Supply and Demand Trading Strategy

how to trade the supply and demand trading strategy in 20 minutes or less that's what we are going to talk about today I've been trading this strategy for over 10 years now traveling and trading around the world and now helping Traders become consistently profitable in 90 days and in fact at the end I'm going to give you a bunch of resources and the blueprint about how to become a profitable Trader in 90 days we're going to cover everything in this video what is the theory of supply and demand how to identify draw trade these supply and demand zones how about entries exit take profits we're going to talk about three setup we're also going to touch based on the importance of identifying Trend because it it is extremely important we look at traders who come to me and time and time again they say look my trending markets perform a lot better than my counter Trend markets my quality trades perform a lot better than my non-quality trades so it's important that we identify quality zones we're also going to touch on journaling and a proper review process very good video it's going to be jam 20 minutes I appreciate if you guys like the video subscribe and if you have any questions you can reach out to me on social media Moneyball Austin and you can drop the question down below about this methodology let's get straight into it so the first thing that you need to understand is that there is no best trading strategy there are many different trading strategies out there but it's important that you find one trading strategy that makes sense to you and you master it for me it's been supply and demand been doing it for over 10 years but you can always add little things from other trading strategies into your analysis the second thing this is going to work for all different markets whether you're trading Forex crypto Futures stocks whatever other markets that are out there this is going to work for those other markets as well I know a lot of people are going to come to me what is the best time frame sequence let me break this down to you because there is no best time frame sequence because not everyone is here to be a day trader or a swing Trader if you want to do long-term trading this is probably something you're going to be looking at if you want to do day trading or scalping these are the time frames that you're going to be looking at all right using the 4 Hour or the 1 hour as your highest time frame you can still use 30 if you want all right there's nothing wrong with that but these are rough Guides of time frame sequences that you want to use depending on the type of Trader you are okay number three the whole theory of supplying demand it is to identify where the big money is buying and selling at and trade with them all right we understand the big money the institutions they move the market so it's important that we are able to identify where these institutions are buying and selling at luckily for us they leave footprints in the market so these very strong imbalances that you see on a chart going down or in this case going up down here from these strong inbalances this is billions and billions billions of dollars moving the markets so these are the type of areas that we want to locate on the chart luckily like I said they leave Footprints and these are the four patterns that we trade the four patterns that we are going to be trading we have two Supply zones and two demand zones our supply zones are going to consist of a rally based drop how it rallies up it bases and it drops we have a drop base drop where prices drop base drops those are our two Supply zones and our two demand zones are going to be a drop base rally and a rally base rally okay those are the four patterns now note the reversal patterns which is typically known as the rally based drop and the drop based rally tend to be higher quality than the two continuation patterns which is the drop based drop or the rally based rally we will talk more about this in depth but those are the four patterns that we need to be looking for okay but how do we draw them out okay because we need to go to a chart and loow them like I said before these big money the institutions they leave footprints in the market all right clearly they saw value up in here before up at this area before it had this massive drop to the downside there was a lot of value that they saw up in here that's a big selloff so what we're trying to think is if they previously saw value up there before will once prices arrive back into this area will they see value in it again again and that's when we want to start trading so if we have a supply Zone up there how do we draw it okay you're going to notice there's two things to these patterns there is strong in balances very strong in balances and then there's base the base is where we want to locate to where we draw our proximal and our distal line so if we're going to highlight the base this is what I want to do for this Supply Zone I want to take the average of the base okay I want to highlight the base I'm not trying to nitpick saying that's the supply zone I'm not trying to say that's the supply zone I'm trying to get to the origin of where the imbalance originated from did the imbalance originate from down here or did it originate from up there it originated from up there so that's where I want to draw my proximal in my distal line your eyes want to gravitate to strong imbalances like this so we're going to draw our base like that highlighting the top 50% candlesticks with our topof the line going at the top of the wick for supply all right but notice how I'm not going like this I'm highlighting the base of where it originated from this is where the imbalance originated from so that's typically where I want to do it same thing for demand so if this was my demand Zone I would highlight my base like this I would probably extend it just a little bit lower to include that Wick but I'm not going like this I'm not ignoring the bottom Wick you don't want to do that that is how we draw out our supply and demand zone now there are supply and demand zones everywhere on this chart but we want to be selective on how we identify certain zones and this is a very important concept that we need to talk about is what makes a tradable supply and demand Zone every Zone needs to accomplish at least a 2: one IM balance within the first three candlesticks if prices don't go at least two to one within the first three candlesticks I do not want to draw out that as a supply or demand Zone how do we measure that okay this would be my base like we talked about that would be the base the total measurement is 1,700 well I need the imbalance to go at least I don't know what my math is like 3500 right so the distal sorry the imbalan candlesticks need to go at least 3500 something like that within the first three candlesticks well in this case within the first three it's gone like 4 to one so that is a good Zone all right same thing with these two zones over here the base consist of 800 within the first two candlesticks it went 2,000 onto that we want prices to actually remove an opposing zone or break momentum line so in case with these imbalanced candlesticks it needs to remove an opposing area that makes it a qualified zone so in this case with those imbalanced candlesticks it removed that zone this Zone over here was removed this Zone over here was removed that makes it a tradable Zone okay so we need prices to go at least two to one and or and remove an opposing Zone okay it also helps if it breaks momentum line which also makes it a tradable Zone there's three things goes 2: one removes an opposing Zone and or breaks momentum line all right but guaranteed two to1 zone is a must guaranteed okay because it's extremely important that we are identifying the these strong zones once again entry time frame quality setup you can clearly see that there's a difference between a quality setup versus a non-quality setup good setup versus average versus poor two wins five losses when he's trading a poor setup versus if he's trading a good setup 11 wins five losses so it's important that we qualify these zones as tradable zones step six we need to be able to identify trend lines and Trend assessment because trend is extremely important because there is a large difference between our winners and losers sideways with the