Supply and Demand, if only I had discovered that earlier

Beginner Questions
21

Great Topic & Discussion…so I thought I’d add my 2 cents (or more)

For what it’s worth, I do think S&D should be understood at least at the broad level, whether you are newbie or not. In this spirit, I’d like to offer a few opinions to the other comments posted here, some I agree with…but in all, I do respect varying views & opinions.

In the context of trading, I have a slightly different take on the following opinions re: supply & demand :
“…probably the most important knowledge that all professionals use… “
>> not for trading

“economics basics : incorrect to say that price is not dictated by supply and demand…what do you think dictates price in a market”
>> I disagree from a practical tradable perspective even though from a semantic perspective this is correct…ie. this comment as i understand this within the context of this discussion on this forum is not directly applicable to markets and more importantly I don’t believe there is any research quantifying an edge with this approach from an intraday or shorter term trading perspective

“Ask Goldman Sachs if they use any supply and demand as their main tool”
>> well they don’t in terms of the degree of magnitude of their shorter term trading volume

However, before I go further to explain the details above, I am a true believer in verifiable results no matter what approach you use. I’m not trying to bash any concept or approach as if you have a winning approach, then continue to use it and that’s fantastic, please contact me and I will invite you to speak or write. But if you are not in this camp, at the end of the day, it doesn’t really matter if you agree with my views or others, or even which method you use – the proof is if you can provide consistent results (even if initially it’s through back tests, paper money and eventually real money) that can be quantified.

(Without going into this topic in to too much detail, but if there is a holy grail in trading, I imagine it may be related to a process where you are able to leverage a model with a proven quantifiable positive expectation that can be consistently executed upon (by you), the ability to recognize the type of market environment that favors your approach and your quick ability to admit when wrong and knowing how to revise your game plan. This sound like a mouthful and to others may sound obvious, but this actually goes a lot deeper than I can post here…but is essentially why most people can’t profit over time even if I tell you what institutional funds are doing or share a secret or 2 of hedge funds.)

In any case, from an intraday or even swing trading perspective and more importantly from a practical perspective (at least in my opinion), the basic economic law of supply & demand doesn’t really directly apply to forex, futures, securities or any market traded instrument. Before I continue, I am not bashing the basic laws of supply/demand or any trading methodology, nor am I saying that prices won’t increase if demand increases, but would like to impart 4 main points :

  1. While I agree on a semantic level that more demand will effect prices, from a tradable idea perspective, I find it more useful to think of it as an auction process as that’s what it really is. \

In short, a few simple distinctions between the market vs basic supply & demand

 Shorter term market prices are driven by an auction mechanism in a stock, forex, or other market and corresponding behavior to an auction will influence pricing, not the amount of supply or demand in the market. At least this is the common view we took when we advised and worked with a number of global exchanges and financial institutions on this topic

 Eg. Demand may not necessarily rise as prices fall, but conversely, studies have shown that as prices rise demand does typically rise to a point fueling each other irrespective even if supply could increase or diminish. Ie. there’s a skew…think of e-bay…when prices rise, people want to buy it…and even if prices continue to rise, by the time you can produce more product, the auctioning euphoria is gone.

 This is more from a technical perspective, but supply is technically fixed during a trading day (ie. a company, or country isn’t going to float more shares / pairs and just dump it into the market

Why should you care about the difference ? In my view confusing concepts will likely lead to the inappropriate use of techniques which will be detrimental to your bank account. In particular, I am unaware of any studies that can quantify this approach with a positive expectation over time in trading (ie. it has a true advantage or just another approach where some people are more successful using it while others not whether the rules are highly discretionary or the model simply doesn’t work over time).

What you should care about? In my view, price discovery is highly influenced by the nature of a particular type of demand (ie. not just general supply & demand, not just institutional with some limit orders that happen to be around support & resistance areas, but consistent institutional demand…eg. large blocks being traded in a consistent fashion or a number of huge limit orders in different zones with follow on program activity).

However, based on academic studies there has been some evidence showing correlation to likely presence of institutional limit orders to supply & resistance lines, which in my view are in the same vicinity as the supply/demand trade zones. However, if I remember the research correctly, there is only a 30% probability that you can (1) correlate s/r or s/d with these institutional limit orders AND predict (2) directional bias. Basically, this means that s/d may be good to indicate potential areas of attraction and tipping points…not necessarily range bound or event trending trade setups that you can profit from on a consistent basis. However, you can combine this technique with other researched techniques to provide higher probabilities. (perhaps to be written in a future blog)

Thus, not without even going into the academic argument if whether forex trading is a ‘closed’ system (which the basic economic s/d law relates to), I would like those reading this to consider that it may be more useful to look at trading as an auction process, as the auction mechanism and behavior is what dictates the price…not the basic supply & demand model (from tradable shorter term perspective).

