Original subtitles

Hey, everybody. Welcome back. Here's another video for the

Currency Pro Academy course. Today, we're going to be

talking about supply and demand in a very refined way and that

is flip zones. So, let's start diving into what exactly I'm

talking about. So, in the last video, we learned about supply

and demand basics, how we highlight with our rectangle

tool, the consolidative areas within the market. Um in this

video, we're going to go over a much more refined approach,

okay? So, we're on the hourly time frame right now on Euro

USD and I have a few zone marked out here we're going to

start with the higher time frame first the 1 hour and then

we're going to drop down to lower time frames so first of

all I have a zone right here the this rectangular zone and

this is a one hour demand zone and basically instead of

instead of highlighting this entire consolidation what I'm

doing is refining it down to the last opposing candle before

the momentum kicked into the market right this is very

similar to order blocks which we're going to learn in the

next section but it's basically order blocks and supply and

demand are very similar things there's just minor differences

right but this is the last bearish candle before the

bullish up move where all the momentum kicked in so that is

my refined supply zone I mean sorry demand zone so instead of

having my rectangle tool like this to cover the entire

consolidation what I'm doing instead is refining it down to

that one last candle the last low momentum opposing candle

before all the high momentum kicked into the market okay so

that explains that that's my one hour demand zone now I also

have two more demand zones above it and those are more

visible on lower time frames. So the one hour time frame is

the first place I like to start for order blocks and supply and

demand zones. Four hour is just for basically gauging the

direction of the market. Uh but one hour and 15 minute is where

I locate my my real zones to trade from. So let's drop down

to the 15 minute now that we've gone over the first demand

zone. And so now that we're on the 15 minute we can take a

look at the second demand zone that I've highlighted here. So

this one right here same exact concept I highlighted the the

last small low momentum bearish candle before bullish momentum

kicked into the market right we have a lot of volume being

pumped into the market there this is the very last candle

now it doesn't really matter if it's bullish or bearish candle

all that matters is that it's a low momentum candle right

before the actual momentum kicked into the market okay

that's where a lot of people get confused they think it has

to be a bearish candle it really doesn't technically like

a candle like this could be looked at as well if it were in

a different place like if it were down here doesn't matter

if it's bullish or bearish doesn't matter about the color

some people have just one solid color on their charts instead

of a two tone color scheme I just prefer this just visually

I like it so that's that's what I do but just to clarify

doesn't matter if it's bullish or bearish all that matters is

that it's a low momentum candle and it's right before the

actual momentum kicked in that's all we're trying to do

is locate the last point of demand before the market kicked

into gear okay so this was the 1 hour candle now that we're

down to the 15 minute we have this one here that's easily

identifiable and then we have another one up here as well I'm

going to go over that shortly but yeah that those are the two

zones that are visible from here and now we're going to

drop down to the five minute time frame because as you can

see price started trading down but it never actually reached

that demand zone and of course not this one either but it's

good to have them on the charges so you're aware of

where price could go. It also helps with setting profit

targets once you have entered the trade. So I was monitoring

this one. Price came close but just didn't quite make it

there. So I leave it on the chart and continue to monitor

price. But as price kicked into kicked into gear again. We saw

a clear break of market structure. Right? There's a

break of structure here as well. That's what prompted me

to highlight this as well. But now we have another break of

structure right price kicked in to high momentum broke through

market structure and so that prompted me to look at more

recent price action and to do that I was down on the on the 1

minute time frame I like to scalp this pair on the one

minute time frame so let me just adjust this really quick

okay so as you can see the same concept all over again right we

have the last low momentum candle before the bullish

momentum kicked into the market and on the one minute time

frame we have we have more break of structure here very

