Pentru ca supllyul sa fie supply trebuie sa ia prima data o zona de demand refine your level: - If it's a supply level, you do not care about the lower shadows of the candles - If it's a demand level, you do not care about the upper shadows of the candles
Cand pretul se misca haotic pe un tf atunci marim tf-ul si avem cluster!!!!!!:D
pick 2 levels within a tf and allow the PA at those choosen zones for entry intraday trades are taken and banked within zones, thats my plan on any pair any tf taking momentum into consideration ENGULFING -if you have a 30min hammer in a demand zone - it will be constructed of bullish enguilfing pattern on lower tfs - you might get a bullish hammer on hourly , 30 min or compression into demand on hourly followed by a bullish enguilfing on 15 and so on
DECISION POINT = CLUSTER?!? the trend has to start on the lowest tf that you can view so its not a surprise the momentum of a say hourly bear candle within the context of a downtrend is constructed of micro bearish waves, the
bearish momentum can be viewed on any tf lower than the hourly in this context most recent PA - pole is north, let the supply zones drop it for a buy lower will only buy it in demand!!!!!!!!!!!!!!!! Flags and compression its one the most basic of price formations - pole momentum ( goes in the direction of trend ) and flag clears excess supply/demand for another pole to develop once the flag completes its cycle flags are in the direction of the trend or momentum within the particular tf whereas compression is not in the direction of the trend AFTER IT RESOLVES AN UPTREND WILL REMAIN AS AN UPTREND IF THE DEMAND ZONES ARE RESPECTED, LETS SAY YOU HAVE A 4HR DEMAND ZONE, WHERE ON THE LEFT YOU HAVE CLEAR BULLISH ENGUIFING on 4HR - YOU ARE LOOKING FOR ENTRY NORTH AND YOU SPOT A BULLISH HAMMER ON 30MIN, LOOK INTO WHAT CONSTRUCTS THAT HAMMER, MAKE SURE ITS NOT CONSTRUCTED OF COMPRESSED RALLIES ON LOWER TFS BECAUSE IT WILL LIKELY FAIL SINCE PRICES ARE COMPRESSED
so a bullflag dips and consumes excess supply above it and then resolves north, whereas a compression configuration is RISING TOWARDS SUPPLY BUT CONSUMING ITS OWN POCKETS OF DEMAND WITH UNDERSPIKES UNDERNEATH ITS SELF TO DROP LOWER
DIAMOND a diamond represents caution above all else because there is no clear defined momentum either way. But from a price structure point of view, its difficult to hold any position, buy or sell for any period of time or profit. Why diamonds occur near reversals is that the market wants to take out all buyers and sellers and then resolve quickly and the shape of the diamond does that. Its a trend traders nightmare and a scalpers or range traders ideal situation
A question.. How you defined the trend? to define trend - an uptrend is where buyers exceed seller @ demand zones, therefore it creates higher lows FROM demand zones and thats how prices create uptrendlines - so it follows that we should only buy @ demand zones and its the demand zones that create the higher lows .......... unptrend can also be desrcibed by momentum - inotherwords - poles are north with bullflags throughout the various tfs Momentum candles DEFINE THE TREND, so read them and it all makes sense - when the momentum changes, let it change and we then go with the new momentum candles - agreed?
