Supply and Demand Basic - Alfonso Moreno PDF

Last updated: 6th September 2018
SUPPLY AND DEMAND FOREX AND

STOCKS TRADING IN A NUTSHELL
SET IT AND FORGET IT!
Basic concepts and strategy by Alfonso Moreno
© 2016 www.set-and-forget.com
Copyright © 2016 by Alfonso Moreno, Set and Forget S.L
All rights reserved. No part of this publication may be reproduced, distributed, or transmitted in any form or by any means, including photocopying, recording, or other
electronic or mechanical methods, without the prior written permission from the author, except in the case of brief quotations embodied in critical reviews and certain other
noncommercial uses permitted by copyright law. For permission requests, write to the publisher at the address below.
The information provided within this eBook is for general informational purposes only. While we try to keep the information up-to-date and correct, there are no
representations or warranties, express or implied, about the completeness, accuracy, reliability, suitability or availability with respect to the information, products, services, or
related graphics contained in this eBook for any purpose. Any use of this information is at your own risk.
The methods describe within this eBook are the author’s personal thoughts. They are not intended to be a definitive set of instructions for this project. You may discover
there are other methods and materials to accomplish the same end result.The methods describe within this eBook are the author’s personal thoughts. They are not intended
to be a definitive set of instructions for this project. You may discover there are other methods and materials to accomplish the same end result. This is a free eBook. You
are free to give it away (in unmodified form) to whomever you wish.
Disclaimer: Any Advice or information on this eBook is General Advice Only - It does not take into account your personal circumstances, please do not trade or invest
based solely on this information. By viewing any material or using the information within this eBook and www.set-and-forget.com you agree that this is general education
material and you will not hold any person or entity responsible for loss or damages resulting from the content or general advice provided here by Set and Forget, its
employees, or fellow members. Futures, options, and spot currency and stocks trading have large potential rewards, but also large potential risk. You must be aware of the
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Please remember that the past performance of any trading system or methodology is not necessarily indicative of future results.
Alfonso Moreno
[email protected]

Alfonso Moreno
My name is Alfonso Moreno. I’m a full time trader, expert technical

analyst and founder of www.set-and-forget.com supply and
demand online trading community in October 2013.
I have been trading the financial markets using exclusively supply

and demand imbalances, a proprietary strategy developed by
myself over the years which helps locate in any market turning
points where professional and institutional traders are planning
their trades.
I was introduced to trading by my best friend before a full month

trip to India. I didn’t know what a pip or tick was at the time. I was
first introduced into options, luckily I didn’t have any capital to
trade options or I would have blown up my account.
I learnt about Forex and Stocks later and have been trading
mostly Forex, Indexes and commodities ever since, while testing
for years a series of methodical and strict rules set that have
allowed me to become consistent in my trading.
I am at trader, photographer and adventurer. You can follow my

photography work at my new Letstimelapse Instagram profile.

The rules laid out in this eBook are based strictly on supply and demand.
Nothing else is needed.
• No lagging colorful indicators or studies

• No volume
• No lagging overbought/oversold indicators or studies
• No news events taken into account
• No earnings announcements
The concepts and Videos in this eBook can be applied to any market and timeframe. Forex,
Stocks, Commodities, Indexes, Futures, Options, Funds, ETFs, etc.
LEARN MORE ABOUT THE COURSE HERE

IMPORTANT NOTICE:
This short eBook alone is useless. You need to watch the free material available on my
YouTube channel, read and learn from my daily analysis blog, Instagram and Twitter, and test
the rules over a long period of time. Knowledge and confidence will not happen overnight. It will
actually take you months to learn the basics, but once you’ve done that part it will change the
way you look at the charts and the markets. There is much more to this eBook, it will get you
started on supply and demand technical analysis, from there you can decide if supply and
demand is the way you would like trade and learn further by focusing on supply and demand
alone.
You will be receiving a series of emails, each of them covering a basic concept of supply
and demand. A total of 6 emails 2-3 days. Please read them because each of these emails will
contain a short video explaining some basic concepts on supply and demand.
Make sure you have added [email protected] as a safe address in your email provider to
prevent these emails from landing in your spam folder.

THINGS I HAVE TAKEN FOR GRANTED
In writing this particular basic eBook, I made some assumptions about you that may explain the level at which this book is written
as well as show you how Supply and Demand in a Nutshell can be the resource you've been searching for.
Here is what I've assumed about you:
• You have experience. If you've chosen this book, you have some familiarity with Forex, the Stock markets and the risks and
rewards it presents to you. As an investor, you seek ways to manage those risks and rewards. However, if you’re not familiar at all
with supply and demand or you've just had a little exposure to them, fundamentals and mechanics are covered here.
• You know the basics. You know concepts like pip, tick, candlestick, leverage, what an exchange is, a contract or a lot, risk
reward and profit margin.
• You have computer and Internet access. I can’t imagine trading or investing without a computer and reliable access to the
Internet . . . so I assume you have both.
• You are not looking for holy grail. There is no holy grail strategy, many strategies are legit and can work, it's all in the mindset
and how committed you are to become successful at something.
• You don't expect to learn how to trade supply and demand imbalances overnight. It will take you about a year (probably
more) before you understand the strategy laid out in this eBook and the Set and Forget community. Your brain needs time gain to
build habits and patterns in order to gain the confidence to trade any rules set. There are no shortcuts.
• You use a broker. I assume you have a comfort level with your broker's trading platform or web platform. It may serve as a
resource for some of the ideas covered in this eBook.

THINGS I HAVE TAKEN FOR GRANTED
This eBook is not written as a trading guide with newbies in mind, you should have some basic knowledge. This is an
eBook for those of you who want something special. It is for the typical trader who has wasted his time trying to improve his
understanding of the financial markets, spent thousands of dollars in education and workshops, joined several online services
and trade signals, but still needs a trading plan and an edge and an strategy that works over time in any market.
It isn’t an eBook for someone who only ever follows the path of least resistance because there is no path of least
resistance in learning. If that’s you, put this book back on the bookshelf now and move on down to an author that tells you what
you want to hear, not what you need to hear.
The financial market is a world where we should not foster mediocrity or sell you easy shortcuts. It is a place where everyone of
us is equal as long as they are prepared to bust their arses with hard work and commitment. No matter who you are in the ‘real
world’, when you step into the supply and demand domain, you join them or you fail.
There is no room and no time for debate or arguments. Save that for the social media wannabes and charlatans who waste their
lives talking and chattering rather than doing. This is the world of results and the opportunity for those who are willing to take
action to finally make a change in their trading. Some of you will go all in and totally transform your trading and results, most will
fail because they won’t be able to muster the level of commitment to master a trading strategy. You just get out what you put in,
and if your ambition is modest then your output will also reflect that modesty. This eBook is not here to judge, it is here to get you
the basic trading skills that your efforts deserve.

Trading the financial markets is not a 100 meters hurdles race with
hurdles every 10 meters, but a marathon race with hurdles every 100
meters.
Those who have been following me for some time on Forex Factory thread, YouTube, Instagram and Twitter know how hard I've
worked to try and help many traders since I first started to share my analysis back in 2013. It all started like a simple trade journal
on Forex Factory, but out of the blue in a few months it became something very different to what I had initially created it for. The
thread had grown to such an extent that I could have never imagined.
I'm really glad that so many of you are interested in understanding how the market works when seen through supply and demand
glasses.
Life is karma, life is a boomerang. Whatever you do in life, it will be returned to you 10 times stronger. The original Forex
Factory thread changed my life in many ways, hopefully this PDF will change the life of many others as well. The emails I receive
almost every day tell me that I’m going in the right direction.
Trading is all about putting your emotions aside to prevent them from affecting your trading decisions. A trading plan and
a good trade management plan is executed and managed by a human being made of emotions, so unless you control your
emotions, success in trading will be unreachable no matter how much you want it or how good your edge is.