trend or in a sideways Market 19 winners seven losers versus if he's trading counter Trend six winners nine losses same thing for this guy over here when he's trading with a trend or in a sideways Market he's got a 68% win rate versus trading counter Trend 30% win rate so it's important that we actually have a method of determining Trend okay thing is there's a million different ways to to determine Trend in the market okay so how after the first thing that we do on a chart the first thing we do on a chart is we identify our supply and demand zones the second most important thing is that we determine the trend okay like I said before I just explained why it's important so when we go to a chart we need to also determine the trend okay how we determine the trend there's so many different ways some people will use moving averages some people will use Elliot wave theory some people will use higher highs higher lows what's important is that you are consistent with this approach okay so the ways that we will determine how to determine an uptrend or downtrend an uptrend is if we are removing opposing Supply zones and creating higher highs and higher lows versus a downtrend is if we are removing opposing demand zones and we are creating lower lows and lower highs so in this case we would be removing opposing demand zones and creating lower lows and lower highs all right so that would be a downtrend in that case and it's extremely important that how we are determining Trend this is a very important concept and this was my light bulb moment in trading you need to understand that Trend turns from inside out what do I mean by that so if you have let's say for example a 4our supply let's just imagine up here is a 4our supply Zone if you have prices coming back up here to a 4-Hour Supply Zone the trend on a five minute the 1 minute the 15 minute is going to be in an uptrend as it's going up into a 4our supply it has to be in an uptrend on smaller time frames so that's okay if we are going to start looking for confirmation and price turning there's certain things that prices have to do in order to see prices turning we are going to have to see opposing Pivot Point zones being removed and trend lines being broken so in this case if we have prices going up into a 4-Hour Supply we are going to see 5 minute higher highs higher lows in order to see this thing go from an uptrend to a sideways Market the first thing that we are going to see is we are going to see upward trend lines being broken and opposing Pivot Point zones being removed five minute demand zones being removed that is confirmation all right that's a very important concept it changes your trade Al together I could break down the stats for you but I've already been doing it it's extremely important that Traders understand this that this is how prices turn Okay prices turn from inside out so that's what we want to be doing we want to be waiting for prices to be trading with the trend maybe or trading inside a higher time frame Zone and then go down to a lower time frame and look for our entry we don't just trade straight up at these zones let me break down a trade review and in fact let's just start talking talking about the top down analysis all right because I want to talk about the large majority I'm probably already 10 minutes into this top down analysis let's talk about the multiple time frame setup and this is going to be Euros Swiss let's talk about a losing trade setup okay so this was a setup the other day that we were talking about the first thing that we do okay when we come to a chart we draw out our supply and demand zones so before we had a very nice 4H hour little Supply zone right here all right little drop base drop strong imbalance to the downside going at least two to one it removed an opposing Zone that is a good 4-Hour Supply Zone okay so when prices come back into that zone we want to start looking for selling opportunities because this is previously an area where big money took control so prices come back up into our higher time frame Supply and we start going down to a smaller time frame okay so in this case I think it was a a 30 minute time frame and you're going to notice as it's going up higher highs and higher lows that's what we want all right but we need to see confirmation all right we need to see break in structure and opposing Pivot Point zones being removed with momentum lines okay that's what we need to see some people we'll talk about this maybe in a bit some people might be seeing this as confirmation I might say going back to less than one when we started talking about this we want this to occur within the first three to four candlesticks right we want the Zone being going at least two to one within the first three candlesticks it looks like this Zone did it but we we also want the opposing Pivot Point Zone being removed and momentum line being broken within the first three to four candlesticks so in this case it's taken one two three four five it took six candlesticks in order to get all of those candidates for what a tradable setup is so that's not something I would want to trade okay but this over here notice the difference between this setup versus this setup over here highlighting my zone in this case we would have broken upward momentum line okay removed the opposing Pivot Point Zone but everything was accomplished within three candlesticks this is the type of trade that I would want to take versus the other one all right and time and time again when I look at my trade reviews and we'll talk about them rally based drop Supply Zone broke momentum line removed the opposing Pivot Point Zone all within three candlesticks right it's not taking 10 candlesticks it's not taking six it's happening very quickly okay so that's what I want to see let's talk about entries and exits because before yes this was a setup where would you enter on a trade setup like this okay price inside a higher time frame Zone we got confirmation we want to go short okay I am going to enter my short back here at the proximal line of where my base originated from right here okay that's where I'm going to get filled on the pullback right there all right not up here not down here but here that's where I'm going to get filled once prices go back into my zone okay that is your entry your stoploss is going to depend based off of is it going to be a structure stop loss or is it going to be just a a random volatility based stop loss because we never want to place our stop loss right above the Zone like right there we don't want to do that can you see that little green line you don't want to do that right you want to place it above an example of this a volatility based stop loss and I just want to have it generally below so this was my zone down here if I had it right here at my distal line I would have been stopped out you want to create some type of Separation without making it too large all right there's in my opinion you never should really have the Zone more than one to one the size of the base okay this little Supply Zone up here I was selling the pullback back up into here notice my stop loss okay why did I place it there it because I look over to the left there's a clear structure Pivot Point up there so I would want to have it right above that area not directly above my zone this is my little Supply Zone I have it above this area right my distal Line's up there that's where I want want to have my stop loss okay I don't have it 20 times the size I'm not going for a negative reward to risk I want to have it slightly above okay so that's where you want to have your entry and your stop loss what about your take profits because this is a very debatable thing so many people are different on this topic depending if they want to go for a 1: one two: one 3: one or whatever what I like to do is I like to go for a minimum 2: one okay my first take profit will be at two to one and then I will move my stop loss usually by then already to break even or slightly below break even I want to protect myself and then I'll get out maybe at uh the opposing structure point for a second take profit so let's look at a a trade so in this case this was my long trade setup so I was getting long I got in it looks like I got out at like a 1.5 to one up here at opposing kind of structure resistance at this point so that's where I want to manage my first