70 Pips GBPUSD Short May 10th

This post showing the power of SUPPLY and DEMAND Area as confirmation of LST's Divergence. The live trade showing a single trade (No scale-in this time) gained 70 Pips over night.

In this post I'd like to show an example The power of Supply and Demand area as taught by Sam Seiden. I use it heavily and always be my first TP during scale in.

As I repeatedly state that recently Pairs movement have shifted to end of Asian session and sometimes after red box of US session (I assume you familiar with MMM Method).

I used to tie my trading time to London session following typical Pairs intraday movement taught by Steve Mauro in his MMM that movement during Asian session is range consolidation movement around 25 pips range while the true movement is during London Session. After London Session The move will retrace back in to tight consolidation range.

But this is not always happen like this.

We should have not tie our selves to an un-flexible things like this (remember that SM also said that blue and red box is only a guide of sessions).

Many times the move has began before Asian session and some times the big movement started after US session while the move after Asian session could be straight trade continuation or stop hunt retrace then continue to reach ADR. Scroll back a few days and you'll see my point.

I'd rather then tie my self to price action instead of session, no matter what time the setup settle.

Here we'll see an example of Short GBPUSD during US session. I'll point out how Supply and Demand area play its part in to this trading. I didn't scale in this time because the trade was taken during US session before going to bed and reach its TP at the end of Asian Box which was my office hour.

Here is the situations and confirmations triggered by LST bearish divergence that lead to Short trade

The circle - 1 on May 8 has created a strong Supply area sign by the hollow grey box (it was solid grey before revisited by price). Remember the criteria: How Strong, How Fast and How Far the price left the area. Later during US session on May 10 (Circle -2) the price rejected by this area several times. This circle-2 coincidentally at the same area of R-1 of MMM and right at Upper trend line.

The shave of M15 candle showing a clear rejection in this area. M1 chart was showing more sign. The divergence indicator would draw its line after the price clearly move of the top.

As LST taught, this whole situation have more than enough of a confirmation to Bearish Divergence signal.

I placed two orders (yellow dashed line) after the first failed test of the high (Circle-2)  and place Take Profit (Red Dashed line Circle-4) down above the Demand area created by Circle - 3 then go to bed. I'd like to point out that the short placed at Supply Area and Take Profit at Demand Area.

I set the stop loss (Red Dashed line) tightly just about 4 pips above the high but the stop of the 2 orders was separated by less than 1 pips. I use drag and drop SL/TP so it was just an estimation using cross-hair and not set by input numbers modifying the ST/TP.

One of the order has its Stop being taken out while the other one still alive

This is the importance to place extra pips to the Stop Loss as around this area the spread are widen. many times I see the spread of GBPUSD that normally 3-3.4 can widen jumping back and forth to to 5 pips while the price just didn't move. When you opt to agree your Broker TOS there is a section stated that during volatile hours the spread could be wider. Maybe this is a hole to be exploited as SM said Stop-Hunt.

So I turned in after placing 2 orders at Supply Area and TP at the next clear Strong Demand area. The next day at my office (at 7 local time Mat 11st, 22.00 GMT May 10th ) I check the chart and set SL a little bit lower/slightly above the order line/above lower swing hight.

Later the TP taken out right after Asian Box (Circle-4)