Methodology ideal for those working full time or part time. No need to
be in front of the computer all day long
Worried that you will not be able to learn how to trade or manage your trades because you have a full or part time job?
Your job is not a handicap, it is actually a blessing. Why? You only need 30 to 60 minutes a day to do your multiple timeframe
analysis, set your trades and go to your work place, it is as simple as that. Having a job is a positive thing, it will help you to
detach from the charts and let the trade breathe and play out. You do not need to spend hours a day analyzing the markets to
become a profitable and successful trader.
The “Set and Forget” supply and demand trading strategy can be used on any timeframe combination and market. The
type of trader you are is directly related to the timeframe sequence that you will choose to trade. It will determine the type of
trades that you take, how long you will hold them and how you would manage them. Once you have decided which type of trader
you are (by determining the timeframe sequence that you trade) and which timeframe sequence fits your personality, you should
accept that and not deviate from it because otherwise you will always be second guessing your trade decisions which will lead to
emotional distress. You will only take the trades that your chosen sequence allows you to take. You should not look at different
sequences and worry about missing trades. You should ignore them as you will have enough trades per month with the sequence
that you are trading.
READ MORE ABOUT IT HERE

Learn how the market works, no more colourful or lagging
indicatorsLearn how the market works, no more colourful or lagging
indicators
The imbalance of supply and demand is the only reason why price moves every market. The greater the imbalance, the
greater the move in price. Most traders are not aware of the power that trading a supply and demand trading strategy can have.
Most of us are really good applying supply and demand logic when we want to buy some food at the supermarket, buy a bottle of
wine or a car. We want to buy low and sell high, that’s pretty obvious, isn’t it? Would you buy your favourite bottle of wine worth 5
euros a bottle for 15 euros? Of course you would not. Why would then most retailers buy a Forex currency pair or a stock when
price is so high? Ask yourself that question.
All of us have the potential to be consistent profitable supply and demand traders but we won’t be able to achieve that unless we
have a strict rules set to lean on to plan our trades. Supply and demand together with price action is one of the best edges
you could ever possibly have. It is very easy to get lost and distracted by reading dozens of books and looking at internet
resources that push fancy, colourful and lagging indicators of which only tell you what has already happened. RSI, CCI, Bollinger
Bands and a long plethora of indicators are just telling us what is already known to big investors that trade supply and demand,
they just buy low and sell high, it is as simple as that.
WATCH THIS VIDEO TO LEARN MORE ABOUT IT

HOMEWORK YOU NEED TO DO
Knowledge does not come without hard work, we’re not living in a science fiction world like the Matrix movie. There is
no cable you can plug in your neck to learn how to trade or gain the professional mindset required to become profitable. There is
no holy grail.
If you believe supply and demand is the way you want to trade, you must work very hard. Allow for 1-2 years to learn the rules
and gain confidence in them. There are no shortcuts. Learning how to trade is much more difficult than any university career, be
realistic!
Subscribe to my social media channels (links at the footer of every page in this eBook) to learn about new potential setups
and commentaries, where high odds setups are posted and discussed. Watch the videos on my YouTube channel and my Blog.
Interact, there is no better way to learn than interacting.
Don’t despair. You can’t fast forward time, there are no shortcuts. You just have to be patience and believe in what
you’re doing.
If you see the potential to make money trading but for some reason still can't make money trading then there are other issues at
work like trading plan, emotions, a fix set of rules, other traders supporting you, etc. This is where you can get your questions
addressed fully & the support from all within the community, it's like a family. If you believe in supply and demand
methodology and you're willing to work hard, you will be welcome to JOIN US

WHAT IS SUPPLY AND DEMAND?
The only reason why a price moves in any, and all markets, is because of the imbalance in supply
and demand. The greater the imbalance, the greater the move in price.
Why do imbalances occur?

• The currency market, the financial world in general is dominated and ruled by big investors,
institutions, central banks and professional trades. They have the ability and capacity to move and
change the markets with thousands of orders- These orders create the so called supply and
demand imbalances.
• Daily news occurs and affects the world's economies
• Positive news usually increases demand, and reduces supply, leading to higher prices
• Negative news usually decreases demand, and results in an increased supply
• The retailer and small investor ends up becoming the bait, the liquidity the professional
traders need to fill many of their orders. They can't sell if there are no buyers interested
Every trader/institution has a different perception of fair price and future value. Supply is simply
the amount available, while demand is the amount that is wanted. Supply is the amount available
at a particular price, while demand is the amount that is wanted or desired at a specific price.
As prices increase, a seller’s willingness to sell products will also increase. The opposite of
this shows that as prices increase, we see demand reduces. Buyers will demand more when
prices are lower. Read more about it in the community.

A REAL LIFE EXAMPLE OF SUPPLY AND DEMAND
We are really good supply and demand citizens in real life decreases.
scenarios, we're potentially great supply and demand
traders but when it comes to trading most traders will do The next week you go to the supermarket, and see that steak is
exactly the opposite and trade against supply and demand, half of what you normally pay for it; it's 80% off of last week’s
something they would never do when they want to buy a car, a price. Now you will think differently to the previous week. You will
cloth, a pair or shoes or a house. be thinking that you can buy more while the price is cheap. Other
customers are buying while price is cheap, you realise that if you
Let’s imagine that your partner asks you to purchase some meat don’t act fast, all of the discounted meat will be gone before you
for dinner. You go to the market and see the price of the steak buy any!
you normally buy has almost doubled! It’s now going to cost you
twice as much to enjoy your barbecue; you quickly begin to think This is demand at work again. As the price of steak lowered,
how valuable that steak might be. You begin to look at demand increased, not only for you, but the market in general.
alternatives, such as hamburgers or a chicken; replacement This example is very similar to what we see on the currency
products with which you can get a similar result at a far lower markets.
cost.
The Forex market is the largest in the world, $5 trillions is
While you may decide to pay the increased price of that steak, traded every day, and the reason for this is the heavy demand
you have to think of the market dynamics at work. Not every behind the traded assets. Currencies are the basis for the
steak buyer would be interested in doing this; many would opt for world’s economy. Whenever one economy wants to trade with
replacement products because they could not afford the new another economy (provided different currencies are used) a
higher price. This is a living example of a supply and demand SD Forex exchange will be required.
range. As the steak price increases, demand for steak

A REAL LIFE EXAMPLE OF SUPPLY AND DEMAND
Unlike markets that are traded through an exchange, each Remember that Forex is the biggest market in the world, it's
Forex broker is essentially creating a market. More or less, traded by professionals and not by retailers. A hunter has all sort
the charts will look the same, but individual bars can be different of traps to capture its prey, so do the big institutions. We are
and price patterns in particular can vary a little from broker to trying to combat professional hunters, as retailers we are their
broker. Ultimately, the various markets created by the brokers prey.
will, to some extent, be arbitraged (the simultaneous buying and
selling of securities, currency, or commodities in different
markets or in derivative forms in order to take advantage of
differing prices for the same asset.) so they stay close to each
other. In the end you have to trade what you see on your charts
and ignore everything else.
What we perceive as the personality of a currency pair is

just manipulation of that pair. Some instruments have lower
liquidity (some Forex cross pairs and exotics), zones are
overshot and then they work great. That is not the picture of "this
instrument does not respect supply and demand” that is the
picture of "this instrument is being manipulated, bear traps, and
bull traps“.

PRICE IS FRACTAL
Each timeframe can have a different trend, in fact there are scales for our chosen timeframes. This is why using
multiple timeframes happening right now for every single combinations like Weekly, Daily and 15 minutes charts make no
instrument that exits. Price is fractal. Fractal meaning that sense, the scale factor is broken.
there are structures within structures, the same patterns repeat
over and over on all timeframes when we drill down a candle on
any timeframe. Multiple timeframe analysis is needed to make a
high probability decision.
The best combinations for trading multiple timeframe

analysis are those that use a common multiplier, in our case
four to five. Any multiplier or scale can be used but we need
to keep it consistent over the timeframes we select for our
sequence. Remember that Forex is the biggest market in the
world, it's traded by professionals and not by retailers. A hunter
has all sort of traps to capture its prey, so do the big institutions.
We are trying to combat professional hunters, as retailers we are
their prey.
The figure above displays a Mandelbrot fractal geometry. The
By using similar scales and multipliers we are making sure that discovery of fractal geometry has made it possible to
the difference between the chosen timeframes are minimal, the mathematically explore the kinds of rough irregularities that exist
"fractality" of candles will match better if we use very different in nature. Structures within structures. Watch this video