  1. What dictates price in the market ? from a longer term perspective, I agree that fundamentals definitely do such as supply & demand as well as other factors. Also from a purely semantic perspective, you could simplify and say that due to buying demand, the price ticks up, but as mentioned above, I don’t think this comment by itself is practical or tradable. However, from a shorter term trading perspective, what’s important to know (at least in my view) is that prices fluctuate due tofear, greed, difference of opinions or even algorithmic balancing

In my view, supply & demand isn’t as important as the nature and degree of demand. Ie. what I care most about is what the institutions or smart money is doing. Eg. what if from 10am to 11am price is ticking up because overall demand in the market is strong…but let’s say hypothetically I knew these trades were more from amateurs, public traders, but at 11am large institutions would be stepping in. I personally wouldn’t care what was happening at 10am, but more interested what happened after 11am…and more specifically ideally distinguishing at 11am when pros vs amateurs were on opposing sides…and jumping on wave created by the pros.

How is this practical/tradable ? Well perhaps I’ll write about this on my blog in the future.

  1. Ask Goldman … ok … so I asked and the answer is no, Most of Goldman’s intra day and swing trading volume and other institutions like them use High Frequency Quant Trading models which in fact combined attributes to more than 60% of the entire market daily activity. These models are largely independent of looking at supply & demand but more statistical in nature (eg. looking at market maker price inconsistencies vs liquidity, reversion to the mean type of plays, etc.).

  2. While I do agree that for longer term trades (which I categorize more as investments which I think is outside the objective of most people in this forum) S/D definitely has more impact, supply & demand is in fact dynamic (ie. fluctuates during time over the trading day)…so if you want to use the supply & demand approach (which I actually do in part but not really in the way that I think that was originally intended above) wouldn’t it be better to NOT look at simple supply & demand or the zones…but more importantly price action during those zones…ie. specifically looking for when institutional demand programs is consistently picking up or unloading positions? So I almost definitely agree with the following statement, but just need to do emphasize the bolded : “the ONLY correct price range to ever buy anything for profit, is just before or within a consistent institutional demand level or zones”

In summary, while the basic laws of supply & demand helps drive longer term prices, from a trading perspective I believe it is more useful to think of price auctions and tipping points where institutional limit orders are likely to reside.

Whatever idea you use (whether it’s the zones, a trade alert or even if you were mirroring my trade entries & exits, I caution about any of its usage unless you can quantify there is an edge over time and more importantly if you know how to execute on this consistently (which is beyond just entries or exits or targeting 3 to 1 risk reward.

I’m sorry if I’m writing a it too much here, but this is the reason why I believe most traders aren’t successful as I believe many focus way too much on simple entries, even more on new flashing indicators, or even exits…they only have part of the solution,and like a table, if it doesn’t have more than 1 leg, it won’t stand.

So what technique would I suggest for newbies to look at ? I suggest the first thing to understand is how to read the chart and price actions without any indicators. Read the Dow Theory & Wyckoff principles as starters. In terms of specific indicators, I’ve studied many of them, but I actually don’t use any as a primary way to trade as I’ve never seen any combinations or research that could provide consistent results without wild swings in account equity. There are exceptions from a longer term investment perspective…but for intraday to swing trading, I would likely pick what most funds use – variations of simple channel & median lines. In particular, I suggest looking at median lines as from a trading perspective, it’s the rare tool that I know that has been statistically shown to have an 80% probability for prices to revert to median line…however, the issue is that the lines are drawn subjectively. There’s a simple technique to follow to improve this subjectivity, but perhaps a future blog.

Anyhow, I’m not trying to be evasive, but I predominantly use statistical models and may use a moving average or median line or linear regression line or median line to remind me of likely bias in trend.

I suggest looking at one single approach where you have clearly identified a full system : which markets, what times, what positions, what entries, exits, what you will do if you are wrong and what you will do in all conceivable situations.

Once you right these rules (1) if it’s complicated, it won’t work as it is likely overly optimized (2) focus on approaches that have proven results over time (eg. while there are a few, I am not aware of many studies that you can use indicators to trade off of with a quantifiable edge over time). (3) test your results with historical data, but don’t test the data within the last 2 or 3 years. (4) Once you think you’ve got a system and you are sure, try paper trading with real live data…it it looks like it works for 1 month without changes, then you got a system.

