Trading on Supply Demand

Arjun Bakshi

Arjun Bakshi

Introduction
Charts represent filled orders over a period of
time.
Our job is to find the areas where maximum
unfilled orders are located.
Some candles represent accumulation of
orders & others represent consumed orders.

Arjun Bakshi

 Boring candles Supply-Demand in Balance.

Institutions are most probably accumulating
orders
Exciting Candles- Imbalance between Supply &
Demand found at the origin of these candles.
Institutions DONT CHASE PRICE. So, there is less
institutional activity in these candles.
Boring candle -> Body of candle<= 50% of Range
of candle
Exciting candle -> Body > 50% Range
Arjun Bakshi

Arjun Bakshi

How do prices turn?

Prices turn when there is an imbalance of
Supply & Demand
Our job is to locate these areas of imbalance
An explosive move followed by a base
followed by an Explosive move represents this
area of imbalance
How do these look on the chart?

Arjun Bakshi

Setups

Rally Base Rally

Drop Base Drop
Rally Base Drop
Drop Base Rally

Arjun Bakshi

Rally Base Rally

Arjun Bakshi

Drop Base Drop

Arjun Bakshi

Drop Base Rally

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Rally Base Drop

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Multiple Timeframes
Multiple time frames are necessary to provide
a correct perspective of the overall market.
Higher time frame - Range
Intermediate Time Frame - Trend
Lower Time Frame - Execution
Use a factor of 5 approximately

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For Equity Markets

Trading Style

Timeframe

Positional

Swing

Intraday-1

Intraday-2

Range

Monthly

Weekly

Daily

60 min.

Trend

Weekly

Daily

60 min.

15 min.

Execution

Daily

60-240 min.

15 min.

5 min.

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Higher Timeframe
RANGE
Look for untested Demand & Supply Zones on
the Range Timeframe.
Demand zone will be below CMP
Supply Zone will be above CMP
Divide the area between the Demand &
Supply zones into 3 equal parts

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ONGC Example

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Intermediate Timeframe Trend

Check the trend on intermediate time frame.
Can be based on whatever you are
comfortable with.
Ex:- Moving Averages, ADX +DI/-DI, Price
action, etc. Just be consistent with whatever
you are using

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Lower time frame Execution

If price is Hi or very Hi in Range time frame, look for
opportunities to short in good quality Supply zones
If price is Low or very low on Range time frame, look
for opportunities to go long in good quality demand
zones
If price is in equilibrium, trade in direction of trend of
Intermediate timeframe.
Example, if price is in equilibrium & trend on
intermediate timeframe is Up, then look for going long
in good quality demand zones.
Target- Opposing level of Demand/ Supply. Can also
look at monetary tgts or R:R tgts.
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ONGC Example Execution Timeframe

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Good Quality Zone

Will have less than 5-6 base candles
Will have a very powerful leg out Wide body
candles, gaps.
Ideally should be untested or very faint test of
the zone

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Nifty Day trade for 10/8/2015

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Nifty Trend 60 min.

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Nifty Trade-1

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Nifty Trade-2

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More stuff to Read/Watch

http://www.set-andforget.com/supply_demand_beginners
http://www.fxstreet.com/search/contributors/
authors/author.aspx?id=5766b88a-1a31-41028221-e9bf77216d2f&contenttype=w

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Thanks for Reading

Arjun Bakshi

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