Three Ways to Trade Supply and Demand

you know help a few people you know I mean a few is better than none right and hopefully the the masses will follow but so again thanks for having us today guys we're gonna be covering some supply demand methods and you just be aware that this is actually what we actually trade everyday okay there's a couple things that you know we're gonna add to what was in the description so for example we're going to talk about three methods of trading supply demand today but we're also going to talk about institutional order flow you know how to locate that on a price chart and so on granted we have we have one hour so we need to get started it is always my goal to get as much information across as possible in such a short amount of time okay at the end of this if you want to visit our website of course we appreciate that it is pure financial academy.com or if you have any questions during or after the event you can always feel free to send those to us also at support up your financial Academy calm okay okay so let's go ahead and get started we got a quick PowerPoint that we're gonna get through and then we're gonna get out to the live charts because that's always the fun right so let's move forward okay first thing we need to do is just cover an obvious statement but this is for educational purposes only traders you know trading does have of course risks and rewards that we all need to be aware of and any trades of course are placed upon reliance on you know any education that you may learn today then that's gonna be placed at your own accord okay all right so as I stated we are going to talk about three ways to trade supply and demand alright so you know what what is supplying a man well in order to truly understand the movement of price okay and a literal price action doesn't matter the market doesn't matter the time frame but in order to understand that it's imperative that you understand what supply and demand is okay also how is it in fact in fact excuse me guys how does it a little humor in the room never hurts right how does it affect the value of any given instrument okay whether it be you're trading Forex futures equities okay you know options I have people ask me all the time well can you trade can you supply an Amman in options the answer is absolutely that's the only way that I would trade options okay so we'll get into that a little bit later not so much trading options but how supply to man it's relevant all right okay so we talked about what is supply to man and again just bear with me through these slides I promise you we'll have some fun so supply demand is nothing more than an economic model of price determination in any given market it does in fact conclude that in a competitive market price will function to equalize the quantity demanded by consumers and the quantity supplied by producers this is going to obviously result in an economic equilibrium of both price and quantity all right so I'm not sure if you guys can see my you see here if I can get you a that's okay it's not imperative I suppose I was gonna look for a mouse pointer here but nonetheless what I want you to do is focus in on this below okay and the first thing that I'm gonna you know just state here is simplicity is key right so you know there's a reason that people say that you know the simplicity of buying low and selling high produces a lot of financial status right a lot of income well there's a reason for that it's because it's so very simple right but yet when we get into the market we think everything's different now okay no longer do we want to buy low and sell high because that's too easy we need to throw these indicators on the chart because I can't see it on a price chart without an indicator right well no that's that's not accurate we can absolutely see everything that we need to know based on pure price action so based on this you know diagram if you will that we have up notice that there's a red supply I'm going to refer to this as a zone but there's a red supply zone above a blue demand zone below okay to the left you have price to the bottom there you have quantity what I want you to take away from this is nothing more nothing less that when price and quantity find one another okay you do not want to be at an equilibrium that's what we call diddling in the middle you know it's a very low probability oftentimes you find a lot of choppy zones and so on there okay when there is more of a supply okay in other words the quantity all right is higher on the price therefore you're going to find more of a supply for that particular instrument you're going to expect prices to drop when there's more of a demand for that particular instrument obviously we would look for price to increase on its own there okay so again remember we don't want to be into the markets at states of equilibrium the reason for that is because if there is you know indecision in the market it's just like every other aspect in life if the decision is is made very easily okay that's not equilibrium right in other words you know if you know very quickly that the the markets are undervalued okay that's not equilibrium that's off of equilibrium okay so the so the price will move very quickly let's move through this so it makes more sense on a price chart price in fact moves back and forth between the supply demand levels so you know I've been all over guys trust me we've all done our research but you know I'm sure that everyone in the room has heard of supply demand before but let me take this a step further because you know some people you can call it whatever you want to call it supply demand tray it doesn't literally make up a name if you want to it's irrelevant what I'm most interested in supply to me means nothing more than institutional order flow meaning there's more sell orders than buy orders I don't care what you want to call it against supply you know it's just another name for it means there's an abundance of the sell orders demand is in fact an abundance of buy orders and again the only thing that I'm interested in is where are the pile of orders sitting okay they're they're all over the chart we just have to learn how to look for them so again price literally moves back and forth from one pile of orders to the next but I'm going to prove this to you today kind of a perfect example but but nonetheless just understand that you know wherever the pile of orders are those literally are like magnets not only is it going to pull price towards it okay but it's going to push price emit after it is reached as well okay so