Why don’t use the last 2 years ? Well likely when you are trading for that 1 month, you will tweak your system…continue to tweak your system until it works for 1 month…where after, test it on the last 2 years without changes. This is your forward testing and should give you confidence in your model.

Hope this is of some interest to some of you and sorry for the length and any rambling.

Happy Trading…Just another Trader ‘Joe’ who likes to drink Joe (coffee) when trading

2 Likes
22

Definitely interesting Joe. Thanks.Can you please elaborate your way of using median lines and moving average with some charts? If you not mind distributing knowledge to newbies.

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Thanks for your question. I don’t mind sharing, that’s what the forum is about !

It’s usually easier to teach in a live environment by drawing out concepts and showing charts, so bare with me as I don’t normally blog.

Before writing, I just would like any die hard fans of the Pitchfork or other technique know that :
a. I don’t use the method exactly as taught by Dr. Andrews as in my view there’s no one ‘right’ way
b. I don’t typically use such indicators as a primary way to actually pull the trigger, but to confirm. The primary way I trade is using institutional techniques using statistics and momentum analysis but modified for individuals.
c. if I use the Median line, I usually always have 2 median lines on in opposite directions which is why the chart will have 2 example median lines
d. I don’t usually day trade but happen to do so today so which is why a 3 min bar chart example

I’ll assume you understand the basis of the pitchfork and why studies have shown an 80% probability of median line reversion (basically in my view it’s based off the concept of a bell curve distribution where the the curve is fattest in the middle).

To draw a median line, find the median line or pitchfork in you screen.

FOR CHART 1 : THE SIMPLE CHART…please focus initially on the yellow pitchfork.

AUD USD Median Lines - Simple 2012-05-23-TOS_CHARTS.jpg700×437 42.3 KB


STEP 1 :
a. Draw starting with a Regional Lowest Low (LL), Highest High (HH) and Lowest Low (LL)) (of course it could be the opposite but in my example it happens to be this way).

The first thing to note is that the the median line is created by identifying 3 points (a, b, c) - note a is not shown. More importantly the dotted line that connects point a and b is roughly in the middle of all the price action. When drawing b - c, it happens to also be in the middle of all the price action. Note the lines roughly crossing in the middle of all the price action is more important than drawing it to the very high or low.

b. When are you able to draw the a, b, c ? Obviously it has to be sometime after ‘c’ forms. The way you tell when to draw is as follows :

(i) I need to briefly introduce the concepts of Fractals (a complicated word but easy to use).
Once again, for die hard fans, I don’t use the Fractals the way that Dr. Williams originally taught it, but have simplified it to help me determine price action.

What a fractal simply is in my view is a possible tipping point (or point of inflection). It is created simply by looking for a temporary price action with a minimum of 5 consecutive bars with the middle bar the highest (or lowest). Think about looking at your hand, where your middle finger is the ‘fractal.’ What you are looking for is the middle finger which is higher than two fingers to its right and left.

So in my graph what I’m looking for is for price to move from point b down to c…and wait for a fractal to be created either on its way down from ‘b’ to ‘c’ or as it retraces up from a possible ‘c’ in the opposite direction as the price reacts up. After a fractal is created, I want to see it breached or a lower fractal created. In this case, the first fractal was created and was breached noted on the chart in ‘yellow’ as ‘fractal.’ Do you see the High is the middle finger and it has two lower fingers to both its left and right ?

A number of bars after the up fractal is created there is a fractal breakout on the upside (ie. the price goes above the middle finger). Once this fractal is breached, you take the closes Lowest Low, which defines your point ‘c’. Now than you have all 3 points, you can draw out the entire pitchfork (or referred to as Median Lines).

Please note that despite Dr. Bill Williams teaching this isn’t an optimal entry even if you use moving averages as he originally suggests…sorry die hard fans, but I don’t believe there’s a quantified edge in this…ie. just trading on these type of breakouts. Of course, if you know of an approach that can be replicated in a consistent way, please let me know, I’d be interested in looking at the research…otherwise it’s just a good reference for a possible inflection point only

c. Notice that a yellow parallel line is created where I Entered the trade. When the price action reached the line I did not enter, but waited to see if it would bounce off. (Actually in reality, I used another proprietary indicator, but since it’s not available for public use this is the method you should use…on the 2nd picture, I can show you what I was looking at)

if you missed the entry, the bottom median yellow line was hit again a 2nd time giving a second chance to enter.

