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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

  • #1,381
  • Nov 27, 2006 4:17pm Nov 27, 2006 4:17pm
Skyhr,

"1) On the double high lower close / double low higher close, what do you mean by lower /higher close - 2nd bar's close is lower than the 1st bar's close, or lower than 1st bar's low?

In the pictures, it looks like double high lower close is where 2nd bar's close is lower than 1st bar's close. Vice versa for double low higher close."

Double bar low, and close is higher than the HIGH.
Double bar high, and close is lower than the LOW.
...just think of the significance of the price taking out/beating the previous bar and staying that way as the bar closes.

"2) On pinochio bars, what did James mean by "3rd bar can't take out 1st bar by a tick or two" It looks like the nose (protrustion) is a doji on candlestick, and then I have no idea what the eyes (1st and 3rd bars) are supposed to be like...

Does it mean that the 3rd bar's close is within the 1st bar's range? Sorry, but the pictures on this one isn't clearing it up for me much."

I'm confused with where you got that from?? ... but the 3rd bar does NOT have to close within the 1st bar's range at all.

Maybe someone else will read your question better than me. Sorry. LOL
Bundy's status today: "Waiting..."
  • #1,382
  • Nov 27, 2006 4:36pm Nov 27, 2006 4:36pm
Skyhr,

On pin bars, I tend to look at them as a mini-head and shoulders pattern. If that helps??

When James (post #34) says "if the 3rd bar can't take out the 1st by a pip or two" he may may be talking about the CLOSE of the 1st bar . Which kind of signifies the start of the neck line if you imagine the flow of trades that got you that shape, if you understand what I'm saying?

For the record, I've never noticed that sentence before and registered it, hopefully someone else does clarify their experience with that one. I think I understand though. Most of my pin bar trades have been breaks of the low or high (of the pin bar itself, depending on a bearish or bullish pin) , which of course means that close has been taken out anyway.
Bundy's status today: "Waiting..."
  • #1,383
  • Nov 27, 2006 7:04pm Nov 27, 2006 7:04pm
i'm sure this question has been asked before but,

isn't the japanese candlestick formations similar to the pin bar formations? they convey the exact same information, except I feel that candlestick is more visually nice...

which means you can follow the same rules dictated by steve nison on his book to get the same result if you were trading off pin bars right!?!?
  • #1,384
  • Nov 27, 2006 7:50pm Nov 27, 2006 7:50pm
yes hilmy, they are the same thing on just a differently laid out chart. Pin bars are the same as a candlestick as they are a OHLC bar.
I dream, therefore I become.
  • #1,385
  • Nov 28, 2006 4:35am Nov 28, 2006 4:35am
Hi! With Pin bars when the second close lower (when shorting) then some wait to take the trade untill there is a small retrace back?

How do you do to not take profit to early? Are there some rules that says -wait a little more? Maybe even a target.
  • #1,386
  • Edited 5:27am Nov 28, 2006 5:16am | Edited 5:27am
Here's the fourth pic. James says that the bearish outside vertical bar has a lower close; As with double highs and double lows, the close should be lower than the 1st low, right?

But the second circle has a close that is not lower than the 1st low.

From what I gather: 1) dhlc and dlhc; the 2nd close has to be higher/lower than the 1st high/low. 2) buovb and beovb; the 2nd close has to be higher/lower than the 1st close, not high/low

Also, I'm still not understanding the rule on the 3rd and 1st bar of pin bars. I know that they look like mini head and shoulders but what rules apply to the 3rd bar - that is, how does the 3rd bar have to look in order for us to say, "Hey, that's a pin bar" as opposed to "that's not a pin bar."
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  • #1,387
  • Nov 28, 2006 5:27am Nov 28, 2006 5:27am
Here's a spliced pic of the pin bar explanation:

I've underlined the portion I don't quite understand. What does "take out" mean?
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  • #1,388
  • Nov 28, 2006 6:18am Nov 28, 2006 6:18am
Skyhr,


The term "tick" refers to a change in a stock's price from one trade to the next (but see below for more). Really what's going on is that a comparison is made between trades reported on the ticker. If the later trade is at a higher price than the earlier trade, that trade is known as an "uptick" trade because the price went up. If the later trade is at a lower price than the earlier trade, that trade is known as a "downtick" trade because the price went down.