I you know when supply exceeds a man there's gonna be a turn in price action and prices then driven down due to the quantity of goods being produced in the lack of goods for those particular excuse me a lack of demand for those particular Goods and as I stated guys supply is nothing more than an abundance of sell orders so supply is equivalent to we want to sell the market right that's where a lot of the institutions are stepping on board okay was it luck on a price chart anytime you see these large candles a lot of people refer to those as ERC's otherwise known as expanded range candles now all that that really means and again I'm trying to simplify everything here but an expanded range candle is simply a candle that is larger than the majority of the other candles before that particular candle okay so in this scenario you can see here that we have a very large one just very large red candle that drops and so that would become an e rc because it's much larger than any of the candles you see before it on this entire price chart when we come back to revisit that particular area for the first time that is when the institutions look to place their sell orders okay if you think of yourself or any other professional as a technical analysts okay which is exactly what we are we're analyzing price right I would believe that that all of us in here are our technical analysts so if you're a true technical analyst while I look at the markets any different than you do every other thing right we're gonna analyze price and we as an individual are going to over or under value we're going to place a value on that market okay where we determine that the markets are overvalued we want to be a seller where we determine that the markets are undervalued we want to be a buyer why do I stress that we as an individual are a technical analyst because we have the ability to do this right you go out and you purchase a home you don't just randomly go throw money at it you make an offer right everyone knows that so you go out and you make an offer you have now valued the house at what you're willing to pay so when you look at the markets look at it the same way we want to tell the market not what it wants to hear we want to tell the markets what we are valuing it at and what we're willing to pay okay kind of skip through this a little bit faster guys demands just the opposing obviously when demand exceeds supply there's gonna be a turn in price action up okay all right that's due to the quantity of goods being demanded in the lack of supply for those particular goods this is what it looks like on a price chart we have an extreme rally up in price and of course if you look back to that left portion there you will see in fact an e rc expanded range candle okay so focus in on that when we come back to it the first time you can see how the how the institutional order flow steps in and pushes price all the way back up to revisiting supply okay all right so we talked about peaks and valleys guys these are just another name for market turning points Peaks do refer to the top of the area where price turns down okay so if you you want to use another terminology Peaks would be equivalent to swing point highs okay Peaks and or swing point highs can often become areas of supply and they are created by three price patterns rally a base and a drop formation okay valleys do also become areas of demand notice I said a separation their peaks become areas of supply valleys become areas of demand these are going to be created by a drop base rally okay these formations are created by the imbalance between the supply and the demand now there are specific price movements that do determine the peak can valley formations a peak like a moment mention moments ago it is a rally in price a base formation and then a drop out of that particular level the valley is exactly the opposing okay it's gonna be a drop in price a base and then a rally out of that particular level in our in our class we actually teach you you know eighty percent of the time peaks and valleys are nothing more than retests of original levels of supplier to man we won't go into that heavily today but understand this if you are a pivot trader you are not trading the same method as us guaranteed we do not trade pivots okay it's very rare as a matter of fact today was one of the very rare opportunities that we will be willing to take a pivot as an area of supplier demand we'll talk about that a little bit too okay all right so the rally based drop you can see that we have four well technically there's five as one has two inside of it but there's there's about five rally based drop or peak formations that we have on the price chart and if you really analyze these notice what happens every single time we come back into the previous right okay literally a hundred percent of these every time you come back there is yet again another turn in price creating another peak so as I stated just moments ago remember a peak eighty percent of the time is going to be a retest of a previous level not an original level of supply or demand I hope that makes sense and we will cover it on the price chart drop base rally these are our valleys and they look almost identical just opposing sides to the peaks right so if you think of a mountains you think of Peaks being the top the valleys being the bottom okay same scenario notice what happens every time we come back into one of these valleys we get a large rally in price alright they are in fact all retests of previous levels continuation patterns okay they refer to an area in which price obviously showed continued strength or weakness a DVD is a drop base drop okay and these are bearish formations and they're created by a pause in the directional movement to the downside all right these are or become excellent opportunities absolutely excellent opportunities we'll also look at a trading opportunity that we just excuse me that we just placed based on an RB our today as well okay so rally base rally or our be ours are the bullish formations these are also created by a pause in the directional movement but this is a pause in the upward directional movement so where the DVDs are going to offer us great areas of supply the RB ours are going to offer us great areas of demand as stated before I believe they mentioned to you that the this will be recorded so just kind of bear with me as I'm moving very quickly I prefer that we get out to the live charts so it makes more sense you can go back and review this at any time guys so and I do recommend that you do that okay this is what a