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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

  • #12,721
  • Aug 16, 2008 12:53am Aug 16, 2008 12:53am
a pivot zone can vary in size of pips depending on time frame and whether or not it is located very near a big round number (a lot are). it can be a very small range or a larger one but it gives you a great way to predict price movement whether your entering or managing a trade.

Quoting lose_again
Hi, James,

Thanks for your great chart and explaination. Now I follow your thread day by day.

Hope you don't mind asking a question, The problem here is how to define PPZ, The definition I learned from Jarooo is the area right below the ppz box you draw on your chart. draw a box around bars which have same high/low. If the definition of PPZ is arbitray, it will cause confusion.
Attached Image (click to enlarge)
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  • #12,722
  • Aug 16, 2008 1:05am Aug 16, 2008 1:05am
Quoting y.caesar
Thanks James for the chart. I've been starting to trade your methods for the last month or so and have been profitable, but not as profitable as some seniors here like Ghous (some hundreds of pips literally recently). I'm working hard to get there though

I have questions regarding your PPZ. All this time, I'm using confluence of weekly and monthly pivots to initiate a trade. I miss that usd/jpy PB because the PB miss another pivot. I didn't have the confidence to initiate a trade based on former resistance turned to support theory. Regarding this matter, can former resistance be used as support too in shorter time frame like 4H? or is this kind of PPZ only can be used in Daily to greater effect?

Regards,
You'd be amazed how price reacts to support/resistance right down to the tick charts. It's only that they're broken much easier on these lower time frame trends. Price still does however react to these lines (bounce, break, retest, etc..).

Basically, the higher the time frame, the more relevant the support/resistance is. The more times price bounces from S/R, the more "powerful" it is said to be.

In answer to your question, yes, S/R levels can be used on any time frame (tick charts included, but not recommended ). When broken, they automatically become the opposite.

I generally don't take note of S/R levels on any time frame under the daily, purely because I rarely trade below the daily chart. If I were trading 4H charts, I would be using S/R there
  • #12,723
  • Aug 16, 2008 1:10am Aug 16, 2008 1:10am
Quoting james16
a pivot zone can vary in size of pips depending on time frame and whether or not it is located very near a big round number (a lot are). it can be a very small range or a larger one but it gives you a great way to predict price movement whether your entering or managing a trade.
Interesting there Jim. I see the Aussie PB we were talking about is not a PB on your chart
Attached Image
  • #12,724
  • Aug 16, 2008 3:23am Aug 16, 2008 3:23am
Quoting NuckingFuts
Interesting there Jim. I see the Aussie PB we were talking about is not a PB on your chart
That's because his broker has a different time zone than yours. Some brokers consider the daily close to be the new york market closing time others have the daily candle offset by 2 hrs (I think it's because they use 0:00 GMT as official daily close).

edit: You might also notice that in his charts there are these tiny candles at the beginning of every week. They are formed in the two hours from when the market actually opens on Sunday and the time those brokers officially start the daily candle. They are called "Sunday candles." I thought I might just add that in case you hear the term and wonder what it means
  • #12,725
  • Aug 16, 2008 3:36am Aug 16, 2008 3:36am
can some0ne plz p0st the eur0-jpy chart (daily)i would luv to see how it closed
Still n0 access to my pc ;(
  • #12,726
  • Aug 16, 2008 3:44am Aug 16, 2008 3:44am
Quoting ezz
can some0ne plz p0st the eur0-jpy chart (daily)i would luv to see how it closed
Still n0 access to my pc ;(
Here you go my friend!! Have a great weekend!
Attached Image (click to enlarge)
Click to Enlarge Name: eurojpy daily chart 8-15-08.gif Size: 15 KB
  • #12,727
  • Aug 16, 2008 4:37am Aug 16, 2008 4:37am
Quoting CkM8
That's because his broker has a different time zone than yours. Some brokers consider the daily close to be the new york market closing time others have the daily candle offset by 2 hrs (I think it's because they use 0:00 GMT as official daily close).

edit: You might also notice that in his charts there are these tiny candles at the beginning of every week. They are formed in the two hours from when the market actually opens on Sunday and the time those brokers officially start the daily candle. They are called "Sunday candles." I thought I might just add that in case you hear the term and wonder what it means
I believe the official close is 5pm New York time. I use Ikon Royal demo charts that close at this time and also dont have sunday bars. I least I know I'm looking at the same charts as the banks.
If it's too good to be true, it probably is.
  • #12,728
  • Edited 8:40pm Aug 16, 2008 4:49am | Edited 8:40pm
Quoting lose_again
Hi, James,

Thanks for your great chart and explaination. Now I follow your thread day by day.