take profit and then my second take profit is like hey let me go for 4 to one or 5 to one to really hit the home runs because it's a bad feeling when prices only go one to one or two to one I know it sucks right my second takeprofit is going to be at like four or five to one up there which is also an opposing Zone up in here okay so that's where I'll have my second takeprofit now when it comes to trade management all right very important topic I will tend to move my stock stop to I don't necessarily move it straight to break even at a certain time but I'll move it based off of structure so let me share with you an example so in this case I was getting short here on this zone right I was getting short right here short right here stop plus above there got me in this is where I had my original takeprofit it did not hit my takeprofit but it's the worst feeling when it just misses your takeprofit then reverses and stops you out so at this point once it you know starts going right here I'm probably going to move my stop to at least this period right here all right and then once I notice it just missed my takeprofit that's when I'm going to move it to break even because I know if it reverses it's a high probability that it's going to continue in that direction and probably stop me out because normally I want this thing to take off in my direction right but what's important is that you journal the trades and that you can review to see what makes sense to you because if you you aren't journaling your trades you're never going to learn from your losers or your winners about how you can best manage the trade man I I killed that discussion talking about entries stop losses take profits really good trade management too fantastic so let's talk about now we're going to dive into several other examples I've probably already gone past 20 but screw it uh multiple time frame versus the one time frame versus confirmation 2.0 all right so let me show you a little picture of what this looks like once again this is how confirmation moves goes from downtrend to sideways to uptrend right we want to locate when price is starting to turn it's not taking 20 candlesticks it's taking three to four that's what I want so this is the picture I want to share the multiple time frame setup is when you have over here price is going into higher time frame Zone and you have confirmation on your lower time frame price making lower low lower high strong in Balance but look every Zone with the multiple time frame is going to break the momentum remove the opposing Pivot Point Zone pivot not just an ordinary Zone but an actual pivot area and a strong quality zone is being created what is a strong quality Zone price is going over 2 to one within the first three candlesticks price is breaking the momentum line removing the opposing Zone these are all things that I require on my entry time frame okay guaranteed that is the multiple time frame setup we then talked about we didn't talk about it here but then we started discussing about onetime frame let me break down to you what the one time frame setup is the onetime frame setup is when we don't necessarily need prices inside a higher time frame Supply or demand Zone but we must trade with the higher time frame Trend okay this was a trade example USD Mexican when it comes to this one time frame setup everything is going to be the exact same but I don't need price inside a higher time frame Supply or demand Zone but I must trade with the higher time frame Trend I must trade with the higher time frame Trend so I noticed price in an uptrend I'm looking for buying opportunities these were the two setups that we were talking about in the group all right once again you're going to notice these two setups look at this demand they all are going to look like this higher time frame an uptrend but we're going to have the shortterm lower low lower high Pivot Point Zone being removed strong quality Zone being created right once again this demand Zone prices never came back but it was the on the watch list strong in Balance removing Pivot Point zones tight base same thing up with this one all right lower low lower high we could draw that downward momentum line connecting it to the pivot Points we have that very strong inbalance once again first two candlesticks went over 2: one it removed opposing zones and it broke momentum line that's what we want you'd be entering here on the pullback how would I manage my my entry I would have my entry right here sitting at my proximal I would probably have my stop loss right right around here most likely that's where I'd have my stop loss and then my first take profit might be one to one 1.5 to1 maybe two: one so say maybe up here and then my second take profit maybe at 4 to1 5 to one okay but how I'm going to manage this trade once it made this move up to here I'm going to move this stop loss to this I wouldn't necessarily move it to break even I would move it right below to where it previously went into because chances are if it goes back into my zone from this area on it's going to remove it alt together okay but there's a lot of the times where we'll pull back test that area and then blow up to the upside so that's why I want to have it there okay but once I get my first takeprofit hit I'm moving that sucker to at least Break Even okay it's riskof risk- free I'm going I'm shooting for the moon I'm hitting that home run that's where you get paid with the multiple take profits okay but that is the one time frame setup let's go over one or two examples gold I know a lot of people sent me this message on gold and a lot of people caught this higher time frame gold one time frame short downtrend right so if we're in a downtrend market we could say hey I could look for one time frame setups to the downside I don't need price inside higher time frame Supply but I need to be trading with the trend I want to look for a quality setup he went down to his lower time frame and he had this strong quality zone right here shortterm higher high higher low boom right it's the same thing I've just been drawing out guys it has to look like that it's not taking 10 candlesticks it's taking three four candlesticks and it's accomplished all this all right he he trades the pullback he's also reacting off of like a moving average right that's how he's trading it all right he's got his proximal as distal line up here he's got his stop loss up there okay he gets filled into his trade once again it's the same damn setup he's trading with his higher time frame Trend in a downtrend so he doesn't necessarily need price inside a higher time frame Supply and so he looks for one time frame shorts right that is a valid setup it was the same thing with the USD Mexican we just trade and now we also have a second setup which is kind of the confirmation 2.0 setup that is basically when you have say for example here we had pric is going back into this rally based rally once again guys rally based rally proximal distal line tradable Zone gone over 2: one removed opposing Zone everything happened within the first three Candlestick so that is a good higher time frame Zone I am not trading straight up at these higher time frames frame zones okay prices go into higher time frame demand I go down to my lower time frame to wait for confirmation looks like we had lower low lower high we had some type of maybe confirmation down here on a smaller time frame with maybe a stop down there anyways this was the confirmation 2.0 say prices go into your higher time frame Zone that's confirmation one but if we don't get the pullback and prices continue to go down that is what is known as conf confirmation 2.0 and you would trade this as the setup right so in this case we had the break we kind of had this higher high higher low right okay once again this Zone going over two to one within the first three candlesticks it's removing opposing Pivot Point zones and it's breaking momentum it's it's a great Zone okay we trade the pullback back in here and it looks like I was hading my take profit at 2 to one I had my original stop down here as a structure based stop because of down here to the left and what I did prices went up look like it went 1.75 to one and then It reversed but I got stopped out here because I moved my stop up just below break even at that point okay that's how I'm managing the trade and