 So I received a really good question and the gentleman asks When should one consider drawing demand zones from a bearish market or say how are we going to know? Where we reached an all-time low in a bearish market start drawing Thus sorry start drawing demand zones now That's a really good question But we cannot look at technicals alone to understand When we are supposed to buy in you know a downtrend or a bearish market Yeah, and I know we've all heard and we've all seen this Wall Street cheat sheet psychology of a Market cycle where pretty much when the markets going higher, right? You know you get your hope optimism belief thrill euphoria and then complacency anxiety denial panic anger depression disbelief and what happens is is that you know retail traders buy up top here and The Smart money end up buying down here when everyone else is you know panicking and in that anger phase and depression phase of this market cycle and Again, we've all heard You know time to buy when there's blood running in the streets from Baron Ross child and also My guess more recently Warren Buffett once said be fearful when others are greedy and greedy when others are fearful But what they leave out is a very very key component in those quotes Yeah, very key component and it's this and it's buy quote by Oscar Wilde Yeah, nowadays people know the price of everything and the value of Nothing value Yeah, that is what you need to determine when we are looking at buying in a bearish market or buying anything Just just buying Period everybody can look at a price chart and everybody can see what the price of something is But how many traders understand how to derive? value not many and I just want to draw your attention to a Quote from Jesper Jeff Bezos who is one of the world's you know richest men or known richest men And it says almost 20 years ago Bezos was not freaking out during dot-com meltdown even though the stock had gone from over $100 per share to just six dollars in less than a year He saw things differently the stock is not the company and the company is not the stock So as I watched the stock fall from the $113 price to six dollars in price I was also watching all of our internal business metrics number of customers profit per unit Every single single thing about the business was getting better And so while the stock price was going the wrong way Everything inside the company was going the right way ie Value yeah, he was looking at the value of the company and he was not concerned He was not freaking out yeah about the price of You know his company because he understood that he was creating Value so in a bear market. Yeah, it's okay to quote, you know, mr. Ross child Baron Ross child and and and Warren Buffett yeah, but if you're buying yeah a Stock or something where you shouldn't be and you and it has no value then it's gonna go down to zero You know, that's the worst case scenario. Yeah, so you can be greedy where others are fearful But you have to understand why others are fearful You have to understand value you have to understand why people were dumping that stock or dumping that commodity or dumping that You know that that that currency pair. It doesn't make sense to just buy in a bear market, right? I'm trying You know to pick off the lows. Anyways, let's get into you know, why or how technically using supply and demand you know, you could understand How to pick off the the lows? Yeah, so in forex, right? Value is derived from three main components and it's you know, a country's GDP Inflation inflation and interest rates All right, so interest rates. So these are the three main components that give a A Country country's currency value. So first of all, you need to do your fundamental analysis That is, you know, number one. Yeah, that is the most important thing and once you understand that obviously as well because Currencies are traded in pairs. So for example, you're a dollar Yeah, you yeah, you're doing the same thing with both. So you're you're understanding Right the the figures and the data for the dollar, right? And then you're understanding the same figures and data for the the euro and at the moment the dollar is as of, you know, recording this which is the 20th of January 2020 the dollar in the United States is The stronger currency and and the euro in Europe and Eurozone is the weaker one This is just due to you know, the data for example, right? So once we've established that we want to be you know a buyer of The dollar. Yeah, and they sell a shorter of the euro it makes things a lot easier then to understand Where to get involved in, you know, for example in this we'd be we'd be shorting, you know, that currency pair Yeah, but just for Arguments sake and going back to the question. We're talking about bear markets Yeah, so let's pretend that you know the base in the quote currency had switched around so it was actually you II Yeah On a price chart meaning that if we wanted to go long on this currency pair We would be buying the dollar and we'd be selling the euro. So you'd be looking at demand zone. So What we're looking at and this is how technically yeah, we can get involved in You know, maybe something like a bear market one second, right so All right, what you're gonna see is you're gonna see prices, you know tend to come down like this You'll get maybe some sort of pullback at some point Yeah, maybe one two and then you know, we're going Lower Now again understanding the backdrop. Yeah of your you understand value You understand that you should be a buyer of the dollar This could just be negative sentiment. Who knows what's you know, Donald Trump could open his mouth and drive the dollar You know lower, etc. Who knows but When the market is coming down we understand the figures and the numbers so the more Prices end up Coming lower the better the value where this is price and this is Time Yeah, so One of the techniques I use is not to necessarily try to always pick off the absolute lows and less Obviously, we're in an area of potential demand. So we have to look to the left Right and see if there is a demand zone right here, which is you know, which is relevant So how far do you go back? Yeah? You know, you can go back maybe a year or two But what what we're concerned with is is current price. Yeah or current Price and where prices come into this current demand zone and even though it might be, you know, two three years ago What we're looking at is just understanding if this is going to be a bargain price We knew it was a bargain price, you know, six months, you know, maybe a month ago a year ago, etc now We're just understanding if this is going to be one and none of us know anyone who says that they actually know if this is going to be You know, this is going to reverse at this point None of us know because there are no certainties in Trading we just basically trading the probabilities hence the reason why we manage our risk because if we knew what was going to You know, what was going to occur then we would bet it we would bet it all on that one trade We've become, you know millionaires overnight, right if I knew exactly what was going to happen then why am I why am I? Gonna gonna Manage my risk and you know and only trade 1% on a trade doesn't make sense If I knew what was going to happen if anyone knew what was going to happen then ask him Yeah, ask him if you know what's going to happen. Yeah, then why not bet it all on that on that one trade? They don't so they won't so So anyways prices come down here, none of us know what's gonna happen But we have obviously tell tail signs that potentially prices could start to you know reverse here Yeah, now part of the question was was What was it again? So How do we know