Home / Technical Analysis / Top Supply Demand Trading and Analysis (Case Study: February 4-7, 2020 )

Top Supply Demand Trading and Analysis (Case Study: February 4-7, 2020 )


High accuracy Top Supply Demand Trading and Analysis (Case Study: February 4-7, 2020 ) – The supply and demand concept is a core component of economic theory. The Supply and Demand rule states that if the supply of a commodity is high and the demand is low, this generates excess which drives the price down.

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And conversely, if the supply of a commodity is low and the demand is high, this creates a scarcity, pushing the price higher.

GBPJPY Supply and Demand Analysis

 

GBPJPY Supply and Demand Analysis

The Rules of Supply and Demand Analysis

The rules of supply and demand analysis in Forex are quite simple.


You should BUY when the price action approaches a demand level and bounces upwards.

You expect the price to increase as a result of the aggregated buy orders in the demand zone. Therefore, you have the opportunity to ride an upcoming price swing.

You should SELL when the price reaches a supply level and bounces downwards.

You assume that the price action will begin to trigger the aggregated sell orders in the area, which is likely to lead to a price drop. Thus, this creates an opportunity to ride a bearish move on the chart.

You would put a stop loss order right below the demand area when you are long in the market. Conversely, put your stop loss order right above the supply area.

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