that is the confirmation 2.0 setup so if we look multiple time frame confirmation setup prices go into higher time frame Supply okay higher high higher low boom break momentum line opposing Pivot Point Zone strong quality Zone being created once again I need all of this circled right here the one time frame setup is when you're trading with the higher time frame Trend Direction and so you don't necessarily need price inside a higher time frame Zone but you go down to your lower time frame and it's the same damn setup but you need it to break you know the PIV posing Pivot Point Zone break momentum line and that is your zone right and then you trade it once it price comes back up you're not chasing price you trade it once it comes back up stop loss above there you know how to take profit trade management you know all that right and then the confirmation 2.0 setup let's just say this is our demand we have prices going down that would be our confirmation to confirmation one confirmation two is like it misses your entry but it continues to make new pushes or new higher highs or new lower lows right depending if it's a buy setup or sell setup but once again it has to move at least 2 to one and make a new higher higher higher low right or for Supply lower low lower high right but notice they're all drop based rallies or rally based drop patterns for my entry time frame and if you want to add indicators or other technical analysis that's totally fine this is a really good Supply Zone up here went over 2: one very strong in Balance but notice it's removed this Zone it's removed this Zone it's done all this but it's broken through a very clear support so you're going to have support and resistance Traders you're going to have supply and demand Traders you're going to have uh breakout retest Traders shorting up here and you're going to have Traders kind of trading this 200 moving average as it's coming back up you're going to have Traders trading that right so once prices go back into that zone I would consider looking for selling opportunities just because you have all these things doesn't mean necessarily it has to be a winner all right get that out of your head it's important that you understand that but if you want to use indicators chart patterns other confluences I do too I use it but it's Confluence to the trade setup versus if it didn't do those other things right it's important to have a trading plan all right this is a very easy step-by-step process this is something that I did early on I created a mind map early on this is many years ago this would help me determine a trade setup right and so the first thing I would do is okay step one what do we do on the chart we identify our supply and demand zones all right that is step one step two I determined the trend all right after that I can start following this mind map is price inside a higher time frame zone no okay no trade next chart yes okay can we set and forget I no longer do set and forget um so let's skip it so let's go wait for confirmation all right has price shown confirmation broke a momentum line remove Pivot Point zones whatever no wait for confirmation yes it has okay how does it score is it a good setup yes it is okay take the trade so you follow this mind map around to be a good setup and you could extend on this to be like are you trading with the trend do you allow yourself to do a one time frame setup you know what I mean um that's definitely something that you could add to a mind map like this and create your own right because everyone's going to trade a little bit differently but very easy it's actually very easy Once you just understand the basics right so make sure you have a trading plan so another thing I wanted to quickly touch on is the pros and cons of trading multiple markets versus one to three okay I personally focus on one to three but let's quickly go over it because it's a very important topic because people come to me asking this all the time if you decide to take one to three the pros and cons you are going to learn those markets extremely well and you're going to learn how those markets trade During certain times times of the day and how they move okay it's going to be a lot less stressful in your trading when you're only looking at one to three markets versus 30 okay just understand that there is a potential for Less trade setups as a Trader and if you go a couple days three four five days you are start going to panic in your mind thinking oh I got to take trades I got to force trades and you're going to have fomo that is potentially what might happen versus if you take 20 if you trade 20 markets you could be very picky with your trade setup and what a quality setup is okay you can cherry pick them but just keep in mind you won't deal with fomo typically but you will deal with information overload you're going to be looking at 20 different markets 20 different pairs 20 uh three different setups right different time frame sequences it can be very overwhelming just make sure you know that you can always add or remove okay these types of markets so that's important uh depending on who you are so the other thing I want to quickly also touch on is reviewing all right it's important that we journal and review our trades this is what separates a break even Trader versus a losing Trader okay this is something I said to the private group and we're coming to the end of the year and so this is what I say I expect everyone here to do a year-end reviewing reviewing is one of the most important things a Trader can do especially heading into 2024 as a Trader we need to be constantly adjusting our trading strategy and adapting to New Markets this is why we Journal our Trad good or bad as it will become a learning experience and help us create a better Edge for oursel this is what you should do get a piece of paper and create a tick or tally sheet and analyze everything you can determine what is your win loss percentage if you were trading in an uptrend versus downtrend versus a counter Trend Market a win rate when trading a clean arrival versus poor arrival what is the win rate between the one time frame setup versus multiple setup what about if you went for 2: one versus 3:1 or what happens if you go out at one to one versus 5 to1 how does that affect your win loss what about if you moved your stop to break even after a certain point how does that affect your trading do you make more money do you lose more money okay these are so many little things that you need to review to figure out this is what you see that I was showing you that people are reviewing to figure out what makes sense for them as a Trader okay uh it's much different when they do the work and they do the trade reviews and they come up with 40 to 50 trades and I do a one-on-one with them than somebody just listening to this video but is it is extremely important okay in fact there is an hour and a half long video covering everything I just talked about for in a full course that will be down below okay I would strongly recommend checking out this tips playlist going over my trading strategy it's completely for free okay but the traders that decide to work with me you know check it out Moneyball trading.com that's where we have the goal of turning a Trader to profitable in 90 days with a direct coaching I did have an ebook going through this video uh this is for the people in the private group but I did create a free one for anybody that decides to sign up it's completely free for this one register to the free master class and I'll send you that in an email having a free access to the multiple time frame trade setup and a beginner's guide to this trading strategy if you have any questions let me know in the comments below as well appreciate if you guys like the video subscribe in fact if you just want to jump to that hour and a half long video I will have it above my head right now cheers bye-bye