DB D looks like on a price chart okay we have a drop in price a small base and then a continuation to the downside this is significant and it is it is signifying that the imbalance is still off at that particular level that the sellers have consumed the buyers okay layman's terms the sellers are in control alright the opposing is the RBR we got that rally base rally it's the same only to the upside right we have a rally in price a small base and then a continuation move to that excuse me to the upside so this is also telling you it's it's signifying that the bulls are in control okay and that they have now consumed all of the sellers that were in that particular area all right okay so we're going to talk about three entry methods of supply and demand levels right in trees and this is imperative and I'm putting major emphasis here entries are always at levels of supplier to men now before I move into this am I saying that this is the only way to trade am i saying that anyone out there is doing anything wrong absolutely not the way that I look at the markets is are you making money or aren't you if you are continue doing what you're doing because obviously it's working for you and and that's great right but you know ask yourself the question am i making money and am i making money consistently hopefully you are but I just wanted to throw that out there because I definitely don't want to don't want that to be the notion so our first you know entry method is going to be limit orders this is the most basic method of entering on supply and demand levels and it is absolutely the way that I trade every day not that matters to you but this is the this is the way that I choose to place all of my all of my entries I love limit orders guys you know and I trust the levels so it takes a lot of time in order to do this meaning to trust the levels but limit orders literally place the value exactly where you want it so you are essentially telling the market I know where I'm willing to become a buyer or seller meaning I'm making an offer either accept it or don't but this is what it is okay so if you go out and you purchase that house you are literally selling one half a million but you don't have that much right you maybe you have that much but that's all you have okay or whatever the case may be you know that you can spend four hundred and twenty five thousand dollars but that's it right so what are you gonna do I'm gonna go and I'm gonna offer them four hundred and you know whatever it is up to your your amount for ten twenty five thousand dollars if they come back and say you we just can't do it you know 404 sixty is as low as we can go you say okay I appreciate that and what do you do you go find a new house right one that will accept your offer so let's look at the markets the same way and it really adds probability guys okay you'll see this in a moment so limit orders my favorite way limit orders give the ability to set it and forget it I know you've heard that term so we want to set it and forget it so you can walk away from your computer screen I don't want to sit here all day it's very boring okay can be very or emotionally consuming I tell you you talk about anxiety right I think if you sit and stare at this thing too long they probably run out of xanax in the world right so the next entry method guys is to use confirmations confirmations do offer a sense of comfort for a directional change and I will agree with that okay so as a beginning trader you may choose to use a kind of a confirmation entry there are ups and downs to everything while it does make you feel you know maybe more of a sense of comfort okay you have to understand that you're getting in at a worse entry right in other words your entry is not going to be as low in demand or as high in supply as it would have been using a limit order because obviously you're waiting for price to turn okay so an example of that would be a close above or below the previous candle all right it's just one form that a lot of people use as far as a confirmation all right the the last entry method we talked about bull and bear traps okay bull and bear traps offer extremely high reward market turning points because it comes after sweeping stops right yeah high probability why would it be you know why would I put emphasis on that why is it such high reward market turning points because it's due to massive order flow right which is equivalent to a great time to buy or sell that particular instrument alright so in other words guys if we're moving up in price we're coming into a let's say an area of resistance okay generally the conventional thought process tells you that if we take out a high right a pivot high then we break out to the upside right that we become a buyer and that's exactly what we want everyone to believe because as a you know supply demand trader you can step right in after sweeping those stops because in order to sell the market excuse us okay in order to sell the market all right what do you have to have right we have to have buyers okay when that makes sense so in order to sell something you gotta have someone to buy it from you right is there ever gonna be a better time when we break out of something because not only do you have traders who have previously sold they just got stopped out so that order turned into a buy order you also have the breakout traders buying after a pivotal after a rally and price after a pivotal high - so you've more or less doubled the amount of buy orders that are sitting in the market and the institutions know that there's never gonna be a better time to gobble them up than right then okay that makes sense hopefully everyone's with me I appreciate your guys's patience on the questions by the way too so I do promise you that I will do a Q&A as well I know that a lot of you probably have some questions so move a little bit faster three ways to trade supply and demand you got to understand that consistency is key to any style of trading it's rule-based right so we now talked about our entry methods but let's talk about the three actual supply demand methods we have reversals continuations and we have trend following reversals guys it's very everyone knows what a reversal is it's a trend direction being no longer intact supply and demand shows itself okay this is important at areas of reversals supply or demand dependent upon the direction you're going will in fact show itself okay it has to otherwise there will not be a reversal so these are very important little footprints in the market that we want to be aware of though we can