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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

  • #4,721
  • Jul 19, 2007 4:54pm Jul 19, 2007 4:54pm
When I joined the PF three weeks ago, it was instant access. No problems at all.
  • #4,722
  • Jul 19, 2007 4:57pm Jul 19, 2007 4:57pm
For the next few days I would like to ask a question a day, and hopefully get some consice answers... Thanks for all those who may answer.

Todays question...

What is the correct way to trade DBHLC and DBLHC ??? This assuming I have found one at the right place and the right time... what are the rules for trading this ???
  • #4,723
  • Jul 19, 2007 5:09pm Jul 19, 2007 5:09pm
Quoting Tiki Trader
For the next few days I would like to ask a question a day, and hopefully get some consice answers... Thanks for all those who may answer.

Todays question...

What is the correct way to trade DBHLC and DBLHC ??? This assuming I have found one at the right place and the right time... what are the rules for trading this ???
I just responded with same thing in PM to tiki, but in case others are intereted.

Much like any PA bar you can play them as soon as the bar closes(most aggressive) you can play a retracement(semi-aggressive), or you can wait for a break of the bar this is the most conservative way, and the way I play them. Much like other PA, one should trade them on demo till they find what works best for them. There is no one right way. Some might even choose to use them for direction on a smaller timeframe, and jump on in when the smaller timeframe agrees.

best,
Mike
  • #4,724
  • Jul 19, 2007 8:15pm Jul 19, 2007 8:15pm
Quoting dltvn
Hi Mimas, I wouldn't consider this DLBHC as a good entry, it is in a top of a long LONG run. A better set-up here would have been if this was a DHBLC , it would mean something, a suggestion for a reversal or a ret. .
dltvn, I would say that the reason this particular DLHC was not very good was because its position was right below a strong R level. If it had broken above it, then off she goes! In fact, I would go so far as to say that a LONG run like this would give even more weight to a DLHC, as the pair has momentum galore and a minor S level would have been tested and rejected. But alas, we run into R here, so we'll just have to wait and see!
  • #4,725
  • Jul 19, 2007 8:18pm Jul 19, 2007 8:18pm
Something obvious occurred to me earlier today, and I thought I'd share it just in case some others had not picked up the obvious as well. I remember from this thread or maybe his other that Mike says he pretty much ignores the 4-HR IBs. Well, besides the 4-hr TF being not as smooth as the daily (for obvious reasons), part of this is because during off-hours for a pair like the EU (say, 2PM to midnight Eastern time), there is so little trading activity that there is simply less action, and an IB can form just from the lack of volatility. Now, if you're using tick charts, it's a different story, but I'd bet that no more than a handful here do.
  • #4,726
  • Jul 19, 2007 8:25pm Jul 19, 2007 8:25pm
nice observation and true but you need to do a little fiddling and testing on each pair and when they trade with the most movement.

jim


Quoting JoshDance
Something obvious occurred to me earlier today, and I thought I'd share it just in case some others had not picked up the obvious as well. I remember from this thread or maybe his other that Mike says he pretty much ignores the 4-HR IBs. Well, besides the 4-hr TF being not as smooth as the daily (for obvious reasons), part of this is because during off-hours for a pair like the EU (say, 2PM to midnight Eastern time), there is so little trading activity that there is simply less action, and an IB can form just from the lack of volatility. Now, if you're using tick charts, it's a different story, but I'd bet that no more than a handful here do.
  • #4,727
  • Jul 19, 2007 11:13pm Jul 19, 2007 11:13pm
Quoting JoshDance
Now, if you're using tick charts, it's a different story, but I'd bet that no more than a handful here do.
Can you explain a little more about this, please, Josh?
  • #4,728
  • Jul 19, 2007 11:24pm Jul 19, 2007 11:24pm
Quoting the_wizard
Can you explain a little more about this, please, Josh?
On a typical 1H chart, a new bar forms every hour, whether tons of trades were placed that hour, or if it was very light volume, like on a Friday afternoon. On tick charts, you can specify that a new bar be formed when a certain number of ticks goes by. So each bar would represent an equal amount of trading activity. So I can say, I want each bar to represent 133 ticks. Well, during an NFP news release, for example, you might get that many ticks in one minute, so a bar might represent one minute's worth of trading, whereas at 6PM EST, it might take 20 minutes to form one bar! So your charts are not time-based, they are activity-based. They are very popular in futures trading and other markets.

