"The Only Supply & Demand Video You'll Ever Need (Full Breakdown)" — Transcript

Full transcript

1. 0:00Every trader learns supply and demand,
2. 0:02but most traders still lose money using
3. 0:04it. And the reason is always the same.
4. 0:07The drawing zones on anything that looks
5. 0:08like a zone without actually filtering
6. 0:10the ones that you need to be focusing
7. 0:12on. In this video, I'm going to show you
8. 0:13the exact criteria that I use to
9. 0:15identify high probability areas of
10. 0:18demand and supply. Every zone has to
11. 0:20pass these specific four criteria. If it
12. 0:23misses even one, I do not touch it.
13. 0:26These are the exact rules I use
14. 0:27consistently and the exact rules I teach
15. 0:29my students. By the end of this video,
16. 0:31you'll be able to look at any chart and
17. 0:33immediately know whether a zone is worth
18. 0:35trading or not. Before I get into the
19. 0:36criteria, I want to show you exactly
20. 0:38where most supply and demand traders
21. 0:39fail. Because if you understand the
22. 0:41problem, it's a lot easier to understand
23. 0:42the solution. Most traders, they just
24. 0:44see an area of consolidation like this
25. 0:46and they're like, "Yeah, it caused a big
26. 0:48move down. Let me enter my short
27. 0:50position here. Target lower prices."
28. 0:54And sometimes it works, but most of the
29. 0:55times you get absolutely cooked. Don't
30. 0:57draw zones without any evidence that
31. 1:00this is actually a good area to use. Not
32. 1:02every consolidation, not every low to
33. 1:04high, high to low is going to be a good
34. 1:06area to use. The four criteria filters
35. 1:09I'm about to show you is going to
36. 1:10eliminate any doubts. Gets rid of the
37. 1:12weak zones, focuses on the good zones
38. 1:14only, and that's the difference.
39. 1:17One of the most important filters that a
40. 1:18lot of traders skip completely is it has
41. 1:20to be responsible for causing a external
42. 1:22break of structure. By that, I mean when
43. 1:25we have structure like this,
44. 1:28I need an area of supply that was
45. 1:30responsible for actually breaking this
46. 1:33low here. If we had something like this,
47. 1:36this area of supply is not valid. Why?
48. 1:38Because it hasn't broke external
49. 1:40structure. If we had something like
50. 1:42this,
51. 1:43area of supply is not valid. Why?
52. 1:45Because it didn't break any external
53. 1:47structure. My external structure is
54. 1:49currently this high to this low, and
55. 1:52this was previous
56. 1:54external structure. So, it has to be
57. 1:56responsible for breaking external
58. 1:58structure if you want to choose the best
59. 2:00zones. For example, here we had a low
60. 2:02and we can see when we candle closed
61. 2:03below it
62. 2:04here. So, we need to find an area of
63. 2:07supply that was actually responsible for
64. 2:09breaking this low. Now, this is quite
65. 2:12cool here. So, if we draw this area
66. 2:14here, where a lot of traders would mark
67. 2:16the area of supply, to me this would be
68. 2:18invalid. You might ask why? Then, wasn't
69. 2:20it responsible for breaking the
70. 2:21structure? No, because if we go back,
71. 2:24okay, where did we first take the low?
72. 2:27We first took the low
73. 2:29and that includes a wick as well we took
74. 2:30the low. We first took the low actually
75. 2:33here.
76. 2:34Okay?
77. 2:36You can see
78. 2:38boom, this wick took the low. So, I need
79. 2:40to find an area of supply responsible
80. 2:42for taking this low. This area of supply
81. 2:45that was formed after here
82. 2:49was not responsible for breaking this
83. 2:51external structure because we broke this
84. 2:53low first, then we formed this area of
85. 2:55supply. So, this one is why it becomes
86. 2:57invalidated and I would not use this
87. 2:59one. However, if I go up, boom boom
88. 3:01boom, we have this area of supply here,
89. 3:05which did what? It actually broke this
90. 3:07low here. So, this one is always going
91. 3:09to be 10 times better than this one
92. 3:11here.
93. 3:12Step two, everybody's favorite word,
94. 3:15liquidity. What do I mean by that? Well,
95. 3:17in an uptrend, if I have an area of
96. 3:21demand like this,
97. 3:23this would be valid and good to use.
98. 3:25Why? Because we know that lows are
99. 3:27liquidity in an uptrend and what do we
100. 3:29have? We had a low here
101. 3:31that price can sweep and then come into.
102. 3:34So, we want a low above our areas of
103. 3:36demand and in a
104. 3:38downtrend,
105. 3:40we have two possible areas of supply,
106. 3:42this one
107. 3:44and this one. But, I could not use this
108. 3:46one. I can use this one. Why? Because
109. 3:50this one here, when coming into it, we
110. 3:53have not swept any liquidity. This one
111. 3:56here, we have swept liquidity. Which
112. 3:58one?