trade with them okay so applying the larger timeframe analysis is what helps us determine the potential reversals okay so we'll drill that down we'll use the the large timeframe for potential reversals okay as well as budding our head up against major support resistance alright smaller time frame for our trend and level analysis the next is the continuation patterns these are momentum moves continued by another momentum move in the same direction okay price move sideways at or near a level the order flow is being consumed and this is very important that you understand this okay order flow is being consumed when you just sit at a particular area doesn't matter where it is it's that indecision okay so it think of it as you know if you have ten thousand sell orders the buys move into that level and sit there just think of it like a what's the machine at the casinos the one that you pull the handle down I can't even rule out you guys know what I'm talking about just think of it like that right it's ding ding ding ding ding every single order is just literally being used up over and over and over again until eventually all 10,000 10,000 of those orders are now consumed and then we push right through it okay the last is trend following this offers low-risk high-reward entry points with the overall direction of the of the trend okay or price in an uptrend we want to play the pull backs into demand and in a Down trim we want to play the pull backs into supply all right not really going to talk about this guys this is our automatic supply demand zones of course we have that automated on the chart if you are interested in that we'd be happy to give you all the information that you need just visit our website okay and you can get all the information I'm gonna get you guys out and do some education so that you you really enjoy the rest of today but again if you have any questions about that just just visit our website okay and you can get you can see the videos and everything and how that actually works okay let's stop the application sharing now let's go ahead and get out to the live charts that's always the most fun in my opinion okay thanks Andrew absolutely it's a slot machine how did I not know that right Wow it takes a genius doesn't know I tell you you know listen I'm a simple guy you know never claimed to be a genius good thing to all right it's why I love trading because it's very simple right absolutely all right well we do all right so here we go guys okay bear in mind we're only here for an hour so I'll do my best to teach you as as much as possible okay so we've talked about three different methods to enter supply to man levels we talk about what supply and demand was all right it's nothing more than little pocket it's okay and they're all over the price chart you'll notice in here that we have a lot of you know we have a lot of zones drawn in on our charts okay a lot of lines if you will these are areas okay that the pocket of orders are residing on the exchange so I want you to think to yourself really quickly if I want to be a buyer or seller doesn't really matter either way what do I want to do I want to be a buyer or a seller the same place the institutions are being a buyer or a seller right the same place that you know all of the other professionals are doing it so we look for areas of these supply demand imbalances to know and I use the term know very easily because we never know nothing's 100% but to add probability we look for these pockets of orders sitting all over the price chart all right let's drop to the smaller time frame and we'll look at look at a couple of entries we had today help you guys understand what it is that we're talking about all right so today we come in and something that we're going to do is always look above current price and we're gonna look below current price and we're going to ask ourself if I'm trading at X amount of you know whatever the instrument is for here we're looking at the Nasdaq if I'm trading at a particular area so for example we came in this morning and we were trading way down below well before this extreme rally and price okay so if we were trading approximately this area in through here okay we want to value the market we want to look above current price okay and we want to look below current price and then we want to ask ourselves the simple question okay have we been there before right so every little pivot point that you find on the chart ask yourself the simple question have we ever been there before now you've probably heard the term fresh versus unfresh levels of supplier to man and that's great but I'd like to take that a step further okay fresh versus unfresh levels let me explain to you what that is okay it's one question that's all that you need to ask yourself have we ever come back to revisit that level before it's in it's always a yes or no answer there's never maybe it's yes or no right in other words if we draw in this level and then we ask ourselves the simple question right have we ever been back there before well the answer is clearly no right this was as close to the level as we came and that's a grave distance away so the answer becomes no if the answer is no we've never been back there before then you clearly have a fresh level of demand however this is where I'm going to take you a little bit deeper into the rabbit hole I guess so to speak an original level of supplier demand very different from a fresh level ok so while we know that this level is fresh there's no way that I'm going to place a limit order there to buy the market ok I'm not interim I'm gonna say the same thing I'm gonna come in and I'm gonna say I'm no way guys I'm not there's no way I'm interested in buying the markets here ok a lot of people say well why not ok and it's always the best question you can ask is why right but they'll say look at the rally in price and they'll say you know you know there's a clear imbalance here a lot of demand took place and so on and so forth and I agree with you but to take that a step further I would then say why did the demand form in the first place okay so after you ask yourself have we been to that area before ask yourself another question is there a reason that that particular area formed in the first place ok the answer here is clearly yes look at all of these previous pivot loads which is why I'm teaching you that we don't trade pivot lows okay so in other words you have the original pivot head back here you've now retested it here retested it again here and here so how many times would you expect this level to hold ok not very