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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

  • #7,041
  • Edited 8:02am Oct 16, 2007 7:23am | Edited 8:02am
Quoting raczekfx
...shame on you hip..., you translated it backward...
//... trader made $$$ shorting g/j from 240.40... bought his neighbor a castle in France.....then they both gone fishing...///
Future charts (in att.pdf).....never lie.


p.s.
sorry, teezn' you guys.... just ignore me...
  • #7,042
  • Oct 16, 2007 8:26am Oct 16, 2007 8:26am
Long at 237.46, nice move from the PZ around 236.50 area. DBLH on 1 hr.
  • #7,043
  • Oct 16, 2007 8:54am Oct 16, 2007 8:54am
continuation PB?
If yes then we should see g/j around 236.30 soon. I would cautiously look at going long there
.
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  • #7,044
  • Oct 16, 2007 10:08am Oct 16, 2007 10:08am
Hey guys I have been trying to read the thread from the beginning and as you all know it is quite a lot to read. I was wondering on the chart of gbp/usd daily if you would consider this a dbhlc when yesterdays high and todays high are 3 pips apart. I know the candle has to close but just wondering.

Thanks
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  • #7,045
  • Oct 16, 2007 10:26am Oct 16, 2007 10:26am
Yield not to temptation when the pocket is weak!
100% of traders are losers. Just that some win more than they lose!
  • #7,046
  • Oct 16, 2007 10:47am Oct 16, 2007 10:47am
Quoting fss side
Hey guys I have been trying to read the thread from the beginning and as you all know it is quite a lot to read. I was wondering on the chart of gbp/usd daily if you would consider this a dbhlc when yesterdays high and todays high are 3 pips apart. I know the candle has to close but just wondering.

Thanks
Hi fss side,

Welcome to the forum! It is a long read but well worth it. Some of us have read it several times over!

Some of us have tighter criteria for DBHLC/DBLHC. On 1hr, 4hr I would like to see them identical. On a pair with a decent ATR (100+ pips) I guess 1 or 2 pips difference is fine.

Also remember that the second candle must close lower than the LOW of the previous candle.

The one you highlight appears in a range. As others have already mentioned, playing PA whilst in this range may be profitable but it would probably be safer if you are just starting out to wait for a clearer trend.
  • #7,047
  • Oct 16, 2007 11:26am Oct 16, 2007 11:26am
Quoting the_wizard
Hi fss side,

Welcome to the forum! It is a long read but well worth it. Some of us have read it several times over!

Some of us have tighter criteria for DBHLC/DBLHC. On 1hr, 4hr I would like to see them identical. On a pair with a decent ATR (100+ pips) I guess 1 or 2 pips difference is fine.

Also remember that the second candle must close lower than the LOW of the previous candle.

The one you highlight appears in a range. As others have already mentioned, playing PA whilst in this range may be profitable but it would probably be safer if you are just starting out to wait for a clearer trend.
Thanks for the reply! I started re-reading from the beginning last night as I wanted to make sure that I had digested some of the stuff. I took a short trade last night on euro because the thursday candle and yesterday candle were 1 pip apart from each other on the high. I played this like a dbhlc. I realised after taking the trade that I played it wrong. Anyway it worked out and I made 50 pips. I am trading micro lots just trying to put the 3 months of profit together before I commit any money to it.
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  • #7,048
  • Oct 16, 2007 11:32am Oct 16, 2007 11:32am
Quoting JoshDance
It depends on his position sizing strategy unlv. Many here use a fixed % risk model, where each trade is worth a certain percentage of your account (say, 0.5%, or 1%). So if my stop loss is 100 pips, then my lot size is such that a complete 100 pips loss translates to 1% of my account (i.e., in theory, I cannot lose more than 1% of my equity). If my stop loss on the next trade is 200 pips, I still use a 1% risk model, so in this case my lots traded will be half that of the previous trade. If I use a 20 pip stop loss, my lots traded will be 5 times that of the original, and so on. Basically, with this model, the tighter the stop, the more lots you trade, and vice versa. Thus, with the GBPUSD daily pin you all were discussing, a better strategy (IMO) for a target at the top of the channel would have been to look on the 1H or 4H after the daily pin, and set your stop loss accordingly below the retrace you observe on the lower TF, thus allowing you a larger R:R ratio. Under a fixed % position sizing model, 50 pips with a 100 pip SL (0.5R gain) does NOT equal 50 pips with a 20 pips SL (2.5R gain--big difference huh?). :-) You can read more about this in some of Van Tharp's books, they are very good and explain the subject very well.

I wrote an EA for metatrader that does just this--calculates position size based on a fixed %. You can download it here and play with it if you like:

http://www.forexfactory.com/showthread.php?t=48623
Thank you so much for your detailed explanation. It makes perfect sense. I have read Van Tharpe's books (what great reads) and also from Elder on position sizing v. risk thought processes.

Where I was confused is I know with Forex you trade Lots (or Mini or Micro Lots). So I did not realize you could trade partial Lots (which seems to be what you are describing).