So what I believe that "take out" is referring to is that if the third bar's price does not go higher than the first then the "nose" direction(up/down) is lying and price should go in the opposite direction.

Hope this helps


Quoting Skyhr
Here's a spliced pic of the pin bar explanation:

I've underlined the portion I don't quite understand. What does "take out" mean?
All 4 1 and 1 4 All
  • #1,389
  • Nov 28, 2006 8:07am Nov 28, 2006 8:07am
Quoting 4rex

So what I believe that "take out" is referring to is that if the third bar's price does not go higher than the first then the "nose" direction(up/down) is lying and price should go in the opposite direction.

Hope this helps

I think on this pic by James, the pin bar's 3rd bar IS higher than the 1st bar. So does this break the classical rule, meaning it's still a signal but not as valid as one where the 3rd bar's close doesn't go higher than the 1st's?
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  • #1,390
  • Edited 8:33am Nov 28, 2006 8:15am | Edited 8:33am
Quoting Skyhr
I think on this pic by James, the pin bar's 3rd bar IS higher than the 1st bar. So does this break the classical rule, meaning it's still a signal but not as valid as one where the 3rd bar's close doesn't go higher than the 1st's?
Hi Skyhr
What is meant by 'taking out' is the bottom/top of the 3rd bar's price range being lower/higher than the 1st bar's price range. In your image you can see the low of the red bar before the pin and the low of the green bar after the pin are about the same, so the 1st bar's price didn't get 'taken out'.
I've attached a classic where the 3rd bar's range hasn't exceeded the 1st bar's range, so one way to play this is when you see price stalling below the upper/lower range of the 1st bar set an entry order just below the pin.

Hope this helps
Attached Image
  • #1,391
  • Nov 28, 2006 11:15am Nov 28, 2006 11:15am
Quoting PeterFM
Hi Skyhr
What is meant by 'taking out' is the bottom/top of the 3rd bar's price range being lower/higher than the 1st bar's price range. In your image you can see the low of the red bar before the pin and the low of the green bar after the pin are about the same, so the 1st bar's price didn't get 'taken out'.
I've attached a classic where the 3rd bar's range hasn't exceeded the 1st bar's range, so one way to play this is when you see price stalling below the upper/lower range of the 1st bar set an entry order just below the pin.

Hope this helps

Awesome, that cleared up a lot.

When you say, the pin bar's price stalling below the upper/lower range of the 1st bar, do you mean the open and close of the pin bar being below the 1st close (when nose is up, above 1st close for nose down) - that is when the pin price close can't exceed the 1st close, it's a more powerful sign?

Example: in your picture, the middle pin bar's open and close are below the close of the 1st bar - is this what you mean by below the "upper range"?

Also, in that case, where would you put the stop? Right above the pin, or the 1st bar? Or the closes perhaps?
  • #1,392
  • Nov 28, 2006 2:19pm Nov 28, 2006 2:19pm
The only close I worry about (if I fully understand Jim's thinking) is the open & close of the pin.
In a perfect pin they will both be within the 1st bar's full range. If you think about it it's logical.
Let's look at my mini-picture. Price has been climbing higher, and the bulls have tried to push it higher still, the fact that the 1st bar's close is back down into its own range could hint that the bulls are running out of steam.
Nevertheless, they have one more go at setting a new high, but again they can't quite make it happen.
Now the bears get their chance, as soon as the 3rd bar opens and tries to rise again, those traders that were long start to bail out (ie covering their arses) and the bears help them out and the downward slide speeds up.
If the 3rd bar had gained some fresh momentum its price would have taken out the 1st bars high and the bulls would be back in control.
As far as stops are concerned it will depend on your Money Management.
If you're staking a fixed % of your account and the pin is, or looks to be, close to the end of a trend (whatever that might look like ) or is hitting a major Fib number, or historical S/R area then you could set a smaller stop just above the 1st eye and run with more lots.
The conservative approach would be to set a bigger stop, to protect against some retracement on the 4th bar, above/below the pin's nose and trade a smaller amount of lots.
There are several ways to play these and experience will help you pick the best pins and there are several guys around who specialise (Habeeb for one).
If I've got anything wrong here, I'm happy for Jim or anyone else to help Sky improve his understanding of this powerful tool.


