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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

  • #12,681
  • Aug 15, 2008 12:54pm Aug 15, 2008 12:54pm
Quoting speedarad
I also use "Volume" in this type of set ups.
If you look at the chatrts below I post to different situations when a pin occur.In one case we see a reversal,in the other is a fail.
When I see a pin I also like to take a look at the volume.
If I see a spike in the volume, wich would be way above the average,than I know I have a better chance to see a true reversal.
The logic behind this is based on "supply and demand"
If we have an increased activity on a pin bar that tells us there is more pressure for an reversal than usual.
Chris
i just finished reading pring's book and he discusses and uses volume mucho w/ pins and the other patterns found in the book. however, i am very unclear on how to determine whether volume is just average or spiked, etc. i believe this is an important concept to understand and use along w/ fibs, s/r, etc. (pring actually mentions "weight of the evidence" which includes at least 5 "indicators" lining up --- "indicators" as this term is used by pring means many things including the pin bars themselves)

p.s. is there a way to plot the average on a volume meter from mt4 platform?
"Believe nothing you hear and half of what you see." Proverb
  • #12,682
  • Aug 15, 2008 12:58pm Aug 15, 2008 12:58pm
Quoting ghous
I like this idea Chris, a PB that has moved with a lot volatility is a good way to dteremine it's strehgth, (i''l leave the rest for the master to coment on) i'll backtest this idea, how long have you been using vloumed with Jim's stuff?

I just start reading Jim's thread about 3 weeks ago.
His PA aproach really has an positive impact on my account.
I use this with other strategies .However pin bars are not new for me, I used them before.On daily charts I use the pins to get in on a possible reversal.This is like a very small initial bet (less then 1% from my acc.) just to get me in.After that ,my intensions are to add more positions if the trend proves himself.That's where I'm looking to get some more profits.

Regards Chris
  • #12,683
  • Aug 15, 2008 1:03pm Aug 15, 2008 1:03pm
Quoting Rainmaker
Hey Chris,
thanks for your thoughts and examples. This is not intended to be "finger-pointing", I just wanted to throw my thoughts in:

1. The "failed" pin bar in your first chart example wasnīt broken to the upside by the next bar, so it never triggered and therefore never was a confirmed pin bar. (But I do agree there are examples where pins actually get triggered and then reverse on you ... )

2. Using volume as an add-on in FX trading can be deceiving as FX is not a centralized marketplace like stocks or futures. You only get the volume information from your broker and who can tell if this isnīt just the tip of the iceberg?

Regards
RM
the volumes you see on your mt4 charts is basically the calculation of ticks/period expressed on a bar chart, so it's somewhat directionally proptional to the real volumes, i.e when big volume is being traded price moves wuicker indicated by larger volume bars on your mt4, so when a pin bar moves vigourously here and there before closing as a pin it may be a good indication of it's healthy nature...
I believe . . .
  • #12,684
  • Aug 15, 2008 1:08pm Aug 15, 2008 1:08pm
Quoting Crown
On another note, I am still favoring this EURAUD trade, I am not very familiar with this pair but I am currently up 180 pips and there is a potential weekly pin. Did anyone trade off of the daily pin? Any opinions?
my friend and i took this pin. despite this being a great pin (contrary to the eurusd pin being discussed --- that is, long nose, close in the bottom 10-25% of the bar) ... i was concerned about the ranging area back in nov07, dec07 and felt like it "might" stall out through this area ... (my question was whether the latest move right through it would allow for us to look past that congestion) ... however, some of the other reasons i decided to take it was that it was off monthly R3, upper BB, and a good area of resistance (3 prior times at this level it dropped) ...

p.s. i am curious about your entry ... i entered at the break of the pin ... did you enter at the retrace? :-)
"Believe nothing you hear and half of what you see." Proverb
  • #12,685
  • Aug 15, 2008 1:09pm Aug 15, 2008 1:09pm
Quoting Rainmaker
Hey Chris,
thanks for your thoughts and examples. This is not intended to be "finger-pointing", I just wanted to throw my thoughts in:

1. The "failed" pin bar in your first chart example wasnīt broken to the upside by the next bar, so it never triggered and therefore never was a confirmed pin bar. (But I do agree there are examples where pins actually get triggered and then reverse on you ... )

2. Using volume as an add-on in FX trading can be deceiving as FX is not a centralized marketplace like stocks or futures. You only get the volume information from your broker and who can tell if this isnīt just the tip of the iceberg?

Regards
RM

Both observations are correct!

