Basic Concepts and Terminonoly
Questions
What are new students recommended to get started and learning?
What do green and red candlestick represent on a price chart?
What markets can be traded using supply and demand imbalances?
What is the lowest timeframe that can be shared in the community?
Candlestick types and colours that you can use.
What are the abbreviations or acronyms that I will see in the forums?
How long will it take to learn how to trade supply and demand?
Do we need to understand fundamental analysis, macroeconomics, news events and earning
releases to trade?
Are all the rules included in this FAQ?
Why aren't there so many examples in the FAQ rules?
What trading platform am I allowed to use to trade imbalances?
Can I use indicators and oscillators to trade supply and demand?
Why can't I reply to the topics in the trading forums?
What are new students recommended to get started and learning?
The best way to learn the strategy is by reading as many posts as possible and watching video
analysis and webinars. These posts and topics contain live analysis that explains many different
types of scenarios, all of them happening in real-time.
As a new member or someone that has been part of the community for some time, this is what
you should be doing to get the most out of it and learn the core rules strategy.
1. Read the Core Rules Strategy. It's a FAQ with the rules that explain how to read the
markets using supply and demand. These rules have no videos, maybe only a couple.
Keep on reading below.
2. Watch the webinars. They go in depth in many aspects and different scenarios.
3. Watch the weekly video analysis. There is a new one published every week.
4. Read the analysis in the trading channels. You will see how the concepts are being
applied to the live markets.
5. After you've done that for a few weeks/months, you will be ready to ask questions and
contribute by sharing your analysis in the trading channels. You need to be corrected,
the only way to do that in a virtual environment like this, is by sharing your analysis. Read
the new topic rules before you post them.
You will not learn by watching ten or a hundred short videos on how to draw a TL or an
imbalance. You need to be immersed in the core rules and watch as many webinars and weekly
video analysis and possible. Then reading the daily updates and then start asking questions and
feedback on your analyses and doubts. Take your time going over the material.
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The best way to learn is by making mistakes, not by reading a book or a list of rules. There are
no shortcuts.
If you intend or have the expectations to learn how to trade in a few weeks just by reading
the core strategy rules, the weekly video analysis and the topics being shared in the community,
then you are wrong. That won't happen. You will be exposed to the rules, but the live markets
are a different monster and it will devour your live account.
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No matter how many times you read the core strategy rules or the topics sharing the analysis,
you will not learn how to trade correctly.
No matter how many times you watch your favourite actor play or your favourite singer sing,
you will never become a good actor or singer if you do not practice and are corrected.
New members and new posts
New members and those who have not contributed at all will not reply to the
existing topics. They will be able to read all the content but unable to respond. Why?
Because we want quality posts that follow the rules, we want quality versus quantity. We
do not want the live forums to be full of questions and answers about a trendline or a
zone's validity. You will have to do that by asking questions in Questions & Answers or
posting your charts in Practice the Rules. As a new member of a member that is not very
active, you will still be able to see all the posts; there won't be any restrictions.
What do green and red candlestick represent on a price chart?
The engulfing pattern is a two-candle reversal pattern. The second candle completely 'engulfs'
the real body of the first one, without regard to the length of the tail shadows.
What markets can be traded using supply and demand imbalances?
Supply and demand imbalances can be found in all the markets; the basic laws of supply
and demand can be applied to any market and asset. This is great because you don’t need to
only focus on trading stocks or futures. You can add currencies (Forex), metals, or bonds, and
you can invest right where you see a new opportunity.
What markets can you trade?
Depending on your education and experience, a person may not even be totally aware of the
investments or trading vehicles that are accessible with a click of the mouse.
These are the different markets you can trade:
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Stock Market. We can buy or sell shares of a company.
Forex Market. The largest and most liquid market. The Forex market facilitates the
exchange of one currency for another currency. Currencies are always traded in pairs,
with many potential combinations available, but not all are very liquid.
Contract for Difference (CFD). A hybrid of the stock, forex, and options market allows
participants to place trades in a derivative product based on an underlying asset.
Generally, the CFD does not have an expiry date, premium or commission, but they are
not regulated or allowed in many countries, the US is one of those countries.
