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Where can I learn more about Price Action like those in James16 charts? 9 replies

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james16 Chart Thread

  • #3,781
  • May 25, 2007 8:13am May 25, 2007 8:13am
as mentioned earlier pbs on many yen crosses last night. nice one on audjpy 1h. i'm usually not taking pbs on less than 4h charts but detroit-cleveland got interesting so had to take action fast
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  • #3,782
  • May 25, 2007 11:36am May 25, 2007 11:36am
No one ever posts trades that fail, so for everyone who is new to price action, there is a bit more involved than just picking PBs, DBHLC, DBLHC, etc., bars...

Here's two trades that failed on me this week... I ended up breaking even for the week because of them and yes, this happens A LOT.

3rd bar from right -- BEOB with no support in sight. What you would be thinking at this point is that USDCAD is going to continue down. Set your SL at the top, leave the TP open and you could then use Base150 to help you with targets... I was very happy with this trade and pulled the trigger.

2nd bar from right -- Pinbar. Wouldn't you know it... so now you're thinking..."I'm getting a bullish signal.. price is telling me that CAD will start to turn up for a small win and I can get in on this... so I better get out of my BEOB." So I closed my BEOB for a loss and reversed.

1st bar -- BEOB. I am now stopped out of the PB for two losses in a row. Will the BEOB carry through? The probability is that it will since the PB failed and there was a BEOB before that but at this point, who knows.

Now... there are some people here that will, in hindsight, say, "Well I would've never took that because ..."

But that's bull, because most people would -- especially newbies.

Anyway, just wanted to show everyone that PA is not necessarily the magic way to trade as so many people try to make it out to be. It takes a lot of practice. And there are a lot of these kinds of formations that happen... I don't think Jim tells you that enough.

Bear in mind, I'm not trying to be rude or saying PA doesn't work. And I'm not being rude to Jim... This is how I trade -- but I would never suggest that anyone risk more than 1-2% on PA trades. There are some distinct disadvantages to trading this way when you compare to a nice system that is mechanical...

This is why I'm seriously thinking about moving to weekly bars... this happens all the time. But the problem with weekly's is that unless you look at 15-20 pairs, you might only be in maybe one or two trades at a time. And that sucks, because theorically, you want to be in enough to use your margin up so that your money is working for you.
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Mr. Trend
  • #3,783
  • May 25, 2007 11:41am May 25, 2007 11:41am
Here's loss #3 of the week:

BUOB on NZDUSD at support... and yes, that close is high enough for a valid BUOB.

Once again... just trying to show everyone what reality is.
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Mr. Trend
  • #3,784
  • May 25, 2007 11:49am May 25, 2007 11:49am
Quoting Mr Trend
Here's loss #3 of the week:

BUOB on NZDUSD at support... and yes, that close is high enough for a valid BUOB.

Once again... just trying to show everyone what reality is.
Hey Mr Trend,

Yes that is a valid BUOB, but I wouldn't have place a buy order until the market broke above the high of the BUOB. The next bar doesn't do that. It's a way to filter out trades. It's not hindsight, just make the market prove you right.
  • #3,785
  • May 25, 2007 11:52am May 25, 2007 11:52am
Quoting mrnando
Hey Mr Trend,

Yes that is a valid BUOB, but I wouldn't have place a buy order until the market broke above the high of the BUOB. The next bar doesn't do that. It's a way to filter out trades. It's not hindsight, just make the market prove you right.
That's not how you trade BUOBs... you trade them by opening a position at the close of the formation.

The only formation that you should really be waiting for is pinbars. It's easy to say that in hindsight.

