The Moving Average
The video discusses supply and demand trading, which is a popular forex trading method. Retail day traders cannot move the market, as it has a daily volume of $6.6 trillion controlled by central banks. The video explains how to identify supply and demand zones and trade like banks. One can look for smaller moves and draw a rectangular box across the zone, waiting for the price to come back up and using it as a diving board to sell off the market. Short bases are essential, as banks take the market in smaller chunks to move massive liquidity.
The Ultimate Guide to Supply and Demand Trading: Understanding, Finding, Entering, and Taking Profit
Introduction
Supply and demand trading has become one of the most popular methods of trading most forex pairs today. From combing through thousands upon thousands of your comments, it’s become clear that it’s the thing that you guys want to see the most. So, in today’s video, I’m going to help you guys understand supply and demand, how to find it, when to enter, and when to take profit.
Understanding Supply and Demand Trading
The first thing you guys have to understand when looking at supply and demand is the simple fact that retail day traders cannot move the markets. The forex markets have a daily volume of 6.6 trillion dollars allocated probably to about 80 percent central banks across the entire world. Moving money, whether it’s from gbp to usd, whether it’s from euro to jpy, they are making transactions depending on the influx of currency that they get to the currency that they would like to get, and they always want to get the best price. So, they will hold out, manipulating the market to the point where they want to get in on their big positions and then get in, and at that point, that’s when you see the massive spikes in the opposite direction.
Trade Like the Banks
Daily volume of 6.6 trillion dollars, the banks move the market, and retail traders do not. So, the most logical thing for you guys to do is to trade like the banks.
Finding Supply and Demand
What you want to look for is the swift sharp move, the v-shape that only happens when banks get into the market. No amount of retail day traders can make a price move like this ever. You have to look for a ton of sellers, not only that in previous price action, looking at this area and people taking long positions here trying to target this, their stop loss is going to be below that area, so what is a stop loss of a buy order? That’s right, more sell orders.
Understanding Stop Losses
So not only are there retail trader buy orders here, there are two massive chunks of retail trader sell orders here, which is completely primed for the massive amount of liquidity that the banks are going to put in their buy orders, and you see a massively sharp straight-up movement. Retail traders cannot move the market like this; only big banks can.
Types of Supply and Demand Zones
Banks will trade off of two types of supply and demand zones, the wide platform ones, and the narrow little flimsy dongle ones. That’s depicted right here with a small base and a sharp move, then another one right here with a single candle sharp move again.
Patience is Key
So, if your chart looks like this when you get on and do your analysis, you should be drawing up a long rectangular box across this zone and then patiently waiting for the banks to come back to that zone and use it as their diving board to sell off the market as the price comes back up to that zone.
Entering and Taking Profit
As the price comes back up to that zone, and we get this sharp one or two candle rejection in the opposite direction, that right there is your short position. Your stop loss is going to be above the peak, just barely, just above the peak of that, maybe two or three pips, and your target is simply going to be looking left and where the most price has crossed right there.
Closing Thoughts
Making money with the banks, whether the price is going up or down, always keep your focus on the smaller moves because banks make smaller moves as well as their massive moves. Remember, the daily volume is 6.6 trillion dollars, and sometimes, price continues, and if you want to leave a runner, close 90% of your position, but we usually advocate that you just close 100% of your position at your take profit and you look for your next trade.