For the fail pin I was basically looking for an example.I could probably find more if I start scroling the charts.

It's very true about the volume in forex.
If I see a pin where the volume is average ,but at least is a previous S/R or a fibb level I will still play it ,but I will have less expectations so I will risk less money! The high volume will just increase my overall odds.
But I would not take it for the holygrail
Regards Chris
  • #12,686
  • Aug 15, 2008 1:14pm Aug 15, 2008 1:14pm
Quoting fibbinarchi
Using volumes will be hit and miss, it's not as easy as you make out, and they are not true sense of the word volumes, just look back on your charts and you will see it doesn't always spike at turning points, I wish it was, then we could just trade of volume spikes and reversal bars!
Yeah,me too.

Like I just said I'm not looking only for spikes on volume at turning points!

And Yes in trading mkt. can turn against you at anygiven time
  • #12,687
  • Edited 1:51pm Aug 15, 2008 1:20pm | Edited 1:51pm
Quoting fibbinarchi

To see and hear the thoughts of a more experienced trader on this method before the trades in my opinion is priceless, instead of post facts.
I do have to agree and disagree with fibbinarchi. The pre-analysis of Price Action set-ups is probably the most informative for me. Those that have seen some of my past charts, I tried to show entries in real time or as close to real time as possible. I have probably learned the most when I would post a chart, in real time with all of my confluences and reasons, and then to get comments and instructional advice as the trade unfolds.

Post analysis (charts) are valuable as well. How do you know what a successful set-up looks like if you never seen one before. lol.
A carefully study of these charts (esp. Jim, Mike, Seeking , Bundyraider and many others) one can learn tons of information that can be applied to their next PA set-up.

Jim
Indicators show the past. Price Action "Indicates" the future.
  • #12,688
  • Aug 15, 2008 1:43pm Aug 15, 2008 1:43pm
Plays for the coming weeks, if you're not already in them.

have a great weekend
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Money & Pain Respect the market, protect your capital, be patient
  • #12,689
  • Aug 15, 2008 1:47pm Aug 15, 2008 1:47pm
HEY GUYS/GALS,

Of course these bars and the methods i use to trade them (pivot zones,confluence, etc..) fail from time to time EVEN WHEN THEY ARE PERFECT BARS IN PERFECT PLACES.

This is not the holy grail of trading. No such system/method exists.

You all know that.

This thread is popular and has been since the very early days of forex factory for one basic reason.

A LOT OF PEOPLE HAVE FOUND IT IS A RELIABLE WAY TO ENTER AND MANAGE THERE TRADES. IT IS ALSO EASY TO LEARN AND IMPLEMENT.

They have also learned that even less than perfect setups have a high odds of success.

success being defined as a move off of the bar reaching a first level of support and resistance based on how i approach/teach s/r.

I dont expect every post in this thread to be a positive one but i would always like to see the negative ones coming from a place of maturity and respect for the years of hard work with this thread and the countless hours of personal time i have spent helping people for free.

I spend just as much time responding to requests for help from this thread as i do from the group.

Its ok everyone, its all ok.
  • #12,690
  • Aug 15, 2008 1:56pm Aug 15, 2008 1:56pm
Quoting toyboy tramp
Plays for the coming weeks, if you're not already in them.

have a great weekend
Toyboy,

Don't forget the Nzd/Jpy as well.
Patience + Humility + Study = Success
  • #12,691
  • Aug 15, 2008 2:00pm Aug 15, 2008 2:00pm
i came across something in pring that was really interesting when i examined the recent eurusd "price action" (rather than referring to it as "failed" pin bar)

pring's basic definition of the basic pinocchio bars is as follows:

"a pretty common form of exhaustion shows up when a security opens and closes relatively quietly, but during the bar the price breaks temporarily above a trading range[] [OR] level of resistance, [OR] trendline and then falls back below it[,] ... because they give a false sense of what is really going on." [see, p. 278-79] he then posts some examples (for those of you with the book, look at figure 15-6 --- it's very close to what happened with the eurusd as i will explain below)

my first chart shows you the level of resistance we have all been talking about recently. in my second chart ... it's an upside down pin --- for lack of a better word right now (and these are discussed a lot in candlestick trading methods) ... do you see the "nose" of that bar? it tested the level of resistance shown in chart one "temporarily" and then fell back AND closed below it ...

in reviewing this chart again and w/ respect to pring's basic characteristic of a pin and figure 15-6, that upside down pin was a clue the market was giving us a false impression of bullish strength.

