Master Institutional Supply and Demand Trading (ULTIMATE STRATEGY GUIDE)

if you can Master supply and demand you will be able to trade with the large institutions find big risk for all trades and Bank consistent profits in this video I'm going to share some vital points about institutional Supply demands that most people simply don't know and it's these critical points that have now helped countless of our members get funded and Bank their first ever profit splits this video explains what is supply and demand how to read institutional order flow how to mechanically draw the zones how to find high probability institutional zones and I'm going to drop some serious source for you here and finally how to enter and exit for maximum profit but first to take advantage of the market you must understand the true reasons as to why price moves does the price fall from here to there because there are more sellers than buyers nope this is wrong keep watching to find the truth now as history has repeatedly shown Traders are often a very emotionally charged group when millions of them get together in a highly emotional money game of fear greed and uncertainty their combined Behavior takes on a herd mentality and we can spot this on our price charts and make money from it how well you've got millions of Market participants putting millions of orders through the market for a million different reasons all of this behavior and participation is what drives the order flow that is put through the market and that order flow is what prints price action on our charts and that price action creates patterns these patterns repeat themselves over and over time and time again and that allows us to make high probability forecasts of where price may move in the future because when those big institutions enter trades they cannot hide their order flow and we can spot their footprints in the market if you know what to look for let me explain currency exchange rates move up and down as a result of supply and demand from Market speculators no trades can take place unless both the buyer and the seller agree on a price so this drives the price of currency pairs where buyers bring with them demand for the pair applying that upward pressure on prices while sellers bring Supply applying downward pressure on prices the market runs like a continuous auction throughout the day with buyers and sellers competing with each other to get the best possible price now in a perfect and free market this would be quite a smooth and fair process but in the final financial markets this is often a heavy manipulated process let me explain markets work in two-way auctions both buy and sell sides of liquid instruments or have blocks of orders on both the bid and the offers we can see this visualized on the order book on the left hand side you can see all of the bids from the buyers and this shows how much volume is demanded at each price level and then on the right hand side you can see all of the offers from the sellers as this is also called the ask price and this shows how much volume is supplied at each price level and the more volume that there is at each price level the more liquid the market is think of it like an auction house or Ebay where if you are the buyer then you are making bids for it and you either sell it it's the price you're offering it or the price you're asking for someone to pay for it now remember a trade can only take place if both the buyer and the seller agree on a price so to execute an order it must be paired with an opposite order of equal size for example so sell 10 Lots there must be a buyer willing to buy them at the ask price and vice versa this is how the markets move now what most people don't know is that there are two types of orders where both buyers and sellers can be passive or aggressive passive Traders use limit orders and they are waiting for price to hit them so all of these orders that you see on the bid and the ask they are limit orders so if they were only passive orders then the market wouldn't move because all of those orders are waiting to be hit so this is where aggressive orders come into play aggressive buyers and sellers they are trading at the current market price and they are not waiting for the market to come to them but to do that they have to cross the spread to buy at the ask price or cross the spread to sell at the bid price most execution platforms look like this where you buy on the right hand side as that is the current ask price and you must cross that spread to be an aggressive buyer and if you want to sell then you must cross the spread to the left to hit the bid and it's this interplay between passive and aggressive orders is what we call order flow so let's take a look at a very oversimplified example of what can happen on the order book in a live market imagine this was the order book for euro dollar and a large institution wants to buy 10 000 Lots at Market so this is an aggressive order they have to buy 10 000 Lots at the best ask price but as you can see there are only 103 lots available for sale at that current ask price so the price will rapidly shoot up as it instantly absorbs all of the supply at each level until all 10 000 lots have been filled at 1.1539 due to that huge imbalance between supply and demand and now the market is sitting at what is deemed to be fair value between buyers and sellers so price has to keep moving up to search for enough liquidity to fill the order institutions cannot hide those huge imbalances that they cause in the market so if you know how to spot their footprints on a chart then you can trade with their order flow rather than getting smashed against it so what does this look like on a Candlestick chart here you can see price impulsively moving to the upside as aggressive buyers keep pushing price higher and higher until they find enough Supply to fill their demand and price is then rebalanced likewise here you can see aggressive sellers liquidating all of these bids pushing the price lower and lower until they have consumed enough demand to fill their supply and this is how markets move when there is an overwhelming imbalance between supply and demand price will keep moving to search for new liquidity to rebound its price and this is happening every single second that the markets are open now obviously you and me were not quite trading at the size big enough yet to move those big liquid markets so how do we make sure that we are trading on the right side of that institutional order flow and that's where supply and demand zones come into play but how do we identify these zones when prices moving sideways in a Range this is where orders are being accumulated or distributed as price moves into the bottom half of the range this is where buyers step in to buy at discount cheap prices