how to trade the supply and demand trading strategy in 20 minutes or less that&#39;s what we are going to talk about today I&#39;ve been trading this strategy for over 10 years now traveling and trading around the world and now helping Traders become consistently profitable in 90 days and in fact at the end I&#39;m going to give you a bunch of resources and the blueprint about how to become a profitable Trader in 90 days we&#39;re going to cover everything in this video what is the theory of supply and demand how to identify draw trade these supply and demand zones how about entries exit take profits we&#39;re going to talk about three setup we&#39;re also going to touch based on the importance of identifying Trend because it it is extremely important we look at traders who come to me and time and time again they say look my trending markets perform a lot better than my counter Trend markets my quality trades perform a lot better than my non-quality trades so it&#39;s important that we identify quality zones we&#39;re also going to touch on journaling and a proper review process very good video it&#39;s going to be jam 20 minutes I appreciate if you guys like the video subscribe and if you have any questions you can reach out to me on social media Moneyball Austin and you can drop the question down below about this methodology let&#39;s get straight into it so the first thing that you need to understand is that there is no best trading strategy there are many different trading strategies out there but it&#39;s important that you find one trading strategy that makes sense to you and you master it for me it&#39;s been supply and demand been doing it for over 10 years but you can always add little things from other trading strategies into your analysis the second thing this is going to work for all different markets whether you&#39;re trading Forex crypto Futures stocks whatever other markets that are out there this is going to work for those other markets as well I know a lot of people are going to come to me what is the best time frame sequence let me break this down to you because there is no best time frame sequence because not everyone is here to be a day trader or a swing Trader if you want to do long-term trading this is probably something you&#39;re going to be looking at if you want to do day trading or scalping these are the time frames that you&#39;re going to be looking at all right using the 4 Hour or the 1 hour as your highest time frame you can still use 30 if you want all right there&#39;s nothing wrong with that but these are rough Guides of time frame sequences that you want to use depending on the type of Trader you are okay number three the whole theory of supplying demand it is to identify where the big money is buying and selling at and trade with them all right we understand the big money the institutions they move the market so it&#39;s important that we are able to identify where these institutions are buying and selling at luckily for us they leave footprints in the market so these very strong imbalances that you see on a chart going down or in this case going up down here from these strong inbalances this is billions and billions billions of dollars moving the markets so these are the type of areas that we want to locate on the chart luckily like I said they leave Footprints and these are the four patterns that we trade the four patterns that we are going to be trading we have two Supply zones and two demand zones our supply zones are going to consist of a rally based drop how it rallies up it bases and it drops we have a drop base drop where prices drop base drops those are our two Supply zones and our two demand zones are going to be a drop base rally and a rally base rally okay those are the four patterns now note the reversal patterns which is typically known as the rally based drop and the drop based rally tend to be higher quality than the two continuation patterns which is the drop based drop or the rally based rally we will talk more about this in depth but those are the four patterns that we need to be looking for okay but how do we draw them out okay because we need to go to a chart and loow them like I said before these big money the institutions they leave footprints in the market all right clearly they saw value up in here before up at this area before it had this massive drop to the downside there was a lot of value that they saw up in here that&#39;s a big selloff so what we&#39;re trying to think is if they previously saw value up there before will once prices arrive back into this area will they see value in it again again and that&#39;s when we want to start trading so if we have a supply Zone up there how do we draw it okay you&#39;re going to notice there&#39;s two things to these patterns there is strong in balances very strong in balances and then there&#39;s base the base is where we want to locate to where we draw our proximal and our distal line so if we&#39;re going to highlight the base this is what I want to do for this Supply Zone I want to take the average of the base okay I want to highlight the base I&#39;m not trying to nitpick saying that&#39;s the supply zone I&#39;m not trying to say that&#39;s the supply zone I&#39;m trying to get to the origin of where the imbalance originated from did the imbalance originate from down here or did it originate from up there it originated from up there so that&#39;s where I want to draw my proximal in my distal line your eyes want to gravitate to strong imbalances like this so we&#39;re going to draw our base like that highlighting the top 50% candlesticks with our topof the line going at the top of the wick for supply all right but notice how I&#39;m not going like this I&#39;m highlighting the base of where it originated from this is where the imbalance originated from so that&#39;s typically where I want to do it same thing for demand so if this was my demand Zone I would highlight my base like this I would probably extend it just a little bit lower to include that Wick but I&#39;m not going like this I&#39;m not ignoring the bottom Wick you don&#39;t want to do that that is how we draw out our supply and demand zone now there are supply and demand zones everywhere on this chart but we want to be selective on how we identify certain zones and this is a very important concept that we need to talk about is what makes a tradable supply and demand Zone every Zone needs to accomplish at least a 2: one IM balance within the first three candlesticks if prices don&#39;t go at least two to one within the first three candlesticks I do not want to draw out that as a supply or demand Zone how do we measure that okay this would be my base like we talked about that would be the base the total measurement is 1,700 well I need the imbalance to go at least I don&#39;t know what my math is like 3500 right so the distal sorry the imbalan candlesticks need to go at least 3500 something like that within the first three candlesticks well in this case within the first three it&#39;s gone like 4 to one so that is a good Zone all right same thing with these two zones over here the base consist of 800 within the first two candlesticks it went 2,000 onto that we want prices to actually remove an opposing zone or break momentum line so in case with these imbalanced candlesticks it needs to remove an opposing area that makes it a qualified zone so in this case with those imbalanced candlesticks it removed that zone this Zone over here was removed this Zone over here was removed that makes it a tradable Zone okay so we need prices to go at least two to one and or and remove an opposing Zone okay it also helps if it breaks momentum line which also makes it a tradable Zone there&#39;s three things goes 2: one removes an opposing Zone and or breaks momentum line all right but guaranteed two to1 zone is a must guaranteed okay because it&#39;s extremely important that we are identifying the these strong zones once again entry time frame quality setup you can clearly see that there&#39;s a difference between a quality setup versus a non-quality setup good setup versus average versus poor two wins five losses when he&#39;s trading a poor setup versus if he&#39;s trading a good setup 11 wins five losses so it&#39;s important that we qualify these zones as tradable zones step six we need to be able to identify trend lines and Trend assessment because trend is extremely important because there is a large difference between our winners and losers sideways with the trend or in a sideways Market 19 winners seven losers versus if he&#39;s trading counter Trend six winners nine losses same thing for this guy over here when he&#39;s trading with a trend or in a sideways Market he&#39;s got a 68% win rate versus trading counter Trend 30% win rate so it&#39;s important