ETF (exchange-traded fund). Funds representing all sorts of sectors, industries,
currencies, and commodities. ETFs also allow a trader to partake in other markets such as
the movement of oil, gold, silver, or stock indexes.
Futures and Commodities. A futures market is an auction market in which participants
buy and sell commodities and futures contracts for delivery on a specified future date.
Options Market. A market that allows participants to undertake positions in the
derivative of an asset by buying time instead of the underlying asset.
Cryptocurrencies. A cryptocurrency is a digital asset designed to work as a medium of
exchange that uses strong cryptography to secure financial transactions, control the
creation of additional units, and verify assets' transfer.
What is the lowest timeframe that can be shared in the community?
H4 (four hours) is the lowest timeframe that is allowed. You can use smaller timeframes to trade shortterm or intraday, but you are not allowed to share those timeframes or ask for feedback on timeframes
smaller than H4.
Candlestick types and colours that you can use.
Chart 2 below represents the typical candlestick chart that will be presented throughout the
lessons. There are a few characteristics you need to pay attention to because we will be using
them many times.
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Basing candlesticks. Basing candles are usually pauses. These pauses are the most
common candlestick patterns in continuation patterns. You can distinguish a basing
candle by the orange dot in the middle of the candlestick body. [1] and [2] are examples.
Extended Range Candles (ERC). Wide candlestick bodies covering around 80% or
higher of its candle range. Bearish candles [3] and [4] are ERC candles.
Black or bearish candles. Black candlesticks are bearish candles. The close is lower than
the open.
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White or bullish candles. White candlesticks are bullish candles. The close is higher than
the open.
Red and Green candles. These represent bullish and bearish engulfing patterns,
respectively.
Underlying asset and ticker. You will usually see the underlying asset and company
together with its ticker as a watermark in the background. You can use this information
together with the price levels and dates displayed at the bottom and the chart's right
side to look at the scenario in your trading platform.
Timeframe. Likewise, you will always see the timeframe of each chart next to the ticker
name watermark.
Valleys and peaks. #7 and #8, #5 and #6 are valleys and peaks formations.
That's all we need to pay attention to, bullish and bearish candles together with candles that are
not strong enough to create ERC candles, or the so-called basing candles. All candlestick pattern
formations with fancy names like engulfing, dark cloud cover, harami, etcetera, are a
combination of these two types of candlesticks.
What are the abbreviations or acronyms that I will see in the forums?
The acronyms or abbreviations that will be used throughout the forums are listed below. Please
try to remember them. Don't worry, though, because there are not too many, and they are
straightforward to remember—no weird combinations.
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ATH = All Time Highs
ATL = All Time Lows
CP = Continuation Pattern
D1 or D = Daily
H4 = Four hours timeframe
H1 = Hourly timeframe
DZ = Demand Zone
ERC = Extended Range Candle (wide candlestick bodies covering about 80% of its candle
range)
EM = Expected move
HTF = Higher Timeframe
LTF = Lower Timeframe
MTF = Multiple Timeframe analysis
M or MN = Monthly chart
OCHL or OHCL = Open Close High Low candle, that is, the whole candle range
OOA = Out Of Alignment
OE = Over-extension
RR = Reward/Risk
SL = Stop Loss
SZ = Supply Zone
TL = Trend Line. This is the trendline we use to assess the trend
TF = Timeframe
WK or W = Weekly chart
These acronyms will be highlighted in the forums and you will be able to read the full
description by placing your mouse over it for a couple of seconds. See below, you will see a
tooltip expanding the definition of the acronym when the mouse is placed our those words (see
the dotted underlined words).
How long will it take to learn how to trade supply and demand?
It can take many months, even years. It will depend on many variables. How hard you work, how
much you have to unlearn from previous strategies and how consistent you are. It's impossible
to tell you how long it will take you to learn, but allow for at least 1-2 years to start with.
Do we need to understand fundamental analysis, macroeconomics, news events and
earning releases to trade?
Do you really need to learn how to understand various macroeconomic data releases and
indicators, and how they could impact the financial markets? No, you don't!
Unless you are trading very small timeframes, you can ignore fundamental analysis.
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Markets will move erratically, but for the most part, they will respect a bigger timeframe
imbalance if one is in control. So we don't really need to pay attention to fundamental analysis.
