Big Profit Trading From Demand

During this past week we've seen some large rallies on a number of pairs. A number of which I previously highlighted for opportunities in my weekly forex outlook. In this article I share 2 trades which came in with great profit this week. As always I break down what I did and why.

EURNZD

Daily

Now I've been talking about the EN a lot in recent weeks. I took a short whilst waiting for a long ( you can find details on that trade here if you missed it) and now the long opportunity that I've been waiting for finally arrived. I exited my short last week and price arrived at the demand with clear red candles showing a lot a profit potential. The setup looked perfect on the daily.

A22 image 1 EN Daily

H1

The view on the H1 was a great one too. A H1 QM formed with the closest supply being engulfed and there was nothing to stop price for over 100 pips. This was an obvious one to take. If you look at this pair now you'll notice that price has rallied much more since my exit. That will happen sometimes.

A22 image 2 EN H1

5m

The entry was the same as usual. After an engulf of the nearest supply on the 5m I entered the trade at the demand below it. Price did drop down past the 5m demand but my stop is always behind the H1 or 30m SD level so there was no issue there.

A22 image 3 EN 5m

Result

The profit on this trade was well over 100 pips. Simple setup, simple trade.

GBPJPY

Daily

This pair hasn't featured on my weekly outlook recently and that's simply because I didn't think that price would reach a significant level any time soon. I still had SD levels marked up on my charts though. Price gapped down almost 200 pips at the start of the week and soon after that, I had an alert on my phone that price had reached the daily demand level I had marked up. With the red candles and the large gap, There was a lot of profit potential for this trade.

A22 image 4 GJ Daily

H1

After price hit the daily demand, the nearest supply level on the H1 was engulfed pretty quickly. A 30m demand level sat below which I believed to be the source of the engulf so I waited to see what happened if and when price returned to it.

A22 image 5 GJ H1

 

30m

A22 image 6 GJ 30m

5m

After the nearest supply was engulfed I entered at demand. One thing to note here is that the reaction at the 30m demand was immediate. Price engulfed that opposing level straight away. Ideally that's what you want to see. It's a good sign that price is going to turn higher.

A22 image 7 GJ 5m entry

Result

This was another great trade with lots of pips.

The One That Got Away

The GBPAUD was the one that got away from me. Price reached the demand I identified in my last weekly outlook article and rallied as expected but unfortunately it didn't give me an entry. Price has run on for hundreds of pips now so I'll be waiting for shorts instead.

A22 image 8 GA Daily A22 image 9 GA H1

I hope you found this useful

Happy trading

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4 Comments

  1. Terry on September 16, 2014 at 01:39

    Yes, this is another excellent example of reading the charts. I’m going to put more time in identifying the source of engulfs. I appreciate what you are doing here Joe.

    Thanks

    Terry

    • Joe Wright on September 16, 2014 at 21:57

      Thanks Terry. That sounds like a great idea. Engulfs offer a good indication of where price might go next and since we’re trading supply and demand, it’s best to find a level to trade from.

  2. Beka on September 16, 2014 at 18:58

    Hey Joe! Great peace of work!
    I would be interested in failed set ups and trades as well. I highly appreciate your efforts here!
    thanks

    • Joe Wright on September 16, 2014 at 22:09

      Thanks Beka. I’m glad you find the info useful. I’ll share some of the less successful trades too. They don’t always run away like the recent ones did.

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