minor structure but still break of structure nonetheless but

again that prompted me to look for a demand zone for price to

trade back to to mitigate right because similarly to order

blocks which we're going to go over in the next video supply

and demand zones and order blocks in order for them to be

validated or at least have more confluence it has to be paired

with a break in market structure okay so that's what

happen with all of these zones we had a break of structure

here the point of origin was this one hour demand zone we

had another break of structure here the point of origin was

sorry we had a break of structure here the point of

origin was this demand zone and same thing here we have a break

of structure technically this is a point of origin on the 15

minute but I was going much more refined than that because

I was looking for an intraday trade so I was on the lower

time frames so again on the 1 minute time frame break of

structure of this area price pushed right through it this

was the point of origin and the last low momentum candle before

high momentum kicked into the market okay so that's what

prompts me to highlight this demand zone so again this is

the most recent demand zone we of course have two others below

it but it would take quite some time for price to get there so

I'm always looking at the most recent price action because if

I want to get in the trade it's not going to help me if I'm

targeting something you know all the way down here or

whatever like it has to be in recent price action if I

want to catch a trade that day for example it has to be up to

date right so I'm always targeting the most recent zone

and monitoring that closely so as you can see price had a huge

impulse and then started moving downward in a very corrective

manner you can see how this is this whole move here is all

very high momentum full body bullish candles we had one

large full body bearish candle but from that point on we're

just kind of messing around just consolidating in a

downward in a downward motion very corrective manner right

however we did mitigate this demand zone we actually

mitigated 50% of the demand zone so this can really be

considered mitigated from this point on right sometimes price

just taps into the top of the area and then trades away but

to me personally it's it's fully mitigated once it's hit

at least the 50% zone right sometimes it can trade lower

than that of course but 50% and I'm looking at it as fully

mitigated so this is a fully mitigated demand zone and so

this is where the flip comes into play alright so the whole

concept of this video basically other than refining our supply

and demand to the last candle instead of the consolidative

zone the flip zone is basically a very refined entry style it's

one of my personal favorites it's not the only way I enter

trades as we're going to go over in in later videos but it

is one of my favorites especially for scalping Euro

USD on the one minute time frame because this happens

almost everyday okay so let me explain what the supply and

demand flip is okay so as we've already explained we have a

demand zone right here price mitigates this demand zone and

then trades away from it okay so if this demand zone were

strong enough to hold then technically price would

continue trading higher and higher and higher we would have

a break of structure maybe a pull back and then continue

higher again right we have bullish order flow but what a

flip zone is is when you you watch price react to the zone

it has to trade away from the zone and then if price has

enough bearish momentum now to break through the zone that's

what the flip is because then we would be looking for a

supply zone to target instead of a demand zone right so it

flips from demand to supply so let's see if that's what

happens here or if price just takes off to the upside instead

let's play price forward Okay so price dropped to the

downside and clearly violated this zone okay so let me just

go over this briefly one more time price came down into the

demand zone mitigated it fully traded away from it but failed

to create new highs see instead of you know breaking structure

here breaking structure here breaking structure here and

continuing bullish order flow we couldn't even break this

minor here. Price traded away from the demand zone but didn't

have enough momentum to create new highs. So instead we just

kind of topped out right here right? And then from that point

on price fails to the downside. So what that tells me is that

demand was temporarily respected but overall supply is

taking control and pushing price to the downside. So

that's the flip. It flips from demand to supply. Okay so now

that now that the demand zone has been violated This is also

of course a break of structure. So let's map that out because

this was our low. And we clearly broke that low. Right?