The target was simply the middle line.

AUD USD Median Lines - Simple 2012-05-23-TOS_CHARTS.jpg700×437 42.3 KB

Step 2 : Same Picture but focus on the Red Median Line … simple but a bit more complicated than step 1.
a. Since the Median Line in Step 1 looks like it correctly captured the ‘frequency’ of the price action, I reuse it’s lines to start my a-b for wave 2.

Note : that the red median line needs 3 points to create a median line…so the first 2 points will be over point b and c of the first ‘correct’ median line.

b. When do I create all 3 points ? same as above, after a fractal is created (see ‘fractal’ in purple in chart - however, please note I just noticed the label of ‘fractal’ in purple should be more to the left and up pointing at the sloppy fractal created right along the median line.) Note : that in the first median line, the fractal label is the first fractal created on the top side to be breached…where on the 2nd median line I’m looking for a fractal on the bottom side that will be breached

In this case, the fractal was breached and retraced towards the upper Median Line at the intersection of the other Median Line.This area of the chart labeled 'Entry 2 us a short entry where you would target the median line. Note : I actually targeted much lower and entered a bit higher (see chart 2, the more complicated chart to see why)

c. When I drew the final point for the red Median Line it wasn’t at the highest high…the 2 rules to follow is :
(i) it should be in the middle of all the price action
(ii) if not move point ‘c’ to the left where the horizontal line at the top of the bar of point c crosses at least 3 consecutive bars and remember the line created from point ‘b’ to ‘c’ needs to cross roughly the middle of all the price action

Summary of Tips :
a. draw points a b & c through price action
b. point c shouldn’t be drawn until you see a fractal that is breached in the opposite way
c. the last point doesn’t need to be the very High (or Low), but an imaginary horizontal line at the top of bar ‘c’ should cross at least 3 consecutive bars that it is next to
d. always have 2 median lines on (more is too much, less isn’t enough)
e. draw the 2nd median line based off of the last ‘correct’ median line
f. the direction of the median lines are important…this gives you the direction of the trend

AUD USD Median Lines 2012-05-23-TOS_CHARTS.jpg700×437 68.4 KB

For Picture 2 : Just to let you know what else I was looking at when I took those trades.

Entry 1 :

  1. Note : the very bottom of the chart tells me supply & demand…before Entry 1, I see that demand was on the upside. Please note that supply & demand for short term trades is not as important as nature of demand (ie. institutional demand) which is the chart above it labeled Y4A_Alpha_Wave. I use the supply & demand for price trend forecasts at longer time frames for reports when I advise funds or active investors on adding/reduing as well as buying & selling within a longer term portfolio perspective

  2. Please refer to label ‘entry 1’ in green, I was more looking at my second study which differentiates between demand by institutions vs amateurs. It attempts to detect likely consistent institutional activity is going on. On that bar, I see amateurs were selling hard (in yellow), where the pros didn’t care (virtually no red or green bars). So I was looking for this and it happened to be next to the median line which is why I took the trade

Entry 2 .

  1. The small red and yellow arrows is also a proprietary indicator that uses a mathematical model and attempts to (i) determine likely High frequency program trading activity and (2) it’s in a way that I can personally exploit (a lot of the quant models are microseconds, but a number of the models have trades lasting for minutes to days, etc.

Exit for Entry 2 :
The Red Bars indicates some institutional selling
The Big Red Arrow indicates likely one or more consistent strong institutional program selling

When I saw this, I didn’t target the median line, but would take 1/2 position at the median line and trail the rest…however in the case of the trade above, I just trailed the trade until I was stopped out at the High of the Bar labeled ‘Exit 2’

I have a 3rd entry which I didn’t show…and at the time I took the picture snapshot I was still in the trade…but I just exited the trade and in total, including the first 2 trades made around 100 pips which was a good coincidence that you asked your question about median lines at this time as No, I’m not profitable on every trade, but trade off of not only ‘high probabilities’ but trade off of an edge that can be quantified. That is, there is a difference about someone saying that it’s a high probability pattern vs actually quantifying this probability, edge, expectation, etc.

Hope some of this helps.

  • Hedge Fund Returns for the Average Joe by just another ‘TraderJoe’
1 Like
24

Everything you are discussing I pretty much have just started to realize on my own lately.

The raw market is the best teacher out there. it is most useful to learn to draw lines, study patterns, and identify levels on your own. Doing these things help develop a good sense of how the market truly works and builds your skills. It almost seems as if you can become one with the market after awhile. Does anyone else kinda get this mindset?

