VingTsunKuen
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First of all i would like to stress out the obvious.
This is not some new and revolutionary idea that came to mine mind.I have learned it thanks to Mr.Sam Seiden.
This concept lives from time of Adam Smith if i recall good.
Although it is nothing new i think that concept of supply and demand is the backbone of all free markets.
If we do not have supply and demand on certain market,price simply would not move because no one is buying or selling.
So we can not see order flow on FX,right?WRONG!
Candles that are printed are footsteps of buyers and sellers.
Note that there is decline in price until certain price level is hit.After that,price just could not stay at the level.
Why?
At the very moment when last sell order was filled there was no one to sell more,so just one thing can happen.
Price shoots up.
Note that later on there is retracement all the way down to demand level.
You can see what has happened.Price could not stay there.
Why?
Because price was (almost) hitting level where we had more willing buyers than sellers,so the price went up again.
Later on you can see that price have broken demand level.If it pulls back to this level it would be nice short entry.
Same thing whit supply.See how price went up.Then we had lack of buyers,sellers came in and knocked price down.Price is revisiting supply level few times and just could not stay there,because there was more willing sellers than buyers at this level.
I am writing this post because understanding of this concept have helped me a lot.I am calling it supply/demand but it is also known as support/resistance.
May be there are some rookies like myself who could find this useful!
Cheers,
VTK
This is not some new and revolutionary idea that came to mine mind.I have learned it thanks to Mr.Sam Seiden.
This concept lives from time of Adam Smith if i recall good.
Although it is nothing new i think that concept of supply and demand is the backbone of all free markets.
If we do not have supply and demand on certain market,price simply would not move because no one is buying or selling.
So we can not see order flow on FX,right?WRONG!
Candles that are printed are footsteps of buyers and sellers.
Note that there is decline in price until certain price level is hit.After that,price just could not stay at the level.
Why?
At the very moment when last sell order was filled there was no one to sell more,so just one thing can happen.
Price shoots up.
Note that later on there is retracement all the way down to demand level.
You can see what has happened.Price could not stay there.
Why?
Because price was (almost) hitting level where we had more willing buyers than sellers,so the price went up again.
Later on you can see that price have broken demand level.If it pulls back to this level it would be nice short entry.
Same thing whit supply.See how price went up.Then we had lack of buyers,sellers came in and knocked price down.Price is revisiting supply level few times and just could not stay there,because there was more willing sellers than buyers at this level.
I am writing this post because understanding of this concept have helped me a lot.I am calling it supply/demand but it is also known as support/resistance.
May be there are some rookies like myself who could find this useful!
Cheers,
VTK
