Just some observation I see a lot in 6E. ( maybe also in other market but i just only watch 6E )
When you take an " obvious entry" , price will often revisit the exact point of entry and moves on.
I think maybe this is because a lot of people will put their stoploss on that spot, to breakeven. But this is just speculation.
Example just 1 hour ago:
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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.
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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.
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Hello kulu, if you know good information of finding relevant SR levels I'm very interested. Beggs also uses SR levels in combination with strenght/weakness of price action. ( no indicators naked chart ) Two weeks ago I found information of Sam Seiden who has great articles about Supply and Resistance. The articles really turned my view of the stockmarket upside-down. Especially the fact you mention, the novice will buy AFTER a big move ( and sometimes right into resistance ). Because I also believe this is very important information for trading, I'am very interested if you have good information on gauging the relevance of support and resistance levels.
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Its all about support & resistance which play the net order flow in different time frames.The six principles( 4 rules within the framework & 2 at the edges of the framework) of Lance Beggs are most appropriate to follow in any time frame. A gem of a book which has opened how to read market & trade fruitfully.
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I'm trying! That's what I'm learning to do right now using higher time frame 1hour bar swing highs and swing lows or areas of consolidation. Generally speaking I just draw a horizontal line, but the interpretation is a zone a few pips wide above and below the line. I tend to see them everywhere though, sometimes I have too many. I don't want to start introducing more rules for them though, I'd rather just build up my experience.
I do find it easier to spot the setups with such S/R in place on the chart, and I find it more difficult to work out what I might have done at a pull-back in a trend when there's no S/R nearby.
Most of what I look at is Sam Seiden, and Lance Beggs. I have not attended Sam's XLT course nor do I have Lance Beggs books. All I have is there free online resources. Also, nobrainer trades put out a video a few weeks back about liquidity gaps which is basically spotting those spikes what we use to draw our zones.
I think the most important thing is to define what a supply/demand zone is to you in terms of profit potential. Also, just be as picky as you can, if you don't see the level/zone immediately, then it's not there. I look to take one or two trades per day, and some days there are no good setup on the instruments I watch and I pass. However, because of the RR on trades that work out (or fail) I don't have to trade everyday.
Practice is very important. I know that Sam Seiden has the Odd enhancers that they looks at. I look at those too, especially, how price leaves the levels, and space (profit margin). I seldom take second test of a level, and I like to wait on those to see some form of confirmation within the zone and take my trade as price leaves the level.
I hope this helps. It's still a learning process for me as well, but I feel comfortable taking the obvious trades. Again, it is nerve wrecking to go short when you see price coming at your level. I trust the setups and as long as my risk level is acceptable I am willing to take a loss for a potential healthy percentage gain into my account.
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Here is a trade on the FDAX based on the supply zone (level on top of a level = one of the Odd enhancers by sam seiden). I was at a meeting and I missed my entry.
Because the level was very wide, I was going to watch the 15 min chart for my entry to lower my risk. Just wanted to share the setup. Also, look at how late you get into the trade if you waited for the Pin Bar to close and then enter on that as confirmation of a reversal. I am just saying.
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after watching several video's of Seiden I also noted the odd enhancers. But in some videos he tells about 6 and in another video he tells he uses 11 variables to gauge the possible succes or failure of the setup. Offcourse he cannot tell everything because his courses would be useless and the people paid for it will be angry.
Which do you use? Or do you use a few in combination with common sense? Are'nt you afraid you use information which is possible not complete for this reason?
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