Identifying Tradable Supply and Demand Zones

In this section, the speaker discusses how to identify tradable supply and demand zones versus poor quality ones. He emphasizes the importance of trading at high-quality zones with significant imbalances.

Criteria for a Tradable Supply Zone

• A drop-based drop or rally-based drop supply zone must fulfill at least one of the following two criteria to be considered tradable:

• It must take out an opposing demand zone.

• It must be the zone responsible for breaking the momentum line or trend line.

• Strongly recommended: A strong two-to-one imbalance move away from the zone.

Criteria for a Tradable Demand Zone

• A demand zone must fulfill at least one of the following two criteria to be considered tradable:

• It must take out an opposing supply zone.

• It must be the zone responsible for breaking a momentum line or trend line.

• Strongly recommended: A strong two-to-one move away from the zone.

Poor Quality Zones

• If a supply or demand zone does not fulfill any of these three criteria, it is not considered tradable.

• However, these zones should not be completely ignored as they can still provide valuable information.

Example Chart Analysis

In this section, the speaker analyzes an example chart and explains why certain zones are marked as tradable.

Identifying Tradable Supply Zones

• The speaker identifies a drop-based drop area of supply with a very strong move down to the downside that went over two-to-one relative to the size of its base.

• This indicates that there is a significant amount of sellers in that location.

• The supply zone also removed multiple demand zones and continued its trend to the downside with a strong two-to-one move away from it, making it a high-quality, tradable zone.

Identifying Tradable Demand Zones

• The speaker does not discuss any specific demand zones in this section.

Conclusion

In conclusion, to identify tradable supply and demand zones, traders should look for significant imbalances and strong moves away from the zone. Poor quality zones should not be ignored but should not be traded at. By trading at high-quality zones, traders can increase their chances of success.

Introduction to Supply and Demand Trading

In this section, the speaker introduces supply and demand trading and recommends watching his playlist on the topic. He also invites viewers to like and subscribe to his channel.

Understanding Supply and Demand

• To identify a tradable supply zone, look for a rally base drop with a strong move to the downside that takes one to two candlesticks.

• A significant imbalance between buyers and sellers will result in a strong move to the upside or downside.

• When drawing out supply and demand zones, look for areas where there is a strong imbalance between buyers and sellers.

Identifying Tradable Zones

• Look for tradable zones that have broken upward trend lines, removed opposing demand zones, or have a strong imbalance to the downside.

• Avoid scrolling into your charts when identifying tradable zones. Instead, scroll out to get a big picture of what's going on in the market.

Examples of Tradable Zones

• The New Zealand Yen weekly time frame has a weekly supply zone that broke an upward trend line with higher highs and higher lows.

• The coffee weekly time frame has a very strong demand zone marked out with multiple instances of removing supply from previous levels.

Journaling Trades and Identifying Tradable Zones

In this section, the speaker emphasizes the importance of journaling trades to identify trading statistics. They then proceed to analyze the CAD/USD pair on a weekly timeframe and identify a tradable zone based on supply and demand zones.

Analyzing Supply and Demand Zones

• The speaker switches to a 5-minute timeframe for USD/CAD.

• They identify a demand zone with broken downward momentum and removed supply, indicating an imbalance to the upside.

• The speaker marks out a supply zone as well but cautions against labeling all areas as supply or demand, emphasizing the need for clear imbalances and opposing zones.

Top Tips for Trading

In this section, the speaker provides their top tips for successful trading.

Key Tips

• Watch the video again and write down the top five tips provided.

• The speaker asks viewers which team they are cheering for in the World Cup before sharing that they are rooting for Team Mexico since they are currently in Mexico.

• Viewers can access a free training masterclass at moneyballtrading.com that includes an ebook and bonus content on supply and demand methodology.

Conclusion

The transcript covers topics such as journaling trades, identifying tradable zones based on supply and demand zones, key tips for successful trading, and accessing free training resources.