FAQ: Supply And Demand Forex Example #1 (USD/JPY 1H)



Attached my first trades using the pinbar strategy…

First I saw UJ reverse on the H1 chart, making a new HH after it made a low… it happened that the candle making this temporary new high was also a pinbar (at least I think it could be called as one) so I did enter my first trade after this H1 candle did close with a market order.

Next I waited… and waited… was kind a hard for me.. but it paid off.

I had switched to the M15 chart and used my alert indicator to go to my pc once a new bar closed.

That’s when finally I saw a new pinbar had formed and I stacked upon the first order.

Before I had drawn, or tried to since im not sure whether I draw the zones ok, the H1 supply zone but once price came close I couldn’t stand it anymore and set a hard TP which got hit..

I marked the H1 and M15 charts for you to verify whether I have the causes what formed the pinbars in the first place, correct. I really hope so…

Its awesome to notice that im slowly find myself no longer thinking ‘impulsive’ but rather trying to reason why a certain pattern formed AND think what would the banks do, where would they

have there open trades started… Still work in progress but, due to your articles and feedback on my emails, we’re really improving! that’s a great thing to observe on its own I think…

Well, im going to do some other work… need to finish some coding…

If you got some time to look at my charts, that would be great.

Did you catch some nice trades today? You mentioned that you only try to take trades which at least bring home +50 pips? Is it me or do those pairs (EU/UJ/AU) seem a bit slow?

Talk soon…


From just a quick glance at your charts and explanations I can see your on the right track. The pin bar on H1 which you specified as being bank traders placing trades is exactly right. 

Is this the candle you placed your first trade on?

From here we see the price move up until we see a bearish pin bar form which was created by bank traders taking profits off the buy trades they had placed on the bullish pin bar which you specified.

You said you closed the 1 hour trade early?

This was a slight mistake but was to be expected because your not used to trading higher time-frames.

When I stack my trades I’ll always leave the first trade running no matter what because that gives me the safety to get the other trades placed.

I know if I lose on one of the stacks the profit from the first trade should make up for it.

The pin bar which you missed was actually a good thing because typically pins like that dont tend to work out successfully. Sometimes they signal that a reversal may be about to take place but in this case the market continued higher after the pin had formed.

The understanding behind the pin you took on M15 is correct aswell.

When the pin was forming it looked like a bearish engulf, this lead many traders to sell because they thought the price was going to fall. The banks came in and used the few sell orders which were present to get more buy trades placed and the price started moving higher again. 

All in all Phil your understanding of what was unfolding was virtually spot on, you knew which pins were created by what action and traded in a thoughtful rather than impulsive way.

Gotta say I’m really quite impressed with your understanding even at this stage, not only that but your ability to trade based on your understanding instead of using a specific trading strategy.

The only mistake you made was closing the first trade to early, had you left it open of course you would have made more profits but at the end of the day it doesn’t really matter because you made some great trades and showed you was able to read the market very well.

If you want me to take a look at any of the other trades you have placed send them over and I’ll go through them when I get chance.

Have a great week…

Much much easier to see what is really taking place in the market.

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