many and this is great for us because this is how we do we look at the markets on a daily basis when we get back to this level am I saying that it's impossible for it to turn no guys of course I'm saying that right but what I am saying is that the probability if we get back to this area the probability now lies with the sellers not the buyers isn't very important that you understand this okay the difference between original versus fresh levels of supplier demand very very different okay so if we pull back on a price chart I want you guys to you know anyone I'm not saying everyone but anyone that's very interested us and in supply demand trading I want you to go back and I want you to start doing this okay all right this is an hour chart guess six yeah this is an hourly chart 60-minute hourly whichever same difference okay so what I want you to do is go back on the price chart and every single time you get a you know a large rally or decline in price I want you to mark that level okay and what you're going to then come to find is that generally speaking so if we really go back and you know scroll kind of deep back into the level notice these pivot points alright and what I'm going to do here I hate to kind of remove all of this drawing objects but it is what it is right let's kind of do this for video purposes so we're gonna remove drawing okay take a very simple tool your horizontal line go back to your peaks and valleys okay and then do the simple analysis and ask yourself is there a reason that we turned their scroll back as far as you have to go let's use this top here okay notice this level above look at what it's actually coming from everyone am i resonating this is it makes sense how peaks and valleys or swing point highs and lows pivot points if you will are not the areas of supply demand that were generally interested in okay hope that makes sense right and again you can go back and really do this with any of the pivot points you want to okay and you're gonna find that generally speaking like I said about eighty percent of these are in fact retests of pre vs levels all right so let's move back into today's trading and say okay well why would we have place the trade that that we did today all right so if you guys can see let me just explain the trade very quickly so we're currently short than as that oddly enough you're gonna think this is quite unusual okay we're actually short the Nasdaq and long the SP right now at the same time extremely unusual right well maybe okay but again what we're interested in is the pocket of orders I want you to think TD I'll come back to that question I promise you just so we'll have to time think to yourself what if a catastrophic event happened right okay so I want to think and I hope that never does guys I hope that catastrophic event never have we know that it does but I hope that you know I never hope for that but let's say that some catastrophic event happen so earthquake or you know whatever the case may be I don't know in exchange has some technical issues or whatever okay ask yourself this question if there is more cell orders then there are by orders what's going to happen does it matter that a catastrophic event happens does it matter that you know bad news or good news or any news comes out at all no because irrelevant no matter what you think you know okay about you know price in the given direction I have to tell myself this every day but meaning you know whatever the bias that we have in the market is if the order flow okay is excessive in one area okay meaning the sellers are outweighing the buyers or vice versa there's an absolute it's an impossibility to go through that level that makes sense again it's very important that you guys you know understand what I'm saying as I'm saying it so if you know if I'm going too fast hopefully ugly I'm not so let's go back and look at this level and say you know what that's great but you know how can we apply this on the price chart well this morning we came in okay and we noticed that we have a good level of interest and that's what I refer to you know my levels of supply and/or demand right order floats all I need to know is do I personally think that there are more orders more sell orders there are more buy orders there so when I came in we look at this level and this becomes a level of interest and so I asked myself the simple question okay what do you guys think I asked myself this morning anyone want to take a stab at what the first question I asked myself was and type that into the Q&A there what do you think the first question I asked myself well don't be shy it's okay guys okay we think the first question I asked myself was about this level that's a good a good thought process sure yeah exactly guests for that's right is it a fresh level that was the first question that I asked myself coming in looking at this level it's always the same question is it a fresh level okay now I need to ask myself another question the level of interest that I am looking at okay let me now format this and what I'm going to do is extend it to the left and not to the right okay I'm gonna then ask myself whether the only if the level is fresh of course I'm gonna say is the level original right so if I go back scroll all the way back scroll back scroll back until I find okay that particular level see this line right here this is the line that I had drawn in let me tell you what let me do this let me remove all of these other lines so that it makes more sense right so can you guys does everyone understand how these are the two lines okay this was the level of interest so I then scroll the chart back okay until in and I get this question all the time how do you know how far to go back you don't you go back until you can't write in other words if there's no price action there you continue until infinity right yeah absolutely as far back as you need to go it's if it's a you know a day or a year or ten years it doesn't really matter so notice back here I want you to notice something if I follow this all the way back okay I want you to notice how there is no supply right here there's no supply level this is a supply level okay and then we come back to retest that come back to retest that but notice what we do on this particular peak right does everyone see how the top line here is not within a previous supply level does that make sense okay we if the level in itself the level in question if it's an area of supply we're going to use previous supply if it's an area of demand we'll use previous demand okay we're not talking about cutting