that we actually have a method of determining Trend okay thing is there&#39;s a million different ways to to determine Trend in the market okay so how after the first thing that we do on a chart the first thing we do on a chart is we identify our supply and demand zones the second most important thing is that we determine the trend okay like I said before I just explained why it&#39;s important so when we go to a chart we need to also determine the trend okay how we determine the trend there&#39;s so many different ways some people will use moving averages some people will use Elliot wave theory some people will use higher highs higher lows what&#39;s important is that you are consistent with this approach okay so the ways that we will determine how to determine an uptrend or downtrend an uptrend is if we are removing opposing Supply zones and creating higher highs and higher lows versus a downtrend is if we are removing opposing demand zones and we are creating lower lows and lower highs so in this case we would be removing opposing demand zones and creating lower lows and lower highs all right so that would be a downtrend in that case and it&#39;s extremely important that how we are determining Trend this is a very important concept and this was my light bulb moment in trading you need to understand that Trend turns from inside out what do I mean by that so if you have let&#39;s say for example a 4our supply let&#39;s just imagine up here is a 4our supply Zone if you have prices coming back up here to a 4-Hour Supply Zone the trend on a five minute the 1 minute the 15 minute is going to be in an uptrend as it&#39;s going up into a 4our supply it has to be in an uptrend on smaller time frames so that&#39;s okay if we are going to start looking for confirmation and price turning there&#39;s certain things that prices have to do in order to see prices turning we are going to have to see opposing Pivot Point zones being removed and trend lines being broken so in this case if we have prices going up into a 4-Hour Supply we are going to see 5 minute higher highs higher lows in order to see this thing go from an uptrend to a sideways Market the first thing that we are going to see is we are going to see upward trend lines being broken and opposing Pivot Point zones being removed five minute demand zones being removed that is confirmation all right that&#39;s a very important concept it changes your trade Al together I could break down the stats for you but I&#39;ve already been doing it it&#39;s extremely important that Traders understand this that this is how prices turn Okay prices turn from inside out so that&#39;s what we want to be doing we want to be waiting for prices to be trading with the trend maybe or trading inside a higher time frame Zone and then go down to a lower time frame and look for our entry we don&#39;t just trade straight up at these zones let me break down a trade review and in fact let&#39;s just start talking talking about the top down analysis all right because I want to talk about the large majority I&#39;m probably already 10 minutes into this top down analysis let&#39;s talk about the multiple time frame setup and this is going to be Euros Swiss let&#39;s talk about a losing trade setup okay so this was a setup the other day that we were talking about the first thing that we do okay when we come to a chart we draw out our supply and demand zones so before we had a very nice 4H hour little Supply zone right here all right little drop base drop strong imbalance to the downside going at least two to one it removed an opposing Zone that is a good 4-Hour Supply Zone okay so when prices come back into that zone we want to start looking for selling opportunities because this is previously an area where big money took control so prices come back up into our higher time frame Supply and we start going down to a smaller time frame okay so in this case I think it was a a 30 minute time frame and you&#39;re going to notice as it&#39;s going up higher highs and higher lows that&#39;s what we want all right but we need to see confirmation all right we need to see break in structure and opposing Pivot Point zones being removed with momentum lines okay that&#39;s what we need to see some people we&#39;ll talk about this maybe in a bit some people might be seeing this as confirmation I might say going back to less than one when we started talking about this we want this to occur within the first three to four candlesticks right we want the Zone being going at least two to one within the first three candlesticks it looks like this Zone did it but we we also want the opposing Pivot Point Zone being removed and momentum line being broken within the first three to four candlesticks so in this case it&#39;s taken one two three four five it took six candlesticks in order to get all of those candidates for what a tradable setup is so that&#39;s not something I would want to trade okay but this over here notice the difference between this setup versus this setup over here highlighting my zone in this case we would have broken upward momentum line okay removed the opposing Pivot Point Zone but everything was accomplished within three candlesticks this is the type of trade that I would want to take versus the other one all right and time and time again when I look at my trade reviews and we&#39;ll talk about them rally based drop Supply Zone broke momentum line removed the opposing Pivot Point Zone all within three candlesticks right it&#39;s not taking 10 candlesticks it&#39;s not taking six it&#39;s happening very quickly okay so that&#39;s what I want to see let&#39;s talk about entries and exits because before yes this was a setup where would you enter on a trade setup like this okay price inside a higher time frame Zone we got confirmation we want to go short okay I am going to enter my short back here at the proximal line of where my base originated from right here okay that&#39;s where I&#39;m going to get filled on the pullback right there all right not up here not down here but here that&#39;s where I&#39;m going to get filled once prices go back into my zone okay that is your entry your stoploss is going to depend based off of is it going to be a structure stop loss or is it going to be just a a random volatility based stop loss because we never want to place our stop loss right above the Zone like right there we don&#39;t want to do that can you see that little green line you don&#39;t want to do that right you want to place it above an example of this a volatility based stop loss and I just want to have it generally below so this was my zone down here if I had it right here at my distal line I would have been stopped out you want to create some type of Separation without making it too large all right there&#39;s in my opinion you never should really have the Zone more than one to one the size of the base okay this little Supply Zone up here I was selling the pullback back up into here notice my stop loss okay why did I place it there it because I look over to the left there&#39;s a clear structure Pivot Point up there so I would want to have it right above that area not directly above my zone this is my little Supply Zone I have it above this area right my distal Line&#39;s up there that&#39;s where I want want to have my stop loss okay I don&#39;t have it 20 times the size I&#39;m not going for a negative reward to risk I want to have it slightly above okay so that&#39;s where you want to have your entry and your stop loss what about your take profits because this is a very debatable thing so many people are different on this topic depending if they want to go for a 1: one two: one 3: one or whatever what I like to do is I like to go for a minimum 2: one okay my first take profit will be at two to one and then I will move my stop loss usually by then already to break even or slightly below break even I want to protect myself and then I&#39;ll get out maybe at uh the opposing structure point for a second take profit so let&#39;s look at a a trade so in this case this was my long trade setup so I was getting long I got in it looks like I got out at like a 1.5 to one up here at opposing kind of structure resistance at this point so that&#39;s where I want to manage my first take profit and then my second take profit is like hey let me go for 4 to one or 5 to one to