Supply/Demand Levels and Price Action Confirmation

I have heard sam seiden talk about using price action confirmation. But I am still failing to grasp how to use it with Supply Demand levels. I think I am making more errors than actually increasing my odds. So if anyone could explain how to use price action confirmation that would be great.

Hi MeiHua,

Have u ever read these 3 threads:

http://forums.babypips.com/free-forex-trading-systems/6632-alternative-technical-templates.html
http://forums.babypips.com/free-forex-trading-systems/19076-technical-templates-2-a.html
http://forums.babypips.com/free-forex-trading-systems/29902-technical-templates-continued.html

I believe after reading and understanding it, u will have a grip on supply and demand.

Hi MeiHua,

One thing… there is never 100% confirmation for a trade, so we will always take risks in any trade.

This is a current setup that I might take for a long in E/U (8H chart)…is still developing, the candle hasn’t closed yet… but I am preparing the trade…

1º) we have a fibo/support/pyschological level at around 1.3400
2º) we are in a clear downtrend
3º) there is a pin bar in formation (US session)
4º) the pinbar is bouncing off support
5º) there is divergence forming in RSI (in an oversold market)

Now… I am waiting for the candle of the US session to close… if it holds then I have 3 different possible entries

1º) around 50% of the pin bar candle

the good thing is about this entry is that you reduce the risk because there is less distance from the entry to your SL… the SL can be around 10 to 20 pips below the low of the pin bar, or below other support level. in the downside, you can not be sure if the long will be filled

2º) above the high of the pin bar candle

good thing is you are sure your order will be filled but the distance to your stop loss (higher risk)

3º) wait for another candle and repeat the analysis…

If I take the trade I expect around 100-200 pips profit

This is the way I use PA confirmation around S/R levels

I am NOT suggesting you or anybody else should take this trade…the candles are still forming so I might NOT take the trade

Hope this helps! :51:

these threads keep coming up. but they are so large its hard to digest, espeically since i cant find the 1st thread where it describes Tess and Associates systems. But instead of reading a new trading book this weekend i will get through those threads thanks .

@yunny1
thanks for the chart and breakdown. it was really good to see that. I know there is no such thing as 100% confirmation, i am just looking to put the odds in my favor. I really have looked at your chart and your reasoning. I hope I can start to apply the principles you outlined in my own trading. It gives me one more tool in my toolbox. I really hope over the next few weeks by adding and refining my understanding and system i can recover my losses and turn profitable. Well isnt that always the goal in the end? LOL