The Exact Supply Demand System That Makes Me $100k/mo (Full Guide)

Summary

This video script delves into advanced trading techniques, focusing on how to identify and analyze demand and supply zones across multiple timeframes. It covers concepts like internal and external trends, structure cycles, and key points of interest (POIs), with an emphasis on decisional and extreme zones for high-probability trade setups. The script explains the structure cycle, from main pushes to pullbacks, and outlines the importance of multi-timeframe analysis to align trends. It also introduces advanced entry techniques, using inducement, time windows, and lower timeframe confirmations to optimize trading strategies and improve profitability.

Takeaways

• 😀 Internal trends on lower timeframes (e.g., M5) help refine entries within an overall external trend on higher timeframes (e.g., 4-hour).
• 😀 Extreme demand zones are crucial for identifying high-probability entries, as they mark the last bearish candle before a bullish breakout.
• 😀 Decisional demand zones are formed by internal structure breaks that lead to higher highs, offering significant points of interest for trades.
• 😀 The structure cycle in trading includes a main push, internal trend, complex pullback (to decisional or extreme zones), and a new higher high or lower low.
• 😀 Strong points of interest (POIs) align with the main trend and structural breaks, while weak POIs are based on internal trends that are no longer relevant.
• 😀 Trap POIs occur in areas like the Asia high/low or at the Frankfurt open, where price consolidates and can trap traders into false breakouts.
• 😀 A multi-timeframe approach (e.g., 4-hour for external trends, M15 for refined entries) helps in accurately identifying and validating key demand and supply zones.
• 😀 The complex pullback involves price retracing to an extreme or decisional zone, where the market is expected to continue in the direction of the main trend.
• 😀 Advanced setups require a combination of inducement, time windows (e.g., London open), and lower timeframe confirmation to validate the trade's high probability.
• 😀 Traders should focus on restricted trading to remain disciplined, taking only high-probability setups that align with the overall market structure and trends.

Q & A

What is the difference between external and internal trends in trading?

External trends refer to larger timeframes (e.g., 4-hour charts), showing the primary market direction, while internal trends are smaller timeframes (e.g., 5-minute charts) that help refine entries and can indicate shorter-term movements within the broader external trend.

How does an internal trend influence an external trend?

An internal trend facilitates the continuation of an external trend by breaking structure within smaller timeframes, such as forming higher highs and higher lows. This helps validate the larger trend and allows for better trade entries aligned with the main direction.

What are extreme demand and decisional demand zones in trading?

Extreme demand zones are the origin points of a trend where price initially reacts, while decisional demand zones are where the market breaks a previous structure (higher high or lower low), creating a new trend. Both zones are important for identifying valid entry points.

What is the structure cycle in trading?

The structure cycle consists of a main push (main trend), followed by an internal trend (sub-trend with lower highs and lows), a complex pullback (retrace to demand or supply zones), and finally, the formation of a new higher high or lower low, continuing the overall trend.

Why are weak points of interest typically internal structure?

Weak points of interest occur when the internal structure no longer aligns with the larger trend. These are considered less relevant because they do not contribute to breaking significant structures and can lead to false signals.

What is the importance of multi-timeframe analysis in trading?

Multi-timeframe analysis is crucial because it allows traders to identify the main trend on larger timeframes (e.g., 4-hour) and then refine their entries on smaller timeframes (e.g., M15), ensuring that trades are aligned with the broader market direction and increasing the chances of success.

How do you differentiate between strong, weak, and trap points of interest?

Strong points of interest include decisional and extreme demand or supply zones that align with the main trend. Weak points are internal trends that no longer match the overall market direction. Trap points occur at areas like Asia high/low or during events like Frankfurt open, where the market often manipulates price before reversing.

What are some common characteristics of a trap point in the market?

Trap points are often found at areas like Asia high or Asia low, where the market may induce traders into false trades. These points typically lead to price manipulation, and trades in these zones are likely to fail as the price reverses sharply.

How does the complex pullback fit into the structure cycle?

The complex pullback happens after an internal trend, where the price retraces back to a demand or supply zone, completing the 'efficiency of the pullback.' This pullback phase is critical in setting up a new higher high or lower low after the price returns to a valid zone of interest.

What is the 'efficiency of the pullback' and why is it important?

The efficiency of the pullback refers to the price movement returning to an extreme or decisional demand or supply zone. This phase is important because it signals a potential reversal or continuation in the market, setting up for a new main push in the direction of the trend.