To map that out okay so that's our break of structure so now

that we have a break of structure and a confirmed flip

zone where can we look for entry well since supply is in

control we have to locate our last point of supply before the

momentum kicked into the market and technically like like we

went over in the last video for being general about it the

entire consolidation zone is right here okay that's the

entire consolidation zone but that is an extremely messy way

to enter a trade especially on the one minute time frame like

we don't want to do that we want more precision than that

right we don't this massive stop loss because that means in

order to achieve a good risk reward ratio we would have to

be targeting extreme extreme lows just to get a a profitable

trade right so we want to be more precise than that so like

I explained earlier what we can do is refine our supply zone to

the very last point of supply and that was again doesn't

matter if it's a bullish or bearish candle in this case it

is a bullish candle low but all that matters is that it's the

last candle before momentum kicked into the market so this

bullish candle right up here let me just draw it this

bullish candle right here is a very small bodied you know

wicks on both sides no directional bias it's a very

low momentum candle there's no volume in the market at that

point right immediately after that candle prints on the chart

we see these huge full body bearish candles kick into the

market causing this break of structure okay so that's a very

important takeaway these full body candles broke the

structure but the point of origin is this last candle

here. That is our refined supply zone. Okay? So now that

we have that mapped out on on the chart with our supply zone

template it's just a great template that has an S for

supply that is now our ideal entry point okay so in this

case what I would do is I wouldn't refine it any further

I'm already on the one minute time frame I never trade below

that to be honest so at this point I would set a sell limit

order right at the bottom of that supply zone Stop loss can

be Two pips is fine. Keep in mind we're trading Euro USD

here so that's one of the tightest spreads across all

brokers. It doesn't matter who you're with. Euro USD is the

most commonly traded pair in the market so it has the lowest

spreads by far. So two pips is perfectly reasonable. Um to be

honest I don't really go any lower than that. Like

technically you can keep the stop loss just above the zone

but I'm not trading with a stop loss of like one to one. five

pips. That's just too tight for me. I don't like that. You

never know what's going to happen with a broker and

spread. So I like to keep it a bit safer. So in this case two

would be reasonable even even 2. 5 to to three pips would be

reasonable but again completely up to you doesn't matter in

this case for this example I'm going to go for two pips so now

we can get into targets right because we've already set our

stop loss we've set our entry we've confirmed why we're

entering this trade right we had a demand to supply flip

supply is in now in control the supply created a break of

structure we've located the point of origin and that is our

target entry point right now in of targeting profit for this

trade we can simply target the higher time frame demand zones

right because we had them there for a reason the the thought

process is that eventually some point at some point price is

going to be drawn to those zones like a magnet okay

they're unmitigated demand zones so now if supplies in

control we can anticipate that eventually price is going to

reach those demand zones to mitigate them as well just like

we had a mitigated zone here price needs to mitigate all

those other zones as well so we have two here we have two time

frame zones. The 15 minute and the one hour zone that we

identified earlier. So if you want to be a little more modest

or if you want like an actual intra day trade you can

certainly just go for the first zone here and as you can see

you know two pip stop loss 18. 7 pip target profit which

leaves us a 9. 35 risk reward ratio which is absolutely

phenomenal can't complain about that that is more than most

traders make in a month if not a quarter some traders don't

even make that in a year to be honest so that right there is

phenomenal. Uh now if you wanted to be a little more

ambitious you could certainly target the bottom zone here.

Keep in mind we should be confident in this because we

know that supply is now taking control and we're seeing

bearish order flow because we've had a break in market

structure prices moving impulsively to the downside

right like all the signs are there for supply to take over

and so we should be confident in in targeting these lower

demand zones right so for this example I'm going to target the

lowest demand zone for 39 pips of profit which increases the

risk reward ratio to 19. 5 sounds absurd to some people I

know but you know let's just watch this play out and see

what happens because it is more than it it's entirely possible.

These kind of moves happen everyday in the market. It's

all about having a precise entry and knowing what you're

doing and being able to read market structure and order

flow. So let's play price forward and see what happens.

See if this trade gets triggered and how it progresses

from there.

Okay so we're moving back up correctively. There we go. So

we're triggered into the trade. Let's just move this over a

little bit. Okay. Yeah so triggered into the trade. So

far basically zero draw down. Just wicked into it a little

bit. Uh so no draw down so far. Let's see how it plays out.

Okay so right away we have some pretty insane momentum. So you

can see how well respected this supply zone is right? Price

needs to come back up and mitigate that point of origin

that caused this break of structure in the first place.

We need to mitigate that zone. And you can see as soon as it's

mitigated that's when momentum kicks in because it like price

gathered all the fuel that it needs basically. It was you can

look at this as stopping at the gas station for fuel with your

vehicle right? Price was stopping at stopping for fuel

as soon as it it took off to the downside. Just melted away.

And of course that causes another break of structure. So

we can map that out. I know it's visually obvious that

price broke structure but I like to map it out anyways. Um

just to remind myself at the start of the next day or

whatever the next trading day. Just to remind myself the

current order flow of the market. So if I have breakup

structures to the downside mapped out on my chart. It's a

constant reminder that we are currently in bearish order

flow. So let's continue to play in price forward and see how

this progresses. Okay so that was quick. So if you were

targeting this first zone here for nine pointthree five R I

believe it was. Uh nine point 3five risk reward ratio. Your

take profit would have been hit. You would have been done

for the day. Uh how long did that take?