IT IS PARAMOUNT THAT YOU BACKTEST THE RULES IN THIS eBOOK
Back testing visually on Metatrader 4 or your trading platform is useless because you know what has already happened and
you’ll tend to find what you are looking for. Back testing without knowing what is going to happen next is the best way to test any
rules set, it’s what I’ve been doing for years and where my trading strategy originated.
You can use Forex Tester 2 software for your tests (version 3 was recently released). The fact that the software is called Forex
Tester does not mean it can’t help you testing the rules on other markets. You can aslo import historical data for any
instrument, Stocks, Indexes, Commodities, etc. It's one of the best testing software out there in my opinion. Once you have
tested these rules or any other rules for months (I don’t mean months of data, but months of daily work on your side), ONLY
THEN you will gain confidence trading these rules or any other strategy you decide to trade.
This is why you have to take your time and backtest these rules a couple of hours a day for months, but most traders don't want
to commit to this hard work, they consider it a waste of time and very boring. They do not realize that it's the most powerful tool
they have at hand, it’s the best way to gain confidence in the rules and eventually becoming full time profitable traders. Traders
feel the urge to trade without the confidence of months of testing the rules they are going to use to risk their capital, resulting in
blown up accounts! Wonder why most traders fail to become consistent and profitable? Self-sabotage! Most do not want to put
the amount of work needed to become a professional trader.
You have to do your homework; nobody can do it for you except yourself. Take your time and test the rules laid out in this
eBook. While testing you will see many things that you can't see now or couldn’t see the day before, your brain needs time to
process all the information, don’t rush. If you are not willing to spend some months testing these rules, then you should not be
thinking of becoming a trader. Learm more about Forex Tester

WHAT WILL HAPPEN AFTER A COUPLE OF WEEKS TESTING THE RULES?
There are only 2 possible outcomes: I am always encouraging traders to test because in my
humble opinion it's the only way to gain confidence and
FIRST ONE. After a few weeks you verify that the rules work become consistent trading any methodology, be it supply
pretty well and you are getting a nice % success ratio and you and demand, EMA crosses, Fibonacci, MACD, you name it.
will STOP testing. MISTAKE. A few weeks of testing is NOTHING, if It's just the way it's, do not believe what I say or do or what
you stop testing after a few days or weeks then you are not getting anybody else say or do, do it yourself. Step into the
my point. If you ever went to the University, did you stop studying "believe stage" of your trading and get the most out of your
and making exercises after reading the first book? No, you didn't. marriage with the rules you will be embracing, it's the only
You spent a few years studying, graduated and learnt the hard way way. Your thoughts are physical, but you need to work very
that you really didn’t know about the career you had studied because hard to make them become real.
you have no experience in a real job and most employers will be
interested in hiring people with experience in the field. I am personally focused on swing and position trading for
my entries for one single reason, it's not just trading but a
SECOND ONE. You will see no progress and believe that the way of life. Most of us want to have a life other than being
rules do not work, thus ignoring this strategy and looking for in front of a computer screen all day long, H4 and D1 levels
another one that makes more sense to you. This could probably help me to achieve that purpose, it helps me to be patient
happen, but it will happen to you on any strategy. You have to and walk away from my computer.
believe in the logic of the rules and the nature of the markets,
because supply and demand governs the markets and our world, we
like it or not. Take your time, spend some months testing, ask any
doubts you have, be patient, don't despair!

PSYCHOLOGY AND CONTROL OF YOUR EMOTIONS ARE PARAMOUNT
Learning how to trade does not happen overnight. We’re emotional beings and as such our emotions have a
lot to say about our lives and our careers, how we behave at work or how we deal with problems on a day by
day basis.
Having success at trading depends on how well you control your emotions and execute your money
management rules. Since we’re emotional beings, the money management rules in our trading plan will be
managed and executed by a human being driven by emotions, so at the end of the day it’s all about how good
you are controlling your greed, your fears and your psychology.
There are many strategies that work, it’s all about who executes the strategy and how well he manages his
emotions.
Learning a strategy but not working on knowing how weak you are emotionally is a recipe for failure. Read as
many books as you can on how to control your emotions, if these books are trading related even better. One
of the best books on such a matter is Trading in the Zone by Mark Douglas. It changed the way I saw the
markets when I first read it a few years ago. There is also a DVD version.

YOUTUBE VIDEOS ON SUPPLY AND DEMAND
I've created my own templates, tools and indicators for Metatrader 4 platform
that will help you draw rectangles (supply and demand imbalances) and extend
You can view the videos
them to current price, these tools also calculate the number of pips in the zone, on my YouTube channel at:
draws these imbalances trendlines automatically on the higher timeframes like the
Daily and Weekly charts so you can see where these lower timeframes
http://www.youtube.com/user
imbalances are located in the context of a bigger timeframe chart and imbalance. /supplyanddemandforex
Location and context are key, so you’d better have the tools that help you to
pinpoint where these imbalances are located, you could be buying into a bigger
timeframe supply imbalance after a strong rally in price, not a good idea  Subscribe to my YouTube
Some members have indicators for other platforms, Trading View, Trade Station,
channel if you want to be
Trade Tiger, etc. automatically notified of new
These indicators are included in a free package you should have
videos being posted.
downloaded together with this PDF book. Follow the instructions and install
them on your Metatrader 4 platform. I wish I could create similar tools for other
trading platforms, but I just can’t, I do create the tools I need for my own trading
and the platform that I use, I just can’t spend my time and resources on coding
them for platforms I don’t use.
Download indicators HERE

YOUTUBE VIDEOS ON SUPPLY AND DEMAND
By the way, I am not an OTA graduate, never took a course with level, a rally and a drop is a drop, fresh and original, the range,
them. My initial steps learning supply and demand were based the altitude, the range, overbought, oversold. I did not invent
on my finds on free Internet resources, a few forums, public those terms, they are just commonly used by many educators
videos published by Sam Seiden and other supply and demand and supply and demand traders all over the world.
sources on Internet. Anybody who puts a lot of hard work can
possibly create their own set of rules and strategy, not just me. Remember this very important thing: the more indicators you
use on your charts; the more rules you will have to add to your
I've just taken the time to compile my own ideas and worked trading plan. Adding an indicator means you will have to add
very hard to back test and forward test my rules in the live rules when to use it and when not to use it and synch it with all
markets. I've written my own indicators, my own trading the other variables used in your plan. If you add too many
plan and my own rules (many of them are common-sense, I indicators, you will be flooded with variables and decisions to be
didn't invent the wheel), and shared it with other traders, taken in every single trade, resulting in over-analysis and trading
nothing else, that simple. Supply and demand is the law that paralysis.
governs the markets, I just created my own version as the
result of years of testing a series of rules. Watch supply and demand video analysis on my YouTube
channel
The verbiage and sentences used throughout this PDF may
sound familiar to you if you have taken education with any of
the supply and demand educational companies out there, there
is no use to use different terminology, a fresh level is a fresh

THE 3:1 RISK REWARD CHALLENGE
In order to succeed in the trading business you need a sound methodology, LEARN MORE INFORMATION
and edge and a lot of common sense. Not only that but a lot discipline and a
rock solid understanding that if you do not treat this as a business you have a ABOUT THE 3:1 CHALLENGE
zero chance of long term success. I believe the statistics say that 95 percent or IN THE FOLLOWING LINK
more of new traders fail even when the owner knows what they are doing. Do you
really think trading Forex or Stocks is going to be an exception and work for you Many are the benefits if you take
after 3 months of practice or less?
accept this challenge. Your
If you are interested in this trading challenge and you want to learn Set and traiding will change forever.
Forget's supply and demand methodology, read below.
LEARN ABOUT THE
CHALLENGE HERE
This small 12 minutes’ video

Learn more about this challenge here demonstrates the power of risk
reward and 3:1 exits:
https://www.youtube.com/watch
?v=6ToFTuY79Rk

IT'S NOT OVER UNTIL I WIN
This is what I believe and I am willing to die for it.
No matter how bad it is or how bad it gets, I am going to make it! This is what we should be saying to ourselves day after day when
we are sitting in from of our trading stations.
Some of you right now, you want to go to the next level... in our case, becoming a successful trader... You can't get to that level
economically where you want to be until you start investing in your mind, invest in yourself.
Watch these 6 minutes’ motivational video by Eric Thomas and Will Smith, watch them every day if you will, this is what we
need to think about ourselves to become successful at any task. Click on the images to watch the videos

WHAT YOU SHOULD NOT SEE ON YOUR CHARTS
The chart below shows a chart loaded with indicators, you Crabs? Yummy. I love crabs!  But look at it closely, you can hardly
can hardly see candlesticks. You want to become a trader see price action. Those crab patterns are created by price action and
and not an abstract painter like Picasso. supply and demand, but most traders are more interested in the
patterns rather than in what causes those patterns in the first
place.

