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  1. #1
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    Sam Seiden - the difference between Supply and Demand levels, and Pivot Lows/Highs

    Hi everyone,

    First-time poster, so apologies if I have posted this thread in the wrong forum.

    I've been subscribing to Sam Seiden's Supply/Demand analysis of the Forex
    charts in order to try to identify the low risk/high probability turning points.

    Something I really appreciate is the clarity with which Sam discusses his methods,
    however, during one of his recent FXStreet webinars I noted quite a lot of confusion
    amongst the attendees over the distinction between a "good" Supply/Demand level,
    and a straight-forward Pivot Low/High.

    I'm not sure that the distinction was really broken down in full, and I have to
    say I finished watching the webinar none the wiser. Can any of you guys throw
    light on the subject?

    Thanks in advance.

    Simon
    Last edited by simond; 03-27-2012 at 11:05 AM.

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  3. #2
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    Hi, simond

    When price moves sideways, supply and demand are in equilibrium. A level is formed when there is an imbalance between suppy and demand, i.e. a stronger buying/selling pressure, causing price to leave that level. A good supply/demand level is that which meets what Sam calls odds enhancers.

    Sometimes price returns sharply to a level. A pivot high or low forms when price spikes back into a level.

    There are some good references regarding odds enhancers, but I'm not allowed to post attachments. I'm sure someone else will be willing to post them for you.

    Hope this helps.
    Last edited by shicuco; 03-27-2012 at 08:11 PM.

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    Hi shicuco,

    Thanks for your reply, and taking the time to help.

    I'm familiar with Sam's Odds Enhancers, and his scoring system for
    taking a trade. It was just this one video where all of a sudden there
    seemed to be some discrepenacy and now I'm a little confused.

    The video is here, and the time that he draws in the levels that
    prompt the questions from the attendees is around 24:40.
    Perhaps you could take a look and give your thoughts?

    http://www.fxstreet.com/webinars/sessions/session.aspx?id=a413db7a-e033-4e81-9489-ad35e901734e

    I suppose what might look like a great level on a 60min chart could look like a pivot on a daily chart.
    I've understood it, (and would you agree), that for a Sam level to actually be a level there needs to
    be a period of basing, which is somewhere between 4-8 candles regardless of the timeframe?

    All the best,

    Simon

  5. #4
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    I know it can be confusing sometimes. I've watched all his webinars and I also think there are some discrepancies here and there. Sam is usually a bit reluctant to be too specific about some of the key aspects of his strategy. With regards to your question, the answer is yes: there needs to be some basing for a level to be considered a good level. Don't get too hung up with the number of candles, though. Just try to grasp the logic behind it: if price could only trade for a few candles at a certain level, it means there were many orders sitting there to be filled and price finally rocketed when the remaining supply/demand was absorbed. So the difference between a supply/demand zone and a pivot high/low is just the small basing. Watch Planning out longer term Forex trades 29_09_11. A guy who is in the XLT course makes a comment about this. Pivots are usually pullbacks into a level, so don't get too excited about them. Whenever you see a pivot (a spike), look to the left to find out if there's some supply/demand sitting right above/below. If so, the spike was probably a bounce from that level, so the level is not fresh anymore and the spike is not really a supply/demand level. If the spike is not a pullback into a level, drill down to a lower timeframe to see if there is some supply/demand at that spike: it probably will.

    Also watch Spot Forex vs. Forex Futures 25_11_11. There's some brief explanation about pivots around 29:50.

    Remember to always look left to be right.

    Hope this clarifies your doubts.

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  7. #5
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    Thanks for your reply, shicuco - and yes, that's really helped to start to make things clearer.

    I've only been trading for a few months, and having taken onboard a mountain of information reached the point where I want to just focus on what for me is the important stuff - i.e. supply and demand.

    The pivot issue has been a real "confuser" but I think now I'm able
    to add the results of our chat to my trading rules, which I'm aiming to
    make as clear and concise as possible.

    What I really like about Sam's interpretation is how it applies across all
    timeframes - the same picture within picture - kind of like a Russian Doll.

    All the best,

    Simon

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    I wish I had been as focused as you are after only a few months in the trading business.

    The supply/demand approach rules!

    Good luck with your trading!

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    http://tradingacademy.com/lessons/lessons20080502.shtm

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  11. #8
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    Check this two threads on FF:
    http://www.fore.xfactory.com/showthread.php?t=311095
    http://www.fore.xfactory.com/showthread.php?t=316631

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  13. #9
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    Thanks for the articles Johan - they make great reading

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