DislikedIf you were to suggest a method of trading, which ones would you recommend and why?
1. Order Flow
2. VSA
3. Supply and Demand combined with PA
4. Fibs ala Skunny
5. Combination of above? Or something else?
I have been working heavily on supply and demand zones and they have been working well for me. But I can't help but notice some other threads talking about Order Flow or VSA trading. I don't know much about them and how difficult it would be to gain the level of understanding to benefit so I was hoping to get other people's thoughts.
Which...Ignored
It is simple supply and demand, if more people want to buy than sell, then price will move up to satisfy the imbalance of supply and demand. Price does not react at your supply and demand zones because of some magical quality they have, it is simply because other traders see them too so they will place ORDERS at these levels. Also, there are people holding the instrument that remember the level was the highest it had been before so they don't want to miss out on the best price they have seen so they place an ORDER to get out when it comes back. Also, people who got on at demand level that didn't work waiting to get out at breakeven so they will place an ORDER when price returns (support turned resistance). Etc, etc, etc...
Once you really get your head around this it becomes less about using a single method and more about trying to work out who is in the market at any given time and why, who is waiting on the sidelines ready to pounce, which levels will be defended with big money and which will be swept to take out stops for either a profitable stop run or a liquidity hunting excersise etc etc.
Hope this helps