Hope you don't mind asking a question, The problem here is how to define PPZ, The definition I learned from Jarooo is the area right below the ppz box you draw on your chart. draw a box around bars which have same high/low. If the definition of PPZ is arbitray, it will cause confusion.

Quote
James16:
a pivot zone can vary in size of pips depending on time frame and whether or not it is located very near a big round number (a lot are). it can be a very small range or a larger one but it gives you a great way to predict price movement whether your entering or managing a trade.

And guess where I got the defintion from . . James16 . . lol.

Let me illustrate this from Jim's point of veiw and he can tell me if I'm off track or not.

PivotPointZones are made up of Support and Resistence levels. S/R levels can come together and be on top of each other and be very tight as Jim has shown a few posts back. Or they can be wide in range.
The area between the Sup and Res levels is the PPZ.


Let's look at the Usd/Jpy prior to the up move through Resistence. An obvious Res. level. (Chart 1)

Then Price moved up and up and then down which created a Support level. This is what Jim is pointing out. (Chart 2)

This area between the Sup and Res is the PPZ. (Chart 3)

Now this is where the fun part comes into play and it requires participation on your part.

Put the horizon lines on your Daily chart the same as mine. At the 109.09-.10 level and the 108.39-.40 level. (click off the "autoscroll") And go back in time . . . 2008, 2007, 2005, 2004, 2000 and even back 1998.

Cool stuff.

Jim
Attached Images
Indicators show the past. Price Action "Indicates" the future.
  • #12,729
  • Aug 16, 2008 4:56am Aug 16, 2008 4:56am
here are a few good setups i spotted on 2 pairs during weekend analysis...
Attached Image(s) (click to enlarge)
Click to Enlarge Name: nzdjpy.gif Size: 13 KB
Click to Enlarge Name: audchd.gif Size: 12 KB
I believe . . .
  • #12,730
  • Aug 16, 2008 5:46am Aug 16, 2008 5:46am
in the nzd-jpy there is a d0wnside triangle(i dont know what else to call it)

Its when price keeps making l0wer highs and keeps its l0ws at one line
This is a downward continuati0n pattern
Just take care
Soz i cant p0st charts atm(am on my cell) maybe someone else can point 0ut what i saw in that chart
  • #12,731
  • Aug 16, 2008 5:52am Aug 16, 2008 5:52am
Quoting ezz
in the nzd-jpy there is a d0wnside triangle(i dont know what else to call it)

Its when price keeps making l0wer highs and keeps its l0ws at one line
This is a downward continuati0n pattern
Just take care
Soz i cant p0st charts atm(am on my cell) maybe someone else can point 0ut what i saw in that chart
i know what you're talking abt ezz, i have that falling wedge in my mind...but thanks for the reminder anyways...
I believe . . .
  • #12,732
  • Aug 16, 2008 7:02am Aug 16, 2008 7:02am
PPZ is actually the area between the Sup and Res, My bad.

Thanks, Jarroo, I knew I can always learn something from you.
  • #12,733
  • Aug 16, 2008 7:15am Aug 16, 2008 7:15am
Quoting NuckingFuts
I'm sure you've heard the saying "there's more than one way to skin a cat", I also think there's more than one way to skin a playable PB too.

Someone may find this useful, so I'll post how I trade a PB that is of interest.

1) The stock standard way Jim suggests to play. Enter just above/below with SL below/above the nose (generally with a pending order).

2) The retracement, if applicable. I'll fib the PB and try to get in at a better price with a smaller SL. I usually watch lower time frames to see how the price is reacting at each fib level with lower lows/higher highs and other PA patterns (double high/low, outside bars, PB's, DIBS - see below). I don't really care if the price goes past the 61.8% fib. Many successful PB's I have traded have moved beyond this level and were still a roaring success. Others may have a different view on this, but it's my money and I'm in charge. One thing I do practice is never adding to a negative pips position. I'll only add to a green pips position if I feel confident enough the price is going to continue.

3) The DIBS approach on either 1H or 4H with bias towards the break of the PB. SL can be set just past the low/high of the IB, I usually allow more or set it below/above the nose of the pin.

I only ever trade a PB on they daily chart and above. Sometimes I'll scalp lower, but I love my fishing and would much rather be doing this

I guess you could use any trading system to play a PB with bias towards the break of the bar.