113. 3:59Boom. This high here. Remember in a
114. 4:00downtrend, highs are all liquidity. So,
115. 4:02I need to sweep some sort of liquidity
116. 4:05before coming into our supply, otherwise
117. 4:07it is not valid. And this is so crucial.
118. 4:10It can't just be random lows. Let me
119. 4:13explain.
120. 4:14Let's say we have an area of demand
121. 4:16here.
122. 4:18Okay. This
123. 4:21is not liquidity. A lot of people would
124. 4:23see this low resting above this demand
125. 4:25zone, assume this is liquidity, look for
126. 4:27a long, we're like, we swept liquidity
127. 4:28in here,
128. 4:30and get stopped out. Why? Because that
129. 4:31liquidity has to break the high it came
130. 4:35from. So, it has to of course have that
131. 4:37mini break of structure. Which high did
132. 4:39this low this liquidity come from? This
133. 4:41high. You can see we did not break it.
134. 4:43So, this is not valid liquidity. Only
135. 4:46when we break it, it can be a wick or a
136. 4:47close, this then becomes valid
137. 4:49liquidity, and now I can say sweep
138. 4:52coming to here, push higher.
139. 4:55So, guess what? It's the exact same
140. 4:57in a downtrend. As we pull back
141. 5:00into this area of supply here, I cannot
142. 5:03call this liquidity yet. I cannot call
143. 5:05this liquidity yet until what? Until
144. 5:08we break this low here. This, and none
145. 5:11of these highs are valid liquidity.
146. 5:14Okay, they've not given me that break of
147. 5:16the low. Only when we do here, boom, we
148. 5:19call this sort of mini break of
149. 5:20structure, I like to call it. What was
150. 5:22the highest point between this low and
151. 5:23where we got that mini break of
152. 5:24structure? This high here. This becomes
153. 5:27my liquidity, and now I can look for a
154. 5:30sweep in this area of supply, and boom.
155. 5:32Otherwise, I can't use this area of
156. 5:33supply as it has no liquidity. So, for
157. 5:36example, we go back to our chart here,
158. 5:37you can see we had this area of supply,
159. 5:40and we had this area of supply. And
160. 5:43obviously, we're always going with the
161. 5:44trend, the downtrend only looking for
162. 5:45supply, uptrend only looking for buys,
163. 5:47and you can clearly see we are in the
164. 5:49downtrend, so I'm only looking for
165. 5:50supply. And what do we notice about this
166. 5:52liquidity before this liquidity? If we
167. 5:54come into this liquidity here, this zone
168. 5:55here, have we swept any liquidity before
169. 5:57doing so? No. So, guess what? This isn't
170. 6:00a valid area. Well, this liquidity here,
171. 6:02have we swept any liquidity? Yes.
172. 6:05This high here is valid liquidity. Why?
173. 6:07Because can you see we got that
174. 6:09mini breaker structure here.
175. 6:11Low high low low. This actually broke
176. 6:15this low. So, if again, if this did not
177. 6:19break this low,
178. 6:21we cannot call that liquidity. Once it
179. 6:23took the low it came from,
180. 6:25boom, this high becomes liquidity. I can
181. 6:27look for price to sweep here and here
182. 6:29cuz now we have that criteria of an
183. 6:31external break structure and liquidity.
184. 6:33Now, another important step is
185. 6:35mitigation. What do I mean by that? We
186. 6:38want to buy and sell in fresh areas.
187. 6:41Think of an area of demand or supply
188. 6:44like
189. 6:45a fuel tank, okay? So, this is a nice
190. 6:48fresh
191. 6:50fuel tank with that
192. 6:53liquidity. Every time price comes into
193. 6:55here and fills up that fuel, collects
194. 6:58that orders, pushes higher, guess what?
195. 7:01There is now no fuel anything left for
196. 7:04price to come into and bounce. So, I
197. 7:06need my area to be less I like to keep
198. 7:08it simple less than 50% mitigated. So,
199. 7:11if we go into this area of demand here,
200. 7:14right? And when I draw my box, I can see
201. 7:16this middle white line is 50%. This is
202. 7:18fine.
203. 7:19This is fine. This is fine. This
204. 7:21boom, this area of demand is now done. I
205. 7:24cannot use it. It's the exact same thing
206. 7:26when we talk about areas of supply.
207. 7:30If I draw this area here, what do we
208. 7:33notice? Fresh. I can still use it.
209. 7:36However, if I was looking for my area of
210. 7:39demand, I marked it, it caused a break
211. 7:42of structure, it had liquidity in it.
212. 7:45Guess what? I will not use this. Why?
213. 7:47More than 50% All these orders have been
214. 7:50filled, lower probability of getting a
215. 7:52sweep and rip. It's actually more
216. 7:53probability of coming into where and
217. 7:55shifting structure. So again, going back
218. 7:57to our example where we had our nice
219. 7:59area of supply here.
220. 8:01Why is this valid? We can see price
221. 8:02holding liquidity and guess what? Still
222. 8:04fresh. This 50% dash line completely
223. 8:07untapped. Price has not come back into
224. 8:10this zone, I am more than happy to use
225. 8:11this. Our final step is something
226. 8:14everyone's heard before, premium and
227. 8:16discount. How does this work? Well, when
228. 8:19I have
229. 8:20supplies, for example, I might have
230. 8:21multiple.
