Trading Scenarios

Trading Scenarios

In this section, we will discuss some of the special cases using both the MTF analysis and the supply and demand curve.

These trading scenarios are common in the forex market and we use them to better understand how MTF and the curve work together to identify trading opportunities based on market conditions.

Scenario 1:

In this trading scenario, we have:

[Monthly: Uptrend, Weekly: Uptrend, and Daily: Downtrend]

The daily chart has lost momentum and is not aligned with the monthly and weekly charts. We need to look for nested demand zones between daily and weekly charts if we want to buy.

If we have an opposing supply zone close to the current price on either weekly or daily charts, we move to the weekly chart and look for demand zones to buy.

If we have an opposing zone on the monthly chart, we wait for the price to reach a monthly demand zone in order to buy. We don’t consider weekly or daily demand zones here, only monthly demand zones.

Scenario 2:

In this scenario, let’s assume that we have:

[Monthly: Sideways, Weekly: Downtrend, and Daily: Downtrend]

What we need to do is wait for the price to test an opposing supply zone on one of these charts. If we don’t have any opposing supply zone, we don’t trade.

On the chart below, we can see that the monthly price is moving in a tight range. On the weekly chart, price broke the trend and on the daily chart, we have two opposing supply zones.

If price retraces back up and tests one of them, we short.

Scenario 3:

In this scenario, we have the weekly chart going against the monthly chart. At this point, there is no need to look at the daily chart until we have both monthly and weekly aligned and moving in the same direction.

[Monthly: Uptrend, Weekly: Downtrend]

Here, we wait for the price to test an opposing monthly demand zone to buy.