Supply and Demand Forex Trading Strategies: Price Action Anatomy - ForeXposed

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Tuesday, February 28, 2017

Supply and Demand Forex Trading Strategies: Price Action Anatomy

Supply and Demand Forex Trading Strategies: Price Action Anatomy

If it is called a downtrend, then we see a series of ' lower low ' from point A to B, otherwise, the uptrend was a series of higher high (green circle) from B to C. Between the running trend we find a consolidation areas (black lines). On a trend that is happening (impulse wave) always appears a correction wave often called as 'retracement'.

The trends will continue to move in a certain period to finally get a bigger reaction and reverse the direction of the trend (reversal). Note that, the reversal takes time and effort to compete with the existing wave action. This pattern occurred over and over again, just different on the scale.

What's the point of knowing the trend? If we can identify a trend especially in the early stages of creation, then we know that a series of ' higher high' or ' lower low ' than the chances of (probability) will happen. So this gives the opportunity to perform multiple entries in line with the trend when the retracement happens.
Simple fact: THE PRICES NEVER MOVING ON A STRAIGHT LINES, ALWAY MOVING ON ZIG ZAG.
By understanding this reality, then a forex trader will stop looking for Open Position on loose ends and will look at every corrections/retracement as an opportunity for entry in the same direction of the trend. Because now you have a system with a high probability, if it’s uptrend after the price has been pushed up it’s will be on down correction, then moving up again and so on.


Identify the market conditions by asking a number of questions to yourself.

Pre-Entry:

  1. Look at the conditions indicated by the current chart, whether it's trending? Consolidation? Just answer YES or NO, don't respond by saying "I think", the answer should be simple, YES or NO.

  2. Whether the momentum (while trending up/down) is stronger? Weak? You can see from a long body candle, is it (strong) or short (weak)? YES or NO.

  3. Does price action in line with the main trend (use a large frame)?

  4. Does price action is currently entering a process of reversal (buy/sell climax)? (Later I will explain more detail about this).

  5. Do you know supply and demand area on the chart?

  6. Have you calculated the risk?

  7. Have you calculated the reward?
Suppose you want to buy, then surely the entry condition uptrend/strong momentum is the most ideal, and the answers should support the decisions to be taken.


Post-Entry:

  1. Is the price moves accordance with the analysis? Accordance to the expectations?

  2. Does price movement behavior accordance with the analysis? And the momentum increased?
If the answer is YES, then hold your position to generate maximum trade in accordance with the trade plan. If the answer is NO, then get out/exit, no need for us to argue with the Market.