through candles and we're not talking about support and resistance I ask myself the simple question is that area of supply within a previous area of supply and the answer to that question is no it's not because we penetrated above the previous level of supply so for that particular reason it says to me that this is an original level of supply that simply means that it formed in the middle of nowhere on its own right absolutely it just formed on its own there's no previous supply that that that created it it's just new fresh order flow okay so there's still a very large pile of orders just sitting there okay and if they're just sitting there waiting to get filled what do you think I want to be a seller the same area the institutions are selling right absolutely so this morning okay we come in we place a limit order you can see that we had our fill there at 26 94 halves and we've already taken off profit target we took our first profit target it's sick eighty eighty three quarter twenty six eighty three quarters so right in right in here was our profit target we can show you that in a moment if you'd like to see it no problem okay but so we've already done that and notice where our break see this right here okay we've now moved our stops to break even plus Commission so you know already making profits in the trade there is no way to lose right okay that makes sense but the reason that we still have a contract down here is because of a path sorry I move that medicine because of a path of least resistance okay the only area in this entire you know zone that I have drawn now any form of demand has stepped in would be right here okay see if I can well that's not working for me very well there we go okay this area right in through here this is the only area in which the buyers have now stepped in so the question remains you know are we going higher are we going lower okay so we're looking at larger time frame so we're gonna use the the the selling there right and we'll hold off on this so let's go look at another market okay we actually in all of these trades I take that back excuse me the Nasdaq was not presented in the live room this morning both the SP and the Dow were so let's go take a look at those we actually did have an entry at the 13 to 20 and we couldn't get a fill I mean we literally got hit on the tick you can see our zone that we had drawn in and again this was done in the live room this morning you know hours and hours in advance but then we come back and we literally hit our entry and you know some just pure luck that we that we called it to the tick but you know luck doesn't do you very good with a call unless you get filled right but we did get our fill on the S&P so we talked earlier in the video or in the the session about you know our be ours and DB DS right these are continuation patterns so they often refer to areas of supply or demand you just have to ask yourself is it a fresh level and is it an original level okay all right so I'm going to cover this trade very quickly and then I'm just going to do a quick Q&A session okay because I see that we're running out of time here you know never enough time guys to teach what you want and and you know I need to be very upfront learning to do this takes a good you know while but once you do learn to do it it becomes very simplistic right so this morning we came and the SP looked very different for the Nasdaq so let's go back and let me show you something very quickly okay why would I not short the SP okay why did I not want to get short the SP you see where this draw rally base rally happens so if we remove all excuse me the Dow I apologize let's remove drawing okay and I'm gonna scroll back okay and I'm gonna ask myself remember the two questions okay I'm gonna grab a horizontal I'm gonna go back and I'm gonna look at this and most people would say and I will I take that back I can't speak for other people I can tell you that my experience with with traders and that's just coming from the live room and so on and so forth most of them would say this is an area of supply in which we'd look to you know get short the markets and so on and so forth right okay notice where we're coming from so why was I more interested in selling the Nasdaq as opposed to the Dow because we had original supply on the Nasdaq but we didn't on the Dow notice what happened okay notice what happened this is the exact same peak guys okay that we just saw on the Nasdaq I'll open this back up okay so we scrunch this back in okay see that right there notice this peak back here remember we'd already violated through it right so original versus non original supply that's the only reason okay so if we go back over here and we look at this area we would anticipate that we would actually push through that area reason being because it's not original supply right the orders have already been used up that makes sense okay all right however this level was absolutely fresh okay this level right in through here there if I can mark it right we had it to the 220 well you get the idea good enough all right so this level it was just a new pile of orders that's what it was and it acted as a magnet to pull or drive prices right back to where it wanted it to come makes sense okay same scenario on the S&P okay we look at previous areas all right and we say to ourselves you know is this an area where I would be a willing seller a willing buyer to questions is it fresh and is it original okay if you guys look on our trading blog I believe in the left well if you go to pure financial Academy calm you can visit our trading blog via the top of the top of the website there and you can actually go back and review a pretty recent video there in which we sold the markets out of this level okay so all of these you know levels that you see on the price chart these were actually presented in the live room but this right here was a great trading opportunity so we had the capabilities of getting short the market and then we turn right back around and took it right back to the upside okay so we're looking at you know literal order flow back and forth okay and it's quite amazing even to myself it's just amazing to sit here and watch it you know bounce back and forth from from level to level to level so let's do a QA guys I don't want to take up too much your time I only have about 12 minutes left here you know just focus in guys hopefully that helps you you know the three ways that we talked about trading supply demand you know we've got limit orders okay is my favorite way of doing it you can use confirmations if you