So all that was to say that on a time-based chart, a very small IB may be formed simply from a lack of trading activity, and the high/low are likely to be very close to each other. Whereas on a tick chart, one bar might be 2 hours worth of activity, and another might be 7, but they will represent the same amount of activity, and you would be much less likely to have "fake" IBs. Unfortunately, as an MT4 bar can only be as small as 1M, tick charts are not possible, though some not-so-good attempts have been tried. Other programs like fibonacci trader, probably trade station, and others have them.

All this was just to say that that's one reason IBs are more common on 4hr charts, not the only reason, and not to say that tick charts are really superior, as that's a matter of preference.
  • #4,729
  • Jul 19, 2007 11:52pm Jul 19, 2007 11:52pm
Quoting Tiki Trader
For the next few days I would like to ask a question a day, and hopefully get some consice answers... Thanks for all those who may answer.

Todays question...

What is the correct way to trade DBHLC and DBLHC ??? This assuming I have found one at the right place and the right time... what are the rules for trading this ???

Hey Tiki. Got it in PM as well, but answering here helps everyone. Although I have to say I think the answer's been posted to this thread a couple of times and possibly within the first 200-300 posts I think...I'm pretty sure I remember the time I used to read through this thread initially myself...I remember pumpkin cats and sundials and and wizards and...

Anyway, to the question, I wanted to add: if you get a weekly or a monthly DBLHC and there are smaller timeframes that are well visible, it could be you get an IB or similiar smaller TF setup "inside" the bigger formation. This is a very effective way for me to reduce my stop size on monthly / weekly setups. This is however not recommended for "starters".

Just trade them like Jim teaches and Mike explained, to get used to them first, and on the SAME timeframe.

I also watch how price behaves at the top of the first bar of this two bar formation - a lot of times price uses "kick off points" and observing this behavior over the long term can key you in to what's happening and how price moves.

Then again you mentioned having little time, so sticking to one TF and using orders on daily / weekly is most likely the way to go here

I'm starting to worry a bit that I love going a bit too deep into detail and complexity.

Mike does a great job of keeping everything KISS, with all the really important core facts
Trust price. Know yourself.
  • #4,730
  • Jul 19, 2007 11:55pm Jul 19, 2007 11:55pm
Quoting SeekingLight

Mike does a great job of keeping everything KISS, with all the really important core facts
aka I am a lazy bum :

but seriously, everyone has to find how to suit PA to their personal style, and things will start to fall into place and click

Hope everyone ends the week nicely,
M
  • #4,731
  • Jul 20, 2007 1:13am Jul 20, 2007 1:13am
i think it is

what do you say?
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  • #4,732
  • Edited 1:50am Jul 20, 2007 1:39am | Edited 1:50am
Hi Everyone,

Still reading!!! I was scalping yesterday and noticed many buyers come in at 1.0415. It just got me looking for answers. The daily pivot is at 1.0437. The second IB is today's.
But I noticed a pyramid- Am I correct?
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  • #4,733
  • Jul 20, 2007 3:44am Jul 20, 2007 3:44am
Quoting lava
Hi Everyone,

Still reading!!! I was scalping yesterday and noticed many buyers come in at 1.0415. It just got me looking for answers. The daily pivot is at 1.0437. The second IB is today's.
But I noticed a pyramid- Am I correct?
I have no idea what a pyramid in FX or TA is, to be honest. Not a formation I am familiar with and not part of Jim's PA. Sorry that I can't help you there.

--------

I just wanted to post some musings on cable which could of course turn out utter BS, but they are just some observations. Wondering whether we'll get a last stab higher to meet some of my targets on my crosses, as I am out of GBPUSD currently.

Daily made an IB, 4h has had some hints for us as well.

While the whole GBPUSD thread remains attempting to catch tops and shorting this down, I still see an okay chance for this to either hover a bit or take a last shot higher.

Just wondering where to

I just wanted to make and post a chart, I'm bored again.

Please note that the marked setups are not good setups. They are simply HINTS. Going long in possibly the last 5-10% of a run up after 800+ moved without correction is extremely risky imho. Not that _I_ am trying to predict tops, but I just mean to say that a good "late" entry would have been < 2.0200 e.g. when we hadn't escaped too far yet =)

Just some personal considerations I am bothering this thread with, sorry ;p

Thought maybe some folks would find it interesting to hear how my nutty little mind works ;p


BTW that FE 100 is a projected "squeeze" target if my totally incorrectly drawn triangle does break out to somewhere.
Attached Image
Trust price. Know yourself.
  • #4,734
  • Jul 20, 2007 4:22am Jul 20, 2007 4:22am
Quoting SeekingLight
I have no idea what a pyramid in FX or TA is, to be honest. Not a formation I am familiar with and not part of Jim's PA. Sorry that I can't help you there.

