Supply and demand is one amongst many other trading strategies, it’s not better or worst than other strategies, but this trading strategy explains in a lot of detail how most of the strong movements are created while following a logical rationale. Once you start trading our supply and demand strategy, your reality will be re-framed, how the market works and is moved by professional investors.
Once you understand and accept that supply and demand are the forces that control and move the markets, you’ll be able to trade in-line with the big banks and institutions and ride long term trades where they place their trades.
Supply and Demand Strategy
Our supply and demand trading strategy is suitable for any market. Is supply and demand the same as support and resistance? No, it is not. It could be said that support and resistance is simply the result of supply or demand.
There is support at a particular price level simply because of the demand for the asset at that price level. On the other hand, there is resistance at a particular price level due to the available supply at that price level.
At Invested Traders, we’ve been helping many traders around the world to understand how the markets move and how the newly created supply and demand imbalances can create so many trading opportunities.
At Invested Traders we don’t have a physical classroom you can attend, all the learning and education is done in our online Members area.
Price Action and Supply and Demand.
Price action and supply and demand go hand in hand. There is not one without the other. Mastering price action together with our supply and demand trading strategy will teach you how to read institutional order flow using supply and demand on larger time frames and trade with the big fishes.
You will learn how to determine whether supply and demand areas are strong or weak, when to trade them or when not to trade them. Price action together with the logic laid out in our supply and demand trading strategy will improve your understanding of the markets a hundredfold and will give you an edge to trade the markets.
Why do Supply and Demand imbalances occur?
The only reason why 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.
The financial world in general are dominated and ruled by big investors, institutions, central banks and professional traders.
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. One single investor can change.
Supply and demand is one of the four major factors that cause both long-term trends and short-term fluctuations.
The other three factors are governments, international transactions, speculation and expectation. Government mandates like interest rates or spending or tax policy, impact international transactions, which play a role in speculation, and supply and demand plays a role in each of these other factors.
Changes in supply and demand create trends as these market participants fight for the best price. Daily news occurs and affects the world’s economies International transactions, balance of payments between countries.
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.
The financial markets move trillions every day, and the reason for this is the heavy demand behind the traded assets. Currencies are the basis for the world’s economy. Whenever one economy wants to trade with another economy (provided different currencies are used) a Forex exchange will be required.
Ultimately, the various markets created by the brokers 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. Some instruments have lower liquidity (some Forex cross pairs, exotic pairs and Stocks) zones are overshot and then price goes in the opposite direction.
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”.
The financial markets are traded by professionals and not by retailers, each of them has its own trading strategy, most of the time not a supply and demand trading strategy but some of these big players do create these imbalances. 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.
If you want to learn to trade the markets based on Supply and Demand analysis, you can visit our Online Course. You can learn our Supply and Demand trading strategy only in a few months.
Learn To Trade Our Strategy
Our Strategy focuses on supply and demand, market sentiment, momentum and Stop Hunting ( Order Traps and Fakeouts)
Supply And Demand Trading
As supply and demand traders, we do not need to pay attention to the news, fundamentals, or any earnings reports. Why is it that you see positive News and then the underlying market drops like a rock, or a negative news announcement and the market rallies? You are probably missing the fact that big institutions are trying to make money!
Unless you are doing very short term trading and scalping, you should not worry about fundamentals or earnings announcements.
You can use these imbalances to plan your trades in lower timeframes. Trading is just waiting for the right trigger points and scenarios to present themselves. We need to patiently wait for the correct scenarios and setups to happen and wait for the price to react from our levels and we can take advantage of these moves!
If you want to learn how to trade using our trading strategy, join our Price Action Trading Course.
What are Fakeouts (Order Traps, Stop Hunting)?
First things first, before you can learn our strategy you have to understand how to use order traps to your advantage, you have to know what they are and how to identify them.
Order Trap ( Stop Hunting, Fakeouts ) are terms used in technical analysis to refer to a situation in which a trader enters into a position in anticipation of a future transaction signal or price movement, but the signal or movement never develops and the asset moves in the opposite direction.
Order Traps are when a trader puts on a position expecting it to move in a direction and it fails to do so.
Stop Hunting happen when many traders plan their exit by offsetting orders to make sure their potential losses are limited
Stop Hunting can cause considerable losses for a technical analyst. These traders will typically rely on well-tested patterns, multiple affirmations of an indicator and specific allowances to protect from significant losses. Sometimes the setup can look perfect, but outside factors can cause a signal to not develop as planned.
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