econintersect.com
       
  

FREE NEWSLETTER: Econintersect sends a nightly newsletter highlighting news events of the day, and providing a summary of new articles posted on the website. Econintersect will not sell or pass your email address to others per our privacy policy. You can cancel this subscription at any time by selecting the unsubscribing link in the footer of each email.



posted on 19 August 2016

Look For The Profit Zone

by Sam Seiden, Online Trading Academy

Online Trading Academy Article of the Week

For any market speculator, the most important function of your routine is proper analysis of supply and demand. This leads to the two important pieces of a trade/investment:

  • Market Turning Points - For low risk / high reward entries and exits

  • Large Profit Zones - Profit potential

profit.380x180

This opportunity was found in the NASDAQ futures using a very small time frame. Notice the supply level on the grid and chart #1. We know this is a supply level because price could not remain at the level and declined from the yellow shaded area. Price only declines from supply because there is more supply than demand at that level. Notice the first time price revisits supply on chart #2. Our rules tell us that novice traders are buying here. We know this because these buyers are buying AFTER a period of buying, mistake number 1, and they are buying at a price level where supply exceeds demand, mistake number 2. The objective laws of supply and demand ensure that the trader who commits these two mistakes will consistently lose. We simply sell short at the level with our protective buy stop just above the level. The lines/level represent the "supply zone". As active traders, we determine these zones each day. As longer term investors, we do the same thing in the larger time frames.

Supply Demand Grid July 26th - NASDAQ (NQ)

Click for larger image at Online Trading Academy.

How to Determine Your Profit Zone

Let's now discuss the key point that made this trading opportunity such high probability. Notice the rally in price on chart #2 up to the grid supply zone. It is a strong rally built with NO DEMAND levels during the rally, just nice big green candles. This means that as soon as price reached supply, it was likely to fall very quickly back through that area. We require strong rallies in price such as this one to our pre-determined supply levels as that increases the odds of our short position working. In other words, price reached our supply level and we shorted at supply for a move down through the very clear "profit zone".

Trading Tip: Consider identifying a Profit Zone before Supply and Demand levels to arrive at strong trading/investing opportunities.Tweet: Consider identifying a Profit Zone before Supply and Demand levels. http://ctt.ec/G_Vdp+

Hope this was helpful, have a great day.

>>>>> Scroll down to view and make comments <<<<<<

Click here for Historical Investing Post Listing










Make a Comment

Econintersect wants your comments, data and opinion on the articles posted.  As the internet is a "war zone" of trolls, hackers and spammers - Econintersect must balance its defences against ease of commenting.  We have joined with Livefyre to manage our comment streams.

To comment, using Livefyre just click the "Sign In" button at the top-left corner of the comment box below. You can create a commenting account using your favorite social network such as Twitter, Facebook, Google+, LinkedIn or Open ID - or open a Livefyre account using your email address.



You can also comment using Facebook directly using he comment block below.





Econintersect Investing


search_box

Print this page or create a PDF file of this page
Print Friendly and PDF


The growing use of ad blocking software is creating a shortfall in covering our fixed expenses. Please consider a donation to Econintersect to allow continuing output of quality and balanced financial and economic news and analysis.


Take a look at what is going on inside of Econintersect.com
Main Home
Analysis Blog
A New Era of Central Banking?
Is Free Trade Harming the Economy?
News Blog
China Moves To Put North Korea In Its Place
Trucking Data Improves In January 2017
February 2017 Chemical Activity Barometer Has Strong Gain
Infographic Of The Day: 2017's Top New Year's Resolutions
Early Headlines: Asia Stocks And Dollar Up, Oil And Gold Steady, Nat Gas Plunges, Fed's Williams Says Low Rates Will Last, Steep UK Brexit Bill, Greek Poverty, China Stocks Look Up? And More
Climate of the Southwest
Did the Romans Create both Christianity and Islam?
The Psychology Behind Trump's Awkward Handshake ... And How To Beat Him At His Own Game
Most Lawsuits Against Trump Related To Travel Ban
Average Gasoline Prices for Week Ending 20 February 2017 Statistically Unchanged
Explainer: Trickle-down Economics
How The United States Is Governed
What We Read Today 21 February 2017
Investing Blog
The Real 401k Plan Manager 20 February 2017
Investing.com Technical Summary 21 February 2017
Opinion Blog
The Blame Game
Fascism Defined And Described By Oswald Mosley
Precious Metals Blog
Deflation And Gold: A Contrarian View
Live Markets
22Feb2017 Pre-Market Commentary: Wall Street May Take A Break Today And Open Flat And Down, US Dollar Remains Higher, Crude Slips, Investors Watching Yellen Today For Higher Interest Rate
Amazon Books & More






.... and keep up with economic news using our dynamic economic newspapers with the largest international coverage on the internet
Asia / Pacific
Europe
Middle East / Africa
Americas
USA Government





























 navigate econintersect.com

Blogs

Analysis Blog
News Blog
Investing Blog
Opinion Blog
Precious Metals Blog
Markets Blog
Video of the Day
Weather

Newspapers

Asia / Pacific
Europe
Middle East / Africa
Americas
USA Government
     

RSS Feeds / Social Media

Combined Econintersect Feed
Google+
Facebook
Twitter
Digg

Free Newsletter

Marketplace - Books & More

Economic Forecast

Content Contribution

Contact

About

  Top Economics Site

Investing.com Contributor TalkMarkets Contributor Finance Blogs Free PageRank Checker Active Search Results Google+

This Web Page by Steven Hansen ---- Copyright 2010 - 2017 Econintersect LLC - all rights reserved