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YTC Price Action Trader (www.ytcpriceactiontrader.com)

  #14 (permalink)

Elite Member
Buckeye Nation
 
Futures Experience: Intermediate
Platform: Ninja Trader
Broker/Data: Amp/CQG, TOS
Favorite Futures: CL, 6E, YM and ES
 
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Supply and Demand


trendisyourfriend View Post
This is not new. This behavior happens all the time on the ES. A lot of traders that trade the ES move their stop to BE as soon as price moves one point in their direction. I always thought it was a bad tactic to proceed that way. Most of those who do that overtrade anyway. If the area is backed by good demand or supply then there is no reason to exit or move your stop to BE when price tries to shake you out. When things get scary for the small traders that's where pro add to their positions.

@Trendisyourfriend ,

I agree with you. I think supply and demand is a concept that most traders do not understand or practice enough. There are plenty of resources on this topic and when you learn to pick the important levels, they work out very well. I think the reason why most people are "scared" of this way of trading is that "you are asked" to take, for example, a long when price is moving down towards the Demand zone and most people are uncomfortable with that. Most of us retail traders want to wait for confirmation and buy/sell after a period of buying/selling. However, if you are unaware of pure supply and demand levels above/below current price, most of the time you will trade right into these levels and price will reverse hard on you. I am just getting comfortable taking these trades at the supply and demand zones without waiting for confirmation as long as the risk profile meets my plan.

Sorry for the long message. Here two trades I took this week based on the supply and demand zones.

Attached Thumbnails
YTC Price Action Trader (www.ytcpriceactiontrader.com)-tf-09-11-60-min-08_30_2011.jpg   YTC Price Action Trader (www.ytcpriceactiontrader.com)-fdax-09-11-60-min-08_25_2011.jpg   YTC Price Action Trader (www.ytcpriceactiontrader.com)-ym-09-11-15-min-08_23_2011.jpg  
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