It’s episode four, and if you’re not winning trades yet, I will change that for you today by combining all the last three episodes into this one video. I’ll make it even easier with a higher time frame trading strategy of supply and demand.
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This is the only Forex strategy that you’ll ever need.
Many of you guys have been asking me to do these serious real-life trading strategies with no indicators, and that’s what this free course is.
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Live Trade: EURJPY (Buy)
My first example is a EURJPY buy on the H1 time frame using support & resistance, with supply & demand. It combines everything that I’ve taught you in the course so far.
You could see it went in my direction. I had a sniper entry smashed that first take profit before hitting the second.
It was a huge win.
I had a risk-reward ratio of 3 on the first trade and 4.9 nine on the second.
My verified MyFxbook account shows I gained $8,000 on this position opened on April 10, 2023.
It also shows in the history section as 93 pips, $3,000 gain on the first take profit, and 152 pips, $5,000 on the second.
Like I’ve told you before, if you’re new to supply and demand, you can use one take profit level. You don’t have to use two. I only place two because I’ve been using this strategy for several years.
Step To Take for a Perfect Supply and Demand Setup
If you still don’t get this strategy, try to follow these processes carefully:
1. Understand the market structure. In my example, I observed what happened before as the price broke a downtrend line to create an uptrend. There was a consolidation before a retracement below, and the price continued its bullishness.
2. Set up your support and resistance levels. You can see them in my example (video shared above). The price touched the points several times, so we can expect to see them hold/broken. Once you know them, they will be areas we can take trades from, especially when we’re looking at sniper entries. That is a classic trading pattern if you know anything about technical analysis.
3. Draw your demand. I already told you the market structure was bullish in our example, so we wanted buying opportunities. However, we need a way to enter the market – by drawing a demand zone. It is the bearish candle before the huge push above.
Generally, I want three big consecutive candles (pushing away), but two suffice. It matters because you and I, retail traders, can’t move the market 67 pips. Only huge businesses, institutions, and banks can move the market that much, which means the bank tells us that area is demand.
There are a bunch of buy orders at that level. Hence, we want to see the price return to it. And that’s how we will get our entry right.
I pulled my demand zone up a little bit on my sample trade. It was a 1H chart, so we had a lot of time.
I saw two wicks react off of the demand zone quickly. Hence, the area was incredibly valid since no candle closed inside it.
For my sniper entry (if you read the second content in this series), I had the support at the same area of the demand zone.
The price respected it, so that’s where I entered my trade.
Now, that is a perfect entry. How do I exit these trades? That is the last step in the only Forex trading strategy you will ever need.
My first profit target was on an imbalance. The candles before and after it never covered the space between, needing to be filled at some point.
Price could fill it in weeks from now, but it should subsequently happen. It is a market inefficiency that needs correction.
For my second take profit, I went back in the charts to use an old wick. I used it because the price reached that area in the past. Hence, I placed the order a few pips below to be safe.
Those are a couple of ways to exit trades effectively.
I will give you free trades that you can use this week at the end of this article. However, let’s jump into my backtest results.
Backtest Result With Supply and Demand Strategy
I backtested this strategy on EURJPY throughout March 2023. The win rate was 100%, and I gained 34% risking about 2% per trade.
The backtester recorded 3-6% wins, but I was risking 2% on those. Hence, they were 1.5-2% solid wins.
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Backtests with The Supply & Demand Forex Trading Strategy
I already showed you a live trade, so you understand it takes too long to complete it. Hence, share this content with other traders and tell me if you like it.
First Backtest Opportunity
In the first trade, there was a push above our interest area. Hence, the previous bearish candle becomes my demand zone.
It is a valid demand zone because there are three wicks, meaning the price pushes off whenever it gets there.
Moreover, one-hour demand zones are strong.
Hence, I’d enter a trade after the positive momentum for a solid 1:2 reward-to-risk ratio.
Besides, as seen before the opportunity, we are in a bullish market. That’s the first thing I check every time – to be sure I’m in sync with the market structure.
There were some sell examples in the past, but mostly I’m pretty bullish. Hence, I will only consider buy examples.
Second Backtest Opportunity
The demand zone in my second example was a bit harder to draw. The bearish candle had an extended wick, so I had to shrink the area, which worked well.
Hence, I was waiting for a reaction and saw some wicks at the level before the push above to smash the take profit.
Third Backtest Opportunity
The third example is similar to the last one.
It was also challenging to get a demand zone, but the price wicked off at an outlined area. I wanted that because that meant there was respect for the level.
However, when the price closes the demand zone below, I’m not looking to buy again because that invalidates the demand zone.
Fourth Backtest Opportunity
Going further back, we were in a range. Thus, we got a selling opportunity.
The price dropped heavily, and I set up my supply. It was a bit wider than usual. However, as I noticed the price wicking off, I started to expand the area because that showed me the respected zone.
Then, the price pushed down for another solid result.
Fifth Backtest Opportunity
We had another buy example next to our fourth back test opportunity.
The price created two huge candles, which I liked to see. Hence, I could mark my zone. We started to push in the area a little bit and wicked off twice.
Eventually, I waited for the third wick-off, which broke above, smashing a take profit.
That’s a nice-looking trade. I chose that exit level because of an imbalance around there.
Sixth Backtest Opportunity
Further back, there was a selling opportunity with this strategy.
There was a significant push below for me to set up my supply zone. The price tapped into it for validation, giving decent wicks and later closing within.
I waited for a bearish candle or reaction before entering the trade. It was a solid result, targeting a past level.
Seventh Backtest Opportunity
I would also have taken this trade in March 2023:
I saw a push above with four green candles in a row. It created a demand. However, the price didn’t close within but started to wick off the area.
I also had a support level – an extra confluence for that sniper entry, which I went through in the second content.
I hope that you enjoyed this content. It is the fourth of five in the course.
In the fifth article, I will do several live trading samples to show how I analyze the market in real-time, teaching some of my analysts and students.
Check out my free trading group if you want some trades from me. We’re five free trade wins in a row using low risk. My VIP trading room is also available, where we just got a new Telegram bot. The copier is upgraded and functioning better.
I’ll see you in episode five.