Yeah I actually made some pips based on that. Although I used some confirmation from my other work.
There is one thing I have been meaning to talk to you. I think it would be great actually. I just improved an indicator on trading view to improve the timing of COT Index. Just in case you don’t know. COT Index is a famous indicator based on the positions of commercials. It is updated every week by the Commitment of Traders Report.
The reason I went long New Zealand is because commercials (the mega-bucks banks) are holding a massive long position on New Zealand. Normally this leads to (at least) a multi-week rally in New Zealand.
My initial targets are 0.6787 and 0.7046 based on the weekly chart.
But if we can combine that with your areas of interest we’d basically know what big money is thinking.
I tried doing an analysis on the weekly chart and I faced massive difficulties. If you can do New Zealand weekly just as an example I’d be very thankful.
I recognize the hardship of supply and demand as we start with larger timeframes and drill down till we find a tradable zone. Its very difficult to put SD into one timeframe with a fixed roc volume - however on the majors only I will switch just to 30min TF with Volume ROC 16 - so this will put everybody on the same page. OK supply and demand zones what qualifies where we set targets - I will draw it up on one of my trading view charts - tradeinterceptor is not user friendly - give me a few minutes
I do not know if you can read all this or if these images can be enlarged. In supply and demand the zones generally are identified at the bottom or top of momentum bars. The zones are played through entry orders. The zones are fresh once and once only. Price action is directly related to left side of page - not the bars behind - the bar directly opposite price action. If price is advancing supply will be broken and price will replenish on demand. If price is falling demand will be broken and price will replenish on supply. Supply is always on top and demand is always on the bottom.
the above was 2hr GbpJpy here is the view on 1 hr - I think you will see the obvious supply zone - the quality of price action at the zone matters - we want a decisive strong action away from zone - price that lingers is pretty indicative the zone will fail - as in my euro demand yesterday
UsdChf on the 30 min. The bar of interest where volume increased has held as well price formed supply then broke low below both. Presently price is back to first demand which is not fresh(price has been here already). Price is more likely to break this level and pick up on demand below which is fresh - however we have two supply areas above we can exploit if price reaches there -
First of all - really great trade Philip. Second the break down starts at weekly and goes to lot lower TF - I will draw it up but the effect may not be what you expect - the lower TF I go with SD the more accurate it becomes for the zones
As you can see the weekly is hard to break down without breaking it down into the smaller TF - however you have supply areas above showing how price collapsed on itself - the wick low at .7161 - which will be in play - then two small supply areas - the zones you be looking for are hidden within the wicks - the zones are deep but not too bad - to get down to a more clearer zone again you need to go to smaller time frames - alternatively price may consolidate here as we had a lot of volume to buy last week
Here is the traditional SD on GJ - if I expect Yen to break my pivot low 2 and I have pound within 17 pips of top supply as posted in my plays at beginning of week - then I expect GJ to minimally hit pivot 0 which is your wick low - admin I hope you are ok with me teaching SD as I go along - to understand the system traders have to know how to trade supply and demand
Price presently is in demand which we should see price move up and replenish on supply above at 1.0963 to 1.0984 before moving down to bottom demand at 1.0835 where we should get a strong reaction to move up to minimum 1.1023. The bottom demand is traditional as well shows large roc on the volume
Still a lot of confusion with volume roc - ok - if we see a surge in the roc on the volume we can see what candle bar above it surged on and exploit it to enter a position. In the first surge price was at bottom and we saw a rise in price - the next three surges price was high when we saw the surge so would expect a price drop. So I am going to annotate this chart to traditional supply and demand. These areas of high volume roc should also act as supply going up for aussie - which means price should load at these areas and drop - fresh supply is what we look for and the only candle bar that offers us this is second from end, so second from send volume roc surge
When there are clearly momentum bars we can expect or most of the time expect price to recover these bars. I have put in two historical momentum bars and how price recovered these along with the present one price is working on. We get supply when price explodes out of a price area - we expect there are orders that were not filled and that is the area we want to place our sell orders. To see how price is being supported by demand presently we need a smaller TF
On the 30 min TF on left side of chart on Volume roc - we can see volume starting to surge and price creates momentum bars - on the left side of page price recovers these bars and we have demand - this demand we want to see hold for aussie to move forward. We have a well used supply area just above - but we know we have a fresh area of supply just above this one and that is the price point we are hunting
Yen - lets try this again - volume surges left side of page occurs at top of price - indicating a move down where are surges on right side of page occurred at bottom indicating a move up - price is coming out of traditional supply - price is hunting demand going down - three nice targets below - notice how the last volume surge has occurred at top of price this time
Now here is euro on the 5 min at a minor supply area facing some volume roc surge - we may see price pull back down before advancing to supply on bigger tf
that was very smart here is what we are expecting from a traditional supply and demand - the 5 min tf demand we want to see hold, price reload there and take out the above supply area - if so then we can anticipate that our price rising taking out supply and replenishing on demand
Here is the yen trade landed in demand on our larger TF now looking for supply above - I put it to 5 min to show how the volume roc is starting to surge, we have momentum bars created with supply zones sitting above - I suspect price will go to top supply zone - this area we want to see hold for a further move down
So yen did hit our supply areas above 1.2423 - however just short of our top supply area, we came back down and carved through our demand into the bottom demand. Price is sittin in demand now and looking for a retrace up into supply - we have two potential areas above - the top area of our two most recent supply areas is most likely to be hit/price replenish on and fall further down into our next demand area - alternatively the move down remains strong and price hits next demand at 1.2373 - however we have volume roc starting to build here
Follow up on Aussie we started to look at this play around .7283 - presently sitting in supply - however the supply above at .7390 is fresh and where we want price to go
we started to follow euro this morning at 1.0901 with the hope of getting price into supply - we are at bar of interest with volume roc starting to surge - the move up was 44 pips from this am - ultimately we would like to see price at 1.0963 before falling again