p.s. IMO reviewing a trade after-the-fact is invaluable. simply proclaiming "it was a failed pin" and dismissing eveything said as "futile" rather than trying to figure out whether or not that is the truth or whether ... perhaps ... it was a C+ pin and a C+ set-up ... is not smart business. frankly, i learn more from my losses than my gains ... if i can give an analogy from poker ... a losing player will lose his money and go home and say "i got unlucky and it was everyone else that played bad" ... a winning player loses and goes home and reviews the hands he played and decides if he/she could have played his cards better or if he did indeed get unlucky in some spots. it's the same for me w/ the eurusd trade recently ... personally, i have learnt a lot from it b/c it helped reinforce many underlying principals of j16 trading. just my 2 cents tooooooo .... :nerd:
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"Believe nothing you hear and half of what you see." Proverb
  • #12,692
  • Aug 15, 2008 2:12pm Aug 15, 2008 2:12pm
Hey Seeking :-)

Hope all is well with you.

Quoting SeekingLight
Hey FXP
I'll interpret this as a "how do I know when something works(for me)" question.
If it's meant in a general manner from the outside: you see if you can understand the logic presented, try and apply it yourself, compare with the original idea and see if it fits or not. This is also where you'll figure out whether you're made for it or not.
Sorry don't quite follow you here.

Quoting SeekingLight
In a concrete, "inside" manner of trading it yourself: you have a ruleset, you lay out trading plans, have a game plan i.e. trade management and exit criteria. If you don't have a stringent before-during-after, you WILL end up just afloat in a big ocean of randomness.
I'm with you now. Absolutely. I do have rules that I apply to my trading.

Quoting SeekingLight
You will know this works or rather establish this works in the very period everyone is still banging on about...the demo phase. After laying your groundwork and testing it in a live environment consistently and repeatedly, you figure out whether you know what you're doing or not and, most importantly, imho, you find out WHY it works.
So, if we do say 1 year on demo and take only the best bars we could be working on an assumption that the +-50 trades we have taken are indicative
of typical market action.

Add another 3 years live trading you have maybe +-300 trades (if picking the best setups) to draw our experience from. Are you saying this is proof that this form of discretionary trading works in the long term?



I wish you all the best.

FXP
  • #12,693
  • Aug 15, 2008 2:18pm Aug 15, 2008 2:18pm
Quote
when big volume is being traded price moves wuicker indicated by larger volume bars on your mt4, so when a pin bar moves vigourously here and there before closing as a pin it may be a good indication of it's healthy nature...

I don't know why everyone is always looking for extra crutches.
IMHO we already have all we need.
Some might try to turn it as an item of "confluence"(fine by me on indices and stocks maybe, but I don't see the lack of edge as early as commodities and even less so in FX), but what on earth is wrong with plain size?

If you get moves of an average daily bar of 200-300 pips and then a pin bar of 150, how strong is the PB vs the momentum?
At the very least, the most basic item of information that bar is giving you is: it's smaller than most of the others.
And if you get a big-un' blowout bar that's 50% over normal ATR forming the PB/BUOB/whichever, then that in turn is going to just be VISIBLE.
Why do I need to know what exchange traded how many contracts to form it if can just look?
We've all gone over the "long nose, level eyes" mantra so many times we should be in more than deep meditation now.

Of COURSE there are small pins that also work, just as there are also pins that are with crooked closes that work etc pp. And one can argue solid s/r levels from here to Sunday.
But whatever is jumping out at you on the chart or not is all in what you perceive and then choose to take.
This just goes round in circles to "figure out what you're doing and why" first.
I've tried to explain that there's a point where we run out of things we can blame(including ourselves) and have to just accept that we're not trading an ideal but reality. And the simple reality is that there is only so much we can do before "going for it" and then it's up to the market.

IMHO:
If you want a more certain ending point to a trend, why not wait for the timeframe some of the "big traders"(the ones with the giant footsteps and whatnot) always tossed around in references supposedly prefer to look at?
Weekly bars.
USDCAD, USDJPY, USDCHF and EURGBP just off the top of my head started IMMENSE runs off of weekly pin bars(and I think almost each one was posted here, too). Talking 4 digits in pips.

The current situation is a perfect example for an environment that warrants waiting for something that tells just about anyone looking at the market that something's changed. As I wrote - I believe there may just be some (large) market participants who most likely don't even look any lower than weekly.

Sometimes it feels like people just think it's a joke when the higher timeframes are mentioned, as if that were intended to keep people bored or away from "fast money".
The opposite is true.
There's no bigger clarity than on a weekly chart and there's a very good reason the EURUSD progression charts I posted were charted with weekly bars in turn.

