Ive been trying to learn a bit about using supply and demand to buy and sell equities. Does anybody use this? Or is it more of a guideline indicator? It seems if you really get it right, it could be incredibly profitable, but its much easier to see how its done in hindsight. Does anybody know of any useful books or resources about this? Stockcharts.com has a good little basic tutorial, but it doesnt go very in depth. Thanks OBeavers
Check out BillyRayValentine and "No Brainer Trades" over at Forex Factory. Some great examples and assistance with spotting good S/R potential trades. In essence it all boils down to one simple concept, though. If it's an obvious level to you, it's probably an obvious level to a lot of other people/systems, therefore there will be significant price action around that level as people react. Simpler is often better.
Being able to identify Support & Resistance is one of the keys to successful trading. Try using Google. Find out everything you can about: 1. Trend 2. Swing High 3. Swing Low 4. Support and Resistance
I attended a couple of Oliver Velez' free webinars and they were a superb lesson in using candlestick patterns to read the footprints of crowd behavior and project quite accurately the direction the crowd will run next (continuation of trend or reversal). Doesn't that sound so simple? Either a trend will continue, take rest and channel for a while, or it will reverse. All we want as traders is to follow the crowd (the direction of which is created by supply/demand imbalances). What I learned in these webinars was very useful in putting on high probability trades; the important thing is to get out quickly when price reaches the point the trade is invalidated. (There is a lot of sales hype in these webinars, but the trading info was fantastic.) I just attended a free webinar with Pristine and was surprised at how tight their stops were. As soon the trade signaled entry they were in, but the stop was a penny or two from the invalidation price level (stops .05-.15 cents). There rationale was if the trade was valid it should go their way quickly. I found that when I'm very patient and wait for the best setups, I can also place very tight stops without getting shaken out, but when I jump in too quickly, I either have to use wider stops or I piss away money with small losses before catching the move I'm looking for. Fellow trader retire45 on this site once posted "Will the trade survive my stop?" Great pre-trade question that helps you sit on your hands until the setup is truly ripe. To learn more about choosing strong setups and invalidation points (stop loss points), I suggest reading Velez' "Tools & Tactics of the Master Day Trader", Alan Farley's "The Master Swing Trader (tough read, but worth it). This is probably more info than you need, but it's all good!
Thank you Dax. While it appears to be a simple concept, I have found that most traders find it very difficult to implement consistently in their real-time trading. Lets just say that "if you can't do it, then you won't trade successfully".
Here's a couple of bad calls by The General that illustrate what I am talking about. Bad Call #1 Bad Call #2