Does anyone trade Supply/Demand Zones (RBR/DBD/RBD/DBR)?

J

jennywestwong

I switched from using indicators to price action last year and is having better results. However, the biggest issue I still face is determining RBR/DBD/RBD/DBR live. Once a while I can see that the price breached out of the supply/demand zone along with candlestick pattern to confirm an entry. But after a few candles it would go against my trade and turn into a loser. So essentially, when I think it is a reversal, it would becomes a continuation of trend and if I think it is a continuation of trend, it becomes a reversal. I would love to hear suggestions/tips from anyone that uses a similar strategy. Thank you in advance.
 
You have to align your trade with the major trend. In that major trend, you have pullbacks which are shorter in duration. So, if you are following the trend, you enter once, it starts moving higher. Remember, most of the huge moves will be with the major trend. So, trade with the major trend no matter what time frame you are trading.
 
A few of people messaged me about how I predict markets: https://www.elitetrader.com/et/threads/prediction-based-trading.351176/page-42 I use variations of what you're describing, but I also use longer term things in conjunction, a form of multi-timeframe analysis. (Some people use historical POCs/HVNs) in order to determine longer timeframe movements. Imo indicators/price action/etc should have different utilities with less overlap.

I think you should have more than one timeframe to look at; "don't miss the forest for the trees". Another trick I use is looking at more than one thing at a time via correlation/divergence. Let's say for example that Nasdaq is bullish and SPY is bearish. Due to the correlation among them, it produces ambiguity. Now let's say they both look bullish and you have a buy point on each which are technically disparate yet just so happen to coincidentally hit at the same time (keep in mind, this works only if a single vehicle in isolation has positive reward expectancy. Then the combination adds even more in theory)
 
smallfil said:
You have to align your trade with the major trend.
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That's a great one smallfil, however, I forgot to mention I do use mult-time frame to go with the trend. The most troublesome area is often when the 2 time frames no longer are in sync. For example, the 1h is starting to look like a reverse, but ofc the 4h is still pointing down. What would you do in these situation?
 
jennywestwong said:
That's a great one smallfil, however, I forgot to mention I do use mult-time frame to go with the trend. The most troublesome area is often when the 2 time frames no longer are in sync. For example, the 1h is starting to look like a reverse, but ofc the 4h is still pointing down. What would you do in these situation?
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Use the time frame you are trading. For short term trading, the same rules apply. Each time frame still has a major trend and a minor trend (pullbacks). It becomes problematic when you use 2 times frames to base your trading decision and they are in different market cycles.
 
smallfil said:
Use the time frame you are trading. For short term trading, the same rules apply. Each time frame still has a major trend and a minor trend (pullbacks). It becomes problematic when you use 2 times frames to base your trading decision and they are in different market cycles.
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Simple solution is to simply trade only when they are in the same 'cycle' as you put it.

Also, the same direction should confirm on other correlated asset(s) as well.
 
jennywestwong said:
That's a great one smallfil, however, I forgot to mention I do use mult-time frame to go with the trend. The most troublesome area is often when the 2 time frames no longer are in sync. For example, the 1h is starting to look like a reverse, but ofc the 4h is still pointing down. What would you do in these situation?
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I ran into a similar situation today in the GBP/USD.
 
jennywestwong said:
So essentially, when I think it is a reversal, it would becomes a continuation of trend and if I think it is a continuation of trend, it becomes a reversal.
More...
Do you first compile stats on 10 - 15 examples of the methods that you explore prior to trading them live?
 
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