Anyway, it seems that using higher time frames with no indicators or somebody else’s subjective system yields excellent results once you get the basics down. It actually becomes astonishingly easy to make money after awhile once you really start to get it.

The market ultimately moves in only 2 directions, up or down. Once you understand when the odds are in your favor, it is fairly easy to pick out winning trades. Hell, I like losing trades almost as much as winning trades because it gives me an opportunity to learn where I went wrong. Gratification can be gained from pinpointing your mistakes and then integrating your new adjustment into your trading plan. The thing that makes you lose trades keeps you a winner if you keep learning from your mistakes.

Happily trading and drinkin coffee right beside ya bud! :wink:

25

Hey Judge - I think you hit the nail on the head. Getting the basics is important, although I’m sure most will not spend the time to do it. I suppose it’s sort of like taking flying lessons, where they teach you to fly VFR (visual) first and teach you not to just rely on instruments. re: odds in your favor…yes, the game needs to be played out by the numbers, so patience is required to wait for trades that have a quantified edge.

For the market direction, I noticed for my own trading it is more useful to look at it in 7 possible states : 1 & 2) up & down trends, 3 ) sideways 4 & 5) Transition from Sideways to Up / Dwn or 6 & 7) from Trend Up/Dwn to Sideways. 1-3 are the easiest to trade, but the transitions are tough. Note : #3 assumes relatively lower volatility.

Happy Trading.

26

Hi there. Has anyone been using s&d Advantage Signals and are your results in line with expectation as presented on their website. If yes just the 30day trial or live (and for how long live). thanks a lot for sharing before i consider the 30day trial. much appreciated:46:

27

I would like to know about this as well. I have been signed uo for the occasional signals which come through about once a month.
I was going to post one of the signals they sent through but im not sure if that is allowed??
If it is me know and i will try and post it tonight

28

James - did you sign up for 30days trial with Advantage Signals and only getting 1 signal per month ?? or are they providng you the odd signal thru a different channel? Thanks Sweeeet

29

No i havnt signed up for the 30 day trial yet. You can put your email on their website and they juat send you occasional signals/trades. I been getting 1 or 2 a month from them. They dont send any follow ups to them but it is good if you just want an idea of what they offer. The signals all come with in depth reasons for each trade so its quite interesting.

30

What is this I see to get a 30 day free trial?

1 Like
31

I am at work on my phone so i cant find it at the moment. I will try and post the link when im home at 6 uk time. I signed up for the occasional signals about 2 months ago so hopefuly they havnt changed it.

36

I aint spamming. Someone asked me how to get the occasional signals from advantage signals and i showed them a link. Its called being helpful. I aint nothing to do with that company. Look at my other posts on this site before accusing me of spamming. I dont appreciate it.

38

Aiight, another dude was spamming and I thought you were in on it…my bad then.

39

No probs mate. I should of thought how it would of looked before i posted. I got a telling off from the moderator as well :). Lesson learnt.

40

Hi Petefader. This thread is about Supply and Demand. Page 1 references a company called Advantage Signals who provide signals based on S&D. I googled them, discover they have a 30day free trial so posted to the forum if anyone had actually singed up / any good etc given folks on this thread are S&D interested. Dont believe thats spamming - simply using the forum to gauge feedback before pursuing / validate not a scam etc. Not sure how thats any different to other threads requesting experience on any other singal provider / E.A which is prevalent throughout Baby Pips (other than it may be in the same thread). As part of 30day trial they do ask for payment details although they say they dont trigger it unless wish to proceed live so thats the initial area of concern i guess. Please be assured it not spamming - more interested in ensuring they arent scamming. All good! cheers Sweeeet

41

Isn’t supply vs demand mean the volume??

And the amount of buyers compared to sellers?

as retail traders we don’t don’t have to worry about liquidity right?

43

No, it is not about volume. You can identify supply & demand on a chart, and unfilled orders are where we make the money on retesting the supply or demand level.

44

actually, it can be about volume. it depends on who you talk to.

45

yes and no.
depends on what you mean exactly and how you trade.

46

Hopefully this will be helpful to someone.

[B][U]Supply and Demand[/U][/B]

Basic Mechanics of Supply (Reverse this example for Demand mechanics):

In order to create a [B][U]Supply[/U]/B zone the following takes place, e.g. imagine price rising (uptrend) on your chart hitting the below prices from the bottom up.

