 So in this video, I'm going to be talking about why supply and demand trading is the genesis of all trading strategies, meaning that all strategies really are born from supply and demand trading, and it's a bit of controversial subject. There's, you know, hundreds and thousands of strategies out there, but I'm going to state my case as to why they all came from supply and demand. So keep watching in the beginning, in the beginning. So imagine you've got a brand new market, I mean, I think, or an asset class. And, you know, most people probably think of, you know, crypto currencies, right, like Bitcoin. And in the most recent historical example, right. So let's imagine, you know, Bitcoin was created and then, you know, started to be traded on an exchange. Now, at some point, you know, people started buying Bitcoin. Why? Because they perceived that there was going to be future value. So it was, you know, future value being more than zero, right, more than nothing. So there was demand there. There had to have been demand. Remember, we haven't got any technical analysis to rely on. We have absolutely zero, because it's a brand new market. But what we do know is that there was demand, right, prices went higher. Then at some point buyers assumed or thought that, you know, the value of Bitcoin or whatever the asset class is, would probably be expensive around there. Yeah, whether that's five pounds or whatever it was. Yeah, a bit expensive, not willing to buy up there. Maybe they're taking profit, etc. Prices come down. But the move up is demand, right. And demand is equal to potential value. Yeah, so this is a cheap or a bargain price. Yeah, it's a bargain price. So up here, the buyers were unwilling to pay for Bitcoin at, let's say for example, five pounds. So this now becomes what? An expensive area. Yeah, an expensive area until proven otherwise until buyers start to perceive whatever asset this is. Yeah, as being a bargain again. Now, if price never goes past this, for example, five pound price range, never goes above that. Then this is definitely an expensive area where there is no demand at that price. But once price goes beyond that, it's proven that even at this price point, previously expensive area, buyers were willing to buy and continue the price going higher until they perceive another price point as being expensive. Let's say, for example, that was 10 pound. That's the new expensive area and so on and so forth. So before any technical analysis, before any support and resistance, before any technical analysis indicators, MACDs, stochastics, etc., there was supply and demand. It's just the way that markets move, perceived value, expensive areas, bargain or cheap area. And again, rinse and repeat. So you have to, you know, all strategies are born from this because there was no technical analysis. There was no support and resistance. There was no Fibonacci. There was no Bollinger Bands before demand and supply. So all strategies are born from understanding bargain and expensive areas. So the higher high, higher low and lower high, lower low principle where many of you who may have heard of supply and demand have heard of rally-based drop, rally-based rally, drop-based drop, etc., imbalances in supply and demand. But that doesn't tell you the full story. Like I explained in the previous slide, it's all about perceived value. So again, just understanding this is price, this is time, yeah. What we're looking for is higher highs and higher lows. Again, you can say that there was an imbalance in demand or supply and demand here, which price is higher. But that doesn't tell you the full story. It doesn't tell you why. You have to understand what it is that is causing buyers to buy or sellers to sell. What is causing the imbalance in supply and demand? Meaning that you have to understand what drives the asset class that you are trading fundamentally. Now, there are some asset classes that are going to be driven by things like scarcity. There are some, for example, commodities or usefulness. There are some asset classes like Forex that are going to be driven by interest rates, inflation and GDP. So understand what it is that you're buying and selling. Now, the higher high, higher low principle, yeah, this can be represented on a price chart. Let me get my tool, yeah. This is representing the higher highs, higher lows, meaning that prices are making new highs. And this area here is an absolute bargain, yeah. So this is the bargain area and this was a previously expensive area. How do we know that? Because prices made new highs, yeah, higher, higher, yeah. So when we get a move like this, where would be the best place to buy in your opinion? A lot of traders think that support and resistance is the best place to buy. So a previously expensive area, right there, yeah, is where we should be buying. But I would argue that it's not, it really isn't. If this is an expensive area and this is a bargain area, right, because this is the source, this is where prices originally, where buyers, the smart guys originally bought at this price, whether it be something like £3, yeah, the start and the source of this move is where the absolute bargain is. Any pullback, yeah, this is what Fibonacci is, is just a 38.2% pullback, a 50% pullback, a 61% golden ratio pullback. That's just the discount that you're looking to buy it at. But the absolute bargain would be where the origin of the move came in. So the origin of the move started. So between a bargain area and an expensive area, something known as fair value, yeah. So what 50% retracement is, and a lot of Fibonacci traders actually don't realise this. They trade this instinctively, but they don't understand exactly what it is that they're actually doing. They're buying at just a discount, but where is the best discount? Do you want to buy at a 38% discount or even a 50% discount? If this is still a bargain down here, this is proven to be a bargain. No, the best place would be to buy at 70, 80, 90% discount. That's the best area to look for buys. Yeah, this is what we want to do. Important resistance traders are constantly being stopped out at areas. Not to say that this isn't going to work, right? But what I'm saying is, is this the best place to buy? If you consider this being a bargain and this being an expensive area, no, the best place where we all want to be buying is in the