Furthermore, the R:R on these types of setups (if you wait for them to confirm) invalidates the trade. I have detailed GIFs that show valid setups, yet they are a horrible .5:1, .8:1... rarely 3:1, 2:1, etc...
Mr. Trend
  • #3,786
  • May 25, 2007 11:59am May 25, 2007 11:59am
Not saying that price action always works (it definitely doesn't) but the BUOB on nzdusd stopped at the 4H 200ema where price bounced off of twice already this week (with the 150 also being 15 pips away). at least some resistance there...
easy to say that in hindsight, but jim noted these areas need to be taken into account.
not trying to say Mr Trend is wrong in what he wrote about PA ( ithink he's right) but in this case something else was in the area too.
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  • #3,787
  • May 25, 2007 12:04pm May 25, 2007 12:04pm
Quoting Mr Trend
That's not how you trade BUOBs... you trade them by opening a position at the close of the formation.

The only formation that you should really be waiting for is pinbars. It's easy to say that in hindsight.

Furthermore, the R:R on these types of setups (if you wait for them to confirm) invalidates the trade. I have detailed GIFs that show valid setups, yet they are a horrible .5:1, .8:1... rarely 3:1, 2:1, etc...

That's not how YOU trade them. It is a way to FILTER OUT FALSE BREAKOUTS! The next bar breaks to the down side. The bar after that is an inside bar. I haven't done a fib ret on this move, but this is in an up trend. how much has it pulled down already. It doesn't seem like 38%, yet. Just because it's an BUOB doesn't mean you take them blindly.
  • #3,788
  • May 25, 2007 12:06pm May 25, 2007 12:06pm
Quoting Mr Trend
That's not how you trade BUOBs... you trade them by opening a position at the close of the formation.

The only formation that you should really be waiting for is pinbars. It's easy to say that in hindsight.

Furthermore, the R:R on these types of setups (if you wait for them to confirm) invalidates the trade. I have detailed GIFs that show valid setups, yet they are a horrible .5:1, .8:1... rarely 3:1, 2:1, etc...
going to have to respectfully disagree, you can trade a BUOB/BEOB the same as all the price bars, on the close, on the break, on the retrace

also your close really isn't high enough(that is more of a neutral bar). You want the close to be higher then the previous bars high. That is the best BUOB. Your reality will still remain the same, this isn't magic, just increasing our probabilities

Have a good weekend all,
Mike
  • #3,789
  • May 25, 2007 12:06pm May 25, 2007 12:06pm
I like this thread, keep it going guys!
  • #3,790
  • Edited 12:26pm May 25, 2007 12:07pm | Edited 12:26pm
Quoting gidnoa
Not saying that price action always works (it definitely doesn't) but the BUOB on nzdusd stopped at the 4H 200ema where price bounced off of twice already this week (with the 150 also being 15 pips away). at least some resistance there...
easy to say that in hindsight, but jim noted these areas need to be taken into account.
not trying to say Mr Trend is wrong in what he wrote about PA ( ithink he's right) but in this case something else was in the area too.
Ya know though, that may be true, gidnoa, but the truth of the matter is that you can say that all the time.

I can throw up three or four different MAs -- hell, I can throw up MAs that in the past have been known to represent support very well -- 34, 55, 89, etc..., and I can make a case to not enter a trade. I can do that all this weekend and show everyone why you shouldn't take some of the most popular setups. If that's the case, I would never trade, because there's always a support level, or MA, or Fib line, or whatever in the way.

It's like drawing twenty lines on a chart and declaring that price hit resistance or support. Well no kidding it hit it... it's bound to hit it. You'll never take a trade using PA if you always worry about that.

There's an individual (who will remain nameless) on this forum who was pimping his book for a long time. He doesn't do it much anymore. Well in essence, his "system" was basically a ton of different Fibonacci lines drawn on a chart and he would enter and exit based on, "how the currency moved within those lines".

Well talk about pulling your friggin' hair out -- OF COURSE price is going to move in those lines. There's ten lines drawn on the darn chart...

Well the best part of it was that he would go on and on about how trading his way was non-stressful and carefree... "Just let price move harmonically and whatnot..."

