Supply & Demand is the BEST trading strategy I've used.
Here is a full A-Z breakdown on how to trade it...๐งต
Here is a full A-Z breakdown on how to trade it...๐งต
By the end of this thread you will understand..
1. How to find S/D zones. ๐
2. How to execute S/D zones. โ
3. How to outsmart the rest of retail traders. ๐ง
4. How to improve your trading. ๐
1. How to find S/D zones. ๐
2. How to execute S/D zones. โ
3. How to outsmart the rest of retail traders. ๐ง
4. How to improve your trading. ๐
WHY TRADE SUPPLY & DEMAND?
When trading in the stock market, one must understand that it is heavily influenced by INSTITUTIONS and ALGORITHMS. To remain profitable in the market, one must trade like an institution.
When trading in the stock market, one must understand that it is heavily influenced by INSTITUTIONS and ALGORITHMS. To remain profitable in the market, one must trade like an institution.
WHAT IS SUPPLY?
Supply is where there is a quantity of shares yet to be sold (limits yet to be filled) at a certain area. This tends to lie in areas where the stock had previously sharply sold off due to sell orders being filled.
Supply is where there is a quantity of shares yet to be sold (limits yet to be filled) at a certain area. This tends to lie in areas where the stock had previously sharply sold off due to sell orders being filled.
WHAT IS DEMAND?
Demand is where there is a quantity of shares yet to be bought (limits yet to be filled) at a certain area. This tends to lie in areas where the stock previously rallied aggressively due to buy orders being filled.
Demand is where there is a quantity of shares yet to be bought (limits yet to be filled) at a certain area. This tends to lie in areas where the stock previously rallied aggressively due to buy orders being filled.
WHAT ARE LIMIT ORDERS?
Limit orders are orders that HAVE NOT been filled yet. This is how institutions trade, they set their limit orders at supply where they have sell orders, and limit orders at demand where they have buy orders.
Limit orders are orders that HAVE NOT been filled yet. This is how institutions trade, they set their limit orders at supply where they have sell orders, and limit orders at demand where they have buy orders.
WHY DO S/D ZONES WORK?
Institutions have previous limit orders set from before. Once you identify where you think they have their orders, once it reaches the zone, the orders fill, and go through with your thesis.
Institutions have previous limit orders set from before. Once you identify where you think they have their orders, once it reaches the zone, the orders fill, and go through with your thesis.
HOW TO FIND SUPPLY & DEMAND ZONES
When looking for supply and demand zones, you are looking for areas on the chart where the stock had made a SIGNIFICANT move to the upside or downside.
A move that retail traders cannot make, but only institutions.
When looking for supply and demand zones, you are looking for areas on the chart where the stock had made a SIGNIFICANT move to the upside or downside.
A move that retail traders cannot make, but only institutions.
HOW TO DRAW S/D ZONES
I draw my zones on the 15m, 30m, & 1h timeframes but anything above the 5m works.
When drawing your zones you want to have your box cover the wick to the body.
Supply = Top wick -> bottom body
Demand = Bottom wick -> top body
See image for reference.
I draw my zones on the 15m, 30m, & 1h timeframes but anything above the 5m works.
When drawing your zones you want to have your box cover the wick to the body.
Supply = Top wick -> bottom body
Demand = Bottom wick -> top body
See image for reference.
If you're having trouble finding these areas, understand this. The market is always in either 2 stages, balanced or imbalanced market.
Balanced market is when b/s are agreeing on price. Imbalanced market is when one side has taken control.
The transition is your zone.
Balanced market is when b/s are agreeing on price. Imbalanced market is when one side has taken control.
The transition is your zone.
SUPPLY EXAMPLES
Below are 2 real life examples of supply zones. Both drawn from the top of the wick to the bottom of the body. Price comes back to our zone, sell orders get filled, rejection happens, and price moves down.
Below are 2 real life examples of supply zones. Both drawn from the top of the wick to the bottom of the body. Price comes back to our zone, sell orders get filled, rejection happens, and price moves down.
DEMAND EXAMPLES
Below are 2 real life examples of demand zones. Both drawn from the bottom of the wick to the top of the body. Prices comes down to our demand, buy orders get filled, bounce happens, and price moves up.
Below are 2 real life examples of demand zones. Both drawn from the bottom of the wick to the top of the body. Prices comes down to our demand, buy orders get filled, bounce happens, and price moves up.
ZONES GET WEAKER
Our zones represent limit buy/sell orders. As price touches our zone MORE, our zone gets weaker because there are LESS orders because they're being filled.
This is very important when playing S/D because if a zone is weak, it will lead to a S/D flip.
Our zones represent limit buy/sell orders. As price touches our zone MORE, our zone gets weaker because there are LESS orders because they're being filled.
This is very important when playing S/D because if a zone is weak, it will lead to a S/D flip.
S/D FLIPS
As mentioned once a zone is weak and our zone is broken, demand turns into supply and supply turns into demand. This TSLA chart is the perfect example.
Our red zone which was demand (now supply) was broken, we reject and move down to our demand zone, bounce, move...
As mentioned once a zone is weak and our zone is broken, demand turns into supply and supply turns into demand. This TSLA chart is the perfect example.
Our red zone which was demand (now supply) was broken, we reject and move down to our demand zone, bounce, move...
...back up to our supply zone and reject. The next day we gap up, come down to what should be treated as demand and bounce multiple times!
When trading S/D flips it's important to wait for confirmation that the opposing side is present to defend the move.
When trading S/D flips it's important to wait for confirmation that the opposing side is present to defend the move.
HELPFUL TIPS
1. Watch LVL2/T&S as confluence in the zone. This allows you to know if buyers/sellers are present.
2. Scale into your zone.
3. Look at the lower time frames to spot a reversal.
1. Watch LVL2/T&S as confluence in the zone. This allows you to know if buyers/sellers are present.
2. Scale into your zone.
3. Look at the lower time frames to spot a reversal.
KEY TAKEAWAYS
1. S/D will always give you a predetermined stop loss, a 5 minute close above/below my zone is how I do it.
2. S/D will always give you good risk to reward.
3. S/D will allow you to outsmart retail and be on the institutions side.
1. S/D will always give you a predetermined stop loss, a 5 minute close above/below my zone is how I do it.
2. S/D will always give you good risk to reward.
3. S/D will allow you to outsmart retail and be on the institutions side.
ORDER OF OPERATION
1. Find the move.
2. Draw your S/D zone.
3. Scale into your zone.
4. Full position.
5. Profit.
1. Find the move.
2. Draw your S/D zone.
3. Scale into your zone.
4. Full position.
5. Profit.
And if you liked this thread, follow me @ShinobiSignals
I post free value like this thread often.
I post free value like this thread often.
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