Hi Everybody, Hope you guys are doing well. I'm doing some automated trading. Want to implement a new strategy. Have some thoughts in mind but not completely sure about the results. The strategy uses supply and demand zones. I need some help with the implementation of zone detection. Are there some libraries available that can detect the zones given the historical values? Is any developer here willing to share the implementation with me? Obviously, we will discuss the reward. Thanks, Ruben
This topic was discussed in a spiral bound book named "Detecting High Profit Day Trades In The Futures Markets Using Zone Pattern Probability Analysis" by JT Jackson(1994). You can access this style of trading through the Fibonacci Trader platform. I believe FT owns the rights on it. Good luck.
Okay, well, that sound you hear is the collective "Whap!" of palms to foreheads around the world -- in frustrated, rueful sympathy for the whole crowd of unfortunates who are familiar with the chuckleheaded phrase "supply and demand zones." That is all.
From the first sight, it doesn't seem like that is exactly what I'm looking for. Also, I need to be able to integrate this into my existing trading robot. So basically I need source codes.
I'm not trying to give you a hard time but I am not quite sure what you mean by "supply and demand zones"??? The total size on the Bid is the closest thing you have in real-time to Demand. The total size on the Offer is the closest thing you have in real-time to Supply. You could go up and down the DOM (for futures) or Order Book (for stocks) and try to guesstimate "zones" based on Bid/Ask sizes up and down the ladder. I have a feeling that is not what you are talking about Ruben, am I wrong? There was a vendor called "APA Zones" that would draw support & resistance lines/boxes and this vendor called those "zones" and sought to gain credibility by slapping on terms like "supply and demand zones". Bid/Ask Size is the only measurable thing you have to actual real-time supply (sellers) and demand (buyers), everything else is further guessing and marketing hype. Hell, I could slap a moving average on a chart and call prices above the average "the demand zone" and prices below the average "supply". Is that accurate? No. But adding fundamental economic terms to off-the-shelf/well known technical analysis methods somehow allows these vendors to earn a living. Can't the vendor just call it a S&R line? No there are magical "zones" with "supply and demand"! Cliffs Notes version of my post: APA Zones is what you are talking about/looking for I believe.
Hey Matthew, This is what I'm essentially looking for: https://www.tradingview.com/chart/EURUSD/DZblrqHg-How-to-draw-Supply-and-Demand-zone-EDUCATIONAL/ Evelated Bid/Ask size does not always match with demand and supply zones. Even if it did, I want to have an ability to detect historical zones. I'm not referring to realtime supply and demand. I was not familiar with APA zones, but from the first sight, they seem different from supply and demand zones I am trying to detect. The supply and demand do not always match with support and resistance. Where as APA seems to be based on S&R. The problem of the MA is that it is lagged. By the time the MA tells you to enter, it might be the best time to exit.
The link you sent me is just a guy drawing boxes around Highs and Lows. This is just drawing boxes around Price Action. I'm going to become rich. I am going to draw these exact same boxes around Highs and Lows and call it the "Inside Information Zone". Forget trading, I will be rich. LOL. All joking aside, the link you sent has people in the comments section saying that APA Zones does the exact same thing.
For the ones that prefer text http://www.forexmentoronline.com/the-two-types-of-supply-demand-zone/ or http://www.tradersimon.com/2014/08/supply-and-demand-trading-basics/ Again, I'm not familiar with APA zones, but i got an impression that they are based on supports and resistances. S&D zones have lots of similarities but are not identical.