HI all,
I was reading another thread (http://indo-investasi.com/showthread.php/17690-Sam-Seiden-the-difference-between-Supply-and-Demand-levels-and-Pivot-Lows-Highs) and the below comment by shicuco sums up some of the important aspects of supply/demand. So, I thought to share it here:
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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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Cheers