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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

  • #12,801
  • Aug 18, 2008 10:31pm Aug 18, 2008 10:31pm
Quoting NuckingFuts
There are many threads on here that debate demo versus live. I personally 100% agree with Jim and others who promote the same path. Demo trade first for at least 3 consecutive profitable months before going live. You must exercise strict MM, get your system clearly defined and, become confident and proficient with it BEFORE committing any real money. You'll only be donating your hard earned cash otherwise.

I also agree with demo trading not providing the true emotions you experience with real money. To me, demo trading was like Monopoly. I paid the price a number of years ago by cooking my first live account (only $200) in around 6 months. I exercised good MM, but just had an over trading problem. The market was moving and I viewed it as money I could be making. I also had problems with my exits, cutting the gains short and not getting into the "free trade" position.

Sure some people can treat the demo in the same way as a live account, but some people can also act and others (like myself) can't.

I then went back to the demo for almost 7 months to fine tune what I learnt by trading live. I still had the Monopoly blues, but I did not forget what it was like to lose. Like most people, I loved winning and despised losing. One thing I quickly learnt was that losing is just part of the game/business, thus the utmost importance of strict MM.

If I had my time again, I would take this approach:

1) Demo trade for at least 3 consecutive profitable months. The main objective here is confidence and proficiency in your strategy/system and keeping to strict MM. It's an added bonus if you can grasp the psychological aspects too.

2) Live trade with a very small amount (an amount you can afford to kiss goodbye). The objective here is to get in-touch with your true emotions. Learn to cut losses short and take them on the chin. You'll also want to learn how to ride out gains to maximize your profits.

3) Is dependant on the outcome of step 2. If you cook your live account, then it's back to the demo and step 1 for you. If you consistently profit month after month, then you can slowly add more funds and start blowing out the emotions again. Trading a cent per pip is MUCH easier than trading $100, $1000 and beyond per pip.
i won't confess too much here but, ...

demo trading allows you to experiment more w/ whatever you plan to do ... i have gone against the advice of many that cautioned demo trading first; and b/c i hadn't developed a well-defined "system" of entries and exits ... i LOST ... and i didn't lose just a little --- those small deposits ADD UP!!! demo trading gives you the latitude to experiment and fail. ... as exits are definitely an issue for most traders (if they're anything like me!) ... try some things out ... modify, edit, revise ... but ultimately, practice becoming CONSISTENT ... then take your EMOTIONS and your CONSISTENCY from your demo trading and go live w/ very small lots ...

j16 is not crazy when he STRESSES, REPEATS, and STRESSES, and REPEATS his cautionary tale about demo trading first. not only for the above reasons stated, but also (inter alia) to learn PATIENCE and DISCIPLINE.

if you're okay losing money ... even pennies per trade ... then ignore j16 and jump into the deep end even when you don't have much experience in the shallow one.

peace and profitable trading to all.
"Believe nothing you hear and half of what you see." Proverb
  • #12,802
  • Aug 19, 2008 3:18am Aug 19, 2008 3:18am
Quoting ghous
Hi again guys,
so here is my theory of momentum,
note however that i am not going to go too much into detail
Understatement of the year

IMHO you can make it a lot simpler(although I have equally disturbed levels of complexity, no worries, main thing is that it does something for YOU):

1. If price doesn't have anything in it's path that would cause it to stop, it won't(like in physics).

2. If price doesn't say it wants to go elsewhere loudly enough, it likely won't be heard over the general noise (compare the EURUSD and GBPUSD pins and their surrounding bars vs NZDUSD's situation).
Trust price. Know yourself.
  • #12,803
  • Aug 19, 2008 4:30am Aug 19, 2008 4:30am
Quoting SeekingLight
Understatement of the year

IMHO you can make it a lot simpler(although I have equally disturbed levels of complexity, no worries, main thing is that it does something for YOU):

1. If price doesn't have anything in it's path that would cause it to stop, it won't(like in physics).

2. If price doesn't say it wants to go elsewhere loudly enough, it likely won't be heard over the general noise (compare the EURUSD and GBPUSD pins and their surrounding bars vs NZDUSD's situation).
all that i have posted is not even close to being complex in the mind, once you get it you hardly seem to even notive that you're using the concept. the reason i made that post long was because i wanted to hand in what i define as momentum and that as you saw came from my interpretation of the fx markets, that's it. when we say strong momentum anybody can say that it's steep movment in some direction, i rather call it a situation of one party totally dominating the other which to me appears more leitmate for some reason...but that's just me because ofcoarse traders were making money without this extra tool i mentioned in that post, and those of us who are extermely succesful might find it useless but then again i have nothing to cribb upon, all of this was an answer to a request from Ezz to me to explain how i interpret momentum...

Regards,
Ghous,
I believe . . .
  • #12,804
  • Aug 19, 2008 5:43am Aug 19, 2008 5:43am
thanks 4 the explanation gh0us

<<still on vaccation with n0 access to charts i am dying to see the eur-jpy daily ;(
  • #12,805
  • Aug 19, 2008 8:12am Aug 19, 2008 8:12am
Quoting ezz
thanks 4 the explanation gh0us

<<still on vaccation with n0 access to charts i am dying to see the eur-jpy daily ;(
Got a mobile phone with WAP EZZ? ....try http://wap.akmos.ru/chart.


And well done to those stepping up to help/share lately! Awesome.
Bundy's status today: "Waiting..."
  • #12,806
  • Aug 19, 2008 9:01am Aug 19, 2008 9:01am
Hey guys,
thanks for all tips. ANother discussion. How do you fight with emotion .. how to say ... " I must be in" , market is in chop and then it break down or up and you think about "oh dear, it's new trend , i have to jump in" , then you lost vs your emotion and it's usually "C--trade. ". Sometimes i miss really nice pinbar and then i take some "random" entry.and my acc goes to -

Every tip would be great.
  • #12,807
  • Aug 19, 2008 9:18am Aug 19, 2008 9:18am
Quoting Jankone
Hey guys,
thanks for all tips. ANother discussion. How do you fight with emotion .. how to say ... " I must be in" , market is in chop and then it break down or up and you think about "oh dear, it's new trend , i have to jump in" , then you lost vs your emotion and it's usually "C--trade. ". Sometimes i miss really nice pinbar and then i take some "random" entry.and my acc goes to -

Every tip would be great.
I'm back on demo after blowing my mini account. It was real emotional rollercoaster ;]. Overtrading , to big expectations , no discipline and no plan. I'm thinking the only way to be less emotional is to have a plan for every possibility you can imagine before entering a trade - where would you put/move stop loss , when would you put it @ b/e , t/p expectations...
Never let the market surprise you in a bad way. