Sam Seiden
Independent Analyst
Most people who view my income and wealth trading workspace in one of the many live trading sessions I deliver eventually ask me the same question… “Why is the US Dollar chart always on your screen no matter what market you’re looking at?” There is a reason, and it is the focus of this piece.
Let’s go over a trading opportunity from the other day using our Supply / Demand Grid in the GBPUSD, Euro Futures, and EURUSD and walk through all the deciding factors that led to these quality trading opportunities.
First, notice the charts on the right. These are charts with supply zones in the GBP and Euro futures and spot markets. On the charts, you will see that price has rallied to an area of supply that the arrows are pointed at. When price is at or near supply and there is a significant profit zone below, we only want to think about shorting. This offered our student members a low risk, high reward and high probability trading opportunity but not just because of the quality supply zones found using our grid.
Next, look at the chart of the US Dollar on the left in both cases. Notice that while there was supply above, current price was at demand, and this is a weekly chart which is significant. That US Dollar demand information was a strong hint that FX markets against the Dollar were likely to decline. What we had in front of us and in advance was clear vision as to where major global banks where buying and selling. Quantifying financial institution supply and demand is the key to getting this right and accurately predicting price movement in any and all markets.
11/16/17 – OTA Supply/Demand Grid FX Opportunity
11/17/17 – OTA Supply/Demand Grid FX Opportunity
Setting up these trading opportunities in advance based on objective information is also very important, it takes all the emotion out of the decision-making process and also means we don’t have to sit in front of the computer screen all day, which no one wants to do.
During that trading session and over the next couple days, the Dollar rallied off demand and EURUSD and GBPUSD declined, as they should. Identifying fresh institution demand and supply, properly correlating the US Dollar market, and then executing our rule based strategy is the key to making this work.
Hope this was helpful, have a great day.
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Editors’ Picks
EUR/USD stays below 1.0700 ahead of US data
EUR/USD stays in a consolidation phase slightly below 1.0700 in the European session on Wednesday. Upbeat IFO sentiment data from Germany helps the Euro hold its ground as market focus shifts to US Durable Goods Orders data.
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