and then as price moves into the top half of the range sellers step in to short at premium expensive prices you want to buy low and sell high right pretty simple eventually aggressive buyers will cause an overwhelming imbalance between Supply on demand and this is where price will rapidly break out the range to the upside to search for more liquidity to absorb the demand and this is what creates those demand zones now we don't trade the initial breakout as this is where losing Traders fomo into long positions and they buy the highs instead we wait for price to return to that zone and then we look for our entry models to get long as this is where the wrist reward will be on our side and we are buying where the institutions will be now why does price return to the zone and then continue from there well at this level there is not enough demand to keep pushing price higher so we wait for price to return to the demand Zone where there is previous institutional buyers they will have a vested interest to make sure that price does not trade any lower and they keep their initial long positions in profit and it's also likely that they did not get filled on all of their original position so they will want to get along with their remaining orders at these discounted prices because remember they're going to want to buy as cheaply as possible now there are some other theories but we won't get into those in this video and the exact opposite happens in the creation of Supply zones where prices in a Range sellers will then cause an overwhelming imbalance between supply and demand as price will rapidly break up to the downside but again we will wait for price to pull back to that Supply Zone to then look for potential shorting opportunities and it's a four-step process where we have the range the initiation the mitigation and the continuation and it's that continuation is what we are looking to trade in line with the institutional order flow this is the cycle and heartbeat of the market where order flow will continue in One Direction until there is an overwhelming imbalance between supply and demand in the opposite direction price is constantly seeking liquidity to rebalance price so here you can see price rapidly initiates out of the range to the downside creating a supply Zone it's likely this was backed by institutional involvement price then pulls back to mitigate the supply Zone where we can look to get short to catch the continuation you can see the sustain bearish order flow as Supply is clearly in control but markets are obviously don't move in One Direction Forever eventually the market moves low enough to discount prices where demand then comes into the market to overpower Supply then we see the sustained bullish order flow and institutions will defend the last levels that they entered at to keep their running positions in profit the highest probability trades will always be in line with autoflow so just don't bother trying to fight it so how do we mechanically draw supply and demand zones in the same way every single time there are three types of supply and demand zones the first two are the ones that I recommend you use these are range and pivot zones the names are pretty self-explanatory a range created zone is where price clearly initiates out of a range of candles you draw the Zone from the top to the bottom of the range a pivot zone is where there is a pivot in price caused by only one or two candles you can draw this from the single candle that is engulfed or you can include the second candle too depending on how refined you want to be for a supply Zone it's usually a bullish candle where the next thrust candle closes below its low this can be called a buy to sell zone for demand it's usually a bearish candle where the next thrust candle closes above its high and this can be called a cell to buy zone now I'm not personally that strict on the cell to buy or buy to sell method because sometimes I will draw a demand Zone on a Buddhist candle that's then engulfed by another bullish candle and vice versa because I'm just looking for those pivot Points in price you know where price has sort of paused and is moving sideways and then price clearly initiates out the range but for a demand Zone that thrust candle must close above the previous candle's high and for a supply Zone the thrust candle must close below the previous candles low for it to be a valid Supply Zone and you can see how a range Zone can be refined to a pivot zone or even a fractal Zone which is just the wick however more refinement does lead to increased accuracy giving you that smaller stop loss which in turn gives you that higher risk reward but it does increase the probability of more mistrates as price might not tag you into the position once enough orders have been filled find a consistent balance that works for you and stick to it so your Edge can play out in the long run you know don't be chopping and changing just because you feel like it I recommend that you start with always looking to take the single candle pivot as this gives the best balance between risk's reward and also getting entered into enough positions now remember that the market is made up of all of those orders transacting with each other but we make sense of that complicated order flow with our Candlestick charts if you see a range Creator Zone on one time frame this will be a pivot Zone on a higher time frame so if you see this range Creator Zone on let's say the one hour chart the zone is made up of four candles but if you go up to the four hour chart what do you think that zone is going to look like you guessed it it will be a single candle four hour pivot Zone because for one hour candles are going to make up one for our candle so when you truly understand the fractal nature of markets you don't even need to change time frames to be able to visualize what price action will look like on that other time frame so that's why a lower time frame range will be a higher time frame pivot Zone and vice versa here are three types of fractal supply and demand zones the first is an inside bar this is when a candle fails to break the previous candles high and low and it trades inside of it inside bars are a range on a lower time frame the second type of fractal zone is sell to buy or buy to sell wixoms foreign when price is bullish and moving to the upside it looks like there isn't a demand Zone because price doesn't form a pullback on that time frame but those Wicks represent a pullback on a lower time frame as you can see price moves to the upside then it pulls back as the next candle starts to form and then pushes up again so if you were to look down on the lower time frame this will be a lower time frame pivot or range created demand and the exact opposite happens for buy to sell Wick zones which represent