Supply and Demand Forex Trading Strategies with Price Action - ForeXposed


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Friday, May 26, 2017

Supply and Demand Forex Trading Strategies with Price Action

If you understand about supply and demand strategies and understand about supply and demand rules, let's continue with applying the forex tutorial we explain in the article titled Guide To Understanding Supply and Demand Strategies For Forex Traders.
Supply and Demand Forex Trading Strategies with Price Action

After we did the zoom out on the H2 time frame of the GBP/USD pair, on the bottom, the left corner, we can see supply and demand areas.

The supply area is indicated with magenta, whereas the demand area is marked with blue.

In the chart, we can see clearly that the price bounces a few times from the demand area, and there we had a few chances to make a trade.

In this case, we can assume that the demand areas will trigger bullish orders. And preferably, stop loss is placed under the demand area.

Notice as the price increases from the demand zone, that it eventually reaches the nearest supply zone above.

See, when the price moves up from demand area then it will try to achieve supply area that sits on it.

And then what happens is the price breaks the level areas with strong momentum, showed us that the area's level is weak, and the GBP/USD pair would likely continue his bullish directions.

This indicates that prices are starting new rally moves, which confirm that the bullish trend on the GBP/USD pair being in conditions of strong. This bullish trend continues for 1 week, then followed by bearish moves.

A bearish channel in red indicates decreasing tops and bottoms. This indicates that the bullish trend will end soon and replaced by a bearish trend.

If you have an open order in conditions like this, it would be very good if you do exit orders on the second descending bottom after the formation of two descending tops.

To see more examples of the application of forex supply and demand strategies, you can read the article entitled Forex Supply and Demand: Stop Loss and Take Profit Placement, where we explain how to complete this application.

Reference: Forex Training Group.