choose to and then there's the bull and bear traps of course okay to define this let me help you understand how I would place the trade just so I'm very clear I'll show you how we did place the trade today when I use limit orders again this is how I always place my trades okay when I'm looking for an entry all right I'm already the order is already sitting there in other words when I was looking at the the chart like this and again you can go back on the trading blog and you'll actually see this but I had my order sitting up here at the twenty one half fourteen twenty one half it was just sitting there and I said to myself look I don't care when price gets back there I'm just gonna trade with that pile of orders right so you know I had to be patient we ended up trying to take a long position down below okay we ended up getting back to supply finally so we short the markets right but look at how long it takes to get there right sometimes it takes a while yeah and so after that the trade that we present in live room was this long opportunity just below as well and so you can see now that that's very nice too okay all right so all right let's wrap this up with a QA we'll try to get as many questions as we can before we before we exit the room I'm gonna try my best guys let me see here I'm just gonna kind of run through time frame on the chart there like so it was hourly chart I do focus in on the hourly chart are you talking about pivot point trading TD you're asking historically how does the plotting of supply demand levels compared to P okay yeah yeah that's what you're saying how does it compare to pivot point trading well I mean you would have to obviously go back and do your own research but there in my opinion there really is no comparison I mean it's I would tell you that you know original supply and demand produces you know oh just tenfold better but again that's that's based on my own research and you know so on and so forth so very good to answer your questions some simplistically let's see move through the questions here let's see so there's no base you look solely on the pivot level or do I go to the lower timeframe to find one okay so you're at you know I never rely on a pivot level if it's not original okay unless it's with the trend I'm not going to go into all of that right now we'll focus in on that in the live room but you know no there's there's really no need to continue put it to you this way if you start on a larger timeframe right and you work your way down to a five-minute chart you can almost guarantee that you're going to find a level I mean it's gonna happen so you got to ask yourselves you know do you want to be that trader that just forces the levels and forces the trades or do you want to be patient right and that's again that's um you know ask yourself that I can't answer the question I tell you for myself you know I'm very patient when it comes to trading I can tell you today it took me nearly all day to get these two trades on ok we had another trade that we presented also on gold but we didn't we didn't get that fill but you can look at all of these - all of these levels that we have marked in these are marked in in the live room well well well in advance right so you have the opportunities if you want to trade accordingly right just like for example right now we have a level drawn in right here this is in advance we haven't revisited that yet however this level we did great buying opportunity and so on and so forth yeah so I would tell you try not to force it okay try to be very patient choose a time frame and and and and stick with it yeah give oh I hope I'm pronouncing it right you know is a 60 minute that's that's that's what I trade that's what we trade in the live room yes where I find the levels right because a lot of people will dial it down to the smaller timeframe but I you know honestly guys I've just found that I do better when I don't because the the market makers and and so on there's a lot more slippage enough sleep excuse me a lot more sweeping stops on the smaller timeframe a lot less sweeping stops on the larger time frame so I much prefer the 60 minute chart how many traces we trade in a day Oh today today is in as in current today just the two yeah so you can both trades that we placed you can still see while the excuse me both trades that we've gotten filled they're still up yeah so you can see both of them have hidden profit targets and now they're both just runners with the second the second profit target yeah so we took our profit target right into this area of resistance okay so we usually try to get you know massive profits we're looking for a minimum of two two ones we're looking for three ones and so on and so forth but yeah so just the two trades actually got got filled today can I explain again how to know a level without a base just the pivots okay it's very good question okay it's very important that you guys get this a pivot point not being the same right ask yourself the two questions a is it fresh okay have we in other words have we been to that level before because that's going to tell you if it's fresh or not but in order to determine if it's a pivot point or not go back to the left put you a horizontal line on the bottom of the pivot point low or the high of the pivot point high okay and just scroll back left that's it that's as simple as it can be right so you know pick a market right I mean any market for example will do it right now I would ask myself this level right here okay is that a pivot high right or is it fresh you know supply and then scroll back okay and ha look at where it lands right you can see that that's a pivot point so would we be willing to short the market's node absolutely not right because that's a retest of a previous level make sense great question by the way guess for thank you do you carry positions overnight do I share email with anyone no I don't I don't share emails no are you in David are you actually in the in our live room is that why you're asking oh okay oh so you know you're not but no I absolutely never that's a that's a privacy deal there so all your information with us is completely confidential so ya know none of information or your emails will ever be shared with others okay to just yeah a great question though but to answer the question about carrying positions overnight sure I mean you see I've done it right now right with two two trades I prefer not to hold them over the weekend however because you know I have to be in a very good position to hold it over the weekend yeah but yeah I mean now all the