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The basic law of supply and demand governs all price changes and it is the best indicator of the future direction of any financial instrument or asset class. The concept of rising prices when demand exceeds supply and the lowering of prices when supply exceeds demand is universal. It is found not only in the financial markets but in commodities, real estate, all other assets and everything else that contains a monetary value.
Supply and Demand Dashboard
We developed an Institutional quality tool and comprehensive trading system using Supply, Demand and Volume data, ignoring mathematical formulas based on historical price data.
Volume, Supply and Demand, when interpreted correctly, give a clear and accurate indication of where future prices will go, Up or Down. The very basic drivers of any auction or sale is the Bidders (Demand or Buyers) and the Askers (Supply or Sellers). Using this very basic universal market principle, the more the Demand the Higher price will go and likewise, the more the Supply the Lower price will go. In depth studies of these two basic drivers of any market can reveal when Supply or Demand becomes very dominant and will influence price.
The “Big Boys” or “Smart Money” is big players and can at once or over time influence markets. If you want to know what the “Big Boys” or “Smart Money” is doing, then this is for you! Trading with and not against the "Big Boys" will improve your winning rate dramatically. Not only will your number of winning trades increase, but you will end up catching bigger moves also, as the “Big Boys” can move markets directionally over time or quick and substantially! The “Big Boys” outnumber the retail traders by far in the number of contracts traded. When the "Smart Money” makes a move, they leave behind a "footprint". By studying Supply and Demand data, these "footprints" become visible if interpreted correctly and give an indication whether the next price move will be Up or Down. It does not matter if price is influenced by a geopolitical event, seasonality, fundamental economic data releases or sentiment driven news, etc. It all reflects in Supply and Demand, where “footprints” of the “Big Boys” or “Smart Money” can be seen.
The Supply and Demand tool displays our proprietary calculated Supply and Demand readings and signals in a Dashboard format, to make the readings usable and easier to interpret. Readings are based on Supply and Demand and Volume obtained from raw internal data of the markets. It is updated live in real-time every day during trading sessions, and does NOT take into account any price indicators or mathematical formulas using price. We do however show the cumulative price change for the trading session or day and in some instances assess price movement’s relationship to Supply and Demand readings. It is therefore fair to say that the readings and signals are independent from other popular price indicators, using historical price data. The readings are an independent assessment of the one and only measureable fundamental market mover: SUPPLY and DEMAND, ignoring price data in most instances. It works on all markets with Volume data and in all time based interval chart setups.
The daily chart above shows our SUPPLY and DEMAND Dashboard and BXB (Bar by Bar) Signals, as well as the Supply/Demand Sentiment Tool and the Wyckoff Wave Volume. Click here for Explanation and Settings.
Our Supply/Demand algorithm on the chart above shows how Supply started to dominate on December the 4th (after the white vertical line), dominating 13 of the following 14 trading days. The average volatility (of Supply and Demand) was also in Bearish territory (above 100) from December the 4th all the way to the right, with the exception of one day, where it was at 92 (below 100), but near the 100 mark, painting a near perfect Bearish picture!
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