WHAT YOU SHOULD SEE ON YOUR CHARTS. NO INDICATORS
The chart below belongs to Aurolab Indian Stock. Daily demand, Apple US Stock, Daily demand triggered two days ago.
daily uptrend. Long triggered. No indicators. Just imbalances. Always planned before the fact read here
Clean charts. Always planned before the fact read here

WHAT YOU SHOULD SEE ON YOUR CHARTS. NO INDICATORS
NZDUSD daily chart. Waiting for new demand to be DOLLAR INDEX. Daily demand has already palyed out.
created to go long. It happened already. As planned before As covered here
the fact read here

TYPE OF LEVELS, CONTINUATION PATTERN vs SWINGS (valleys, peaks)
Let's make a pretty quick summary of the 4 types of zones we're looking to see on a chart.
PEAKS & VALLEYS: best at the extremes of the range or close to it
Rally-Base-Drop
Drop-Base-Rally

TYPE OF LEVELS, CONTINUATION PATTERN
versus SWINGS (valleys, peaks)
CONTINUATION PATTERN (CP): best for momentum, when trading

with the trend
Low odds when you are counter trend or at the extremes of the Range.
Rally-Base-Rally
Drop-Base-Drop
The first thing you want to do is to become an expert locating these kind of
levels on any price chart, be it on a H4, a D1 or a H1 timeframe. It doesn’t
really matter which timeframe you use because price is fractal, whatever
structures and patterns there are, you will see them on all timeframes.
Many say that drawing the levels correctly can be "considered an art"; it
takes time, so be patient, your mind and eye need training, and lots of
screen time till it becomes second nature to you.

Flow chart that shows how to mechanically
draw supply and demand imbalances. This
flow chart was created by our friend Robin, a
www.set-and-forget.com member. He has created
a few more flow charts that are available at the
community: how to draw trendlines, the core
strategy flow chart, the sequence, etc. I'm sharing
this one with you here so you know what kind of
things some of the members have been doing
lately in the Set and Forget community.
On this flow chart you will see how to:
Mechanically draw supply and demand zones

What bases are good and which ones are not by
locating the 50% candles, first and second legs
that every single supply and demand level is
composed of, which ones are not high odds, like
long tailed/spikes at the bases and too much
trading in at the base, etcetera.
How far back in time do I need to go in order to find supply

and demand levels?
As far as you need to, days, weeks, months and even years!

FRESH LEVELS versus ORIGINAL LEVELS
Supply and demand levels can be:
• Fresh. Price has not pulled back yet, untested level

• Non-fresh. Price has pulled back to it at least once
• Used up. Price has pulled back to level several times, not good for trading
• Original. Level has been created out of the blue, not being a reaction to any
previous level
• Original and fresh. Same as original, but it's also fresh (untested)
How do we know if we have an original level of supply? (opposite for original

levels of demand)
• Look left to find original levels

• Draw a horizontal line at the distal line, and scroll your charts until you bump
into a candlestick
• If that candle is part of another supply level, then the supply level you were
looking at was not original
• You are not allowed to cut through candles, that is, once you look left by
drawing the horizontal line and the line meets a candle, you stop and decide if it's
a reaction to a previous supply level
• In order to know if a level is original you need to look left at the origin of the
level

FRESH LEVELS versus ORIGINAL LEVELS
How do we know if we have a fresh level of supply? (opposite for fresh levels of demand)
• Look right to find fresh levels

• Draw a horizontal line at the proximal line, and see if price has touched the level
• If price has not pulled back to the proximal line, then it's a fresh level
• Freshness of a level is known when you look right, you have to see if price has pulled back into the level or not

WHEN IS A SUPPLY OR DEMAND IMBALANCE CONFIRMED AS A LEVEL?
A zone or imbalance is validated under these 2 specific circumstances:
1. Imbalance took out an opposing zone

2. A trendline connecting the last two peaks and peaks (swing longs and highs) has
been broken with full candles consolidating away from it

WHEN IS AN IMBALANCE CONFIRMED AS A LEVEL?
USDCAD DAILY CHART, 11th NOVEMBER 2016. Trendline breaks created supply and demand imbalances.

WHEN IS A SUPPLY OR DEMAND IMBALANCE CONFIRMED AS A LEVEL?
When do we consider a zone to no longer be
valid? When is it considered to be broken and
needs to be removed from our charts?
The zone is no longer valid when it's been taken

out by as little as 1 pip or tick.
We don't wait for a close above or below the zone

in order to consider a zone as a violation
We don't wait for a full OCHL candle above/below
the zone.
Sometimes, we'll see zones overshot by a few

pips, others by quite a few pips and we'll see it
dropping/rallying after that, most likely after our SL
has been hit. If that is the case, a brand new level
might have formed confirming willing
buyers/sellers, which could be good for a trade
once it pulls back to retest it by using the
confirmation type of entry.

HOW TO DRAW IMBALANCES? WHAT PATTERNS CAN WE SEE?
There are many candlestick patterns, so many it would take you quite some time to learn about all of them
and even more to remember them. You don’t need to learn all of them to draw supply and demand
imbalances since only a few candlestick patterns are use to locate and draw the bases for most imbalances
these patterns are: engulfing patterns, piercing patterns, haramis, morning/evening stars. High wave
candles, wicky candles will not be used to draw imbalances. We need a clear bases and pauses in the
market
The patterns we’ll use to locate bases for most imbalances are:
1. Engulfing patterns
2. Piercing patterns
3. Haramis
4. Morning and evening stars
If you are still interested in learning about all candlesticks patterns, make sure you get hold of any of Steve
Nison’s books on candlesticks, but remember not to get obsessed with them. As Steve Nison says,
candlesticks are useless if they are not traded in conjunction with a strategy, alone they are useless. One
option would be The Candlestick Course and the second one would be Beyond Candleticks, both by the
same author.

HOW TO DRAW IMBALANCES? PROXIMAL AND DISTAL LINES
The base of any imbalance can be defined by a proximal and a distal line. The distal line will be the price
furthest away from current price, the proximal line will be the closest to current price action. Proximal lines are
always at the top on demand and at the bottom on supply, the opposite for the distal lines.
When drawing demand, you must always cover the lowest lows in the basing area or valley (swing low). When
drawing supply, always cover the highest highs in the basing area or peak (swing high). ALWAYS.

PROXIMAL AND DISTAL LINES SHORT VIDEO
You will soon receive an email with a short video that will give you more details on how to draw the imbalances
based on the candlestick patterns we’ll be using to locate and draw imbalances.

BUY LOW, SELL HIGH. THE SUPLLY AND DEMAND RANGE
Assessing when a trend has changed is one of the trickiest things a
trader will face, because every timeframe has its own trend and multiple
trends coexist. You may be trading in an uptrend on H1, but the D1 is in a
downtrend, and the weekly in an uptrend. So, the first thing you need to do
is to decide which are the timeframes you will be using in your sequence
for the Multiple Timeframe Analysis and the trend, stick to the
timeframes you choose to trade, don't switch them randomly, use always
the same ones. Then choose the entry timeframe where you will be
drawing your entry supply and demand levels; after that, define the
timeframe to assess how high or how low you are in the Range, it will tell
you if you are too high to buy or too low to sell, so you will be more or less
aggressive in picking up levels or your TPs (exits).
If you are too high in the Range, you should be thinking of exiting your
longs and looking for supply zones to lean on for your shorts if the odds are
with you and the trend is as well.
Use the screenshot on the right as a guidance to mechanically know how

high or low you are in the Range. Decide the % you will consider as too
high in the Range (how close you are to higher timeframe proximal line),
and don't go long if price is higher than that %. Do the same for the low %.
Decide upon that and don't break the rules, you will avoid many losses by
doing so.

MULTIPLE TIMEFRAME TOP DOWN ANALYSIS
What is multiple timeframe analysis? What is a top down standard as to how long the average trade is held. From there, a
analysis? shorter term time frame should be chosen and it should be at
least one-fourth the intermediate timeframe for example, a H1
Most technical traders in the forex and futures markets, whether timeframe for the short-term time frame and H4 timeframe for the
they are novices or seasoned pros, have come across the medium or intermediate time frame. Through the same
concept of multiple timeframe analysis in their educations. calculation, the long-term timeframe should be at least four times
However, multiple timeframe analysis is often the first level of greater than the intermediate one, so keeping with the previous
analysis to be forgotten when a trader pursues an edge over the example, the Daily chart would be the third timeframe.
market.
It is imperative to select the correct timeframes when
Multiple timeframe analysis involves monitoring the same asset choosing the three periods.
across different timeframes. While there is no real limit as to how
many timeframes can be monitored, or which ones to choose, Clearly, a long-term trader who holds positions for months will find
there are general guidelines that a trader should follow. little use for M15 chart, H1 and H4 combination. At the same time,
an intraday trader who holds positions for hours and rarely longer
Using three different timeframes gives a broader view of any than a day would find little advantage in daily, weekly and monthly
market. Using fewer than this can result in a considerable loss of combinations. This is not to say that the long-term trader would
data, while using more typically provides redundant analysis and not benefit from keeping an eye on the H4 chart or the short-term
indecision. When choosing the three timeframes, a simple method trader from keeping a daily chart in the selection.
can be to follow the rule of four. This means that a medium-term
timeframe should first be determined and it should represent a

