This is the part 4 of the supply and demand strategy.

(Part 1,2,3.)

I will show how to define the range of a demand zone in this post.

Remember the first post i shared? These are are the patterns that i look for demand zones.


Below is an example of rally base rally pattern on the $V03 monthly chart:

To define the range of the base, use the last opening price of the red candle just before the rally as the top of the range. And use the lowest price of the base as the bottom of the range.


Below is an example of drop base rally pattern on $UOB(U11.SI) daily chart :

The lower the timeframe, the harder it is to spot these patterns.

So for starters, use the bigger timeframes like monthly chart and above.


Look at the $UOB on the 3 months chart below:

Looks clearer doesn’t it?

Most of the times these patterns are not very obvious in once glance.

So you need to look candle by candle scanning through the chart at structure highs and lows for these patterns. You will need alot of practice to able to spot these quickly.


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35 likes 62 comments
KallangDaVinci

Somehow u sound like master donovan lei

zeeq

Reply to @KallangDaVinci : who is that?

sysy

support @zeeq 加油↖(^ω^)↗

sysy

Reply to @duckie : 我现在走可爱路线。。。呵呵呵呵 :)

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InvestingNote

Reply to @wellhandy : Sounds good. Thanks for thinking about us:) Look like @zeeq is getting a lot of traction:)

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Ccm

Bro, if possible , hold a physical session at IN venue.. many want to be discipled by you.. including me..

MH7

i have seen this used in forex trading but never able to get my head around it. Seems like what we are looking for is a strong momentum move, then trace it to the source (base) of the move and see if this is a fresh level.
how do you determine your entry and stop loss given that the supply and demand zone is a range of prices?

MH7

Reply to @zeeq : thanks mate. do you really use this on sg stocks? if so, do you noticed any differences applying this trading method on forex and stocks?

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mrtradingjournal

Good write up. But I still don’t understand how you determine whether the base. That is where I have been stifled since long ago. Lol. That’s why I gave up.

mrtradingjournal

Reply to @zeeq : Can you attached the image for the indicator that you have revised?

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thatsasecret

Thx zeeq for sharing, very interesting analysis. Nice to see an alternative strategy to support/resistance.

zeeq

Reply to @thatsasecret : Most of the times, support and resistance are actually a reaction to supply and demand zones.

Revision History


Recommended & Related Posts

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/...

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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

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Warned about some retracement/correction for
$STI(^STI.IN) $DBS(D05.SI) $UOB(U11.SI) $OCBC Bank(O39.SI)
on Sunday here: https://www.investingnote.com/posts/531087

Let me do a review of this setup posted on 4th of Febuary 2018.
I stated that "This gives us potential long setups for these bank stocks in blue marked areas. Orange areas would require confirmation."

Look how the orange areas gets penetrated and blue areas being respected.
That's why orange areas need confirmation as the odds are lower to take longs there. Expect STI to head lower towards to blue marked area or wait for new demand zones being created before taking any longs.
Sitting on your hands is the best strategy now
(This will save you from unnecessary losses).

Monthly chart on STI looks bearish with bearish engulfing pattern.
BUT we have another 10 days till monthly candle close for the bulls to fight so this bearish engulfing pattern is not confirmed yet!
That's why the best thing to do now is to do nothing.

#zeroindicators
#notevenvolume
Disclaimer: No FA was used in this analysis just like all of my other analysis that i have posted in IN.

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Attachment(s):

Weekly bearish engulfing on $STI(^STI.IN).
Expect some retracement/correction to occur.

This gives us potential long setups for these
$DBS(D05.SI) $UOB(U11.SI) $OCBC Bank(O39.SI)
bank stocks in blue marked areas.
Orange areas would require confirmation.

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Attachment(s):

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