Let’s take a USDSGD Forex cross-pair daily timeframe using supply and demand imbalances for technical analysis without a single indicator dragged on the chart, just price action and impulses.
USDSGD Forex cross pair has been rallying for a few weeks creating new demand imbalances on the way up on the daily timeframe. The big-picture trend is bullish, so we are only interested in buying the USDSGD Forex Cross pair. Supply and demand are telling us that we should only be thinking of buying new demand zones, not selling. Why should we add all kinds of indicators like Bollinger Bands, CCI, RSI, MACD and exponential moving averages to make a trading decision when price action when everything is pointing up? The attached chart for USDSGD Forex cross-pairs a daily chart. Each candlestick is a day. The whole movement started at the bottom, around 1.3472. On the way up, a few daily demand imbalances were created, there has been a retracement to the first three imbalances at 1, 2 and 3, but the price continued to rally strongly without providing a pullback to new demand levels at 4 and 5.
If you want to learn how to trade Forex using supply and demand imbalances, join our supply and demand trading course
Trading supply and demand imbalances is ideal for beginners and those with a full or half-time job, and you won’t need to stay in front of the computer all day long trying to move price action with your mind.
As supply and demand traders, we do not need to pay attention to the news, fundamentals or any earnings reports. Once a big timeframe imbalance has gained control, earnings do just the opposite and react strongly to those imbalances. Why do you see positive earnings and then the underlying stock drops like a rock, or a negative earnings announcement and the stock rallies like a rocket out of control? You are probably missing the fact that there are big imbalances in gaining control.
You should not worry about fundamentals or earnings announcements unless you are doing very short-term trading and scalping.
You can use these imbalances to plan your trades in lower timeframes. Trading is just waiting for the right trigger points and scenarios to present themselves, this game has got a name and it’s called the waiting game. We need to patiently wait for the correct scenarios and setups to happen and wait for the price to pull back or dip into the price levels we want to trade, in our case these price levels are made of supply and demand imbalances.
There are several ways of buying stocks. When trading stocks, you can buy shares of the underlying stock or use options strategies to go long or short at these specific supply and demand levels, long calls or long puts or spreads. You can even buy a CFD (contracts for difference) if you are in a country where it’s allowed.
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