Price = 1.5000 (Buy Orders:4000 - Sell Orders:100,000)
Price = 1.4995 (Buy Orders:6000 - Sell Orders:5000)
Price = 1.4990 (Buy Orders:8000 - Sell Orders:7000)

The above scenario is purely fictional for example purposes BUT this is exactly the mechanics of how price rises into a supply area and reverses straight back down, you will be able to see this clearly across your charts, just look for a pivot high and the action directly before and after it.

[B][U]What is happening here?[/U][/B]
It’s simple, institutions(banks) have pre-determined a price level to sell at, whether for customers or their own trading. The volume of the sell order is what causes the imbalance and the immediate reversal of price back down. How do I know it’s institutions causing this imbalance? again that’s simple, retail traders & average speculators don’t have the power to place these types of orders. Effectively the institutions order will buy up EVERY buy order in the surrounding area pushing price right back down.

[B][U]Why is this an attractive area to sell at when price revisits this zone?[/U][/B]
Look at the difference between the buy & sell orders at 1.5000, the institutional sell order gobbled up all available buy orders in the area and will of likely continued down flooding the market until it reached a price level determined no longer good value. The result is the institution STILL HAS ORDERS LEFT TO BE FILLED so there is a very high probability that when price revisits this area the same thing will happen again, the institutions still have orders to sell!!!

Another reason why this is an attractive area is due to institutions all having the need to find value, if we can see extreme highs and lows on a chart… so can institutions so it adds the possibility that multiple institutions will determine the obvious supply (resistance) area a good value price level… this means potentially more sell orders at that level. Rest assured if one institution determines a price level good value, you can assume other institutions across different trading time zones will be aware of these prices and potentially follow suit.

[U][B]Ok great Sherlock… so why does price sometimes go through Supply & Demand levels?[/B][/U]
I hate to be smart but again… it’s simple, the imbalance is not as great as it was at the initial test to the supply area. This could be down to all sell orders being bought up after 2/3 visits to the supply (resistance) area (this means the institutions get their orders filled so normal balance is restored). It could be down to whatever institution that caused the imbalance changing their objective, moving to a higher/lower price or simply deciding its time to go home. A good analogy to explain Supply & Demand zones would be taking a tennis ball and dropping it on the ground, the first bounce from the floor will be the strongest, the second bounce weaker and third bounce even weaker… in this analogy the buyers are gravity and the floor is a Supply Zone.

[U][B]What else do I need to know?[/B][/U]
Institutions are not your friends, in fact retail traders (me and you) are effectively fish food to them. They will use their power to manipulate price action to make you buy INTO A SUPPLY AREA. I will give you an example, lets say at price level 1.5000, ACME institution wants to sell 100,000 positions but currently price is at 1.4900 which is 100 points away… how can they get price to rise 100 points? simple, they put out a public advertisement to get people to buy, the advertisement is not on TV or Radio… it’s on the charts. ACME institution will create an uptrend, this means they will BUY up enough orders to create an uptrend which then catches the attention of retail traders who think[B] [I]“Wow an uptrend, I wanna be with the trend, the trend is my friend!!! my MACD just crossed over, My moving averages are in-line, omg this is it I can leave my job after this trade!!! I must buy, its a no brainer!!!”[/I][/B] etc etc… so the unfortunate general public see the uptrend, we take the bait and we BUY into an immediate level of supply (resistance), we are walking into the fire people. What happens next? You guessed it

[B]********** BAMN ************* [/B]

oh no… wait a minute… price is reversing… what the hell… oh my god.

ACME institution just sold their 100,000 orders… to people like US!!! buying into the nice looking uptrend… but price rocketed down, our stops get smashed through, we lose money. It’s the same story people, your indicators & oscillators are manipulated to tell you to trade.

[B][U]What is the solution[/U][/B]
Get rid of your indicators, get rid of your oscillators, clear your charts people. Learn to understand supply and demand levels, trade WITH the institutions instead of AGAINST them, do you wanna eat with the sharks …or be eaten by the sharks?

Again the answer is,

SIMPLE.

[B][U]Disclaimer[/U][/B]
The above is a contrived example of Supply & Demand mechanics, the theory behind the example is very sound and very real. Indicators & oscillators can work inbetween areas of supply and demand but if you do use them, always be aware of higher timeframe supply & demand zones before trading from your signals. My advice is learn Supply & Demand observation, once you become aware of these zones you will quickly see how all convential technical analysis and stratergies are at the mercy of supply & demand zones, and at best only work inbetween these zones.