Hi, NuckingFuts,

I have to say your single post is worth more than 100 pages in the forum. Hope price action masters like you can post more of this type of summary. Thanks a lot!
  • #12,734
  • Aug 16, 2008 8:31am Aug 16, 2008 8:31am
Quoting NuckingFuts
You'd be amazed how price reacts to support/resistance right down to the tick charts. It's only that they're broken much easier on these lower time frame trends. Price still does however react to these lines (bounce, break, retest, etc..).

Basically, the higher the time frame, the more relevant the support/resistance is. The more times price bounces from S/R, the more "powerful" it is said to be.

In answer to your question, yes, S/R levels can be used on any time frame (tick charts included, but not recommended ). When broken, they automatically become the opposite.

I generally don't take note of S/R levels on any time frame under the daily, purely because I rarely trade below the daily chart. If I were trading 4H charts, I would be using S/R there

Thanks for your respond NuckingFuts. I agree that the higher the TF, the more relevant S/R is. So from someone like me who trades in 5min or even 1min, 4H chart is a much higher TF than I"m used to. I'm already gaining confidence in taking PB in PPZ created by pivots weekly and monthly confluence. I'm still trying out certain PA in PPZ created by support turn to resistance, and vice versa. It's just that this kind of PPZ, as in James Chart shown, creates a zone that's much higher than I would've like, in terms of pips. However, I agree that it's best that I stick with daily first, with this method, as you suggested. Thanks again.
  • #12,735
  • Aug 16, 2008 12:35pm Aug 16, 2008 12:35pm
I personally would skip NZD/JPY as it looks like the PB on your chart is completely under the PPZ. AUD/CHF looks much more promising. My broker does not carry either pair, so I am going by your charts.

Scott

Quoting ghous
here are a few good setups i spotted on 2 pairs during weekend analysis...
  • #12,736
  • Aug 16, 2008 12:53pm Aug 16, 2008 12:53pm
Quoting phpscott
I personally would skip NZD/JPY as it looks like the PB on your chart is completely under the PPZ. AUD/CHF looks much more promising. My broker does not carry either pair, so I am going by your charts.

Scott
Actually the Nzd/Jpy bounced off the 2007 lows which is a major ppz on the weekly/monthly charts.
Patience + Humility + Study = Success
  • #12,737
  • Aug 16, 2008 1:01pm Aug 16, 2008 1:01pm
Attached is a weekly chart of NZD/USD which has a beautiful looking PB off of a long term trend line. I wanted to share this chart as this is an example of a great looking PB I plan on not trading. The reason I would not trade this PB is because if it were to break to the upside, it is likely to stall at the weekly PPZ (white line). If price breaks above the weekly PPZ, I plan on watching for a pull back to the PPZ and a PA setup on the daily or weekly timeframe.

Scott
Attached Image (click to enlarge)
Click to Enlarge Name: nzd-usd 8-16-08.gif Size: 14 KB
  • #12,738
  • Aug 16, 2008 6:24pm Aug 16, 2008 6:24pm
This links gives you different candle formation to understand price action....
I am memorizing this currently...

First link Is bullish reversal patterns...

http://www.fxwords.com/b/bullish-pev...ormations.html

Here is the link to continiuation patterns...

http://www.fxwords.com/c/continuatio...rns-.html#bull

Here is link to bearish reversal patterns

http://www.fxwords.com/b/bearish-reversal-patterns.html

Let me know your opinion guys...
  • #12,739
  • Aug 16, 2008 6:49pm Aug 16, 2008 6:49pm
Quoting Shermenator
This links gives you different candle formation to understand price action....
I am memorizing this currently...

First link Is bullish reversal patterns...

http://www.fxwords.com/b/bullish-pev...ormations.html

Here is the link to continiuation patterns...

http://www.fxwords.com/c/continuatio...rns-.html#bull

Here is link to bearish reversal patterns

http://www.fxwords.com/b/bearish-reversal-patterns.html

Let me know your opinion guys...
Nice link for an occasional candlestick tuneup.
History is written by the victors.
  • #12,740
  • Aug 16, 2008 11:09pm Aug 16, 2008 11:09pm
Quoting DutchTrader
Actually the Nzd/Jpy bounced off the 2007 lows which is a major ppz on the weekly/monthly charts.
yes the ppz i mentioned is easily the most important ppz for this pair, i can see price responding to it since 2005, as for the pin bar closing below the ppz it really does'nt indicate much because obviously the ppz is'nt just a single line it's more a region then a strictly defined line, i thus felt that the pin bar was just abt in a perfct place for a long...we'll see...
I believe . . .
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