And Jim isn't having a laugh when he says practice on weekly first.

---

Quite frankly, I find all of this to and fro completely exhausting. Especially because I don't see the point.
I refer to my last 1-2 posts regarding losses: it's just plain normal to me to see failed trades occur. What's the biggie?
IMHO you must accept the loss the second you placed the trade, or you have no business placing it in the first place.

The usual "my opinion only, not wisdom sent from the gods" disclaimer applies.
Trust price. Know yourself.
  • #12,694
  • Aug 15, 2008 2:36pm Aug 15, 2008 2:36pm
Quoting fxprocessor
Hey Seeking :-)
Hope all is well with you.
Getting by, there's good days and bad, you know how it is
But when my bones crackle and my back is acting up, oi vay!

Quote
Sorry don't quite follow you here.
I meant that if you encounter something you feel that might suit you, you go and read up on it. Then try and figure out why the thing in front of you is doing what it's doing. What logic it's based on, why it seems to have a positive expectancy for example. Basically, you wonder whether you understand what makes it work. That's all nice theory. Then comes the pertinent bit, actually trying to make what sounded so logic and simple yourself. You will undoubtedly come across things that you might end up doing differently than what was shown to you, or just plain do it wrong, or hesitate, etc. You might even come across situations you felt were suddenly different than in the theoretical ideal.
It's at this point where you realize that you need to make sure whether you really REALLY understood the material first and go back and re-check, maybe ask some questions and then try again, or whether you feel that either you're too unsuited for it or the approach is just plain flawed and only meant for situation x.
If you do decide that it was just lack of practice and awareness, you try again, and cycle this procedure over, until you find it fits like a glove or you decide again. If it fits, you stick with it and once you're set(plan, practice, profit, the three Ps), you go live.


Quote
So, if we do say 1 year on demo and take only the best bars we could be working on an assumption that the +-50 trades we have taken are indicative of typical market action.
I don't think the trades are indicative of typical market action. Even the market isn't always indicative of "typical" market action. But if you've looked into what goes on long enough, you grasp enough of the basic mechanisms to see what's what. And then it no longer matters whether moves suddenly are overproportionally big or small or whether they're more rapid than before, you manage to see that some basic things always, always remain.

Quote
Add another 3 years live trading you have maybe +-300 trades (if picking the best setups) to draw our experience from. Are you saying this is proof that this form of discretionary trading works in the long term?
No, I think it's proof that it's worked up to that point and just like you slip, trip and fall off of a tightrope the second you stop paying attention, so can you slip up in your trading as if on your first day at any point in time.

1 day of profitable trading proves that discretionary trading works for 1 day.
2 days of profitable trading prove that discretionary trading works for 2 days.
3 days of profitable trading prove that discretionary trading works for 2 days.

And so on. You only get certainty up to the point of "now" in life.
That's how it is for trading, that's how it is for everythin in life. Do you know your wife will love you the next 10 years if she's loved you 2? 3? 5? Even tomorrow's sunrise isn't certain; it's just a connection we've made in our mind, but it is not preordained.
IMHO there is no will or won't in our reality, there's only our attitude towards what comes and our flexibility to adapt. We're human and we and our surroundings change every nanosecond.
Our uncertain but always possible death is part of this concept just as much.

Bottom line for me is that how soon we decide that we believe in our trading and ourself, that's up to each one of us. We can get hints and tips and opinions about anything in life from others, but it's US that need to do the deciding and enacting in the end. We can hear 3 months or 3 years(and getting sound advice from solid experience in any matter always helps in life), but it isn't until everyone has found their own comfort zone that he or she will be able to move on either way, regardless of what is said.

Quote
I wish you all the best.
FXP
Thanks! Same to you!
Trust price. Know yourself.
  • #12,695
  • Aug 15, 2008 2:41pm Aug 15, 2008 2:41pm
Quoting fxgrinder
p.s. IMO reviewing a trade after-the-fact is invaluable. simply proclaiming "it was a failed pin" and dismissing eveything said as "futile" rather than trying to figure out whether or not that is the truth
[..] is not smart business. frankly, i learn more from my losses than my gains
I just wanted to make sure that it's understood I don't want to encourage not learning from your losses.
It's obsessing over losses and trying to eliminate them altogether that leads to psychological pitfalls(some people grow afraid to even place a trade anymore because they don't trust themselves anymore, even if it wasn't their fault and they did everything right) that I tried to point out in order to avoid them.

