Price not actually in a great position right now to determine future moves. Price has bounced off the weekly supply so if We look left we see a possible repeat pattern. Price might now break the trend line and fall hard. Checking the monthly kind of confirms this.
You see the large green candle followed by large red candle on the monthly chart bouncing off the supply Zone. That is a pin bar. Clear rejection indicating a move down.
If we want to buy off the trend line this would be the trade to take. However it is high risk. Best to wait on this one.
In simple terms supply and demand zones are areas where price ranges sideways. That is the easiest way to understand it. Why? A range is where buy and sell orders are taking place in bulk. Look at is as price being in balance. When price leaves a range its only because price is now imbalanced .Either supply or demand ran out causing the move away from the range. Price will then move to another zone and range again. This happens over and over. So the zones I mark on the chart are actually all ranges but just on different time frames. Some are not visible on higher time frames and others not visible on low time frames. This is the tricky part trying to identify the strong one among all the time frames. There are rally base rally and rally base drop. From my experience rally base rally should never be a trade entry unless the zone is on the 4hr or higher. To be a valid zone it should either be responsible for breaking through a strong trend line or breaking through a previous zone. Also the less time price ranged before moving away the better. I suggest you watch Sam seidens videos on YouTube as he explains this in detail.
I’ve been watching his videos, interesting stuff, thanks for the reference. Though i find it quite confusing and contradictional at times. He says that you gotta be careful with “drop-base-drop and rally-base-rally” zones and aim for the “drop-base-rally/ rally-base-drop” type of zones. Still most of his examples that I’ve seen are either drop-base-drop or rally-base-rally zones and if someone points out a drop-base-rally/rally-base-drop type of zone he says “No, that’s just a pivot point, we are not interested in that.” I could be wrong but as I understand base does not mean that price necessarily has to move sideways for a bit, meaning it could have a instant reaction to the opposite side and it would still be considered a base (demand/supply level). So I don’t really get how to differentiate between the two(SD or pivot). Could you comment on that?
I will do this as well. Using MT4 I will draw boxes with the retangle tool around the ranges using different colors for 1H, 4H, D. Viewing the D chart l’ll look for nesting boxes or boxes in close proximity.
Hello epidot. So I’ve gotten good at using demand and supply zones thanks to your explanation. But I’ve got a question. If for example gbp usd hits the supply zone and then I short it must I wait for it to hit the demand zone before I take profit. I also use pivot points. So I set my tp on the closest pivot point. Do u think it’s alright. Another question. After it hits the pivot point should I short again because sometimes when it hits pivot points it’s reverses. Do u think I should just set my tp to the demand zone immediately or what advice do you have for me
Why do people adopt these strategies like religion. My strategy is the best and the only thing that works and nothing else works. Why not keep an open mind and pick and choose what works for your trading style and stop putting down other strategies, I am happy that ONLY D&S works for you - why get so religious about it and start putting down other methods. I use D&S quite successfully along with trendlnes and MACD. So there!
100% acting same as S/R flips … once a supply zone is broken watch if u can see a retest on the other side wich become demand …
but like with everything else in trading its not working everytime
Lol that is so true my friend
As long as it works more often than not we should be ok .
I find Supply and Demand trading offers me a much more clear trading opportunities and that it fits my lifestyle to a T !
acting same as S/R flips … once a supply zone is broken watch if u can see a retest on the other side wich become demand …