--------

I just wanted to post some musings on cable which could of course turn out utter BS, but they are just some observations. Wondering whether we'll get a last stab higher to meet some of my targets on my crosses, as I am out of GBPUSD currently.

Daily made an IB, 4h has had some hints for us as well.

While the whole GBPUSD thread remains attempting to catch tops and shorting this down, I still see an okay chance for this to either hover a bit or take a last shot higher.

Just wondering where to

I just wanted to make and post a chart, I'm bored again.

Please note that the marked setups are not good setups. They are simply HINTS. Going long in possibly the last 5-10% of a run up after 800+ moved without correction is extremely risky imho. Not that _I_ am trying to predict tops, but I just mean to say that a good "late" entry would have been < 2.0200 e.g. when we hadn't escaped too far yet =)

Just some personal considerations I am bothering this thread with, sorry ;p

Thought maybe some folks would find it interesting to hear how my nutty little mind works ;p


BTW that FE 100 is a projected "squeeze" target if my totally incorrectly drawn triangle does break out to somewhere.
Hi Seeking,
since you are musing I thought I would add my 2 cents lol...its funny, before I started following this thread I always seemed to be looking for tops and bottoms, in fact I lost a lot of money fading the trend or just plain not following what was going on. This thread has been a real eye opener, I just never realised or it didnt click that yes, if a two bar high or low or three bar high or low was broken it was going to continue down or up big time (could I mean), I just never really thought about it, but it makes such perfect sense.
Since I started considering the possibility that a trend could and often will continue on its merry way without a significant pullback, trading has changed for me. I feel like Ive only been seeing half the picture most of the time, simply because I was expecting a top or bottom to form. So now I dont expect anything and I wait for a signal, and with cable I think youre right its been giving us little hints all the way up...maybe like you say they arent good enough to get you in, but they would sure be good enough to keep you in a trade. Thank you all for helping me see things so much more clearly,
Raz
Never say never.
  • #4,735
  • Jul 20, 2007 4:34am Jul 20, 2007 4:34am
Hi Seeking Light,

RE: sideways pyramid

Quote:
Originally Posted by scpeter
James, could you comment on my take on this chart and your notes.
You expect a possible bounce off of the pivot line. You wait for the 2 or possibly more inside bars. The inside bars tell you a good break is about to happen. Because you were already looking for a bounce off of the pivot line, you take the trade long now because the inside bars add a little more confirmation to the trade. Is this your thinking on this trade?

first of all inside bars are very commonly known and used by many traders. what blew my mind when i first joined this forum was i had forgotten what it was like to be new and not have a clue as to what an inside bar or any other bar meant. pivot levels are where a ton of orders are placed. i wont explain pivot levels just do a quick google search and you will have a complete education in about 15 minutes. inside bars show a tug of war developing between buyers and sellers. the more in a row you get the tighter it gets and when it breaks out it tends to move hard and fast. what everyone shoild do is go look for these on any time frame you want. particularly look for the sideways pyramid shape when you get two or more, they are easy to spot. when price moves down to a pivot level a ton of buy orders are triggered which tends to send it up. BUT NOT ALWAYS. i dont like to hope when i trade i like to know as sure as i can that what i want to happen is going to happen. thats why i try to stack things in my favor. for example the confluence i keep talking about. it could be 2 fib ret close together. it could be a pivot and fib close together. it could be any one of these combined with divergence. then you take it one step further and look for price action to confirm at these levels. its really not that hard. go to your charts plot your fibs and pivots on tomorrows blank page. then sit back and wait for price action to interact with these levels and make a smart trade not a guess. it will work on any time frame you choose. jim

On page 11
  • #4,736
  • Jul 20, 2007 4:39am Jul 20, 2007 4:39am
Quoting lava
particularly look for the sideways pyramid shape when you get two or more, they are easy to spot.

Ohhhhhh I know what you mean now! That's what we just had in GBPCHF, yes!

Hey, very good! The windup, yes yes yes I know what you mean now, one second.


