SNOWFLAKE COMPENDIUM

Supply and Demand & Liquidity Concepts

PART 2(ADVANCED)

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Advanced Market Structure.
The market moves in phases wherein both a bullish trend and a bearish trend we are either pro
trend(Impulsive phase) or counter-trend(corrective phase). Below is a simple chart mapping
showing what this looks like.

In the above bearish market, we continue selling till the previously high is broken and only till
then we can consider pro tend to be bullish

In the above bullish market, we continue buying till the previously low is broken and only till then,
we can consider pro tend to be bearish.
On a bullish trend, we see larger expansion to the upside making it a more favorable buy than to
sell. The longs are impulsive while the shorts are corrective. Below is a simple chart mapping of
expansion on a bullish market.
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On a bearish trend, we see larger expansion to the downside making it a more favorable sell
than to buy. The shorts are impulsive while the buys are corrective. Below is a simple chart
mapping of expansion on a bearish market.

The market simply moves from zone to zone, accumulating at the demand zone and distributing
at supply zones. With this concept, we can understand that a bull run begins at the mitigation or
creation of a demand zone and a bear run begins at the mitigation or creation of a supply zone. In
simple terms what this means all high time-frame movements are caused by either tapping into
a supply or demand zone. This is why it's ideal to have your supply and demand zone marked
from the higher time frames. (High time frame mitigation followed by lower time frame
continuation).
Here's an example of a bearish market with demand zones acting as a catalyst for the pullback.
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Here’s an example of a bearish market with demand zones acting as catalyst for the pullback.

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Putting all this together you might realize that you can participate in moves in the markets, by
selling from supply zones targeting the last low (weak low) or targeting the next high time frame
mitigation on a bearish market. The same applies to a bullish market where we can buy from
demand zones targeting the last high (weak high) or target the next high time frame mitigation of
a supply zone.
Below is a simple mapping of what this looks like both on a bearish and bullish market.

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 With enough confluence, we can participate in buys on a bearish trend and sells on a bullish
trend on major pullbacks(corrections). This is in a way the same as taking pro-trend trades but
since this is a counter-trend that is more corrective, we should expect more manipulation As we
move to mitigate demand zones on a bullish trend and supply zones on a bearish trend.
We can capitalize on this pullback(correction) on the lower time frames with the concept of high
time-frame mitigation followed by lower time frame continuation and hence have larger moves
to work with.

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 Expectation Order-flow

This is the building of multiple probabilities in liquidity, market structure, Order flow, to make a
conclusion on where price might go to next.This can be essential in understanding Intra-day
price direction, which might help you Identify key zones and take the best trades for that day. eg
in a bullish trend, we continue buying till the bull run is exhausted.

Within a range, Liquidity that is generated within that range is known as internal liquidity and any
form of inducement that exists outside the range is known as external liquidity.

SUPPLY & DEMAND

Supply & demand zones are basically everywhere on a price chart.

Above is supply zone mapping,

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Below is a Demand zone mapping,

The most important confluences for stronger zones or rather a higher probability of holding are
as follows:
 A supply / demand zone must break structure
 A supply/ demand zone must sweep liquidity
 A supply / demand zone should have an impulsive follow through
 It’s an added confluence if the supply/ demand zone causes an imbalance

Zone Refinement

An order block is formed by the last series of orders placed before an expansion to the opposite
direction. With this in mind, we can have a better idea of what solid supply/ demand zones look
like.
Below is a series of examples of what this looks like.

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Above is an image of the Lower time frame (1m) supply zone.

Below is an image of the higher time frame (H1) Demand zone.

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Above is an image of the Lower time frame (1m) demand zone

Seeing this we can understand why over refining your zones might result in price not tagging in
your entry. We advise traders to take these zones as they are since on the lower time frames
they are very small in terms of pips and still give better risk to reward than trading other
methods. Sometimes price doesn't always mitigate/ tap the extreme/refined zones but mitigate
the supply/ demand range.
This is what might happen when your zones are too over-refined.

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This is how we map out our zones.

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 What to expect when price enter your zone / POI.
Some of the key things to watch out for when price enters your POI are Mitigation, Liquidation &
Manipulation.
When price reaches your POI the best thing is to be reactive, not predictive. As there is a high
level of liquidation that traps traders when they try to be first in moves. At these zones, there is
tons of manipulation trying to liquidate traders and the real move happens when most of the
traders are liquidated(Stop hunts). With how we trade we have backtested our data and we came
to conclude that most of the mitigation happens on 50% of the zones. When price enters our
higher time frame zone we hop into the lower time frames (1 mint) to play the mitigation.

Below are examples when price taps into our POI.

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Price taps into our H1 time frame

Above we hop into our lower time frame(M1) to look for entries

Below is the trade from the supply zone from the 15 minute after executing on the M1 time frame

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When to take a trade when price enter your zone / POI (valid POI)
 Price taps your zone and it break structure to your intend direction

ed

 Price breaks your opposite zone,

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 When price didn’t tap into any zone or unmitigated candles.