Gotta love the irony.
Mr. Trend
  • #3,791
  • May 25, 2007 12:09pm May 25, 2007 12:09pm
Quoting mbqb11
going to have to respectfully disagree, you can trade a BUOB/BEOB the same as all the price bars, on the close, on the break, on the retrace

also your close really isn't high enough(that is more of a neutral bar). You want the close to be higher then the previous bars high. That is the best BUOB. Your reality will still remain the same, this isn't magic, just increasing our probabilities

Have a good weekend all,
Mike
No it's not. That's a BUOB. Go look at everything that is taught. Show me where it states that you have to take a BUOB when its close is higher than the previous bar's high and I'll gladly admit I'm wrong.

Once again -- 20/20...
Mr. Trend
  • #3,792
  • May 25, 2007 12:36pm May 25, 2007 12:36pm
Quoting Mr Trend
That's not how you trade BUOBs... you trade them by opening a position at the close of the formation.

The only formation that you should really be waiting for is pinbars. It's easy to say that in hindsight.

Furthermore, the R:R on these types of setups (if you wait for them to confirm) invalidates the trade. I have detailed GIFs that show valid setups, yet they are a horrible .5:1, .8:1... rarely 3:1, 2:1, etc...



I thought the standard way to play outside bars was on a break or retracement of the bar. Agreed the R:R usually is poorer on a break but it has everything to do with where the outside bar forms.
I wish there was only one way to play these bars but there are many.
I do remember that playing them on the close is an option.
I think that your mistake was closing your first trade rather than leaving the outside bar stop rule which has less possible variations.
Outside bars are basically Inside bars with clear bias but you pay the price!

On the kiwi interestingly if one had waited on the 4hr for bullish confirmation you would have been kept out as the dhlc first thing never broke its base which would have been the key to this particular Buob.
Just to illustrate how one can disect the daily on the live 4 hr to determine or refine an entry.
Anyway what do I know MrT .
Just wanted to say bad luck dude.
Your comment about pins so true.

All the best Swami S
EDIT wow guy's it must be Friday 5 posts as I wrote 1....
  • #3,793
  • May 25, 2007 12:49pm May 25, 2007 12:49pm
Quoting Mr Trend
Ya know though, that may be true, gidnoa, but the truth of the matter is that you can say that all the time.

I can throw up three or four different MAs -- hell, I can throw up MAs that in the past have been known to represent support very well -- 34, 55, 89, etc..., and I can make a case to not enter a trade. I can do that all this weekend and show everyone why you shouldn't take some of the most popular setups. If that's the case, I would never trade, because there's always a support level, or MA, or Fib line, or whatever in the way.

Well talk about pulling your friggin' hair out -- OF COURSE price is going to move in those lines. There's ten lines drawn on the darn chart...

agreed. it's hard to find setups where there's nothing hinting to the contrary.
haven't played with other MAs enough but definitely saw the popular ones being cut through like butter and i'm sure i'll see some nice setups off of the 71/131/239 MAs in hindsight
don't remember where i read an advice about "looking for reasons not to trade" (not that i succeed in doing that when i WANT to trade) so one has to find the balance between the reasons for/against a trade. easy? noway! possible? maybe...
Mike might be one of the very few here who can make some $$ off of PA alone and that's mostly due to his character traits (dedication, patience, and identifying his own emotional states and working on them?).
I think 95% of people reading this thread (including me for sure) can't make $$ off of the PA presented here alone (PF helps a LOT) but this stuff gives people at least a bit of a push forward which is much more than we can get anywhere else. a total newbee will save a LOT of $$ if they're lucky enough to read this thread before anything else (like the famous author...).
i think jim warns people about trading the PA way more than any other mentor, and the PF definitely adds MUCH more insight into the other important things in trading and handling different situations in PA as you well know.
you showing losing trades is most helpful i think, if my ego lets me i'll try to post some PA losses too (don't trade PA much) from now on (hope there won't be any ) just wanted to show a different angle of the BOUB.

i'd estimate reading and understanding this thread might give a person a fighting chance (not to lose all of his initial capital).
the PF will improve that to a 15% (very optimistic) chance of making 50% per year. hope i'll be in this 15%...
  • #3,794
  • May 25, 2007 1:03pm May 25, 2007 1:03pm
Quoting Mr Trend
No it's not. That's a BUOB. Go look at everything that is taught. Show me where it states that you have to take a BUOB when its close is higher than the previous bar's high and I'll gladly admit I'm wrong.