Under 15 minutes. Yeah. So less than 15 minutes and you would

have made almost 10% profit so that's that is absurd so yeah

if you were targeting that first zone you would have been

done for the day within 15 minutes potentially even done

for the month it depends on your targets right so that's

how easy it can be if your analysis is precise as we as we

were here in this example but of course for this example

we're targeting the lower zone so let's see if that ends up

happening let's play price forward once again another

break of structure here because that was our low price

impulsively broke below it Right? That impulsive bearish

candle broke right through it. And then correctively moving

upwards again. Of course more entries can be taken right?

Like I'm not factoring any any scaling in opportunities here.

Like there's supply here right? So you could technically take a

trade from there. Um I don't know if it would be a win or a

loss. I have to play this forward and see what happens

but technically you could be scaling in at any corrective

move within this down move. And treating it as a new supply

zone. But Let's continue to move price and see what

happens. Okay so yeah that would have been a a minor loss

if you took another scaling trade from there. But overall

the position is still in profit so let's see how this plays

out.

Okay moving quite correctively. Oh there we go. Okay let's

extend this forward so we know that we're still in the

position here. Right so Another clear break of structure here.

Right? So we're still in the trade. Uh yes price was oops.

Price was moving basically sideways for quite some time.

It would certainly take some emotional control and

discipline to be able to to withstand that. However if you

can it really pays off in the end right? Like if you trust

your analysis enough then you should be able to be

comfortable holding this whole trade here. And of course you

can you can trail your stop loss to certain points if you

like. If that makes you feel more comfortable or you can

certainly you for example, you could set your ultimate take

profit for this bottom zone but you could have removed like 50%

of your position at the first zone, right? In that way, no

matter what happens, you've already won, right? So, as soon

as we hit this first zone here, you could take off the majority

of your position and move the stop loss to break even so that

there's no risk left on the table and you've already won.

So, at that point, you're just playing with house money,

right? So, whatever happens happens. Uh that's what I do

quite often as well. I don't just leave the entire thing

running and just hoping for the best. I'll often secure at

structural points and supply and demand levels such as this.

Move stop loss to break even and then just let it run and

see what happens, right? So, let's let's keep going and see

what happens here. Oh, almost hit take profit. And let's see

what happen. Yeah, there we go. So, hit the full take profit.

Which would be yeah about nineteen and a half nineteen

and a half risk reward ratio. So if you're risking 1% capital

that's almost 20% gained in one single trade. And it took a

total of

two two hours so this is still within one trading day right

we're on the one minute time frame so if you wanted to hold

this entire trade you know just over two and a/ 2 hours and

this is this is an insane insane profit for for that

short amount of time nineteen and a half hour is absolutely

insane so yeah that is how we can utilize supply and demand

and refine it to the last can and have this refined entry

style the flip zone right so just to go over the criteria

here one more time we have a clear demand zone price

mitigated the demand traded away from the demand right

that's the key factor we have to reject the demand zone if we

just blew right through the demand zone that is not a flip

zone whatsoever it has to respect it temporarily move up

higher but then it has to show signs that there's not enough

momentum to create new structural highs right and

that's exactly what we did here we made equal highs instead of

making a new high okay price wasn't able to gain enough

momentum enough buying power to break these structural highs

and create new highs there wasn't enough momentum for that

so that's an early warning sign that price is most likely

going to break structure to the downside and gain more bearish

momentum and that's exactly what happened so again demand

zone got mitigated we traded away from it failed to make new

highs and then traded through creating a break of structure

okay as soon as the break of structure happens that's when

our our bullish order flow changes to bearish order flow

so that's when we can start looking for sales and that's

when the supply zone can be identified as we did here and

that supply zone is our entry point and from that point on

you can see as soon as price mitigated that supply right

there that last point of supply we just absolutely melted to

the downside huge profit Taking potential here. Corrective

move. Just regaining some fuel for price to make this next

massive bearish high momentum move to the downside.

Ultimately hitting the final take profit for 19 and a half

R. Okay. So I really hope you guys gained a lot of value from

this example. Um feel free to take notes and just watch it as

many times as you want. It's here for you. It's part of the

membership. So watch it as many times as you'd like. Gain as

much from it as you can. Uh as you watch it and more. You may

pick up on some things that you didn't understand at first. So,

that would be a great idea. So, stay tuned for the next video

guys and I'll talk to you soon.