PUTTING IT ALL TOGETHER
When all three timeframes are combined to evaluate an Multiple timeframe analysis is paramount when trading any
instrument, you will easily improve the odds of success for strategy, supply and demand is not an exception. We can use
your trades, regardless of the other rules applied. Performing the a 2 timeframes or 3 timeframes combination for our entries. I
top down analysis helps you trading with the larger trend, what we personally use a 3 timeframes combination, because it is more
call the bigger picture. This alone lowers risk as there is a higher stress free and it allows for more free time, which prevents me
probability that price action will eventually continue on the longer from watching the charts like a zombie. Besides, I’ve tested it over
trend. The confidence level in a trade should be measured by how a long period of time.
the timeframes line up in this top down analysis. For example, if
the larger trend is to the upside but the medium- and short-term
trends are heading lower, shorting the market is not a good idea,
you should be cautious with your profit targets and stops if you
decide to take a trade. Alternatively, you may decide to wait until a
higher timeframe demand area has been reached before you
decide to join the longer term uptrend.
Another clear benefit from incorporating multiple time frames into

analysing your trades is the ability to identify supply and demand
areas as well as strong entry and exit levels. A trade's chance of
success improves when it is followed on a short-term chart
because of the ability for a trader to avoid poor entry prices, ill-
placed stops, and/or unreasonable targets.

PUTTING IT ALL TOGETHER
SWING TRADING CONFIGURATION: POSITION TRADING CONFIGURATION:

Timeframe's combination for medium-term setups.
If we choose to focus on the D1 supply and demand levels as
BIG PICTURE timeframe: Weekly chart as our supply/demand your entry timeframe, then switch to this longer term combination.
range and bigger picture direction.
INTERMEDIATE RANGE: Daily chart as your intermediate BIG PICTURE timeframe: Monthly chart as our supply/demand
supply/demand range and bigger picture direction. range and bigger picture direction.
EXECUTION: H4 chart as the entry timeframe. INTERMEDIATE DIRECTION: Weekly chart as your
intermediate direction and part of the top down sequence
analysis.
INTRADAY TRADING CONFIGURATION: EXECUTION and trade management timeframe: D1 chart
Timeframe's combination for short term intraday setups. This is the chart where we should draw and pick our levels up,
where we will set our limit orders.
BIG PICTURE timeframe: D1 chart as our supply/demand range This is also the chart where we will manage our trades, we'll
and bigger picture direction. use technical SL to move our SL above/below new D1 SD areas.
INTERMEDIATE RANGE: H4 chart as your intermediate
supply/demand range and bigger picture direction.
EXECUTION: H1 art as the entry timeframe.

POSITION SEQUENCE EXAMPLE: MONTHLY, WEEKLY, DAILY
Aurolab Indian Stock. Monthly in an uptrend. Weekly in an uptrend. Price retraded to Daily and Weekly demand. Long
triggered. Read original submitted before the fact here

SWING SEQUENCE EXAMPLE: WEEKLY, DAILY, H4
Brent UKOIL. Weekly supply in control. Daily supply triggered, new H4 supply zones to short at. Short triggered. Read
original submitted before the fact here

HOW TO DEFINE A TREND USING SUPPLY AND DEMAND
WHAT DEFINES AN UPTREND OR A DOWNTREND AT 2. DOWNTREND: supply areas are being respected, demand
ANY GIVEN TIMEFRAME? areas are being taken out.
Each timeframe can have a different trend. Let me define my A lower low SHOULD remove previous demand to validate
idea of a trend. Remember it's just my idea of a trend, it the supply zone
makes sense to me so I'm using it. Does it make sense to
you? Use it then. Since we are primarily working with supply You must ask yourself: has the previous demand being
and demand imbalances, making a higher high or a lower low removed?
does not necessarily mean we continue on the existing trend.
1. UPTREND: demand areas are being respected, supply 3. Bullish and bearish consolidation: consolidation
areas are being taken out. happens in an uptrend or a downtrend when the trendline is
broken or one opposing zone is taken out. When this
A higher high SHOULD remove previous supply to validate happens we are not allowed to trade in the direction of the
the demand zone previous trendline until price hits one HTF (higher timeframe)
zone or it breaks higher/lower than previous high/low created
You must ask yourself: has the previous supply being by the previous valid trendline as described in the
removed? realignment/sequence rules

HOW TO DEFINE A TREND USING SUPPLY AND DEMAND
Ask yourself this question: what type of trading are we dealing with here? Aren't you trading the supply
and demand imbalances you see on a price chart? We want to trade at those areas where the institutions
left a trace, where smart money is lurking to add a new position. Therefore, if we're trading Supply/Demand
(SD) imbalances, shouldn't we use the higher timeframe's supply and demand levels to assess our trend?
Remember, buy low in and sell high.
What defines a downtrend or an uptrend?

• In a downtrend: supply areas are consistently being respected and demand areas are being taken out
• In an uptrend: supply areas are taken out, while demand areas are being respected
AS SIMPLE AS THAT. Just look at your D1 or your Weekly chart and see what is going on with the supply
and demand areas in control and decide which direction to trade. Once you know what direction you want
to go, locate lower timeframe SD areas with a strong departure, little time at the level, fresh zones, and a
minimum of 3:1 profit margin (3 times or more the risk in pips of the zone you've taken) and plan your trade.

HOW TO VALIDATE AND CONFIRM A POTENTIAL IMBALANCE
The only reason why price moves in any and all markets is Open a price chart, you will see a multitude of supply and
because of an imbalance in supply and demand. The greater demand levels on every timeframe. That doesn't mean we are
the imbalance, the greater the move. interested in trading all of them. Certain levels are more likely to
hold than others, you need to have a rules based mechanical
A strong move in price away from a level indicates that not all methodology as well as making a top down multiple timeframe
orders were filled. For example, at the origin of a demand level, analysis before you choose the levels you want to trade.
there are not enough sell orders to fulfil the total amount of buy
orders. This is why price moves away in such a strong fashion.
When price returns to these levels, the novice traders (those who
don't know about supply and demand) are selling into an area
where institutions (professionals) have their buy orders.
Institutions and professionals buy to the novices, then there are
no more sell orders so price must rise again. The opposite holds
true for supply levels. In both cases, the novice traders provide
the liquidity the institutions need to get their orders out in the
market.
The best opportunities are where we can buy at the cheapest

price possible and sell and the most expensive price
possible. This is the same in any market. Supply and demand
levels on a price chart show all these levels, you just have to learn
how to draw them.

HOW TO VALIDATE AND CONFIRM A POTENTIAL IMBALANCE
These are some common factors to consider when choosing countries’ Stocks, they are highly correlated. SP500 with US
levels to trade, below some of the basic ones: Stocks, Nifty Index with Indian Stocks, UK100 Footsie with
English Stocks, etc.
1. WHAT THE LEVEL HAS ACCOMPLISHED
The variables above are some of the main factors (there are
2. STRENGTH OF THE MOVE (departure) more) that should be taken into account when deciding which
levels to trade. I personally use these variables to fine tune the
3. RISK/REWARD offered by the imbalance level picking process. Remember that trading is a game's number,
it's all about statistics.
4. QUALITY OF THE BASE.
5. LOCATION AND CONTEXT
6. CONSOLIDATION AWAY and MINIMUM IMBALANCE
7. Confluences like Dollar index and HTF imbalances. The US

Dollar Index (DXY) is an index of the value of the United States
dollar relative to a basket of 6 major currencies. How do you think
such an index can affect forex? A lot! If the $ index is at a higher
timeframe supply and the euro is at a higher timeframe demand,
we have to go long, there is no other thing we should be thinking.
8. MAJOR INDEXES. Major indexes are connected to their