the simplest form of trading just now ( OR ANYTIME ) is identify a pole on any pair any tf and trade the flag, or wait for flag to complete its cycle and try and catch the next pole
before any trend changes from an uptrend to a potential downtrend - prices have to clear demand
TRADE PLAN!!!!!!!! Red I am writting a plan at the moment but am finding it hard becasue I have been learning trading for about a year now I know so many different things and ways of trading that it seems impossible to narrow it down to what I will pay attention to what I won't how I will enter how i will exit where I will place stop ect. In this post you say sam can help establish a plan. from the link I posted below could you please point out the videos that could help me in the prosess of writting a plan if you know the ones that will be usefull. http://www.forexfactory.com/showpost...8&postcount=42 Cheers.... today is not the best day for chats etc ...... busy in market
we will discuss this another time, all his education is basically stating the same strategy supply goes to demand and back again, need to pay attention to current trend if there is one could be ranging sideways etc
pay attention to PA @ levels that interest you, ANY TF ANY PAIR @ DEMAND in a up trend - wait for bullish enguilfing ANY PAIR ANY TF
@ SUPPLY in a downtrend - wait for bearish enguilfing ANY PAIR ANY TF you can use any indicators to help to, over bought over sold, fibs divergence etc - makes no difference - PA first then if anything else fits thats a good feel factor
screen time is what you need - what PA looks like on a turn, study it on ANY PAIR ANY TF and you will begin to see
l showed you yesterday an EU entry based on a price configuration l have seen often - rising bulls followed by bears .... there is an issue brought up often - what tf? THAT PA WAS ONLY VISIBLE ON 15MIN, IF I WAS STUCK ON 1HR TF l WOULD NOT HAVE SEEN IT - therefore @ any level of interest to you, say 1 hr supply - keep switching to lower tfs UNTIL YOU SEE SOMETHING YOU RECOGNISE AS A TRIGGER - my trigger would be bearish enguilfing on any tf lower than the hourly or infact it may develop on the hourly
....... and further more Reflex - now you know ANY CLUSTER ON ANY PAIR ON ANY TF is a balance between buyers and sellers - when one side is exhausted then it will break one way or the other - so now there is NO SUCH THING AS NOISE or anything random in this market
it may not be tradable but atleast you know what is going on within the dynamics and functions that market exhibits between supply and demand zones
Hi redsword11,
What did you mean by 'Watching PA for cluster to get engulfed north' in you Cable 15M chart? Thanks Learn2b if the cluster gets enguilfed north it will act as a support for further advance to supply above, so the LEVEL will turn to support
can go long AFTER it gets enguilfed to supply level, then watch PA - price action - for short @ supply
you are trading the flag thats why its choppy!!!!!!!!!!!!!!
Daca nu imi dau seama de price action pentru ca e choppy atunci schimb tf pana imi dau seama REDSWOED11 count how many candles it took for prices to move north and then count how many candles there are in the pullback - which candles covered more pips in less time?
Momentum defined within the context of that chart and tf
l always wait for enguilfing - its the only conformation l know that works best, why........... enguilfing represents instutional order flow, its what the otherside of retail looks like in the bars! The patterns come in many shapes and twisted patterns. So, l have to enter after the enguilfing pattern presents its self. l will switch tfs in a demand or supply zone until l see something l recognise and thats pretty much it
VENICE
Trader. There are many demand and supply zones all over the chart. You need to pick out the significant ones. Price is never guaranteed to hold at a demand zone. But you will almost always get a bounce. Sometimes those bounces turn into reversals, other times they don't. This is why trading is crucial to constantly react to price action and let it lead the way. It tells you what it wants to do (most of the time). You simply just follow. For my trading style, I actually have a less risky setup. I wait for price to bounce at supply demand level, and then break the current resistance level. So if price is currently bearish, I look to the next demand level, and as long as I am not feeling to frisky, I then wait for price to break back out of the demand level. (Resistance turned to support). On the restest, this is when the order goes in ... I run an average win to lose streak of around 10-15 wins per 1 loss. It's really extremely easy... you just have to study the charts and recognize what price does. Over, and over, and over again. Some of the safest trades are the resistance turned to support retest trades. I have seen trades break out of my levels up to +30-50 pips, only to watch it slam right back down to the intial break out point (enter order here), just to watch it go back and completely engulf the retest move and then turn into a 70-100 pip trade in a matter of a half an hour. Markets are so basic and silly... there is no reason anyone can't make it... it just takes time. Lots of studying and understanding of what price actually is. Supply and Demand. When one over comes the other we get movement. When I am looking at charts, I literally 'feel' a struggle going on with the charts. When compression is happening, lets say upwards and compression points to the south, it literally feels like bulls are throwing every thing they got to get the chart moved up. Then what happens? Bulls run out of juice (Ergo we just switched from demand > supply). But now what? all the bulls have already got there positions in, which means we have just eaten up any demand for a bounce. Price then inevitably falls off of a cliff. The shorts are selling more, and as the bulls realize they f'ed up, they start covering which increases the supply even more. Another pattern I absolutely love trading are triangles (or red sees them more as consumption). Let's say we have a bull ascending triangle. Rising lower trend line with a flat ceiling. Can you tell me what is going on here with supply and demand? I certainly can. Bulls are buying and buying and then we get heavy sellers at this ceiling level. What is the reason for the rising trend line in the triangle? Well, the supply at the ceiling is running out of juice to push price down as each iteration comes along. Bulls answer back with each push down with even more demand putting it back to the ceiling when all of a sudden, guess what. BOOM. Price blows out as supply can no longer contain it. And again, the strong breakout comes from the bears going 'oh shit, we f'ed up. Time to cover. These things happen over, and over, and over and over and over and over and over and over and over and over and over and over and over and over and over and over and over and over and over and over and over and over and over and over and over and over and over and over and over and over and over and over and over and over again. Just have to watch and learn.