really hit the home runs because it&#39;s a bad feeling when prices only go one to one or two to one I know it sucks right my second takeprofit is going to be at like four or five to one up there which is also an opposing Zone up in here okay so that&#39;s where I&#39;ll have my second takeprofit now when it comes to trade management all right very important topic I will tend to move my stock stop to I don&#39;t necessarily move it straight to break even at a certain time but I&#39;ll move it based off of structure so let me share with you an example so in this case I was getting short here on this zone right I was getting short right here short right here stop plus above there got me in this is where I had my original takeprofit it did not hit my takeprofit but it&#39;s the worst feeling when it just misses your takeprofit then reverses and stops you out so at this point once it you know starts going right here I&#39;m probably going to move my stop to at least this period right here all right and then once I notice it just missed my takeprofit that&#39;s when I&#39;m going to move it to break even because I know if it reverses it&#39;s a high probability that it&#39;s going to continue in that direction and probably stop me out because normally I want this thing to take off in my direction right but what&#39;s important is that you journal the trades and that you can review to see what makes sense to you because if you you aren&#39;t journaling your trades you&#39;re never going to learn from your losers or your winners about how you can best manage the trade man I I killed that discussion talking about entries stop losses take profits really good trade management too fantastic so let&#39;s talk about now we&#39;re going to dive into several other examples I&#39;ve probably already gone past 20 but screw it uh multiple time frame versus the one time frame versus confirmation 2.0 all right so let me show you a little picture of what this looks like once again this is how confirmation moves goes from downtrend to sideways to uptrend right we want to locate when price is starting to turn it&#39;s not taking 20 candlesticks it&#39;s taking three to four that&#39;s what I want so this is the picture I want to share the multiple time frame setup is when you have over here price is going into higher time frame Zone and you have confirmation on your lower time frame price making lower low lower high strong in Balance but look every Zone with the multiple time frame is going to break the momentum remove the opposing Pivot Point Zone pivot not just an ordinary Zone but an actual pivot area and a strong quality zone is being created what is a strong quality Zone price is going over 2 to one within the first three candlesticks price is breaking the momentum line removing the opposing Zone these are all things that I require on my entry time frame okay guaranteed that is the multiple time frame setup we then talked about we didn&#39;t talk about it here but then we started discussing about onetime frame let me break down to you what the one time frame setup is the onetime frame setup is when we don&#39;t necessarily need prices inside a higher time frame Supply or demand Zone but we must trade with the higher time frame Trend okay this was a trade example USD Mexican when it comes to this one time frame setup everything is going to be the exact same but I don&#39;t need price inside a higher time frame Supply or demand Zone but I must trade with the higher time frame Trend I must trade with the higher time frame Trend so I noticed price in an uptrend I&#39;m looking for buying opportunities these were the two setups that we were talking about in the group all right once again you&#39;re going to notice these two setups look at this demand they all are going to look like this higher time frame an uptrend but we&#39;re going to have the shortterm lower low lower high Pivot Point Zone being removed strong quality Zone being created right once again this demand Zone prices never came back but it was the on the watch list strong in Balance removing Pivot Point zones tight base same thing up with this one all right lower low lower high we could draw that downward momentum line connecting it to the pivot Points we have that very strong inbalance once again first two candlesticks went over 2: one it removed opposing zones and it broke momentum line that&#39;s what we want you&#39;d be entering here on the pullback how would I manage my my entry I would have my entry right here sitting at my proximal I would probably have my stop loss right right around here most likely that&#39;s where I&#39;d have my stop loss and then my first take profit might be one to one 1.5 to1 maybe two: one so say maybe up here and then my second take profit maybe at 4 to1 5 to one okay but how I&#39;m going to manage this trade once it made this move up to here I&#39;m going to move this stop loss to this I wouldn&#39;t necessarily move it to break even I would move it right below to where it previously went into because chances are if it goes back into my zone from this area on it&#39;s going to remove it alt together okay but there&#39;s a lot of the times where we&#39;ll pull back test that area and then blow up to the upside so that&#39;s why I want to have it there okay but once I get my first takeprofit hit I&#39;m moving that sucker to at least Break Even okay it&#39;s riskof risk- free I&#39;m going I&#39;m shooting for the moon I&#39;m hitting that home run that&#39;s where you get paid with the multiple take profits okay but that is the one time frame setup let&#39;s go over one or two examples gold I know a lot of people sent me this message on gold and a lot of people caught this higher time frame gold one time frame short downtrend right so if we&#39;re in a downtrend market we could say hey I could look for one time frame setups to the downside I don&#39;t need price inside higher time frame Supply but I need to be trading with the trend I want to look for a quality setup he went down to his lower time frame and he had this strong quality zone right here shortterm higher high higher low boom right it&#39;s the same thing I&#39;ve just been drawing out guys it has to look like that it&#39;s not taking 10 candlesticks it&#39;s taking three four candlesticks and it&#39;s accomplished all this all right he he trades the pullback he&#39;s also reacting off of like a moving average right that&#39;s how he&#39;s trading it all right he&#39;s got his proximal as distal line up here he&#39;s got his stop loss up there okay he gets filled into his trade once again it&#39;s the same damn setup he&#39;s trading with his higher time frame Trend in a downtrend so he doesn&#39;t necessarily need price inside a higher time frame Supply and so he looks for one time frame shorts right that is a valid setup it was the same thing with the USD Mexican we just trade and now we also have a second setup which is kind of the confirmation 2.0 setup that is basically when you have say for example here we had pric is going back into this rally based rally once again guys rally based rally proximal distal line tradable Zone gone over 2: one removed opposing Zone everything happened within the first three Candlestick so that is a good higher time frame Zone I am not trading straight up at these higher time frames frame zones okay prices go into higher time frame demand I go down to my lower time frame to wait for confirmation looks like we had lower low lower high we had some type of maybe confirmation down here on a smaller time frame with maybe a stop down there anyways this was the confirmation 2.0 say prices go into your higher time frame Zone that&#39;s confirmation one but if we don&#39;t get the pullback and prices continue to go down that is what is known as conf confirmation 2.0 and you would trade this as the setup right so in this case we had the break we kind of had this higher high higher low right okay once again this Zone going over two to one within the first three candlesticks it&#39;s removing opposing Pivot Point zones and it&#39;s breaking momentum it&#39;s it&#39;s a great Zone okay we trade the pullback back in here and it looks like I was hading my take profit at 2 to one I had my original stop down here as a structure based stop because of down here to the left and what I did prices went up look like it went 