EXCELLENT!


This is gonna make me re-read this thread yet AGAIN

My bad for not getting what you meant in the first place =)

That's some good research you're doing, I'm proud of you (and me in turn shamed hehe) =)

Here is what you meant and want to see (note how it made THREE inside bars after another! More windup = more explosive move out):
Attached Image
Trust price. Know yourself.
  • #4,737
  • Jul 20, 2007 4:45am Jul 20, 2007 4:45am
Quoting SeekingLight
I have no idea what a pyramid in FX or TA is, to be honest. Not a formation I am familiar with and not part of Jim's PA. Sorry that I can't help you there.

--------

I just wanted to post some musings on cable which could of course turn out utter BS, but they are just some observations. Wondering whether we'll get a last stab higher to meet some of my targets on my crosses, as I am out of GBPUSD currently.

Daily made an IB, 4h has had some hints for us as well.

While the whole GBPUSD thread remains attempting to catch tops and shorting this down, I still see an okay chance for this to either hover a bit or take a last shot higher.

Just wondering where to

I just wanted to make and post a chart, I'm bored again.

Please note that the marked setups are not good setups. They are simply HINTS. Going long in possibly the last 5-10% of a run up after 800+ moved without correction is extremely risky imho. Not that _I_ am trying to predict tops, but I just mean to say that a good "late" entry would have been < 2.0200 e.g. when we hadn't escaped too far yet =)

Just some personal considerations I am bothering this thread with, sorry ;p

Thought maybe some folks would find it interesting to hear how my nutty little mind works ;p


BTW that FE 100 is a projected "squeeze" target if my totally incorrectly drawn triangle does break out to somewhere.
Hi SL,

Maybe this is not the right forum to ask the question but seeing as you have posted extended Fib moves twice now, one is Gold and today in Cable, can you please elaborate/explain how these are calculated please?
  • #4,738
  • Jul 20, 2007 4:56am Jul 20, 2007 4:56am
Quoting vlazaf
Hi SL,

Maybe this is not the right forum to ask the question but seeing as you have posted extended Fib moves twice now, one is Gold and today in Cable, can you please elaborate/explain how these are calculated please?
Hoboy I hope I don't get in trouble for these distractions and Hobbies

Yes, I admit everything, I use that tool for visualization often.

It is however simply to show spots on the chart which have possible price projections. Things work like this:

Head and shoulder patterns(a lot of pin bars are compressed forms of these):

They have a head and neckline. Initial target for a move out once that neckline is broken and sometimes revisited is the size of the top of the head to the neckline. It is measured and then "projected" from the neckline on.

This doesn't always match up or work, but if I see it coincide with s/r or other fibs etc, it's just something I am trying to watch and learn from.

This guy here
http://www.trading-naked.com/headand...ersREVERSE.htm
http://www.trading-naked.com/HeadandShoulders.htm

uses them for example, but the page is a bit messy.

There's also info at
http://stockstoshop.com/headandshoulders.htm
and also for wedges and similiar. BUT IGNORE THE INDICATORS SECTION


This one also has a really nice essay on it.
http://www.kcifinance.com/CT01.710.html

And there's more about price projections here, too
http://www.forex-trading-software.co...t-patterns.htm

and
http://www.thestockbandit.com/Site-Map.htm
looks cool.

Other stuff is Elliot Wave, but that's far too complex. If you want to look into that sort of thing you can google "simple ABC correction" and "isolation approach", but it will not yield anything tradeable. Hobbies and pastimes, as I said.

Also, a giant word of caution: These projectons mean NOTHING on their own. NOTHING.
They are for ME just a general guide to say "hey, be careful to look what price might do once it gets here".
That's all. Nothing more.

Exiting blindly is the same as cutting your profits short and strongly advised against.

Hope this answered your question
Trust price. Know yourself.
  • #4,739
  • Jul 20, 2007 5:08am Jul 20, 2007 5:08am
Quoting SeekingLight
Here is what you meant and want to see (note how it made THREE inside bars after another! More windup = more explosive move out):
Yes, unfortunately though this one dropped almost 100 pips before going up, so many of us (myself included no doubt) would have been faked out and lost some money here :-/
  • #4,740
  • Jul 20, 2007 5:09am Jul 20, 2007 5:09am
Quoting mamutot
i think it is

what do you say?
Yes it is an 8-hr pinbar, but unfortunately it's going against a strong down trend.
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