Supply & Demand Trading Pointers [XRPUSD Chart]

27 בספט׳ 2017

XRPUSD



"Trading is not an art it's a science, a numbers game" - The notion that trading is an art that only a few people can understand has always been a notion that I cannot quantify. When it comes down to it, trading and investing is a numbers game. The willing demand and supply at the various price levels is what determines the overall price movement. The bears vs. the bulls, buy orders vs. sell orders. Yes! Those words again. With bears and bulls in play it all comes down to numbers on both sides of the mathematical equation and pretty much nothing else. Based on that notion I can see how one would familiarize trading with art but that should be more of a "thoughtful way of looking at it" rather than being a descriptive statement as to what trading & investing might be.

Most movements in price in most markets if not all, is a function of supply and demand. Evident in our XRPUSD chart here, we can see that I opened an initial trade at (i) right after I was certain that the trend would hold above the moving average. At that point in time, volume began rising and outplayed the bears selling activities which drove the price up. I then proceeded to exit that trade(i) after getting out early at (iii) which I consider to be the safest move when market uncertainty is your biggest risk. After exiting that trade, I then opened a new one which is still in play at (ii). By this point in time volume was being driven up by buy orders with a significant amount of sell orders happening too but the bulls outdid the bears at this candle, the battle is evident in the wick. After initiating the trade at $0.18579 the price after about 14 hours moved up to $0.19198 where I then proceeded to move my STOP loss up into the profit zone which keeps me profitable no matter the outcome.

At the time of posting this, the trade is $600 up and counting with a stop loss of -494 Pips.

Therefore, a trading opportunity lives and exists at price levels where the bull v. bear equation is out of balance. The sentiment would be to buy where the major orders are and sell where the major sell orders are. Or in more familiar terms for most, "Buy low & sell high."
Before a trend commences the price remains in an "accumulation" zone or "limbo" until the bulls have accumulated enough positions and then drive the price higher. Bulls can't directly swamp the market all at once because it would result in an immediate bull run leaving a good number of open positions unfilled, hence reduced profits across the board. It is obvious, however, that after the price exits "limbo" not all buyers would have all their orders filled so open interest still would exist at that level. Supply and demand investors and traders use this knowledge to identify price reaction zones.