I was thinking, if you trade a $10,000 Mini Lot with say 1:5 Leverage (lets say you have $2,000 in your account). If you only want to risk 1%, and each pip (GBPUSD) is worth ~$10 then the most you can risk is 2 Pips to stay within your range. That is too tight of a stop for a trade. So in this situation I guess you do not have to trade a full Mini Lot?

This is where I get so confused in Forex. If you have that $2,000 Account, and need to risk 100 Pips, what is your correct strategy?
  • #7,049
  • Oct 16, 2007 12:06pm Oct 16, 2007 12:06pm
Quoting unlv_tj
This is where I get so confused in Forex. If you have that $2,000 Account, and need to risk 100 Pips, what is your correct strategy?
With only $2000 you should be trading 0.01 for a start. There are several borkers that allow that.

$2000 X 1% = $20 risked per trade

$20 / 100 pips SL (@ 0.01 per pip) = 20 lots

------------

0.01 lot = $100 basic minimum position size
20 (0.01 lots) = $2000 trade position size - (for this trade)
$2000 (A/C) / $2000 (position) = 1:1 risk
  • #7,050
  • Oct 16, 2007 12:18pm Oct 16, 2007 12:18pm
Quoting PeterFM
With only $2000 you should be trading 0.01 for a start. There are several borkers that allow that.

$2000 X 1% = $20 risked per trade

$20 / 100 pips SL (@ 0.01 per pip) = 20 lots

------------

0.01 lot = $100 basic minimum position size
20 (0.01 lots) = $2000 trade position size - (for this trade)
$2000 (A/C) / $2000 (position) = 1:1 risk

So .01 Lots is how you could position size correctly. I was not certain if you had to trade a full lot (Mini, Micro, etc.) and use leverage or not. Looks like you are not forced to use leverage, you can instead trade in portions of lots.

It is starting to come together.

I am using Oanda's FXGame (just started this week) and when you enter a trade, you enter in how many "Units" you want. In this instance, would I enter .01 Units?

Thank you for your help.
  • #7,051
  • Oct 16, 2007 12:48pm Oct 16, 2007 12:48pm
Quoting HipsterPipster
Long at 237.46, nice move from the PZ around 236.50 area. DBLH on 1 hr.
Don't blink..
  • #7,052
  • Oct 16, 2007 1:05pm Oct 16, 2007 1:05pm
In oanda 0.01 units is 100 lots.

In demo mode pretend that you are buying at the market and oanda pop up will show you at x amount of units what will be the value of each pip.






Quoting unlv_tj
So .01 Lots is how you could position size correctly. I was not certain if you had to trade a full lot (Mini, Micro, etc.) and use leverage or not. Looks like you are not forced to use leverage, you can instead trade in portions of lots.

It is starting to come together.

I am using Oanda's FXGame (just started this week) and when you enter a trade, you enter in how many "Units" you want. In this instance, would I enter .01 Units?

Thank you for your help.
  • #7,053
  • Oct 16, 2007 1:09pm Oct 16, 2007 1:09pm
I am sorry, what I meant is $0.01 will be 100 lots.


Quoting milan47
In oanda 0.01 units is 100 lots.

In demo mode pretend that you are buying at the market and oanda pop up will show you at x amount of units what will be the value of each pip.
  • #7,054
  • Oct 16, 2007 1:37pm Oct 16, 2007 1:37pm
Okay, I am confused. I hope this is not seen as a distraction from this wonderful thread. I have read a lot of books on trading, and I am greatly interested, but something is not clicking.

Okay, so you don't have to buy a full lot, or a full mini-lot, or a full micro-lot?

You can buy portions of lots?

Because $100 will not even buy a full micro-lot (which is $1,000 correct?).

So you can buy .01 Units (or .01 mini-lots), which would be $100 .

Lets say you have $2,000 and you want to risk 200 pips. So you buy .01 Units (in Oanda) and your leverage remains 1:1. If you lose 200 pips at .01 (GDPUSD @ ~$10 a pip) you would lose $20 (.01 * $200).

So you don't have to use leverage, with even a few thousand dollar account? I hate to say it, why would any use leverage (I know it is powerful, but can wipe out an account so easily)?
  • #7,055
  • Oct 16, 2007 1:51pm Oct 16, 2007 1:51pm
Quoting unlv_tj
Okay, I am confused....

Because $100 will not even buy a full micro-lot (which is $1,000 correct?).

So you can buy .01 Units (or .01 mini-lots), which would be $100 .
not sure about oanda, but mirco lot equals 1k or 10c/pip, mini equals 10k or $1 /pip move, 1lot = 100k or $10/pip. That's the case with fxsol...
  • #7,056
  • Oct 16, 2007 2:01pm Oct 16, 2007 2:01pm
Quoting unlv_tj
Okay, I am confused. I hope this is not seen as a distraction from this wonderful thread. I have read a lot of books on trading, and I am greatly interested, but something is not clicking.

Okay, so you don't have to buy a full lot, or a full mini-lot, or a full micro-lot?