so how much demand do we really need to see yeah before potentially drawing demand zones in a bearish market? Yeah, so obviously one of the things we need to see is how far does price move away from net? so Do you want to be a buyer here at a level of demand? Yes or no depends? It's up to you if you think this is an area of Value potential value then you just go in at maybe You know a half a percent one percent wherever your you know risk management is and place your stop loss below the low None of us know when prices come into any demand or supply zone if it's going to you know If it's going to reverse there now One of the safest ways is not necessarily to try to pick the lows Yeah, if you don't want to if you don't feel comfortable doing that is to wait for the market to tell you That there is proven demand here. Yeah, so let's say for example You start to see prices go higher and this maybe this might represent. It's probably like a daily or weekly chart I wouldn't recommend you doing you know looking at you know something like an hourly chart to to try and you know predict a Reversal in a bearish market. This has to be you know a daily or a weekly time frame So let's say for example, you know, you've had three four five, you know updates now a lot of traders will say Oh, well, I've missed the trade not necessarily All right What we do know for sure is that there is definitely value. Yeah here There is demand at this price point. Yeah, and prices are going higher Now what we want to do is wait for potential pullbacks. Yeah Actually before we get to the pullbacks what we want to do first is look for potential structures Yeah To be to be broken. Yeah, because technically technically We want to see a potential Change in structures being broken and that would indicate That the trend may be coming to an end because obviously a trending market is lower highs and lower lows being made like that and As soon as prices, you know break some sort of Level, you know, however it breaks it might go down and up, etc Then this creates what a potential higher low and higher high Yeah, so that's one of the things that we need to look for is a break in obvious structures Yeah before deciding whether there is You know a potential reversal, you know around here, so Looking for first potential structure breaks and that could happen here and that could happen there We're looking for the amount of distance traveled Yeah from The absolute low and let the market prove that there is demand in that area Yeah So once these structures start to break then we know there is demand down there Then what we look for is potential pullbacks into Demand zones, right? So prices come back down here. We know that at this point in time, you know Maybe a week ago a month ago. There was demand here and recent demand at this price point Then what we're looking for is Understanding if there's gonna be demand there and this ends up being fresh demand right here and then we look to go into the lower timeframes for You know entries, etc. You want to pick off the absolute lows But we know for sure in a bearish market Yeah, if price has been coming down and what you consider to be a bearish market What we want to see is structures break Before looking at getting involved here and some traders will say well, that's just a simple double bottom pattern Yes, and it is, you know, that could be a double bottom pattern. It presents itself how it presents itself All right, but we need to wait for proof Yeah, that there is Demand so distance and structures and then we're looking for pullbacks into created Demand zones and also as well We only really have to Market states. Yeah, overall we have ranging and trending. Yeah, so if price is in a bear market Yeah, let's say for example, this is the bear market. I should go back All right, so let's say for example, this is the bear market All right and rain sorry trending and then markets tend to do what they tend to enter into some sort of Ranging market. Yeah, and then Depending on obviously, you know, the the value perspective then we might have another trending market Yeah, so we want to see an end to the trend by price Breaking structures and major structures as well and also Understanding how far price has actually traveled as well if this is gonna be, you know prices only maybe moved, you know this amount Is that strong demand? Are you really gonna start drawing demand zones from here? I probably wouldn't yeah But a strong demand zone now it's proven Because buyers are buying at whatever price this was They've seen it as an absolute bargain the banks of financial institutions and then what we do is we look for the first buying opportunity once we see proof of Value proof of value value over everything. Yeah, so first of all Just to recap Understand why you're buying right fundamental analysis number two We look for things like distance traveled Yeah proof of value wait for price to prove itself if you're unsure about taking You know demand zones that were maybe, you know a year old two years old, etc If it's more recent if it's more maybe like a month two months three months, etc Then you can probably take those types of zones anything more than maybe a year or two And you're not too confident in whether that demand zone or that supply zone is going to hold they just wait for proof of The demand to be there and then what you're looking for is You know a pullback into that zone. So another scenario before I Before I move forward one sec, let me just take this is you might have a scenario where you have maybe a bit of Something like this. So you have So you have a move like this you have move that comes up Sorry a move that comes up into Into here you get a bit of a pullback Like that like that and then you get a move That does something like this Yeah, so you're getting higher highs higher lows in this scenario This now creates This higher low creates a demand zone right there. This is proof of value So then if prices Come back down to this area. This would be the first zone That you'd be looking for in order to get No Yeah, that would be the first zone again, none of us know which one is going to work We try here because we know that this is the first area Right where there was definitely a bargain prices moved higher. So does this work out? Yeah, brilliant If it doesn't work out Let's say and Prices fall from there then the next area to get involved to see what's a bargain. It's going to be down in this Demand zone right down here Yeah down at the absolute lows Because we know that this was an absolute bargain This is also a bargain area because this is This is how, you know supply and demand works higher highs higher lows lower highs lower lows are areas of potential Bargain areas and then we just basically wait for price to come down into there and see If that is a bargain based off of Fundamental analysis Yes, no Make some money lose some money if you lose don't worry if prices are still a bargain Then we wait for price to come down here and then that's going to be our Buy yeah, so remember as well prices would have been going from a potential Trending market to now potential ranging market And if price is going to range where they're going to range from between this low potentially this high yeah, so This is exactly what we're looking at and this is really how to understand how to you know Basically pick the lows and start drawing demand zones and really start buying within a bearish or bullish market Just reverse it. I hope that helps and Don't forget to like subscribe share if you find this content useful Comment as well, and I'll try and get back to you if you have any other questions So thank you for watching and I'll speak to you soon