Another reason supporting the previous assertion is that the set of rules of the strategy you are
about to learn have been developed without the use or support of any macroeconomic data
releases, earnings releases, interest rates and the like.
Cutting through market noise
Each day, almost every hour, a lot of macroeconomic data is published - so it's easy to
become overwhelmed. However, as a supply and demand trader, you don't need any of
that data. You may want to know which figures may influence your open positions and
what's really worth looking at, but at the end of the day learning about those figures will
be a bad influence for your trading because it will probably prevent you from placing
trades based on strong, high-quality imbalances.
At the beginning of your trading journey, it might be worth focusing on the three
indicators mentioned above, before digging deeper into other data, such as the
consumer sentiment, business surveys or even retail sales.
Are all the rules included in this FAQ?
No, they are not. There are many nuances that only experience will tell. These nuances cannot be
covered in the rules, they are too many. This FAQ module has been made simple and
straightforward on purpose. Reading a set of rules is not enough, you need to practice.
There are many other trading scenarios that can be traded, and many more that you will
probably come up with. I only recommend that you trade with the trend and ignore countertrend scenarios. That's why counter-trend scenarios are not part of the rules any more.
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Focus on trading with the trend for at least a year. It's VERY difficult to succeed at trading even
when trading with the trend. It is IMPOSSIBLE to succeed if you add counter-trend trades.
Remember the KISSS method! Keep It Super Simple Stupid!
Why aren't there so many examples in the FAQ rules?
The FAQ rules have been made short on purpose. The concepts are laid out, then you need to
put the hard work in, or it will not work. Reading a complex set of rules and dozens of scenarios
will not help if you do not do your homework.
What is your homework? Practice the rules, ask for feedback and help others. Only through
repetition will you learn how the market is governed by supply and demand imbalances.
No matter how many examples you see or how many times you read a book or a set of rules,
your brain will tend to forget them. You need to practice a lot and create habits; there is no
other way. The best way to create habits and patterns is by doing it yourself and by making
mistakes.
What can you do?
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Practice, practice practice
Ask for feedback by posting your analysis to be corrected in the Questions and Answers
channel or the Practice the Rules channel
Read the new topic rules before posting anything
Read the live channels to see the rules live in action. There is no better way to learn than to
see the rules play out in real-time in the live markets. Think of the live stocks, forex and crypto
channels as a complement to these rules.
What trading platform am I allowed to use to trade imbalances?
You can use any trading platform you want as long as it has candlesticks 🙂 We do not allow
the use of bars or line charts, or the use of any indicators or oscillators except the 20 EMA.
Can I use indicators and oscillators to trade supply and demand?
You don't need to use any indicator or oscillator to trade supply and demand. We allow the use
of the 20 EMA but you don't really need it.
EMAs other than the 20, bollinger bands, pivot points, RSI, CCI, MACD and the like are
prohibited. You are not allowed to add any indicators to your charts. If you do, your post will be
eliminated without warning.
You are not allowed to shares charts like the one below:
See below the type of charts you want to see on your screen. It will make your trading life so
much easier to have uncluttered and raw charts like the one below. You just need to know
where the strong imbalances like monthly demand level #1 are located. You don't need
anything else.
Why can't I reply to the topics in the trading forums?
New members and those who have not contributed at all will not be able to reply
to the existing topics. They will be able to read all the content but unable to respond.
Why? Because we want quality posts that follow the rules, we want quality versus
quantity. We do not want the live forums to be full of questions and answers about a
trendline or a zone's validity. You will have to do that by asking questions in Questions
& Answers or posting your charts in Practice the Rules and the Newbies Trading Room. . As
a new member of a member that is not very active, you will still be able to see all the
posts; there won't be any restrictions.
You should not be in a hurry to learn. It's going to take you many months, probably a
couple of years to see the markets through the supply and demand glasses. You are
here to learn As an extra, you could take advantage of potential trade setups posted by
more experienced members that worked really hard for a long time to learn how to
trade.
Take it easy and enjoy the process. You are probably happy and willing to spend 5-10
years of your life studying at the university to become a lawyer or a doctor, but you will
not spend a couple of years learning how to trade correctly and how to create the right
mindset. Trading is much more complicated than any university career, and you are not
willing to put in the hard work you would happily put in if you study for a doctor or a
lawyer? Be realistic!