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Thanks Shane, when I get a chance I'll try and explain what I mean by Supply/Demand, Fear and Greed and how this helps me determine the direction of the market. But I have to admit that I don't have a trade plan, never did.
I just build charts based on structure and take trades where I think there might be a large block of traders in trouble and then trade against them. I'll try and show this in a well drawn out structured chart. Today I have appointments but will be back later, JP.
Could you talk a little about your supply level that I circled on your chart.
How did you determine that it was a supply level?
The boundaries of your supply zone don't appear to correlate with any opens, closes, highs, or lows for the area so how do you determine the boundaries of your supply and demand zones?
Good Morning Sazon, the green bar was a fast upthrust bar. It's my opinion that the initial move was caused by Institutions looking to fill resting sell side liquidity. During this upthrust other buyers joined in on the feeding (buying) freenzy.
Once price started to absorb the sell side liquidity the big institutions with their large bank rolls started to push price back down stopping out those buyers and at the same time, other traders then started to sell on the coat tails of these large players causing a further decline in price (domino effect).
Now since this was a fast drop it's my belief that there is more unfilled sell side liquidity at the supply level. So I draw a rectangle and wait for price to retrace back into my supply area. Each time it retraces back into supply absorbing the liquidity, the weaker the level will get until all side side orders are dried up. Price should start moving up again trapping a lot of sellers below that level. That's when I look for a long trade.
If you look at my last trade the 7:33 AM EST, that candle was a fast upthrust candle. Because of this I had a feeling that it was a sell side liquidity grab so I exited my trade for 24 ticks. Price then started to drop as expected.
This is all only my opinion and I could be completely wrong but it works for me, JP
Shane, this might answer the question you had for me yesterday