Once again -- 20/20...
This is from the PF :

3. BUOB: Bullish outside bar - this is a bar where the high is higher than the
previous bars high and lower than the previous
bars low. Preferably the close will be in the top
third to quarter of the bar. The higher the better.

So you are correct. However it's also taught that it's better to place a buy stop a few pips above the high of the BUOB.

It all depends on your risk level I guess. Had it worked out you could have bagged an extra 20 pips.
  • #3,795
  • May 25, 2007 1:08pm May 25, 2007 1:08pm
was gonna take usdcad as a nice pb off swing low (or not) but was lucky the nba game kept me away from the screen long enough to forget about it...
PBs might give a good initial entry point with the odds stacked a bit better on our side (we all need that for sure), so taking them and losing is definitely not being wrong.. (not aimed at you Mr T i know u know that, but saw some people were surprised a nice pin didn't work a couple of weeks ago- hey it's not guaranteed, even aces get cracked vs 72o sometime )
we might just have to start posting PBs and count success rates...
the close weekend got me rambling, sorry for that. have a great one all!


btw- only 50% left on the gains from the audjpy pb i'm in. exits, exits
at least the weekend's interest will help a bit...
  • #3,796
  • May 25, 2007 1:13pm May 25, 2007 1:13pm
Quoting Mr Trend
No it's not. That's a BUOB. Go look at everything that is taught. Show me where it states that you have to take a BUOB when its close is higher than the previous bar's high and I'll gladly admit I'm wrong.

Once again -- 20/20...
I said that is the BEST buob. Not the only kind. Either way your bar looks more neutral to me, but as we both no this is no exact science. I play buob only when the close is higher and they have much greater success rate.

Just think it's better for new people to look for the best setups, especially in this public thread, you have been doing it a lot longer

Best,
Mike
  • #3,797
  • May 25, 2007 1:15pm May 25, 2007 1:15pm
Quoting gidnoa

i'd estimate reading and understanding this thread might give a person a fighting chance (not to lose all of his initial capital).
the PF will improve that to a 15% (very optimistic) chance of making 50% per year. hope i'll be in this 15%...

you can make a lot more then 50% a year with this stuff Don't hope, just keep working hard and you WILL do great!

Mike

edit* especially if you cherry pick trades like this...
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  • #3,798
  • May 25, 2007 1:15pm May 25, 2007 1:15pm
Quoting mrnando
That's not how YOU trade them. It is a way to FILTER OUT FALSE BREAKOUTS! The next bar breaks to the down side. The bar after that is an inside bar. I haven't done a fib ret on this move, but this is in an up trend. how much has it pulled down already. It doesn't seem like 38%, yet. Just because it's an BUOB doesn't mean you take them blindly.
That's fine. And yes, I know you can trade them that way.

But most people wouldn't have waited because it was at support.
Mr. Trend
  • #3,799
  • May 25, 2007 1:20pm May 25, 2007 1:20pm
Quoting Mr Trend
That's fine. And yes, I know you can trade them that way.

But most people wouldn't have waited because it was at support.

But here is the other thing you missed. The market is in a short term down trend. There was a lower high. So, yes, I would have waited for the market to PROVED it was just a retracement. BTW, BUOB was on minor support.
  • #3,800
  • May 25, 2007 1:23pm May 25, 2007 1:23pm
let me clear something up. price action can certainly be traded after a lot of practice by itself. if anyone new is blindly trading bar set ups with no other confirmation then your trading in a risky manner, especially if your new. the whole purpose of price action analysis is to refine and identify the best entries to put you in a winable trade early and often. price action is not a system it is a method to enhance your likelyhhod of a succesful trade whether your a s/r trader or a system trader. TAKING EVERY TRADE YOU SEE BECAUSE ITS A BAR WE DISCUSS IS INSANE. if you do you certainly never heard me say to do this.
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