At some point you will ideally have all your examining done, your rules down, your plan laid out. And then there is no longer going to be too deep an analysis past "fit criteria x, y, and z, yepp, can't do more than this" and moving on, unemotionally, unencumbered, to the next trade.
Even discretion can become more "automated". (Mind, I said this is an "ideal", not as simple as shooting fish in a barrel )
Trust price. Know yourself.
  • #12,696
  • Aug 15, 2008 2:44pm Aug 15, 2008 2:44pm
fib i appreciate your request. For 4 years this thread has prospered and grown with the understanding that i dont give live set ups and follow them.
Thats my choice and if you are here for any other reason than to disrupt you will respect it.

The group and this thread are educational in nature and designed to get people to take simple material AND GO TO WORK. I help people via private email concerning trade entry and management but i dont do it in a public setting.

Now im going to make a pointed statement to you with as much kindness and respect as i can.

You have made your points and made it known how you feel. I appreciate and respect your opinion. Now its time to prove if you are here to learn or to disrupt. There is now no reason to continue with it if you are not here to disrupt. You are free to complain, call me dirt, curse me or anything else you want but IT WILL NOT BE IN THIS THREAD.

I have been at forex factory since its very beginning and not one time have i ever tried to use my friendships with those that run this forum for heavy handed purposes. I sincerly hope this will not be the first but that is your choice and not mine.

When i started the group i voluntarily gave up my moderator status and any formal positions of "power". When i did that FF as a way of saying thanks for helping with there early growth gave me a FREE banner link in the preffered services area and made me a preferred partner. I never asked for it and ive never paid a dime for it.

This thread is my baby and i will protect it from disruption. period/paragraph.

You are welcome here and i think (based on your experience) you could be a great help to those that frequent this thread.

The ball is in your court fib,

Jim





Quoting fibbinarchi
James16

Thank you for a response to show you have read the recent comments. But will you consider posting some charts with trades you have your eye on with your reasonings etc to help your followers?
Whether some would admit it or not, it will be invaluable.
  • #12,697
  • Aug 15, 2008 2:50pm Aug 15, 2008 2:50pm
Quoting SeekingLight
At some point you will ideally have all your examining done, your rules down, your plan laid out. And then there is no longer going to be too deep an analysis past "fit criteria x, y, and z, yepp, can't do more than this" and moving on, unemotionally, unencumbered, to the next trade.
thanks j16 for providing this forum for all of us newcomers that might need more explanation and deep analysis than senior members before, during, and after a trade and for him on insisting we demo trade for at least 3 months ... AND profitably before risking even a penny on just some random pin bars ...
"Believe nothing you hear and half of what you see." Proverb
  • #12,698
  • Aug 15, 2008 2:56pm Aug 15, 2008 2:56pm
Quoting NuckingFuts
Hi pipsja,

I generally prefer the close of the pin bar to be above the PPZ for a potential long and below for a potential short.

The EU pin closed below the PPZ and found it very hard to break back above and close there.

This is not one of Jim's rules, but I do take note of this when trading pins and either wait for a close back above/below before considering the trade or just ignore it

Some consider a close above resistance or below support a breakout, so I think more confirmation is needed in these cases (i.e. a close back below resistance or above support).
This makes a lot of sense and I hadn't thought that far into the placement of the PB. It makes sense that you want the nose of the PB to just touch the PPZ and then get rejected and send price back up to form the PB. If the nose goes too far into the PPZ then it probably will not be strong enough s/r to make the reversal. Your point really hit home for me. Thanks!
  • #12,699
  • Aug 15, 2008 3:03pm Aug 15, 2008 3:03pm
even better is to have the nose extending down thru the pz with the open and close above/below depending on direction. this gives your next bar the oppurtunity to respect the pz and then fire off in your direction. it also allows your initial stop to be less since if you choose to you can put it under/over the pz depending on direction. i will post a chart.

jim

Quoting melmini
This makes a lot of sense and I hadn't thought that far into the placement of the PB. It makes sense that you want the nose of the PB to just touch the PPZ and then get rejected and send price back up to form the PB. If the nose goes too far into the PPZ then it probably will not be strong enough s/r to make the reversal. Your point really hit home for me. Thanks!
  • #12,700
  • Aug 15, 2008 3:03pm Aug 15, 2008 3:03pm
the AUDNZD ... i followed these set-ups -- they were some classics that i learnt from some of the 1st j16 posts ... anyone catch 'em?
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