T2W Trading Community

The supply level here in ABAX again represents temporary price stability which gives the appearance of supply and demand equilibrium. The price drop from that level tells us objectively this is really a price level where supply greatly exceeded demand. Therefore, if and when price revisits this supply level for the first time, we can say that price is revisiting a level where supply greatly exceeds demand. In any market, when price is at a level where supply greatly exceeds demand, prices decline. Again, another student in class sold to a buyer who was buying AFTER an advance in price and at a price level where SUPPLY EXCEEDED DEMAND. His short entry was at the circled area. Mind you, this is a daily chart and a huge low risk gain in a short period of time. What I impressed upon the student was the fact that while the gain was nice, the most important part of the trade was the low risk entry taken to obtain that gain.

An Observation… I have been trading and providing trading education for many years. One of the most important lessons I have learned is that most people can't follow simple rules. I can hand someone quality trading tools and a mechanical set of rules on a silver platter but if the foundation of their trading belief system is faulty, they will not be able to follow or execute the simple rules. The problem is that they succumb to illusion filters they don't even know are present. These illusion creators can come in the form of lagging indicators and oscillators, market or economic news, so-called professional's opinions, green and red candles on your price charts, and so on. This leads to falling for what I like to call, "the illusion trap". At Online Trading Academy, our objective is to not only teach people how NOT to fall for these traps but also how to get paid from those who do with a set of objective rules.

This was my trade in the QQQQ. The entry to buy was at the circled area, a buy at demand (support) right around the first reversal period. Who did I buy from? A consistently profitable trader or a consistent loser? I bought from the seller who sold AFTER a decline in price and at a price level where everyone in my class knew demand exceeded supply. If I was wrong, the stop loss was right below the demand level, nice and close to my entry which is very low risk. The profit margin on the upside was sufficient so the trade was taken.

The Proper Foundation begins with two important concepts:

1. The movement of price in any and all free markets is a function of an ongoing supply and demand equation. Opportunity exists when this simple and straight forward relationship is "out of balance". In other words, we want to enter a position in a market when price is at a level where supply and demand is out of balance and exit that market when price has moved back to a level where there is supply and demand equilibrium.
2. Any and all influences on price are reflected in price. In other words, price charts alone give us all the information we need.