Anyone see this supply zone ? I think there is another level right above it in yellow.
@trademonster: yes we have it, if you see the link in the first post. There is lots of materials already available.
pity your picture is so small :-)
1.lets try to define the programming rules for an indicator when a zone should be drawn
2.any suggestions for the algorithm?
Kor, the link provided in last post will be a larger pic.
i have a few of Sams materials "Quantifying suppply and demand zones" I will go through it and see what can help in developing your indicator.
i will also go thru the materials i have and I will come up with some programing algos and rules, but it's not fun to do it on my own, therefore all ideas and suggestions are very welcome.
How you like me Now
Last edited by trademonster; 03-13-2012 at 01:24 PM.
time at the level.
how prices leave the level
is the level fresh
any opposite supply/demand levels near the marked level when price returns
where you are in the bigger picture supply and demand curve
Rally pause rally, rally top drop - ( w/c he now ses as nothing more than pullbacks to previous levels)
levels on top of levels
profit margin from level to 1st opposing level. 2:1 or more
is the usd index running to supply/demand too?
think those are the criteria
yes, +- these are the criteria.
Now, how to program it :-?
Hi all, apologies I've not had a chance to reply been a bit busy this last week. Thanks for input so far Will go through it tonight hopefully. Agree with Kor4x, great to hear correlation in people's techniques, but to build an indicator we really need some specifics around how you use all this criteria. I think it's prob easiest for people to post a screenshot than try to explain in words, plus that will make it much easier for us to see exactly what is meant and also see other things in the chart that might not get mentioned otherwise.
So if it is possible for you to post a screenshot example of any criteria that would be really useful.
Many thanks in advance
"Dear Optimist, Pessimist & Realist,
While you guys were busy arguing about the glass of water, I drank it!
TIME PRICE SPENT AT LEVEL = no more than 6 candles making up either a pivot high/ low or a trading range continuation pattern. the boarders of the level is taken from the lowest close of the candle/s if its a supply level or the highest close price of the candle or series of candles if its a demand level. the wicks either a high wick or low wick are taken as the boundaries of levels where beyond it we set stops.
HOW PRICE LEFT THE LEVEL = Bigger more impulsive candles in succession no pausing is better, the best is when price shoots up or drops like a rock. another note, is that if the price has at least travelled twice the distance away from the level it is now being detected as a level of interest in my opinion
HOW PRICE RETURN TO LEVEL = a quick impulsive return is preferred because there is no opposing levels leading up to return trip a choppy return is not advisable because it cuts the profit margin by forming opposing supply demand level near the level of interest.
PROFIT MARGIN = at least 2:1 from the supply/demand zone to an opposing zone (a supply dmeand zone that meets all criteria about time and distance) maybe different rules for different traders
IS LEVEL FRESH = has price tagged the level before or is it the 1st. if it has tagged the level but briefly and price never trades more than 50% of the level and reponds impulsively (i might keep the level) or prolly it can be kept drawn until its broken?
rally pause rally = see the pic self explanatory
rally top drop = pivot high/ low
LEVEL ON TOP OF LEVEL = self explanatory, its the higher price level option to enter short in this picture the distance is calculated from the level origin to wherever the opposing level of the same criteria is
THE BIG PICTURE = now ive just been thinking how you gonna differentiate the zones in accordance with the big picture. so ill just explain. in the big pic price made a pivot high and is going down there is no higher time frame demand on the way of prices anytime soon. so on lower time frame take supply levels and take it short if all the sup dem criteria are met.
also the equilibrium point is the 50% fib of the high and low point of the perceived major move. Sam says if price has past eqilibrium point of 50% of a major high low move he is less enthusiastic of selling into lower time frame supply zones when in downtrend (flip scenario over if up trend) and even lesser in doing so as prices approach a major higher time frame supply and demand zone.
USD INDEX = look if USDX is running into supply and or demand the same time your trade happens (dont really know if this is relative to the indicator.)
hope i enlightened you more than confused you. if others have a diff opinion ono how the levels are identified pls share.