SUPPLY AND DEMAND IN CONTROL
1. On every timeframe there is an area of supply and demand until it's been clearly and solidly broken, it's higher odds and we
in control, that is, once price reaches that area, sellers/buyers want those odds in our favour. A zone can resist 1, 2, 3, or 10
will be likely in control and price will most likely have some pullbacks. Only trade when it's solidly broken
reaction. We're always talking about odds, we can't assume or
predict that something is going to happen. If the zone is fresh and 3. Trade with the trend for higher probability. The trend is not
good, price will likely drop quite fast and no kind of confirmation a straight line, SD levels will work in both directions at any given
will work. If the zone has been touched once or more times, then timeframe, with the trend and counter trend, but the higher odds is
it will probably not bounce that fast or even break that area. That to go with the trend until it ends. But where will it end? Near or at
territory is where sellers will probably fill their orders again. So, a higher timeframe supply/demand area. Avoid unnecessary
supply is control when price is high in the SD range. losses trading against the trend in the middle of the range, you will
increase your % success quite a lot if you do it that way. You will
2. What is a supply or demand in control? It's the previous miss many trades for sure, but you will filter out many losses as
fresh or non fresh supply and demand zones which has not yet well. You decide, well, your emotions will decide, and that's not
been broken (taken out). If a supply zone has been hit 10 times good So behave like a robot
and the distal line (furthest away price from current price) of that
zone has not yet been broken, that zone is still valid, that zone is 4. Decide if you want to be a hero by trading counter trend
still the supply in control. You can't, you shouldn't assume or high/middle/low in the range, or you just want to go the safe
predict that you can buy that high in the range on the assumption way by buying the dips and selling the pullbacks with the current
that it will be broken. The market will show you when that zone higher timeframe. .
has been broken, you are not the market, nobody is the market.
Once it's solidly broken, you will be looking to go long at a good
and fresh demand area, but don't buy into a supply zone in control

Weekly demand in control on Apple US Stock. Price retraced to its proximal line and reacting. Demand is in control as
soon as price hits its proximal line.

New demand created at #2 after the trendline break gains control as soon as price retests it. No shorts allowed.
Supply at #1 gains control as price retests the proximal line.

THE RANGE
Let me show you a couple of examples of supply and demand in 5. Going lower than that will be placing more odds against
control in higher timeframes, what it's called the range. you, you can use H4 or H1 for scalping, but I will never do that.
But each trader will decide, but whatever you decide, forward test
Remember, for higher odds we want to buy low in the range and it hundreds of trades. Don't back test, you will see what you want
sell high in the range. to see.
So these are the steps you need to take: 6. If price is at a higher timeframe supply (D1, WK or
Monthly), don't go long. Wait patiently for a short setup, either
1. Decide which kind of trader you are: are you a scalper, intra- set & forget at an original and fresh supply level on H1/H4, OR
swing, intraday, or swing or position trader? wait for a brand new level of supply to be formed and sell the
pullback. Opposite for higher timeframe demand.
2. Once you know what kind of trader you are (not that easy
because your mind will want to trade on all timeframes, you will There are rules for the range. The rectangle reader indicator will
see SD levels on all charts, with the trend and counter-trend, you help you assess how high or low price is in the range. In a
will chase trades), decide which is your Range timeframe. trending market the closes valley/peak/CP will be one extreme of
the range... The opposing zone should be a peak/valley since CPs
3. Use the WK chart as the range for your swing trading. D1 are not used as part of the range if it goes against a trend.
can also be used.
4. Use the D1 chart as the range for your intraday trading

HIGH OR LOW IN THE RANGE? WHAT TO DO

SET AND FORGET versus CONFIRMATION TRADES
Set and forget trading is as simple as its name implies, you just Once you do a certain amount of analysis on any instrument, any
set the trade up and then forget about it for a period of time. This further time spent analysing this data is likely to have a negative
way of trading has two major benefits: effect on your trading, the outcome is usually the same, it causes
you to lose money.
1. It makes it far easier to remove your emotions from the
equation. Emotions are your worst enemy when trading The belief that more is better, is a psychological trap that often
keeps us from consistently profiting in the forex market, and is the
2. It also allows you to enjoy your life as you normally would, reason why many blow out their trading accounts and eventually
because you will not be spending countless hours staring at of give up all together. I've gone though this process and I believe
your computer over-analysing the markets that all traders have and should go through it, it's part as your
evolution as a trader.
Unfortunately, traders become lost with the huge amount of data
that available over the internet and TV. It is extremely easy to
experience analysis paralysis while trying to trade forex or any
other financial market. It can be overwhelming to try and make
sense of all this information and create a forex trading plan based
off this amount of information.

SET AND FORGET versus CONFIRMATION TRADES

LESS IS MORE: SET IT AND FORGET IT
How can we achieve consistent profitability trading forex or

Stocks if it looks like we have been coded to make things more When to Set & Forget?
complex than they are? The very first step in this process is accepting
the fact that you cannot control the markets, you don't need to feed
your ego. The markets do not care what you have done in your life  Use only fresh levels of supply of demand
before; it has no emotion and it is not a living entity. The forex market is when the market is trending. The first pull-
an arena where human beings express their beliefs about the exchange back is the safest and has the highest odds of
rate of a certain currency pair. working out
 Use original AND fresh levels if you want to go
People that over-complicate their analysis are providing that
counter-trend. Make sure your trade has a
predictability for the professionals to take advantage of, the money
flows from the people who don't know what they are doing to those who proper location. Location is key, that is, your
know what they are doing (professionals). trade should be located very high in the range
for selling and very low in the range for buying
An ironic fact about trading forex is that spending less time analyzing  LOCATION IS KEY. Knowing how high or low in
the markets, trying to find the perfect trade will actually cause you to your range timeframe is paramount to allow you
make more money faster because you will be more relaxed, less
to set & forget or wait for clues of willing buyers
emotional, and thus less likely to over-trade or over-leverage your
trading account. This is why swing trading using an intermediate or sellers to enter based on confirmation
timeframe like the H4 chart will help you improve your results and enjoy
your life much more.

WHEN TO PLAN A CONFIRMATION TRADE INSTEAD OF A
SETTING AND FORGETTING A TRADE
There is no such a thing like a confirmation trade really. There is no way that you will have 100% certainty or confirmation that your
trade is going to work well, the confirmation trade just adds some more odds to your side, that's all. Trading is about statistics, you
just have to play the numbers game.
Maybe you are not comfortable with setting and forgetting your trades or you haven't gained the confidence to do so yet. Don't
worry, waiting for confirmation before you place your trade is fine as well, it's just another way of trading supply and demand
imbalances. You just need to find your style and stick to it if it works for you, that's key to becoming successful at anything in life,
not just trading the forex markets.
What is a confirmation trade?

If we are sure about our entry or we're not confident enough with our set and forget trades we can wait for certain patterns to
happen at our entry level.
• Waiting for a brand new supply level if you are looking to go short at a D1 supply area (if the area is not used-up, read below on
when not to take them)
• Waiting for a brand new demand level if you are looking to go long at a D1 demand area
• Brand new levels on your entry timeframe will be a clue that there are willing demand or willing supply at that area

WHEN TO PLAN A CONFIRMATION TRADE INSTEAD OF A
SETTING AND FORGETTING A TRADE
When to wait for confirmation be absorbed. You don't want to trade a retested D1 supply area
without that confirmation. You can do it but it's not higher odds,
• At higher timeframe supply and demand areas. If you are remember the first retest has always the higher odds of working
waiting to short at a D1 supply area, you must wait for the D1 out
supply proximal line to be hit, do not try to go short before the
zone is reached, you would be entering too soon, be patient. If it
doesn't make it to the D1 supply and price starts dropping, wait
for previous demand to be taken out on your entry timeframe
• At continuation patterns (CP) located near or within a

higher timeframe supply and demand area. Since set & forget
is not higher odds at CP against the trend, we should wait for
brand new levels being formed off a CP at a higher timeframe
supply and demand area
• When higher timeframe area has already been retested. If

the D1 supply zone has been retested, don't only wait for a
brand new area of supply to be formed on your entry timeframe,
but also wait for previous opposing entry timeframe demand to

USING TRENDLINES AS DIRECTION AS WELL AS FILTERING OUT
LEVELS IN A MECHANICAL WAY
• Trendlines will be drawn on our entry timeframe to

assess direction, that is, the timeframe where your orders
will be placed
• Two obvious valleys (uptrend) or peaks (downtrend) are
needed in order to draw a trendline
• The second valley MUST make a higher high than the first
valley's second leg (highest high made by the previous
valley) before it's confirmed as a good valley
• Use the last 2 obvious valleys and peaks in order to
draw a trendline. If there is a third obvious peak/valley that
matches the previous 2 ones, we would extend the TL to it

TRADE MANAGEMENT, BREAKEVEN AND
EXIT TACTICS
A TRADE SETUP IS COMPOSED OF 5 STAGES:

PRE-PLANNING TAKE PROFIT AND TARGETS
• Do not take any trades if it's not pre-planned • Which are your targets? You have 1 or more targets?
• Analyze the market and decide if you have a valid trade as • Will you exit at an opposing SD area?
per the rules, room to opposing higher timeframe (HTF) • Will you trail your SL above/below new SD zones until price
supply and demand (SD)area, that is, following your trade reaches a HTF SD zone?
plan
• Set your limit order and wait for the setup to be triggered We've already covered the first 3 stages, now it's time to cover 2
key aspects of any trade setup.
TRADE EXECUTION
• The trade is executed by your broker. Now you are in the
trade
• Control your emotions at this stage. You risked a % of your
equity, it's a number's game
• Don't touch it if the rules still apply
• Walk away from the charts
MOVING THE SL TO BREAKEVEN

• When to move your SL to Breakeven to protect your trade

WHEN TO MOVE STOP LOSS TO BREAKEVEN + SPREAD
As a rule of thumb we'll be moving our SL to Breakeven once our trade to move far away from your entry price before
trade has moved at least 2:1 R/R (Risk/Reward) from our entry you touch your SL
point. PROS AND CONS OF MOVING YOUR SL TO BREAKEVEN AT
2:1 R/R
For example:
• Long entry triggered at 1.1000, our SL is set 25 pips below at PROS
1.0075, THEN we'll move our SL to BE to entry price once price • Your trade is safe, your ego will feel satisfied and you will
has travelled 50 pips (2 RR) in our direction breath better
• Short entry triggered at 1.5500, our SL is set 35 pips above at • Your fear of losing is under control
1.5535, THEN we'll move our SL to BE to entry price once price • You can concentrate on other setups and forget about
has travelled 70 pips (2 RR) in our direction this one since it's now safe, you can't lose (exception:
Sunday open gaps and big news events do not respect
RULES TO MOVE SL TO BREAKEVEN your SL)
CONS
• Move your SL to BE + Spread/Commissions after 2:1 R/R • Price can retest your entry before it finally takes off of your
• Other options: entry level, this happens VERY often
• Move SL to BE + Spread/Commissions after 3:1 R/R to • Your ego will fight against you if it sees that price kicked you
allow price to breath a bit more You trust in your level out of a valid trade on a first retest and the trade played out
and you don't want to have your entry retested and really well without you riding it
kicked out of a winning trade • You can miss very good trades if you don't allow price to
• Don't move your SL to BE, your trade is either a win or breath enough to accumulate/distribute before taking off
a loss You don't care what price does, you want your

WHAT CAN YOU DO TO PREVENT PRICE FROM KICKING
YOU OUT OF THE TRADE ON A RETEST?
You are tired of seeing your entries retested and then see your level working well without you riding it? We need to let
price breath and orders be filled by market makers and big institutions. There are some options to prevent that from
happening:
1. Move your Stop Loss (SL) to Breakeven (BE) + Spread/Commissions after 3:1 or 4:1 R/R allowing price to breath a
bit more
2. Do not move the SL to (BE) after your minimum R/R ratio has been reached
• Leave the SL where it originally was, above/below your level's distal line, and let the trade breath and take off
3. Close half of your position at 2:1 R/R or even 3:1 R/R and leave your SL alone
• By doing this, your trade is safe, you can't lose, fear is under control and you will feel more relaxed
• If you close 1/2 of your position at 2:1 R/R, you will sacrifice half of your position but you will kick your ego hard in
the ***, the trade is now safe, you can't lose
• Manage your SL manually as described below

TARGETS: HOW TO MANAGE YOUR STOP
LOSS WHEN YOUR TRADE IS RUNNING
Once your trade is running, there are several ways of TYPE OF FIXED EXITS: be realistic!
managing your SL. Managing your SL is key to become
profitable, you have to have rules in order to prevent you • Targets 1, 2, 3 or more can be at opposing SD areas
from closing your trade too soon. • You analyse your entry TF and locate good opposing SD
areas where you are going to set your Targets at. Always a
First of all, you need to define your targets. A target can be few pips before within the zone, never at the zone
either fixed or dynamic. A fixed target (exit) is a specific price
where you will exit your trade. This price can be different • Exit at a specific % amount
depending on which type of exit you decide. You must make • Define a price based on % amount you want to earn
a decision before on the pre-plan stage of your trade.
• Exit at a specific R/R ratio amount
• Define a Risk/Reward ratio at which you want to exit your
trade, minimum 3:1. You can set it at 4:1 or 5:1, no matter
what zones you have above/below your entry
• Be realistic, don't set a 5:1 ratio if there is a fresh D1 supply
area right at 3:1 off your long entry at demand

TYPE OF DYNAMIC EXITS:
Technical Stop
• After your entry place your initial SL under the nearest demand
• After a new Higher High has been printed on the charts, move your SL
under Higher Low
• This is the exit that I normally use. Learnt it the hard way
Trendlines
• Since we are using Trendlines in order to assess our trend, it's also
logical to use them to exit our trades if they are solidly broken in the
opposite direction
• Let price breath and use the TL rules to move your SL, moving SL
underneath your TL if you are long, exiting the trade when there is full
OHCL candle below the ascending TL. Opposite for a short entry
There are others, these are other like moving average trading, etc, but I
won't use them


LEARN MORE BY READING HUNDREDS OF BEFORE THE FACT
TRADING ANALYSIS ON MY BLOG
I usually update my trading blog every day with new basic trading ideas every day. These trade commentaries are before the
fact scenarios posted way before the trade happens, no after the fact.
You can use any RSS software to retrieve my blog’s posts in your desktop. By doing so you will have access to the latest
trading analysis as soon as they are posted.
This supply and demand methodology can be applied to any market and timeframe, which is why you will find trading analysis
for all markets.
Check out trading ideas for the following markets by following the links below:
• Forex trading ideas

• Stocks
• Indexes
• Commodities
• Metals and Energy
Feel free to comment on any of the posts, I leave no comment unanswered.

TOO MANY OPTIONS? DON'T WORRY, THERE IS A PLAN
I guess that now your head is clouded with so MOMENTUM Trade Setups with room to HTF SD zone
many different exits rules. You need to make • Close 25% or 1/2 of your position at 2:1 or 3:1 R/R and leave your SL alone a few
a decision based on what type of trader you pips away from my zone's distal line
are. If you can't make it or are unsure, let me • By doing this, your trade trade is safe, you can't lose, fear is under control
give you some hints. and your ego won't be bothering you
• You will sacrifice part of your position but you will kick your ego hard in the
The exits strategies you chose will be directly ***, the trade is now safe, you can't let it run hundreds of pips IF there is
related to where you are located in your room for that of course, but fear of losing is out of the game
Higher Timeframe range. If you are right at • Manage your SL manually using Technical Stops
fresh Weekly supply, don't move your SL to
Breakeven at 2:1, come on, BE REALISTIC! LOCATION and MOMENTUM+LOCATION Trade Setups with room to HTF SD
Let price breath! If you don't, you will zone
probably have quite a few breakeven, you will • Close half of your position at 3:1 or 4:1 R/R and leave your SL alone
most likely miss big runners. • A location type of trade can be a turning point in the markets, not to say if
it's a fresh WK supply with a Monthly downtrend, that trade can be a
These are the exits strategies that I use, it runner, don't play with your SL, leave it alone
might help you make a decision. You can use • A location + momentum setup can become a rocket, don't play with
mine as well, you need to make up your rockets, you may regret
mind. • Wait for a nice departure off your level and for brand NEW SD zones to
move your SL a few pips above/below those new zones distal lines
• Manage your SL manually using Technical Stops

WHEN TO TRADE AND NOT TO TRADE. NEWS AND SLOW MARKETS
It's also good to know when to and when not to trade. There are breakeven on a trade, we will decide if we want to keep it or
times when we should not be trading because it can result in close it depending on what the SD technical analysis is telling us
unnecessary losses. There are traders out there that love trading to do. We may decide to lock in some profits moving the SL
the news, you can earn a lot of money but you can also lose a above/below previous valid SD zone and see what happens
lot. I just prefer to stay out of big news events and take my day after the news
off.
Do not scale in or add new positions a couple of hours
If trading the bigger timeframes, Daily and higher, news is before, after or during big news events, wait for price to either
irrelevant. resume previous trend or break it, do not anticipate or assume
something is going to happen because you don't know what's
NEWS going to happen. This is Rule #1 in trading: we don't know what's
going to happen
• Stay away of big news events like central banks % interest
rates, CPI, NFP and BCE/FOMC speeches/minutes
• Take your day off when there are big news like NFP or a
BCE/FOMC speech, we don't want to gamble, we want to trade.
Price can go anywhere
• Earnings announcements for a Stock. If we already are at