When NOT to trade even if price enter your zone / POI

There are certain scenarios where price will tap your zones but we will not take the trade but
trade the reaction.

 If price taps into unmitigated zone

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Always ask yourself whose in control before taking that trade!!

ENTRY MODELS
We have already discussed what to do/ what not to do when price taps our POI above on how you
can enter Below are some simple entry models that can be used on any time frame to capitalize
on moves in the market. The market is fractal (whatever happens on the lower Time-frames
happens on the higher Time-frames) and this is why these models are flexible with the time
frame of your choice.

We have 3 entry models;

 Risky Entry- Taking trades of your zones without any confirmation… (WE DON’T TAKE THEM)

 Confirmation Entry- Taking trades after price confirmed it wants to print in your direction.

 Continuation Entry- Trades taken on continuation mitigation after it confirmed your entry.

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Below is a live market example

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Below is a trade mapping of trade models,

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Below are live market scenarios;

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Before,

After.

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Confirmation entry:

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RISK MANAGEMENT

Risk management is one of the most key fundamentals in Forex Trading, for capital preservation
and longevity in the trading process. We recommend every trader taking this course strictly
abide by their risk management plan.

Making a risk management plan.

 We use a 1% risk maximum per trade on our account and 0.5% on our funded account.
 Always put a stop loss on every trade.
 If your not sure of which zone price will tap, a small tip we use is by drawing out your fib and
taking the 50% of that whole zone, works like a magic. Below is an illustration,

In the image above if you used the most recent demand you would have been stopped out.

In the image above you can see that price tapped into the 50% range of the demand.

 When placing your stop loss always put them above/ below your POI, we recommend adding
a few pips as most times you can get wicked out.

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 Also remember to cater for spreads on your stop loss, if you have a SL of 1.5 pips add your
broker spread such that your SL will be at 1.7 pips(Eurusd-0.2 pips spread) Below is n
illustration of how you could place your SL

 Set a realistic target for proper account growth and consistency in the trading process.
 Avoid taking part in trades that do not fit your trading plan.
 Have a daily loss limit for your account. We recommend stepping off the charts after 2-3
losses a day.
 Avoid trying to get into trades that you've already missed.FOMO (Fear of missing out)
 Take more continuation trades than reversal trades, when the trend is already set and has
been confirmed as reversal trades might be rather easy to spot while back-testing but rather
hard to predict when a trend might start reversing.
 Enter pro trend trades more than counter-trend trades as The trend is your friend till it ends.

This is why we make use of a mechanical trading system with a solid set of rules that a trader
must follow to prevent :
 Having FOMO(Fear of missing out)
 Taking unnecessary trades
 Over-risking and over-leveraging
 Over-trading.
 Revenge trading.

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TRADE MANAGEMENT

Now that we know how to get into a trade, the harder part is knowing how to manage trade in
terms of when to get out of a trade, when to take off some profit or when to close the full position.
Some of the ways we can have to manage trade are by :
 Having set targets
 Taking off part of the position at the next major structural point.
 Trail your stops at the last major structural point
 Taking off partials of the position when in profit to cover your stop-loss, making your trade
risk-free. This is without moving your stops to break even.
 Moving your stops to break even when the trade moves far from your entry.
 Setting realistic targets like 5% for consistency and longevity.

FUNDING OPTIONS

After you have mastered this strategy and back-tested it over and over, traded on a demo
account/ small live account, and have been consistent for weeks now you can take your trading
to the next level. Some people have that capability to fund themselves but if you can’t there are
companies that fund profitable traders. The companies are called Prop Firms and they give you
capital to trade with after you’ve passed their test.
There are a few out there but I’ll recommend FTMO or My Forex Fund(MFF). They give one good
capital and the capital can be maxed out up to $400K / $600K. Their profit split goes as they give
the trader 80/85% of all the capital they make on their account. It’s a very good amount of capital
a trader can access, Focus on mastering the skill and the rest will follow.

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 PRINTABLE CHECKLIST

 Check if there is any high impact news

H4
structure and direction of the market
 Mark out your supply/ demand zone (POI)

M15
Refine your H4 POI
 Look for ones that BOS, grab LQ/ have inducement or are unmitigated

M1
Execution
 Switch to M1 and wait for the price to come to your zone.
 Play the mitigation of price
 Be reactive and not predictive
 Wait for price to show its hand and choose what entry type you comfortable
with

 Target your most recent zones / unmitigated zone.

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Final comments:

Focus on perfecting the skill, The goal is to be able to execute the same trade over and over
while still following your plan.
It will take time and effort to perfect the skill but once you learn the skill you can never unlearn it.
Go through this PDF over and over again, back-test it millions of times, and if you still can’t get it
ours Inbox are always open to you.
Have a good one….

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