lower time frame Supply the third type of fractal zone is where you have a very large width and instead of drawing the big pivot Zone you can refine it to just the wick of the candle as this will be a lower time frame pivot or range zone now as all of those are fractal refinements they are simply a way of looking at lower time frame zones on your time frame so I would actually recommend that you kind of ignore those for now and you just concentrate on the pivot and range zones on that same time frame that you're looking at because those will contain the most orders and therefore should give you those higher probability moves now obviously not all Supply demand zones are created equal there are very specific criteria that must be met for it to be an Institutional supply and demand Zone there are eight key areas for us to focus on and the first is whether the Zone led to a break of structure this is the simplest and most effective filter that you can use it takes a ton of money to break structure on a liquid instrument and the more significant that the structure it breaks the more significant The Zone swing structure is stronger than internal which is stronger than fractal so zones that cause a break of spring structure they're going to be the most likely ones to cause the next break of Swing structure here you can see this demand Zone broke the daily swing high so then when price returns to Zone there is enough demand within there to break the neck swing High number two is if it is a flip zone now the key here is that you must see that interaction between supply and demand until one overpowers the other here you can see supplier was in control but when price returns to it Supply tries to make a lower low but it fails to do its job because huge demand steps into the market to overpower it that pattern that shows us that supply has now flipped to demand and this is a high probability area for us to get lots but remember you must see that interaction first for it to be valid number three are sweep zones these are zones where liquidity is swept and taken as they are created but why is this important well remember institutions need opposing liquidity for them to trade against so that they can get minimal slippage when they enter and exit the market so if they're buying they need a lot of Supply to buy against there will be a lot of sell orders below this low and that's generated from people's stop losses from early buyers and then breakout traders who are trying to sell that low but the institutions know this and they will use that cell size liquidity behind that low in order to get long so if you see a sweep Zone this signals it was created with institutional involvement number four is inducement and this is another liquidity concept that can get very technical but essentially you just want to see is there available liquidity in front of the zone why well same reason as before institutions are going to need need that opposing liquidity to enter the market with minimal slippage here you can see there is available liquidity behind this low for institutions to use to buy against but if there isn't any available liquidity then very often these zones are trapped and they will usually fail here you can see that there is absolutely no available liquidity in the leg so this is a very obvious trap as institutions will not be selling it number five is the Zone stacked with another higher time frame Zone the more you can stack zones across time frames the more orders there should be in that area increasing the probability of the move number six do you have alignment with the higher time frames because the more time frames that you have aligned the higher probability of that trade here it might look like a high probability cell to follow the bearish trend on the M5 but the M15 is bullish and it's just mitigated the M15 demand at the strong M15 low so now the M5 is likely to also switch bullish understanding multi-time frame analysis will help you to avoid a ton of losses as time is power and higher time frame will usually win number seven is The Zone well priced generally the highest probable demand zones will be buying in discount prices which is in the bottom 50 of the range or selling premium prices in the top 50 of the range this also improves your risk rewards because we want to buy low and sell high right and last but not least number eight is the Zone unmiticated it's just a fancy way of saying is the Zone completely fresh or has it already been touched because if you see a Zone with touches then it's very likely that a lot of the resting orders within that zone have already been filled so I try to focus on zones that are completely fresh as these usually give the strongest move when price mitigates them now combining as many of those confluences together are going to give you the highest probable institutional demand zones to trade from so now you know how to identify high probability zones how do you actually trade from them well there are countless ways but here are three main methods the first one is just simply setting a limit order directly on the Zone the second is to wait for a reversal Candlestick formation at the Zone but this is best combined lined with a liquidation too or finally you can use a lower time frame break of structure for more confirmation and increase risk to reward we will cover entry models in Far More depth in a later video so make sure you subscribe so you don't miss that but before you're even going to enter a trade you should know exactly how and where you're going to exit now I could do a whole series on just train management alone but in my opinion if you want to get consistently profitable as soon as possible my recommendation is to always use the fixed R method so this is where you always Target the same amount such as 3r for example it's a set and forget approach that helps to keep emotions very low as you're not chopping and changing between arbitrary technical targets at the end of the day trading is purely a probabilities game and the fixed our method just helps to put the numbers in your favor now watch this next video in the series to see a full walkthrough of how we trade institutional zones in depth and if it isn't live to share make sure you hit that subscribe button so you don't miss it

Channel: Photon Trading

Views: 743,952

Keywords: How to make money in the forex market, how to not lose money in the forex market, how to trade the forex market, how to get good results in the forex market, forex market tips and tricks, forex market trading strategies, the best forex market trading strategies, how to stop losing in the forex market, how to get consistent results when trading, forex market trading tips and tricks.

Id: -RTpm9ZNV-M

Length: 17min 23sec (1043 seconds)

Published: Thu May 25 2023