Let me share the basics of supply and demand.

I trade supply and demand. I buy at demand and sell at supply as simple as that.

This is the key to buying at the swing low and selling at swing high.

So what are supply and demand zones?


The picture below are the 2 demand zones that i trade:

Rally base rally (RBR) - Trend continuation pattern.

The base is a pause after a strong rally. This is where smart money accumulate thus the explosive move up after that base. This base then becomes demand zone.


Drop base rally (DBR) - Reversal pattern (stronger than RBR)

This pattern is usually a reaction to the RBR.


Supply zones are the exact opposite:

Drop base drop and rally base drop.


The strategy is to buy at demand zones in an uptrend and sell at supply zones in a downtrend.


Look at the $AAPL chart below where there are 2 RBR and 1 DBR setups


When price retraces back to the demand zone i will be looking to buy where other retail traders panic and sell or worst, short sell! So why do they panic and sell? Because they entered after a breakout from that base/pause. The typical stop loss will be placed at the last swing low and when price goes in their favour, they will move their SL to breakeven.

Smart money need to buy quietly in large quantities. So how do they do that?

Push prices lower to back the retail traders entries and SL which also happens to be a demand zone!


This is why i don’t use any indicator or volume. Smart money can hide/manipulate volume but they cannot hide the prices that are printed on the charts.

Of course this supply and demand strategy is not as simple as buying at all demand zone and selling at all supply zones.

I use a mechanical ruleset to filter out which demand and supply zones to trade from.


See if you can spot the demand/supply zones on the setups i have posted on:

$Raffles Medical(BSL.SI) $Hai Leck(BLH.SI) $Best World(CGN.SI) $ComfortDelGro(C52.SI) $ISOTeam(5WF.SI) $UMS(558.SI) $Sheng Siong(OV8.SI) $InnoTek(M14.SI) $STI(^STI.IN) $Venture(V03.SI) $Mapletree Com Tr(N2IU.SI) $ST Engineering(S63.SI) $Tai Sin Electric(500.SI) $Sarine Tech(U77.SI) $Duty Free Intl(5SO.SI) $Food Empire(F03.SI) $Moya Asia(5WE.SI) $QAF(Q01.SI) $KrisEnergy(SK3.SI) $QAF(Q01.SI) $AEM(AWX.SI) $GLD US$(O87.SI) $SoilbuildBizReit(SV3U.SI) $Sembcorp Marine(S51.SI) $Keppel Corp(BN4.SI) $POSH(U6C.SI) $DBS(D05.SI) $UOB(U11.SI)$OCBC Bank(O39.SI) $OKP(5CF.SI) $SGX(S68.SI) $Micro-Mechanics(5DD.SI) $Spindex Ind(564.SI) $StarHub(CC3.SI) $Creative(C76.SI) $bs6

Read more
82 likes 75 comments
ParentalAdvisory

Reply to @zeeq : Appreciate your constant updates. Thumbs up!

ergkmaslowcari

I admire all traders mindsets. why NYSE need to work in pairs now with specialists. I saw last night https://goo.gl/search/nyse+specialist
SEC.gov | Specialists A specialist is a person who is a member of a stock exchange, such as the New York Stock Exchange, whose role is to facilitate trading in certain stocks. Specialists must make a market in the stock they trade by displaying their best bid and ask prices to the market during trading hours.
https://www.investopedia.com/terms/s/speci...
Specialist - Investopedia
https://www.investopedia.com/ask/answers/0...
Who employs the specialists at New York Stock Exchange (NYSE ...

traderx

This is impulse and retracement method. Looks simple but very hard in practise because the stop loss can be very huge (we can loss our pant if lack the mental strength), long retracement can be months if not years and most importantly we are all animal of emotion.
Another similar method is Donchian channel with adjusted smaller stop loss at mid channel or at say 20% although still can be very big.

May be more suited to smaller time frames, say 1 hour.

MH7

you mentioned about using mechanical ruleset to filter. what do you mean by that? trend filter?

mrtradingjournal

This is a common tactic in forex. May I know whether you can provide a good guide? I tried to learn before but I cannot seem to understand how you define the base.

mrtradingjournal

Reply to @zeeq : Please do it. I will be very interested to learn more from you. Thank you for sharing!

  View More Replies Small loading
albertkwok

my strategy is v simple. buy at consolidation usually at a bottom and sell at cycle high or hold for turn around or growth for divid. i follow big boys buy n hold method until weekly start to turn down then i sell everything.

albertkwok

Reply to @Baldwin : spiking loh. as a guide only.

  View More Replies Small loading
mslee888

Basics of demand and supply theory sound simple. In practice, likely you see stars...

zeeq

Reply to @mslee888 : yup this is just the basics therefore trading these patterns by itself is not enough to be consistently profitable

  View More Replies Small loading
View More Comments (17) Small loading

Recommended & Related Posts

$Dutech(CZ4.SI) & $ComfortDelGro(C52.SI) are showing the same monthly chart setup

but the data on $CZ4 is not to same therefore giving me a different outcome for my analysis.


