On the 15 Minute, we have demand levels all over the place and no supply levels in sight. Clearly biased to the upside for now. I will let you guys score all these levels. It’s the only way you can practice!
Hope this analysis helps 
Same story on EURJPY and here are some nice H4 levels. Note that most of them have been tested once though, but they have bricks upon bricks score 
Nice +33 pip scalp here, with 10 pip risk on the trade, from the 5 min chart. Hope you guys got this. It was based on the M15 demand area I had marked in a couple posts back
Hi TL!!
GREAT to see this analysis from you.
I have MANY questions, and zero time just at the moment…
So… I’ll get back to you over the weekend.
But MANY MANY thanks once again!!!
OK!! So here are the first couple of questions!
The first one is easy…
Can you explain your colour coding for the various energy areas? Obviously, green for demand, red for supply, but you have blue and orange as well. Do you have different colours for different timeframes?
How do you set up your platform? Do you have separate charts for each timeframe or do you show all your energy zones on the one chart? I know it sounds like a newbie question, but it will help in learning what you do!
This one is not so easy…
My “zones” are slightly different to yours. Can you run through an example, step by step to show WHY you place your energy zones exactly as you do?
I think we need to understand EXACTLY which candles to include, and whether to include the wicks or not.
Many thanks in advance!!
I’ll try with the “easy” ones first…
I want to understand the areas for drawing the energy zones first and foremost.
Once I’ve got that fully understood, then I’ll start to learn the scoring!
Hi, Rob. So, let me address all these questions as detailed as possible:
- Orange is what I perceive as weak supply (has been tested multiple times, poor scoring etc.) and blue is what I perceive as weak demand. Obviously, green and red are strong supply and demand. This is just my personal style, you don’t have to imitate me in any way, I just find it easier to use different colours, depending on the strength of the areas. I don’t have different colours depending on timeframes, but that is again up to you. You could mark them differently, I just pretty much know where each one is coming from (and if I don’t, I switch timeframes to remember where an area is coming from). I setup all the energy areas on a single chart.
For beginners, I recommend sticking to just EURUSD and picking three timeframes, each on a separate chart with it’s own energy areas marked up. You need :
A. a [B]trend timeframe[/B] (daily chart for me),
B. a [B]decision timeframe[/B] (H1 for me) and
C. an [B]execution timeframe[/B] (M15 for me).
I am a little flexible with these and sometimes switch to an M15 for decision and M5 for execution, but [B]keep it simple first[/B]. Now, the trend timeframe is for determining where price is on the supply/demand curve and which direction has the best odds (up or down?). The decision timeframe is used to find areas that can help you trade in the trend timeframe direction, i.e. if your trend timeframe hints that price is in a good uptrend, you will look for strong demand areas on the decision timeframe.
Once you spot your areas of interest on the decision timeframe, you will have to determine the method of entry on each area:
A. [B]limit[/B],
B. [B]tight limit[/B] or
C. [B]stop order[/B].
A. A limit order means that you just place a pending limit order so that you are in the trade as soon as price touches the area (minus the spread). This is recommended in strong trends, for strong areas and it has the advantage of getting you in most trades (you won’t miss many opportunities). The disadvantage is a bigger stop loss, hence more risk on the trade.
B. A tight limit order means that you place a pending limit order somewhere inside that area, to tighten up the risk (stop size). This is recommended in weak trends, weaker areas or times of high volatility/momentum/news reports. The disadvantage is that you will miss some opportunities (when price barely touches an area and quickly reverses). The advantage is a smaller risk per trade (tight stop).
C. A stop order is when you wait for price to get inside an area (you monitor it from the execution timeframe) and then place a STOP order so that you get filled if and when price moves back out of the area (plus spread). If it first goes through the entire area before coming back, you remove your stop order and don’t trade it anymore, because the energy was absorbed. This is recommended for weak levels and/or high volatility. It can get you out of some bad trades, but you will also miss a few opportunities (in cases where price doesn’t go in the area much and reverses before you get the chance to enter). The risk/stop loss size will be the same as for a limit order.
