher t/f, ie on that higher t/f (s) too it is also an obvious near-term previous swing lo zone - this can add to the potential strength of the zone in see-ing residual demand there if tested again from the topside. Indeed the zone on that t/f may be wider due to the candle formations re point above in 1st paragraph about how they are plotted/drawn.

G/L

 

[oiltanker]

see sam sieden vids on fxstreet archive section

 

[ash2w]

Bbmac thank you very much it's helped me out a lot. Now I'm sorry if you have covered this but I'm out shopping in Tesco so I cannot take it all in lol but for bigger timescales it shows better but what if I wanted a small pip take ( on smaller time framEs) judging from the previous zone entry and market totake it as soon as it hits the zone

 

[Bloodhound]

Bbmac thank you very much it's helped me out a lot. Now I'm sorry if you have covered this but I'm out shopping in Tesco so I cannot take it all in lol but for bigger timescales it shows better but what if I wanted a small pip take ( on smaller time framEs) judging from the previous zone entry and market totake it as soon as it hits the zone

Hopefully this will help.

 

[Shakone]

There's no straightforward answer to what you're asking.

You identified an area it may turn. That's all there is. It may turn there, it may not. There's no sure fire way for knowing it will turn, or that it will turn at the top of that zone or at the bottom, or not at all.

So if you want to play that game, you identify the zone, and then look for a way to enter within that zone, that is low risk and has a good chance of working.

 

[ash2w]

That's cleared everything up I would like to thank you so much for you help. Hopefully in time with greater knowledge /experience I can help like for have would like to specially thank bbmac as his long reply and helpful photos worked wonders for my brain!

 

[Bloodhound]

BTW - I have sent you a PM which I'm not sure you have seen yet.

 

[ash2w]

[/IMG]

it is 4 hour aud/cad - 12/10 first entry and entry today

 

[Bloodhound]

OK - thanks.

Here is one way you could play it. Use your H4 demand and then drill down to H1 to refine the entry.





There are pros and cons to this approach as sometimes you'll get a much lower risk entry and others you won't get filled. I guess only time will give you the answer to which is better.

As an aside, are you basing this on any higher timeframe analysis?

 

[ash2w]

[/IMG]i used daily to look at it . so within the zones are we looking for the "rally" point . also would you say that the smaller zone or larger zone would be best to buy? its the eur/usd . 1 day tf

 

[Bloodhound]

Right. First thing. If the daily timeframe is your 'overview' then can you tell me which way the daily trend is going or if it is rangebound? Hopefully you will agree that it is starting to turn down? Would you say trading on H4 you should be looking to go long or short?

Secondly, I know you know about the odds enhancers so why not try scoring that long? As a guide here is a recent EURUSD short which might help.



All the best

BT

P.S. As to which level to buy, would you rather buy a pint at the pub for £2 or £3?

 

[ash2w]

for the eur.usd it does look like it was going down. i would be looking for short entrys. after looking at the odd enhancers i would say the bigger demand zone would be the one as it scored alot higher apart from the "how fast did price move away" question. Would you agree?

 

[Bloodhound]

for the eur.usd it does look like it was going down. i would be looking for short entrys. after looking at the odd enhancers i would say the bigger demand zone would be the one as it scored alot higher apart from the "how fast did price move away" question. Would you agree?

I would go back a step personally and ask myself which side of the market I wanted to be on. If you want to be a buyer then I think your starting point would have to be the weekly timeframe as that is where we can see an uptrend (the daily is in a dowtrend).



Then you could drop to the daily / H4 to get an entry long. There are 2 that I can see and my only reservation with either of them would be that price stalled ahead of the current level which is not great from a R/R point of view and also could show that demand has kicked in early. If demand has kicked in earlier than you expected what are the chances of there still being demand in your zone (put another way - will there still be enough demand in your zone to create enough of an imbalance to drive prices back up?)



It will be interesting to see how this plays out but my bet is that the current demand zone will fail and that we could see a bounce from the lower level. That said, I don't trade these timeframes and I have only given this a very cursory glance.

Does the above make sense?

 

[ash2w]

the first graph you put is a aud/cad but the graph i was looking at is the eur/usd. i am defiantly adding to the list of notes about the weekly tf thanks! With the price stalled, from what ive read i thought that there would be a bi imbalance and the only reason for it stalling is because that area is such a high demand. so, it i did fall into that channel it would make a strong move up??

 

[Bloodhound]

Sorry - my mistake. If you look at eurusd ask yourself the same question. If you are looking to enter using daily zones then, with reference to the bigger picture, should you be looking to buy or sell? What is your bigger picture directional bias?

Regarding it stalling ahead of the level I strongly recommend you watch this video - I think it should answer your question - An Important Rule To Consider When Scanning For Trading Opportunities In Forex . If it doesn't then I suggest you think about what equilibrium and imbalance are in terms of numbers of orders to buy and sell at a particular level of price. Where is the demand and why is it there? If you can't find the answer from that exercise then come back to me and I'll try and explain.

 

[Splitlink]

There's no straightforward answer to what you're asking.

You identified an area it may turn. That's all there is. It may turn there, it may not. There's no sure fire way for knowing it will turn, or that it will turn at the top of that zone or at the bottom, or not at all.

So if you want to play that game, you identify the zone, and then look for a way to enter within that zone, that is low risk and has a good chance of working.

That is my attitude, too. The whole thing is based on best low risk entries, but one has to decide which way to go, first.

OCO trades, perhaps? What do you think?