You can buy portions of lots?

Because $100 will not even buy a full micro-lot (which is $1,000 correct?).

So you can buy .01 Units (or .01 mini-lots), which would be $100 .

Lets say you have $2,000 and you want to risk 200 pips. So you buy .01 Units (in Oanda) and your leverage remains 1:1. If you lose 200 pips at .01 (GDPUSD @ ~$10 a pip) you would lose $20 (.01 * $200).

So you don't have to use leverage, with even a few thousand dollar account? I hate to say it, why would any use leverage (I know it is powerful, but can wipe out an account so easily)?
I have a simple spreadsheet I could send you. It calculates your lot size based on your set risk and pip value to stoploss. Dion
  • #7,057
  • Oct 16, 2007 2:03pm Oct 16, 2007 2:03pm
Quoting raczekfx
not sure about oanda
I believe 1 Unit is roughly like 1 "real" item of the currency. Like 1 Unit = 1 Euro.

So 1 pip moves 0.0001 cent at 1 unit or something.

Around 14000 units of EURUSD are roughly 1 mini lot = 1 EUR per pip moved for me. My account is in EUR, mind, not USD.

As far as I can tell it usually goes:
1 micro lot = 10 cent / pip
1 mini lot = 1 EUR / pip
1 lot = 10 EUR / pip

Same thing if the base is 7.5 => 7.5 cent micro 7.5 EUR mini and 75 EUR full lot per pip.
They use some messed up calculations these broker guys...

With Oanda I just always fiddle with the exact unit size until my risked amount equals my risk % and that's that. Matches up with +-0.01% precision
(You can size as low or high as you want on Oanda in 1 Unit increments with 1 unit being that sub-1-cent-particle)


Now if they only would also let me put in "1%" directly instead of forcing me to use stupid units (LIKE I SUGGESTED almost 5 months ago by now), they'd actually be super-userfriendly. Instant at market trading yippie that'd be. But oh well.

I guess they just don't really care much about improving based on valuable, useful user input
Trust price. Know yourself.
  • #7,058
  • Oct 16, 2007 2:25pm Oct 16, 2007 2:25pm
Quoting HipsterPipster
I have a simple spreadsheet I could send you. It calculates your lot size based on your set risk and pip value to stoploss. Dion
Thanks man, looking over it might help me A LOT.

I would love to be able to trade without using leverage, if possible.

My e-mail is [email protected]

Or you can send it to me by private message here.

Thank you for your time. I hope when I get this figured out (which I really feel trading and phsychology wise I am close, it is the actual broker usage I need to get down) I can help others.
  • #7,059
  • Oct 16, 2007 2:46pm Oct 16, 2007 2:46pm
Quoting unlv_tj
Thanks man, looking over it might help me A LOT.

I would love to be able to trade without using leverage, if possible.

My e-mail is [email protected]

Or you can send it to me by private message here.

Thank you for your time. I hope when I get this figured out (which I really feel trading and phsychology wise I am close, it is the actual broker usage I need to get down) I can help others.
Wanted to add a note that the James16 group covers these things more extensively for those interested.
  • #7,060
  • Oct 16, 2007 3:23pm Oct 16, 2007 3:23pm
Quoting unlv_tj
Okay, I am confused. I hope this is not seen as a distraction from this wonderful thread. I have read a lot of books on trading, and I am greatly interested, but something is not clicking.

Okay, so you don't have to buy a full lot, or a full mini-lot, or a full micro-lot?

You can buy portions of lots?

Because $100 will not even buy a full micro-lot (which is $1,000 correct?).

So you can buy .01 Units (or .01 mini-lots), which would be $100 .

Lets say you have $2,000 and you want to risk 200 pips. So you buy .01 Units (in Oanda) and your leverage remains 1:1. If you lose 200 pips at .01 (GDPUSD @ ~$10 a pip) you would lose $20 (.01 * $200).

So you don't have to use leverage, with even a few thousand dollar account? I hate to say it, why would any use leverage (I know it is powerful, but can wipe out an account so easily)?
How I understand it is if you wanted to trade a Standard lot ($100K) the broker requires you to put up a minimum amount of money as collateral to do the trade. I'll stick with XXXUSD pairs for now. If there was NO spread and you KNEW the EUR was going up, you could buy Eur (ie sell the dollar) and with that $1000 you could trade 1 Standard lot. So here the leverage would be 100:1 ($100,000 worth of Euros bought with only $1000 of cash). In practice you can't do that because of spreads, etc. So if you tried that and the Eur went down 1 pip you'd get a margin call.

What Brker leverage lets you do is pick the smallest fraction of a standard lot ($100K) that your account can trade with reasonable stops, and a reasonable amount of losses before you get that margin call.

So, going back to your point if you want to buy EUR (sell $) and you want to buy one micro lot ($1000) all you need to put up is $0.10 . If your average stop is 50 pips (50 X 0.10 = $5) and you have a $2000 account you'll see that you could make 400 losing trades before a margin call. If you had that many consecutive losers, you might want to consider a different career
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