1.75 to one and then It reversed but I got stopped out here because I moved my stop up just below break even at that point okay that&#39;s how I&#39;m managing the trade and that is the confirmation 2.0 setup so if we look multiple time frame confirmation setup prices go into higher time frame Supply okay higher high higher low boom break momentum line opposing Pivot Point Zone strong quality Zone being created once again I need all of this circled right here the one time frame setup is when you&#39;re trading with the higher time frame Trend Direction and so you don&#39;t necessarily need price inside a higher time frame Zone but you go down to your lower time frame and it&#39;s the same damn setup but you need it to break you know the PIV posing Pivot Point Zone break momentum line and that is your zone right and then you trade it once it price comes back up you&#39;re not chasing price you trade it once it comes back up stop loss above there you know how to take profit trade management you know all that right and then the confirmation 2.0 setup let&#39;s just say this is our demand we have prices going down that would be our confirmation to confirmation one confirmation two is like it misses your entry but it continues to make new pushes or new higher highs or new lower lows right depending if it&#39;s a buy setup or sell setup but once again it has to move at least 2 to one and make a new higher higher higher low right or for Supply lower low lower high right but notice they&#39;re all drop based rallies or rally based drop patterns for my entry time frame and if you want to add indicators or other technical analysis that&#39;s totally fine this is a really good Supply Zone up here went over 2: one very strong in Balance but notice it&#39;s removed this Zone it&#39;s removed this Zone it&#39;s done all this but it&#39;s broken through a very clear support so you&#39;re going to have support and resistance Traders you&#39;re going to have supply and demand Traders you&#39;re going to have uh breakout retest Traders shorting up here and you&#39;re going to have Traders kind of trading this 200 moving average as it&#39;s coming back up you&#39;re going to have Traders trading that right so once prices go back into that zone I would consider looking for selling opportunities just because you have all these things doesn&#39;t mean necessarily it has to be a winner all right get that out of your head it&#39;s important that you understand that but if you want to use indicators chart patterns other confluences I do too I use it but it&#39;s Confluence to the trade setup versus if it didn&#39;t do those other things right it&#39;s important to have a trading plan all right this is a very easy step-by-step process this is something that I did early on I created a mind map early on this is many years ago this would help me determine a trade setup right and so the first thing I would do is okay step one what do we do on the chart we identify our supply and demand zones all right that is step one step two I determined the trend all right after that I can start following this mind map is price inside a higher time frame zone no okay no trade next chart yes okay can we set and forget I no longer do set and forget um so let&#39;s skip it so let&#39;s go wait for confirmation all right has price shown confirmation broke a momentum line remove Pivot Point zones whatever no wait for confirmation yes it has okay how does it score is it a good setup yes it is okay take the trade so you follow this mind map around to be a good setup and you could extend on this to be like are you trading with the trend do you allow yourself to do a one time frame setup you know what I mean um that&#39;s definitely something that you could add to a mind map like this and create your own right because everyone&#39;s going to trade a little bit differently but very easy it&#39;s actually very easy Once you just understand the basics right so make sure you have a trading plan so another thing I wanted to quickly touch on is the pros and cons of trading multiple markets versus one to three okay I personally focus on one to three but let&#39;s quickly go over it because it&#39;s a very important topic because people come to me asking this all the time if you decide to take one to three the pros and cons you are going to learn those markets extremely well and you&#39;re going to learn how those markets trade During certain times times of the day and how they move okay it&#39;s going to be a lot less stressful in your trading when you&#39;re only looking at one to three markets versus 30 okay just understand that there is a potential for Less trade setups as a Trader and if you go a couple days three four five days you are start going to panic in your mind thinking oh I got to take trades I got to force trades and you&#39;re going to have fomo that is potentially what might happen versus if you take 20 if you trade 20 markets you could be very picky with your trade setup and what a quality setup is okay you can cherry pick them but just keep in mind you won&#39;t deal with fomo typically but you will deal with information overload you&#39;re going to be looking at 20 different markets 20 different pairs 20 uh three different setups right different time frame sequences it can be very overwhelming just make sure you know that you can always add or remove okay these types of markets so that&#39;s important uh depending on who you are so the other thing I want to quickly also touch on is reviewing all right it&#39;s important that we journal and review our trades this is what separates a break even Trader versus a losing Trader okay this is something I said to the private group and we&#39;re coming to the end of the year and so this is what I say I expect everyone here to do a year-end reviewing reviewing is one of the most important things a Trader can do especially heading into 2024 as a Trader we need to be constantly adjusting our trading strategy and adapting to New Markets this is why we Journal our Trad good or bad as it will become a learning experience and help us create a better Edge for oursel this is what you should do get a piece of paper and create a tick or tally sheet and analyze everything you can determine what is your win loss percentage if you were trading in an uptrend versus downtrend versus a counter Trend Market a win rate when trading a clean arrival versus poor arrival what is the win rate between the one time frame setup versus multiple setup what about if you went for 2: one versus 3:1 or what happens if you go out at one to one versus 5 to1 how does that affect your win loss what about if you moved your stop to break even after a certain point how does that affect your trading do you make more money do you lose more money okay these are so many little things that you need to review to figure out this is what you see that I was showing you that people are reviewing to figure out what makes sense for them as a Trader okay uh it&#39;s much different when they do the work and they do the trade reviews and they come up with 40 to 50 trades and I do a one-on-one with them than somebody just listening to this video but is it is extremely important okay in fact there is an hour and a half long video covering everything I just talked about for in a full course that will be down below okay I would strongly recommend checking out this tips playlist going over my trading strategy it&#39;s completely for free okay but the traders that decide to work with me you know check it out Moneyball trading.com that&#39;s where we have the goal of turning a Trader to profitable in 90 days with a direct coaching I did have an ebook going through this video uh this is for the people in the private group but I did create a free one for anybody that decides to sign up it&#39;s completely free for this one register to the free master class and I&#39;ll send you that in an email having a free access to the multiple time frame trade setup and a beginner&#39;s guide to this trading strategy if you have any questions let me know in the comments below as well appreciate if you guys like the video subscribe in fact if you just want to jump to that hour and a half long video I will have it above my head right now cheers bye-bye

Transcript for:Supply and Demand Trading Strategy

Transcript for:
Supply and Demand Trading Strategy