time I'll absolutely hold a position overnight it's not required as a matter of fact you know sometimes if I would have just closed my positions I would have made more but it's just my style of trading right so yeah I mean again you can see that I'm still in the SP and still in the Nasdaq trade ah let's see here guest six I think your question well I think I already answered a question you're asking me to define it's a good I think this is humorous yes please define the fresh and original levels for a six year old okay in other words in layman's terms yet but I think I just did that I think your question came in before I answered it in other words literally go put a horizontal line on top of a pivot point high or go put a horizontal line on the bottom of a pivot point low simply scroll left that's it that's it that's all that you're required to do okay if look at this for example you see this this pivot point right here okay I'm not interested in trading out of this if we come back to it because that's not an original level of demand for me right you know does that make sense everyone I hope so because look at where it's coming from it's just a retest of the original level of demand in which we've been there about four times so the probability would be that we'd actually pushed to the downside not hold up okay all right great question hopefully that that did it pretty good Steve asks do you ever use trend lines in your analysis oh absolutely Steve if you yeah absolutely more than you know right absolutely that defines a lot of things for us we're pretty big on trend lines yeah you see Dennis you're struggling to determine win far back how far back you're saying you're struggling to determine how far back the area has been violated it doesn't matter like say you it doesn't matter how far you have to go back you go back as far as you have to right in other words you just keep going until you find price if that level has been traded through then it becomes irrelevant so let me give you an example okay me remove these lines all of these that are no longer relevant for us and we'll just move this back okay all right sorry if I can draw this in well I'll do that later okay look to this level right here all right I am absolutely never enter I'm not interested in this level whatsoever not even a little bit okay so when we came back up to it I cared less right you know the reason there is because it's already been there before we've already made money out of the level okay and once you violate through the level okay right here once we violated through that level you have to you have to know that all of the sell orders that were there at one time have now a hundred percent been consumed otherwise there's absolutely no it's impossible to trade through the level okay as long as there's still you know sell orders there you can't trade through it right you have to consume all of the orders in order to go through it so in other words we don't cut through candles yeah absolutely that's yeah not right this moment LM Ronnie yeah that's sorry did we just cutting the the time here but if you want to you want to jump into our live room we'd be happy to do that yeah if you use trend lines you use them to anticipate slash predict a channel possibly forming okay anticipate yes predict yeah I understand where you're going with that yes but at the same time I only use that for confluence right so you know in other words I'm not gonna just jump out and trade or place my money in the market if there's not an level of order flow there right so just because it lands on a trendline doesn't really mean that I'm going to be placing an entry and you know if there's an a level there however and it lines up with the trendline then absolutely and we would anticipate a very large move out of that okay I'm sorry guys I'm gonna run through a few quick questions we're already over time and I give just about two more minutes and I'll jump out of the room all right let's see here is it better to trade markets with much money to get clean supply to man levels I'm sorry I'm not to move through that question is I don't really understand it okay yeah I apologize about that I can't tell you about the recording Michael I'm sure that the guys here you know Josh and Paul will take care of that all right how do you know that it's reached the absolute bottom level of demand I mean there's you know there's a million different levels right we just have to find the ones that are our most recent yeah the ones closest to current price okay guys I don't want to I don't wanna keep these guys too much longer I want to say I really appreciate you guys taking the time out of your day to you know educate yourselves on supply and demand I really hope I hope that I've helped some of you you know if you have any questions be absolutely happy to to address those just send them to support at pure financial academy.com guys and again you can check out the trading blog you can get a free trial into the room via the left-hand column there you can see where it says free seven-day trial so we'll put you in the room let you see exactly how we analyze the market trading setups you know each day and so on and so forth and without further ado thanks for all the kind comments guys below I see that my regards to all of you as well god bless I'm going to turn this back over to Josh or Paul and I hope that you all have a very wonderful rest of the day all right well thanks a lot well we really appreciate you coming in to present here today and obviously we stay appreciate you staying on to answer all the questions that came through there seemed like there were a lot of good questions so hopefully everyone who's sending their questions where everyone have them answered I did want to just remind all the participants those are still in the room that we did record today's session so be on the lookout tomorrow for a link to that recording just so that you can review the session again if you are so inclined but that should do it for us here today again thank you will and thank you to our participants who came into the room today obviously we appreciate you coming in for this webinar series and hopefully we'll see you back here in the coming days and weeks for another future Mira's future webinar but until that point in time I hope you guys have a great rest of the evening and hopefully we will see you again real soon take care

Channel: andre vieira

Views: 28,736

Rating: 4.8312235 out of 5

Keywords: Demand, Supply

Id: jDnrcEovtpo

Length: 59min 2sec (3542 seconds)

Published: Sun Sep 28 2014