Hi mate,
I wanted to ask when you trade the hourly chart with 5 mins entry, what is you Risk:Reward/management strategy. And I’ve noticed many times the way you create demand and supply zones on the four currencies can be different to what you outlined in your publications on drawing zones.
Could you help me a bit, I’ve read all your advanced articles and most of the others in general.
Thanks for your time and consideration.
My Answer:
So, with 5-minute entries, things get a bit more flexible.
If I’m trading a supply or demand zone, the size of the zone itself plays a large part in how much I risk. It directly affects the risk-reward ratio of the trade. I manage my trades based on my overall view of the market, not just the daily trend.
Basically, I try to figure out where the market’s likely to react and where it might turn around, and I hold my trade until I hit one of those points.
Then, I’ll watch the price action closely to get a sense of what might happen next.
You might have noticed some slight differences between how I draw zones in the supply and demand article and what I do in my daily S&D zone service. When I wrote the article, I didn’t get into the nitty-gritty of drawing zones for special cases, like zones formed from a single candle.
I’ll update the article soon to clear up any confusion.
Here’s a tip: If the zone is near a swing low or high, make sure to include that swing low in your zone.
Swing lows and highs are where the banks are either taking profits or placing trades to change the market’s direction.
Check out this image: I drew the demand zone to include the lowest swing low before the price went up. Most traders would have started the zone from the beginning of the rise, but that’s not the best move here. The banks likely placed most of their buy trades at that swing low, so there’s a chance the market could dip into the white demand zone and reverse closer to the swing low.
I know this might sound a bit confusing.
It’s tough to explain why some zones need to be drawn differently than others.
But hopefully, this helps a bit!
Talk soon,
PAN