WHEN TO TRADE AND NOT TO TRADE. NEWS AND SLOW MARKETS
SLOW MARKETS
• Stay out of H1 SD levels formed during slow market conditions, normally after major market closes or
during the Asian session, unless the pair is composed of 2 Asian currencies, for instance AUDJPY. Be patient
and wait for some volatility and new SD levels formed during fast markets like the London and NY sessions
• Monday mornings are normally very slow, usually no news events. After Monday's NY session
sometimes the markets will start moving a bit. Trade only clear levels during these times
LATE FRIDAY AND SUNDAY OPEN
• Friday NY sessions are not that volatile normally. If you only trade the NY session, take your day off
• If you have orders open on Friday, it's wise to close them unless you are a position trader. You don't want to
be caught by a big gap on Sunday open due to speculations or an unplanned high impact news event that
occurred during the weekend
• Avoid trading Sunday open, spreads are widened due to the lack of liquidity during those market hours,
gaps may occur due to unexpected high impact news resulting in your SL not being respected at all

FORWARD TESTING IS KEY TO BECOME A PROFITABLE TRADER
Forward testing is KEY to becoming a successful trader. No neurons if you do not practice for months, the same way
matter how great rules prove to be to me or any other trader, or you will never learn a new a new language by just reading a
how great your trading plan is, they are useless if you don't have grammar book, or learn to dance if you do not practice for
the experience, and screen time to trade them. No matter how years dancing with different couples (I've been a salsa
many times you watch my videos or read the posts on the forum, teacher for 7 years, so I can't talk about this).
you will most likely fail to become profitable.
The video below will quickly show you how to set up Forex
Why is this? Because you need screen time. You need to Tester 2 for SD forward testing. You need to purchase it of
forward test the rules hundreds and thousands of time. Your course, but it's a cheap investment, the best investment you will
brain needs to absorb all that experience; your neurons need to ever make if you are serious about trading. You don't need to
create those connections that will give you an instant reaction to purchase the extra Data Feed from them, the one they have for
a particular scenario you've lived hundreds of times. You can free is more than enough for testing H1/H4 entries. I will be
only achieve that if you practice a lot. recording other videos in the forthcoming future, but they will
only be available on the private community.
Once thing that will happen to you as you forward test is that
after some days you will stop doing it because either a) you can't
make it work or b) you are being successful and you think you
are already there. WRONG. You have to spend months of
forward testing, a couple of hours a day.
Experience and new habits will NOT be imprinted on your

FORWARD TESTING IS KEY TO BECOME A PROFITABLE TRADER
This first video shows how to install Forex Tester and to prepare This second video is a 2 hours video, a saga that I've started to
it for forward testing supply and demand. record so that others see all the puzzles of the jigsaw get
together, how I think on SD terms and how I apply the rules.
Click on the images video to launch videos.

WATCH THE VIDEOS TO LEARN MORE ABOUT SUPPLY AND DEMAND
Do not ask any question on the thread UNLESS you haven't The webinar covered:
watched the videos below and understood them. All the
doubts you have will be solved when you watch them as well as • What type of timeframe combinations you can choose from and
several webinars available on my YouTube what type of trader you can choose from
page http://www.youtube.com/user/supplyanddemandforex • What to use the range timeframe (bigger picture) for and what
to you the entry timeframe for (drawing your levels and
1. How to use timeframe combinations and the 3 types of managing your trades)
setups available. • When to go counter-trend (location trade), when to go with the
trend (momentum trades) and when to use both (momentum +
It's also a very important one because it requires that you make location)
a decision now and decide which type of trader you are, a swing, • When to use each of the 3 types of trades
intraday or position trader. • How to draw trendlines to assess direction and filter out levels
above or below it
Watch this video as many times as you can, this is how I believe,
it's just my opinion, how supply and demand works. It's key that http://youtu.be/K_9YMbpKtNU
you do not switch timeframe combos during the same session.
Stick to the same timeframe combo always and master it until
you create a habit and become proficient and confidence with it.

2. How to mechanically pre-plan a supply and demand trade
There are certain variables you need to take into account when
pre-planning a trade, the default values differ whether it's a long
or a short trade, it is also different if you are trading a major pair WATCH THIS VIDEO
versus a cross pair, or if you are planning an intraday or a swing
trade. https://youtu.be/sN-2iKwy8DU
These variables are:

• Entry padding
• Wiggle room padding to protect your SL from market makers
and spread widening
• Number of pips above/below opposing level for your take profit
• It's paramount that you take into account these variables,
otherwise you might probably miss many entries as well as not
reaching your TP for a few pips.

4. Webinar on how to trade the Monthly/Daily combination How to trade with the Monthly/Daily combo, position trading
going through 3 live trades When to use H4 as your entry timeframe, when the D1 zone is
On this video I covered trend trading using the Monthly/Daily too wide or we already have price bouncing off a SD D1 zone
combo and Monthly range. It's much better to have the higher How trendlines can help us assess trend and negate/validate a
timeframes with you on any trade setup. We went through all the level on our entry timeframe
reasons why I took 3 of the live trades that I had running at the
moment when the webinar was being held: USDCHF H4 short, We covered a few live trades (some of them could be losses, but
GBPJPY H4 long and CADJPY long. they were valid ones when they were taken):
Hopefully by going through these live trades, you will understand • AUDCAD H4 short at D1 supply
the rules much better, how we made a top-down analysis from • EURJPY H4 long
the Monthly down to the D1 and H4 entry timeframes. • CHFJPY H4 long (similar trade to EJ)
• GBPJPY H4 long (similar trade to previous two, but a loss)
http://youtu.be/5O2y--2O01I • USDCAD D1 long
• NZDUSD H4 short
5. Webinar on how to trade the Monthly/Daily combination • S&P e-mini H1 long at D1 demand
going through 7 live trades and analysing possible setups
We covered a few things while going through a bunch of trades I The trades were discussed in more detail at www.set-and-
had triggered on my account: forget.com, on the weekly analysis videos and the forum itself.
http://youtu.be/St-9ytkDcJg

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SUPPLY AND DEMAND FOREX AND

Basic concepts and strategy by Alfonso Moreno

My name is Alfonso Moreno. I’m a full time trader, expert technical

I have been trading the financial markets using exclusively supply

I was introduced to trading by my best friend before a full month

I am at trader, photographer and adventurer. You can follow my

Basic concepts and strategy by Alfonso Moreno

• No lagging colorful indicators or studies

LEARN MORE ABOUT THE COURSE HERE

Basic concepts and strategy by Alfonso Moreno

Basic concepts and strategy by Alfonso Moreno

Here is what I've assumed about you:

Basic concepts and strategy by Alfonso Moreno

Basic concepts and strategy by Alfonso Moreno

Basic concepts and strategy by Alfonso Moreno

READ MORE ABOUT IT HERE

Basic concepts and strategy by Alfonso Moreno

WATCH THIS VIDEO TO LEARN MORE ABOUT IT

Basic concepts and strategy by Alfonso Moreno

Basic concepts and strategy by Alfonso Moreno

Why do imbalances occur?

Basic concepts and strategy by Alfonso Moreno

Basic concepts and strategy by Alfonso Moreno

What we perceive as the personality of a currency pair is

Basic concepts and strategy by Alfonso Moreno

The best combinations for trading multiple timeframe

Basic concepts and strategy by Alfonso Moreno

Basic concepts and strategy by Alfonso Moreno

Basic concepts and strategy by Alfonso Moreno

Basic concepts and strategy by Alfonso Moreno

Download indicators HERE

Basic concepts and strategy by Alfonso Moreno

Basic concepts and strategy by Alfonso Moreno

This small 12 minutes’ video

Basic concepts and strategy by Alfonso Moreno

Basic concepts and strategy by Alfonso Moreno

Basic concepts and strategy by Alfonso Moreno

Basic concepts and strategy by Alfonso Moreno

Basic concepts and strategy by Alfonso Moreno

PEAKS & VALLEYS: best at the extremes of the range or close to it

Basic concepts and strategy by Alfonso Moreno

CONTINUATION PATTERN (CP): best for momentum, when trading

Basic concepts and strategy by Alfonso Moreno

On this flow chart you will see how to:

Mechanically draw supply and demand zones

How far back in time do I need to go in order to find supply

Basic concepts and strategy by Alfonso Moreno

• Fresh. Price has not pulled back yet, untested level

How do we know if we have an original level of supply? (opposite for original

• Look left to find original levels

Basic concepts and strategy by Alfonso Moreno

• Look right to find fresh levels

Basic concepts and strategy by Alfonso Moreno

1. Imbalance took out an opposing zone

Basic concepts and strategy by Alfonso Moreno

Basic concepts and strategy by Alfonso Moreno

The zone is no longer valid when it's been taken

We don't wait for a close above or below the zone