Supply and Demand Trading Strategy Masterclass - Complete Trading Course

Understanding Supply and Demand Trading

In this video, the speaker covers everything about supply and demand trading. The video includes how to find supply and demand zones, what time frame to trade them, multi-time frame analysis, timing entries, good and bad supply and demand zones, advanced concepts of supply and demand trading, trade studies, and a Q&A session.

Trend Direction Change

• When a new trend is starting it often follows a very similar rhythm.

• Look for trend direction change because there are significant powers at play here.

• Draw your box around those first consolidations because that is where we can later look for buying interest.

Drawing Supply or Demand Zone

• Draw our supply or in-demand zone from the high of the pattern to the low of the consolidation.

• Extend our zone into the future and then wait patiently.

• Identify a trend change before drawing our box around the supply and demand pattern from high to low.

• Wait for price confirmation before trading blindly in our supply or demand area.

Forex Market

• Forex is the most commonly traded market in the world with the biggest daily turnover.

• It takes a lot of money to turn a trend around in forex market

• When you see that the market is going from downtrend to uptrend it means something significant must have happened here at turning point of trend

Conclusion

Supply and demand trading is an essential concept that traders need to understand. By identifying trends changes, drawing boxes around consolidations, extending zones into future markets while waiting patiently for price confirmation before trading blindly. Traders can make informed decisions when trading on forex markets.

Understanding Trends and Breakouts

In this section, the speaker discusses how to identify trends and breakouts in the market.

Identifying Trends

• Lower lows and lower highs indicate a downtrend.

• Higher lows and higher highs indicate an uptrend.

• Draw trend lines connecting the highs or lows to identify trends.

• Look for a breakout out of a pattern to confirm a trend change.

Trading Breakouts

• Go with the trend on the breakout.

• Stack multiple signals (supply/demand zones, weakening trend, pattern, breakout) for a strong trading idea.

• Focus on trading the first time the market returns to a supply/demand zone.

• Avoid trading supply/demand zones that have already been tested multiple times.

Multi-Time Frame Supply and Demand Trading

In this section, the speaker discusses how to use multiple time frames to identify supply and demand zones for trading.

Identifying Trend Changes

• Look for significant trend changes on higher time frames (e.g., hourly).

• Identify consolidation areas below the top of an uptrend or above the bottom of a downtrend.

Finding Supply/Demand Zones

• Look for consolidation areas on lower time frames (e.g., 5-minute).

• Identify supply zones in downtrends and demand zones in uptrends.

• Stick to two stacked supply/demand zones at most.

Trading Supply/Demand Zones

• Wait for the price to reach the supply/demand zone before entering a trade.

• Exit the trade once the price reaches the opposite side of the zone.

Adding Moving Averages to Supply and Demand Trading

In this section, the speaker explains how moving averages can be added to supply and demand trading to help identify trends and find robust trading situations.

Using Moving Averages in Supply and Demand Trading

• Moving averages can be used in addition to trend lines to describe the trend.

• The 50 period moving average is faster-moving, while the 100 period moving average is slower-moving.

• Waiting for the market to break through multiple layers of context, including supply areas, trend lines, moving averages, and support areas, can help identify high probability trading situations.

• Multiple layers of context are important for creating a robust trading idea.

Understanding Support and Resistance with Supply and Demand Zones

In this section, the speaker explains how supply and demand zones can be used as leading indicators for support and resistance zones.

Supply and Demand Zones as Leading Indicators

• Supply and demand zones can create support and resistance zones that many traders follow on their charts.

• Knowing about supply and demand zones allows traders to identify support and resistance areas before other traders do.

Trading a Breakout with a Demand Zone

In this section, the speaker explains how to trade a breakout using a demand zone.

Trading a Breakout with a Demand Zone

• Drawing a demand zone around consolidation before a breakout can help identify high probability trading situations.

• Waiting for the market to come back into the zone before developing a trading plan is important.

• Trend lines can be used in addition to supply/demand zones to help identify changes in trend sentiment.

• Retest approaches can be used instead of pure breakouts when timing trades.

Trading Supply and Demand Zones

In this section, the speaker discusses how to trade supply and demand zones. They explain that traders should take what the market is offering them, be happy with their profits, and not gamble away their unrealized profits.

Identifying Trading Opportunities

• The first time a trading opportunity arises is on a trendline break.

• Many times after that, there are opportunities on breaks and re-tests of supply areas.

• After identifying a supply area, it can become support or resistance in the future.

Advanced Supply and Demand Strategy: Trap Zones

• Look for the first consolidation before huge candle breakouts.

• Draw the zone from the bottom to the highs and extend it forward.

• Wait for a pattern to emerge before trading short.

• A trap pattern occurs when the market overshoots the zone by quite a bit.

• Wait for price to get to the zone then look for a trend structure like resistance turning into support before trading breakout.

Conclusion

In this section, the speaker concludes by summarizing key points discussed in previous sections. They emphasize that traders should wait for patterns to emerge before making trades and use trend structures like resistance turning into support as indicators.

Supply Zone Shift Strategy

In this section, the speaker discusses the supply zone shift strategy and provides an example of how it can be used in trading.

Changing Direction of Forex Major

• The US Dollar CAD is considered a forex major.

• Changing the direction of a forex major from downtrend to uptrend is not easy and requires a lot of buying power.

Demand Zone

• A violent move occurred in the market, which indicates a demand zone.