correlation redsword
team!
before trading kiwi or aud, use EURNZD supply AND demand zones on the same tf as you are trading kiwi or aud
when EN is @ support - kiwi generally goes south, so check KIWI ( AND AUD ) its @ supply or some kind
when EN is @ resistance - kiwi ( and aud ) generally goes north, check this yourselves and you can time your entries with correlations which helps
EN levels are a good LEADING INDICATOR
only if dx tanks north will loony go too based to dollar strength and uj will go north too BASED on dollar strength but this is rare
when uj goes north it doesn't mean dollar strength but rather yen weakness this is how retail get fcuked over - confusing market conditions
l rarely use limits because how do you know a level is going to be respected or not? Answer - you don't - therefore let prices sink or rally into zone, then identify entry based on price reactions bearish enguilfing @ supply bullish enguilfing @ demand and thats it, nothing else needs to be said about it
If supply is cleared, there is no seller anymore. So what happens ? No resistance on the way up, hence a spike up, like a knife in warm butter, or like daddy in mummy if you prefer. TOUCH TRADE!!! doar cand avem un engulfing continuation Vlad, For price to move from an area, be it continuation,reverse or news there must be engulf. If you have 1 hr supply and price reaches it on 5 min chart, what does it show you that will tell if supply will hold or not. Think about the structure as price is on route to the supply on its final leg. There is only one time i would touch trade and that is the master of all set-ups. When price has engulfed a decision point and pulled back, this pull back area is a great place to touch trade when price revisits. I consider QM's and whipsaws, but they are all types of engulf. To use s and d on its own is like using moving averages, sometimes you might get lucky!
COMPRESSION!!! http://www.forexfactory.com/showthread.php?p=4484730#post4484730
THINK ABOUT IT - a supply zone will be confirmed by bearish enguilfing @ that zone on some tf as it would not be a supply zone WITHOUT BEARISH ENGUILFING because sellers have to exceed buyers and its reflected in price as BEARISH ENGUILFING - too complicated or too simple ?
but the moral of the story was - HE DIDN'T CARE WHAT TF, WHAT PAIR - he just scanned until he RECOGNISED a pole( momentum candles) and a flag ( pullback and low momentum candles )
The ITs need to get tons of orders in around where they wish to turn price. So they'll either compress price on the way to the turn, getting their orders in beforehand, or they'll flag price around the area, accumulating orders all around the best price zone.
Learn the mechanics of these two formations, along with the engulf into PAZ, and you know when price has turned
Hey, All day every day with that first chart. Exactly how i play them! FTR , Then clears the highs and any DP(engulfs) . Then nail it on the FTB. Nice simple chart , with a simple move. Warren
Dp{decision point} is the somewhat precise area where buyers became sellers or sellers became buyers. It happens on any time frame from 10 seconds up. The chart I posted shows a dramatic DP where sellers overcame buyers or engulfed buying. Frequently price will return to these areas either immediately or later. On this chart there was an immediate return but there hasn't been a return since.
So a decision point is nothing more than an area on the chart where it is obvious momentum has changed hands. It' really nothing more than that.
Thank you for your post, you raise some good questions.
I have spent some time with IF on his forum and i have the utmost respect for his attention to detail and integrity. IF coined the term "flag limit" which is a decision point in itself or some call it a marker left by the IT's. I did not want to use that term, as decision point is clear with the meaning and people can relate to it with some simplicity.