On IN its showing 0.60 as the all time high. But on my tradingview pro account it's showing 0.49 instead.


This makes a whole lot of difference in my decision making to go long off that demand zone.

If the ATH was 0.49 i will definitely go long as it took out an all time high therefore making that blue zone a trade-able demand zone. Any idea which is the correct inception price?

Read more
zeeq started a poll

Is it really possible to time the market?

I personally believe it is possible but not 100% of the time it will work.
Please take a look at my blog where i show the before and after fact to prove it is actually possible to time the market.
Timing the market allows you to minimize risk and drawdowns therefore maximizing your returns.



Stocks featured in post:

$Raffles Medical(BSL.SI) $ComfortDelGro(C52.SI) $Best World(CGN.SI) $ISOTeam(5WF.SI) $UMS(558.SI) $ST Engineering(S63.SI) $Tai Sin Electric(500.SI) $Sarine Tech(U77.SI) $Duty Free Intl(5SO.SI) $Moya Asia(5WE.SI) $QAF(Q01.SI) $STI(^STI.IN) $AEM(AWX.SI) $SoilbuildBizReit(SV3U.SI) $DBS(D05.SI) $UOB(U11.SI) $OCBC Bank(O39.SI) $Keppel Corp(BN4.SI) $Sembcorp Marine(S51.SI) $POSH(U6C.SI) $YZJ Shipbldg SGD(BS6.SI) $Hi-P(H17.SI) $FB


https://zeroindicators.wordpress.com/2018/...

Read more
zeeq started a poll

Is it really possible to time the market?

I personally believe it is possible but not 100% of the time it will work.
Please take a look at my blog where i show the before and after fact to prove it is actually possible to time the market.
Timing the market allows you to minimize risk and drawdowns therefore maximizing your returns.



Stocks featured in post:

$Raffles Medical(BSL.SI) $ComfortDelGro(C52.SI) $Best World(CGN.SI) $ISOTeam(5WF.SI) $UMS(558.SI) $ST Engineering(S63.SI) $Tai Sin Electric(500.SI) $Sarine Tech(U77.SI) $Duty Free Intl(5SO.SI) $Moya Asia(5WE.SI) $QAF(Q01.SI) $STI(^STI.IN) $AEM(AWX.SI) $SoilbuildBizReit(SV3U.SI) $DBS(D05.SI) $UOB(U11.SI) $OCBC Bank(O39.SI) $Keppel Corp(BN4.SI) $Sembcorp Marine(S51.SI) $POSH(U6C.SI) $YZJ Shipbldg SGD(BS6.SI) $Hi-P(H17.SI) $FB


https://zeroindicators.wordpress.com/2018/...

Read more
zeeq started a poll

Is it really possible to time the market?

I personally believe it is possible but not 100% of the time it will work.
Please take a look at my blog where i show the before and after fact to prove it is actually possible to time the market.
Timing the market allows you to minimize risk and drawdowns therefore maximizing your returns.



Stocks featured in post:

$Raffles Medical(BSL.SI) $ComfortDelGro(C52.SI) $Best World(CGN.SI) $ISOTeam(5WF.SI) $UMS(558.SI) $ST Engineering(S63.SI) $Tai Sin Electric(500.SI) $Sarine Tech(U77.SI) $Duty Free Intl(5SO.SI) $Moya Asia(5WE.SI) $QAF(Q01.SI) $STI(^STI.IN) $AEM(AWX.SI) $SoilbuildBizReit(SV3U.SI) $DBS(D05.SI) $UOB(U11.SI) $OCBC Bank(O39.SI) $Keppel Corp(BN4.SI) $Sembcorp Marine(S51.SI) $POSH(U6C.SI) $YZJ Shipbldg SGD(BS6.SI) $Hi-P(H17.SI) $FB


https://zeroindicators.wordpress.com/2018/...

Read more
zeeq started a poll

Is it really possible to time the market?

I personally believe it is possible but not 100% of the time it will work.
Please take a look at my blog where i show the before and after fact to prove it is actually possible to time the market.
Timing the market allows you to minimize risk and drawdowns therefore maximizing your returns.



Stocks featured in post:

$Raffles Medical(BSL.SI) $ComfortDelGro(C52.SI) $Best World(CGN.SI) $ISOTeam(5WF.SI) $UMS(558.SI) $ST Engineering(S63.SI) $Tai Sin Electric(500.SI) $Sarine Tech(U77.SI) $Duty Free Intl(5SO.SI) $Moya Asia(5WE.SI) $QAF(Q01.SI) $STI(^STI.IN) $AEM(AWX.SI) $SoilbuildBizReit(SV3U.SI) $DBS(D05.SI) $UOB(U11.SI) $OCBC Bank(O39.SI) $Keppel Corp(BN4.SI) $Sembcorp Marine(S51.SI) $POSH(U6C.SI) $YZJ Shipbldg SGD(BS6.SI) $Hi-P(H17.SI) $FB


https://zeroindicators.wordpress.com/2018/...

Read more

There are more for you ...

View more and participate in our discussion now. It's FREE.

Creating an account means you’re okay with InvestingNote's Terms and Conditions