• Draw a box around such an outlier candle and observe what happens next.

Head and Shoulder Pattern

• The origin of the demand area is marked by 0.1.

• A head and shoulder pattern can be drawn around it with left shoulder, head, and right shoulder.

• The right shoulder is a pre-breakout buildup pattern.

Overshooting Supply Zone

In this section, the speaker discusses how overshooting occurs on supply-demand trading.

Phenomena on Supply-Demand Trading

• The first time the market hits a previous supply or demand area, it may not reach or briefly penetrate it.

• Second and third times often see longer stays at zones and deeper penetration.

Spending Time at Zones

• Market spends long time at zone after second time hitting it.

• Zooming in on point two shows that just because market hits previous supply/demand area doesn't mean you should trade immediately.

Creating Repeatable Patterns for Trading Success

In this section, the speaker emphasizes creating repeatable patterns for successful trading using multiple layers of context.

Importance of Context Layers

• Multiple layers of context are important to find repeatable patterns in technical analysis.

• Checklist helps take off each layer one by one to create trading strategy with repeatable patterns.

Creating a Trading Strategy

• Supply-demand area, trend slowing down, divergence, trend line/moving average, breakout/retest are all layers of context that can be put into a checklist.

• Once rules are in the checklist, you can keep trading it over and over again to find bread and butter trades.

Understanding Supply and Demand Trading

In this section, the speaker discusses how supply and demand trading works and how it can be used to identify profitable trades.

Identifying Patterns in Supply and Demand Trading

• The speaker explains that there are repeatable patterns in supply and demand trading.

• It is important to understand that no trading system works 100% of the time, so traders must wait for trades with context to reduce the chances of losing trades.

• Traders must also be willing to cut losses if a trade does not work out.

Radiating Supply and Demand Forces

• The speaker explains that radiating supply and demand forces refer to the idea that there are strong zones on a chart where price tends to move away from or towards.

• When looking for a trend change, it is important to find a demand zone. Even if the market does not fully reach the zone, it is still valid and tradable.

• Traders should place their price alerts slightly ahead of the supply and demand zone so they do not miss any trading opportunities.

Using Supply and Demand Pattern Trading Strategy

• The speaker demonstrates how to use supply and demand pattern trading strategy by identifying trends on charts.

• On a two-hour chart, traders can identify when the market changes from downtrend to uptrend. This is significant because such long downtrends coming to an end can lead to huge breakouts.

Supply and Demand Trading Strategy

In this section, the speaker explains how to use supply and demand zones to identify trading opportunities.

Identifying Supply and Demand Zones

• Use Bollinger Bands with indicators to spot outliers.

• Draw a box around the supply and demand area at a trend origin.

• Wait for the price to come back to the zone or get very close to it.

• Never trade a supply and demand zone blindly.

Building a Multi-Layered Trading Approach

• Use different trading tools such as trend lines, moving averages, RSI divergence breakouts, support resistance levels, etc.

• Build a multi-layered trading approach by using these tools in context.

Time Frame Considerations

• There is no best time frame; find one that works for you.

• The four-hour-one-hour combination is preferred by some traders.

Supply and Demand Trading Q&A

In this section, the speaker answers commonly asked questions about supply and demand trading.

Recap of Supply and Demand Zone Rules

• Look for supply and demand zones at a trend origin with huge candle outliers.

• Draw a box around pre-breakout consolidation when the trend is starting into a new direction.

• Wait for strong breakouts out of consolidations before entering trades.

• Focus on first touches; second and third touches have lower probability.

Time Frame Considerations

• There is no best time frame; find one that works for you.

Special Offer

The speaker offers four trading courses for the price of one. The courses include Price Action Course, Supply and Demand Secrets Course, Multi-Time Frame Trading Course, Forex Starter Course.

Supply and Demand Trading

In this section, the speaker discusses how supply and demand trading works on different time frames, how to get into trades using market orders, and the difference between supply and demand and support and resistance.

Time Frames for Supply and Demand Trading

• Different traders have different strengths on various time frames.

• Supply and demand works on all time frames.

• Traders need to find the right combination of time frames that work for them.

Getting into Trades with Market Orders

• Wait for price to reach a supply or demand area.

• Look for structures in the area.

• Wait for a breakout that fully closes outside of the defined level.

• Use market orders instead of predetermined pending orders to avoid fake outs.

Difference Between Supply and Demand and Support Resistance

• Supply and demand usually precedes support resistance.

• Strong demand areas can become support areas later on.

• While they may be similar, supply and demand are very different from support resistance.

Using Moving Averages in Trading

In this section, the speaker talks about using moving averages in trading, specifically focusing on which moving average is best to use.

Best Moving Average to Use

• The 50 period moving average is often respected across all time frames.

• It carries more weight than other moving averages.

• While it's not foolproof, it's a well-respected moving average.

Why Moving Averages Work

• The reason why something works doesn't matter as much as how it works.

• Focus on finding out how we can profit from it rather than why it works.

Conclusion

In this section, the speaker concludes by emphasizing that traders should focus on the "how" rather than the "why" of trading, and encourages viewers to leave comments and feedback.

Focus on the "How"

• Traders should focus on how to profit from trading.

• Focus on building robust trading strategies, getting into trades, protecting stop loss and capital, sizing positions correctly, and improving over time.

Encouragement for Feedback

• Viewers are encouraged to leave comments and feedback.

• The speaker will be back with another special video next Tuesday.