An engulf stems from RED, he has sung it from the roof tops. There are two different types of engulf. 1. where price exceeds a previous extreme high (swing) 2. Where price engulfs a decision point. In IF's case a flag. There are thousands of examples all over the charts, but where they visually may look different they are still achieving the goal "Engulf"
What is the purpose of an engulf (in simple terms). It clears orders from a previous decision point and shows the intentions that the market will turn. Price then Achieves a number of objectives for the market movers.
1. Price finds fresh s or d at a wholesale price
2. fools other traders into direction , allowing market makers to take the opposite position.
3. last decision point or extreme was taken out so price can travel to next fresh s or d.
Supply & Demand is a natural force in all free markets, it should be part of the basics learnt by all traders. It is only part of the picture, what do you call strong vs weak supply or demand. There are other factors to take into account.
I trade a number of different set ups, engulf is by far the easiest. Call engulfing pattern a form of confirmation. Let the market movers show their hand. Not all s&d is equal. Another set up is engulf then fake out, head & shoulders or Quasimodo coined by "no brainer trades" here on FF. Touch trades are subjective, unless prior price action has prevailed.
The market moves in many ways, most we see repeat over and over.
I did not post here to take away any of the hard work IF,Red,Kenny and others have done. But just wanted to share how my trading has developed when you understand what forces are at work in the market.
Warren
understand that every Rally Base Drop - Drop Base Rally or Rally Base Rally Drop Base Rally -is a decision point.
Nice point about making it a Warren entry. This is not my type of entry, just because something makes a LL or HH does not make it a Engulf with purpose. I know you are just trying to catch the method out and making really slack trading decisions to make it out as a myth or whatever. I have described in numerous posts what else i look for or consider. Let me help you if you are struggling. 1. An engulf must show intention and be purposeful, it is intended to end a trend of sorts, even on intraday, not necessarily talking long term trend. It takes an awful lot of money to turn the market . 2 Position of the engulfing pattern. Extremes are favourites, remember market movers like wholesale. I did notice on both your charts that you called supply not at an extreme...WHOLESALE 3. Time of day. At london or us open volume enters the market, you can see the market at work over both sessions at times. Price is attracted to extremes like a magnet and often we may see multiple up and down moves during the day. 4, Red has said here many times over " Price can not turn without engulf" 5. The purpose of engulf is to take out an important area and clear the orders for a free route later. The orders form the start of an engulf are more often than not at an extreme, as price moves away with these large orders, is price wholesale anymore??? After the engulf has happened price is pulled back to the source (Wholesale) for another load of orders. You can sometimes see another spike back or two...what are these for ??? filling more orders. This is why we see such a sharp move away from GOOD engulfing patterns. This is quite a key point to understand that great volumes are involved and if you dump 1000's of lots in the market price will move away rapidly and you will not always get a fill, so it has to be done in a few hits , whilst still filling orders at wholesale price. It confuses the average trader, by the time you know what is happening it is off like a race horse.
6. If news is due we often see an engulf happen shortly before and as news strikes it is pulled back to source for a massive move. If you pull up your charts you will see this over and over. They know which way price is going to move before the fact. 7. Over time you become more acustom to price action and you can see where orders are filled (pullbacks) and orders are cleared (engulf). Price structure is fluid and can appear different in its view on our chart. When we consider the now , we must look left to see what price can react to . Has the supply or demand pocket been consumed on route (orders filled) or is there still pockets of fresh supply / demand. Our movement may have trouble there if the intention is to break through. What about compression, how do you view that?? You marked up engulfs now look rather piss poor. I know what you are doing, but until you see it properly you will mince around clutching at straws and bashing everything YOU CANT EXPLAIN. I will post some more examples later Warren
On this chart ive posted ive highlighted an engulf of the swing to the left. The circle shows the decision to break up and the source of the engulf. Price didn't return to source on this occasion. Is this a good example or have I got it wrong?
This is a continuation engulf, price engulfs the high as you say then retests it. The pocket that is formed above the break is important, hence the pullback to it. It is not like a reverse engulf. So you may of waited for the pullback to source after the first engulf which didnt happen. But i would say you would see the next. BIGWALL Vlad, Yes unfortunately there are many different terms. I am sticking with mine Here is a good example it is based on a engulf continuation. When price breaks a prior high or low with an engulf the decision that once was , is no more. BIGWALL