Quoting Skyhr
Awesome, that cleared up a lot.

When you say, the pin bar's price stalling below the upper/lower range of the 1st bar, do you mean the open and close of the pin bar being below the 1st close (when nose is up, above 1st close for nose down) - that is when the pin price close can't exceed the 1st close, it's a more powerful sign?

Example: in your picture, the middle pin bar's open and close are below the close of the 1st bar - is this what you mean by below the "upper range"?

Also, in that case, where would you put the stop? Right above the pin, or the 1st bar? Or the closes perhaps?
  • #1,393
  • Nov 28, 2006 3:58pm Nov 28, 2006 3:58pm
May I know the address of James Private Forum?

Thanks
  • #1,394
  • Nov 28, 2006 4:08pm Nov 28, 2006 4:08pm
chart
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  • #1,395
  • Nov 28, 2006 4:23pm Nov 28, 2006 4:23pm
chart
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  • #1,396
  • Nov 28, 2006 5:28pm Nov 28, 2006 5:28pm
Quoting james16
chart
I agree. If you can't read a chart, indicators aren't going to help you.
  • #1,397
  • Nov 28, 2006 6:02pm Nov 28, 2006 6:02pm
Here is a current trade to watch. This is just an example of what James posted about support and resistance. It's some strong stuff, and definitley puts the ball in your court.

This is the USD/JPY , first zoomed out to show the support/resistance....then zoomed in to where an IB has formed right off that support and 365. A break up and this might go. Be aware its trapped right between the 200/365 tho.
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  • #1,398
  • Nov 28, 2006 6:03pm Nov 28, 2006 6:03pm
Same chart zoomed in. Like i said this at least gives you an idea of where this thing may go/stall if you decide to play it both ways.

Best, Mike
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  • #1,399
  • Nov 28, 2006 9:48pm Nov 28, 2006 9:48pm
just an update, this IB broke south and stalled exactly at the 365 ema, no suprises. So if you did take the IB south I would just monitor it close, cause it wouldnt be a suprise if it comes back. As always we cant predict, only improve our odds


BEST
MIKE
  • #1,400
  • Edited 3:38am Nov 29, 2006 3:24am | Edited 3:38am
Quoting mbqb11
just an update, this IB broke south and stalled exactly at the 365 ema, no suprises. So if you did take the IB south I would just monitor it close, cause it wouldnt be a suprise if it comes back. As always we cant predict, only improve our odds


BEST
MIKE

Hi Mike,
seems the tops are identical at least on my charts, so I would think the second bar would not be an inside bar (as high/low aren't < prior bar) but form a two bar high with the other daily bar? => you could buy a break higher. Not sure if the same high but inside-low counts as IB as well :/

The problem being the EMA / reistance area right around there (116.55ish, again 117.15), but isn't there always

And same thing to the downside the same story, yea, might be why things are erratic atm.

EURUSD / USDCHF / GBPUSD all are starting to give signs of exhaustion, so who knows, maybe we will give back some today. Yen has been VERY weak yesterday and the days before as well, thanks to politico jawboning.
Let's see what happens.

Best wishes,

SeekingLight
Trust price. Know yourself.
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