231. 8:24And I have a break of structure here.
232. 8:28Okay, my premium discount is always from
233. 8:30my external low to my external high.
234. 8:33So my external low
235. 8:34to my external high
236. 8:36is here. If I pull up my discount
237. 8:38premium tab Now I only want to enter
238. 8:40zones when I'm selling, ideally in
239. 8:42premium and buys in discount. So let's
240. 8:44say we had this valid area of supply
241. 8:46here, I would not use this. Why? Because
242. 8:49this is in discount. So I would rather
243. 8:51use an area in premium, one of these two
244. 8:56as that will be higher probability. And
245. 8:58of course, the exact same when
246. 9:01buying. And of course, the exact same
247. 9:03when buying. Here we break structure. So
248. 9:05my external low is here
249. 9:08to here. Now if I'm marking up potential
250. 9:10areas of demand, we have this one here
251. 9:13and we have this one here. However,
252. 9:16simple quick criteria check is drawing
253. 9:18my discount and premium. This first one
254. 9:20here is in premium. I want to be buying
255. 9:22in discount only, so below 50% I can get
256. 9:24rid of that and I can purely focus on
257. 9:27this area of demand here. When all four
258. 9:30criteria are aligned, it caused an
259. 9:32external break of structure, we have
260. 9:33liquidity resting above or below, the
261. 9:36zone is unmitigated and it isn't premium
262. 9:38or discount. This is an extremely high
263. 9:40probability zone.
264. 9:41This is a zone worth risking your money
265. 9:43for. Let me show you all four criteria
266. 9:45shown on this exact chart with this
267. 9:47exact supply zone called live in front
268. 9:49of all of my members, and here's exactly
269. 9:51why. So, the first thing I saw was the
270. 9:53trend, and we clearly broke structure
271. 9:55here. So, I was clearly looking for
272. 9:57sales in areas of supply below this
273. 9:59high. Now, what area was responsible for
274. 10:02taking this low? We already established
275. 10:04that this was formed after the low, so I
276. 10:07could not use this one. However, when I
277. 10:09work my way above, do do do do do we had
278. 10:11this nice area here. External break
279. 10:14structure. Done. Step two was, of
280. 10:16course, liquidity. Did we have any
281. 10:18liquidity resting below it? Yes. Low,
282. 10:21high, lower low. We had this mini break
283. 10:24of structure here I like to call it. And
284. 10:26we left this beautiful high up here.
285. 10:29Step two done. We are sweeping liquidity
286. 10:32before coming into here. Step three, is
287. 10:34it fresh or mitigated? Look at this.
288. 10:37Completely fresh. Price has not returned
289. 10:39into it. Step three. Done. Step four, as
290. 10:43we play price out.
291. 10:46Boom. So, this is now my new external
292. 10:48low.
293. 10:51If I draw my fib from here to here,
294. 10:54this is well within discount, hence I
295. 10:56would not use this area of supply here.
296. 10:58In um premium, sorry. This is well
297. 11:01within premium. I would not use my
298. 11:03supply here. This is in discount. I want
299. 11:05to be buying selling in premium. This
300. 11:07supply we said wasn't responsible for
301. 11:08causing external break structure, so we
302. 11:10get rid of that. And instead, we focus
303. 11:12on this supply zone here. You can place
304. 11:15your stop loss above. Target lower
305. 11:17prices. I mean, just look at that. Price
306. 11:20came into here, respected the area of
307. 11:21supply, and completely dumped to take
308. 11:24profit. Whereas, if you took your sales
309. 11:27in this area of supply, you got cooked.
310. 11:29If you took your sales in this area of
311. 11:31supply, you got cooked. Here's what I
312. 11:33want you to understand. These four
313. 11:34criteria is not complicated. You can
314. 11:36apply them to any chart in about 2
315. 11:38minutes when you know exactly what
316. 11:39you're looking for. Traders who are
317. 11:40inconsistent with supply and demand are
318. 11:42inconsistent because the concept doesn't
319. 11:44work, but inconsistent because they're
320. 11:45trading every zone except these specific
321. 11:47ones which only pass the criteria.
322. 11:50Narrow your criteria, trade less, win
323. 11:52more. The traders I work with
324. 11:53one-on-one, this is one of the first
325. 11:55things we fix. Because once you stop
326. 11:57drawing random zones and only the ones
327. 11:58that fit these four boxes, the noise
328. 12:00gets smaller and the win rate goes
329. 12:02higher. So, if you've been trading
330. 12:03supply and demand and still inconsistent
331. 12:05and want to apply for the one-on-one
332. 12:06mentorship, the link is in the
333. 12:07description below. If you did like this
334. 12:08video, appreciate any likes and
335. 12:09subscribes as always. Any questions you
336. 12:11have, feel free to drop in the comment
337. 12:12section below. Apart from that, I'll
338. 12:14catch you in the next one.