Swiss always so slow trade is in progress up around 20 pips
Still below the plateau and still in our kennedy trend lines but respecting the bottom trend line. I think this will be a good long once it is above the plateau
The first supply failed and was a loss of 20 pips, however I suspect it was more user error on my part. We know that the buy and sell orders will cancel each other out only leaving a bearish structure at the top with sell orders. So what we have is price is still in the trendlines at top supply and as long as price does not breach 111.76 we anticipate a move down. If it crosses above then we will see our supply flip to demeand
ok so dumb ass me I erased this chart so it does not look quite the same as the original - price is below the trend line in supply and now trading below our top structure. It is worth the short here. As I said 111.76 needs to hold
Supply and Demand determine the stock prices or the prices in the economics and financial level. This is a really a good post.
I do not trade stocks I find them alittle harder as they do not always have the volatility as we see in the forex market
I want to make sure we get profits so Im closing the swiss trade for 45 pips profit. That leaves the Yen and Aussie trade still in play. The structure price is hitting now is very large and I do not want to take the chance there is still buy orders here
I think I have pretty much beaten this into anybody reading this thread that inverse head and shoulders is for the most part a fallacy. I went through the theory of how buy and sell orders cancel each other out and the only orders that are left lie in the the top structure on the left down leg. Now I should show what does happen when that top structure is crossed. We have talked about plateaus and what happens when they are crossed - pretty much the same for these top structures once they are crossed. My next chart will address what happens when we have a higher high on the right leg
So we know what happens when price is declining with our structure in the left leg. This is about what happens when price is climbing. We have a structure within a structure. We have the overall corrective wave and we have the structure at the top of the corrective wave(which makes our larger structure). We know there are sell orders in that pink structure and when those orders are run over by price they are overlaid with buy orders. This means there are no sell orders left in this structure they are all buy orders now. We also know that price cannot trade lower then the last corrective wave. When price returns to the previous corrective wave it will be looking for buyers and we can usually find the buyers in those pink structures that were run over as price advanced. We can see that present price is declining and notice how it stopped at our pink structures - price is hunting for buy orders. This is simple to understand and not as complicated to draw out on a chart; understanding the theory behind price action gives you more critical reasoning skills in deciding trade action…deciding if you want to trade supply or trade demand
Euro - we play what we see and we play with some knowledge of price action. Euro has hit that structure on the left leg again we know it is bearish and must have alot of sell orders there. We also know we have an area of buyers in this leg up that would need to support the advance of price. Price is still in the trendlines on this leg up but we need to consider that demand at the bottom contains alot of buy orders and if price is going to climb higher it will need those buy orders to off set the sells it encounters. Ill let this cook and see if the buyers will send price higher or if we overlay the buyers with sell orders turning euro bearish again
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Im closing the aussie trade for 24 pips profit and yen trade for 27 pips profit - Ill wait and see how price action developes before reentering the trades
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So this would be 4 wins 1 loss and 181 pips profit this week but more importantly we are in profit because we understand how price action determines if we play supply or demand
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We know that the sells and buys canceled each other out so we only have orders left in the left leg top structure - our zone is 14 pips deep and our targets are 110. 68 and 110.91 away. Trade is a short
Hi Kate,
Can do a chart for the current EURJPY? Will appreciate it.
I like this set up on ChfJpy. We have a plateau at the bottom - price is sitting in supply. Price is trading sideways. Minimally I like to see if price can retrace back to the plateau - risk is supply will be over run. Reward price will head down to pick up more buy orders as it has been unsuccessful to punch through our structure on the far left - top of plateau. top of demand in play
Hi Alpha when we look at the chart we can see that the last base for the highest run was breached lower by price - that tells me where we had buy orders now we have sell orders. So price is in a flipped zone. Price is also still in the Kennedy trend lines so a new leg down has not started yet. If price is too fall we need to switch our higher lows to lower lows - hope this helps
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So you are saying, although it seems that demand zone about to become supply zone, but seller have yet to show strength, nevertheless, there is a potential short opportunity brewing right?
Once price crosses above then yes the zone will flip to demand again. I brought it to a lower timeframe. As long as price is below the zone it remains bearish
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That’s comforting to know! By the way, thanks for the analysis. Your chart looks really neat.
I really like this thread
I’m trying to improve my price action game, and it’s handy to see how other traders are thinking
thanks @kate25
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