source, the origin of the demand. Because this isn't our game. As retail traders, it's the financial institutions, the banks that are showing you what is a bargain. We're not going to move the market up here. They are. So once they move the market past what is considered an expensive area and prices start to pull back, the best area to look for the bargain would be down here. Now, if prices start to go higher again and you miss out on that move, that's fine. Don't worry because prices will always pull back to some sort of bargain because this now would be the origin of this move higher and then we wait for a bargain down here. Yes, you can buy here, but it's not the best place to look for a bargain just because you win a trade or two doesn't mean it was the best place and the best decision for you to make to buy around here unless you obviously knew what you were buying. So the higher high, higher low principle is what really explains everything. Inbalances in supply and demand and drop based rally, rally based drop only kind of the narrative, that narrative to me didn't make any sense. This is what makes sense and I hope it makes sense to you. So when we're drawing supply and demand or identifying areas of supply and demand on a price chart, what we're looking for is really a simple pattern and the pattern is this is, if you haven't guessed already, higher highs and higher lows. That pattern right there is what we should be looking for. This is demand or what is known as a bargain or a cheap area and pullback will be known as expensive. So EXP and then if this is only a bargain until a new high is made. So this again becomes demand and this becomes an expensive area or supply. Let's think about this just from a cheap and expensive area. So bargain areas. Now has that represented on a candlestick price chart is something like this. There and you get pullback like that and then you get a move higher, something like that. Because look at if this, for example, this free candle sequence was a daily chart. Yeah, or even a weekly chart, but let's say a daily chart. In this day, what you would have is various candles depending on the time frame. Yeah, obviously more green candles than red candles on that day. And then the second day, you would have more red candles, green candles. Price will be moving lower. And then this day here, you'd have your candle. So this of those three candles week sequence on a daily on a lower time frame on an intraday timeframe chart. What you're seeing is, is this high pullback and then a new high. That's what this is. So basing, you know, rally, base, rally, all this is is pullback. Yeah, higher highs and higher lows. Yeah. So again, where would be the best place. If you were looking to be a buyer, where would be the best place to look for a buying opportunity? It would have to be within what we know as some sort of demand zone. Yeah, so demand zone. When we're drawing one candlestick charts, we would draw a demand zone from the bearish candles open price to the swing low. Apologies for that. One second. I have to do like this. Yeah, like that. That's where we want to draw our demand zone because it's around here. Yeah, it's around here where we want to be buyers as we want to be a buyer around the cheapest bargain area. What we're looking for is a pullback into a zone around the lows. And then what we're looking for is some price action that hopefully pushes prices to the upside. That's what we're looking for. Yeah, but it's represented. High highs and higher lows are represented like this. Now, traders get always asking the question, I guess, of can you trade supply and demand on lower timeframes? Now, I will trade supply and demand. My zones are drawn on the daily and the weekly because you really have to understand that. Let's say, for example, this represents this candle is one hour chart. So it's a one hour timeframe. Yeah, and you've got three hours. Now, these candlesticks here are obviously going to be the lower timeframe. Let's say, for example, it is one minute chart, five minute timeframe, five minute timeframe. Who's taking advantage really of a buying opportunity on a five minute timeframe? Whereas if you're entering this on a one day, you're taking advantage of the trend that every single intraday timeframe trader is going to see whether you're trading the one hour, whether you're trading the five minute, whether you're trading the 15 minute or some obscure could be like 135 minute. Yeah, it doesn't matter. But the daily encompasses all intraday trends, meaning that if prices pull back to an area here, you're taking advantage of intraday trends buying at the best area. Yeah, where all other traders can see and then you're looking to again take advantage of bargain prices. A lot of traders get kind of caught up in timeframe analysis and I understand, but opportunity doesn't necessarily mean more profit. More opportunity doesn't equate to more profit. What you have to try and look for is the quality of your opportunities. There's going to be higher highs and higher lows being made on every single timeframe. But does that mean that every that's going to represent a strong area of what? Of demand. If this was a five minute chart. If that was five, 10, 15 minutes of higher highs, higher lows, is that potentially a strong area of demand? Stronger areas of demand are going to be when you look at the end of the day and you look at the price moving and how far price have gone. Yeah, far price have gone in comparison to where the move started. And it's now looks like an absolute bargain around here with one of the first areas to look for a bargain. If not, then you're looking at obviously where the move started, etc. Yeah, so that's what we're looking at. Dailies and weekly zones has the strongest areas of supply and demand. And in my next video, I'm going to be showing you on a price chart how to plot supply and demand zones using, you know, real charts, maybe the euro dollar. In fact, if you want me to analyze a chart, what you can do is send your request in the description box below. And what I'll do is I'll pick one out of those and then I will analyze the charts and plot supply and demand for you. And we'll do that for a couple of minutes so you can get to see how to really plot the best areas of supply and demand. All right, guys, take care and until the next video, speak to you soon.