B (tight limit orders) is something that we haven’t discussed a lot and this gets us into your second question there (how to exactly determine the areas). So, let me break this down using some charts, where I analyze the same DAILY SUPPLY area you marked in your example:
As you can see, the actual energy is inside the entire consolidation area (which has to be the origin of a rally or drop in price). It includes wicks on both sides. [B]If the move originating from this area is strong, the first test usually occurs when price touches this wide area[/B], as you see happened here. I call this the “greedy” method of determining residual energy. We include as much trading activity as possible in the area.
Now, even though that is the entire “equilibrium area”, we can see where most of the trading activity happened. Where did price spend the most time inside this big consolidation that we just found? This is the “modest” approach:
[B]We ignore the wicks on the extremity of the area marking our potential ENTRY POINT. We always include the wicks on the extremity marking our STOP LOSS placement (very important)[/B]! The candle bodies mark areas where price spent much time, therefore there is more equilibrium in there. We determine our area by including all (or most) of the candle bodies inside a consolidation area! Let me know if this is clear. This is used when looking for a tight limit entry. Our new entry point for a short here would be much higher than using the greedy approach, therefore we would have a smaller stop loss, smaller risk on the trade. But we would risk missing out on the opportunity (as you see, price initially reversed from the bigger area and was not able to touch this higher one, until last week).
Then there is the third and most aggressive way of tightening up an area, where we just consider the wicks. I call it the “humble” approach and I used it mostly when there are big wicks, so the area would be just too big if I include the bodies as well. Post continued below (forum doesn’t allow me to add so many images in just one post):
Since price was way into this daily supply area, I tightened it up as much as possible to see what “juice” we still have in there :). That’s why my area was a bit different than yours (you were using the greedy approach). This humble area is almost absorbed as well (only 7 pips left until we get past it), so after we go through it, I will no longer keep it on the chart. I hope this clears up your questions? Let me know
That is correct for the “modest” approach (see posts above). The greedy approach would also include the wicks on the other side and the humble approach would tighten the zones even more, by ignoring the candle bodies and including just the wick side.
Hi TL!
MANY MANY thanks once again!!
I really appreciate you spending so much time explaining this. And the way you explain is excellent - very clear and concise!
Time to do some more studying!! And once I’ve got how to identify the energy zones totally square in my head, then [and only then!] I will start learning about the scoring system!
Thanks once again!
Hi, guys,
A little quiet here lately. Sorry for the lack of updates, I just haven’t traded much yesterday, I didn’t see anything nice across the board. Nothing really nice right now either. I am just trying this scalp trade on the USDCAD:
Hi guys!
I’m a newbie here.
After friday’s breakout the price is ranging in the 1.343 - 1.3474 area. Here is EUR-USD S&D zones for the current moment.
Not sure if this correct or not, TL how do you think?
Hi there. Welcome to the thread!
You got it right. Great chart! Here is mine:
The empty rectangles are areas that have been tested one or more times already. If we break down below the demand area you marked yourself, it will most likely drop to 1.3366, but we might as well break to the upside and there isn’t much in the way of price on the daily chart until we get to above 1.40. Right now, I’d prefer to either let price break to the upside and then trade the newly formed and untested demand areas or let price break to the downside and trade the demand areas lower on the curve (like 1.3366 - 1.3355).
Meanwhile, it looks like I’m going to get stopped on my USDCAD long scalp. It was indeed an aggressive long, betting on the formation of a new demand area. The next area of interest would be below 1.0032.
Sure. Sooner or later we’ll see the breakout. But until then, I’ll try yo trade the range.
We bounced from a second test of the area I traded last friday (at first touch). Didn’t get the chance to get on board this long trade, because I was expecting price to go a little deeper inside the level and give me a chance to place a stop order couple pips above the area, to get filled as it moved out. prtonemy, hope you got some pips 
I had the area marked on my chart and was watching it unfold in real time.
However, I didn’t trade it because I hadn’t scored it… Still working on identifying the correct areas 
Wasn’t really a good score on the second touch, but considering the bullish momentum over the last weeks, I would wait for price to go inside the level and get on board as it leaves. However, this time it barely touched and bounced, so I missed it myself :). No worries, this will happen. Just look for other opportunities.
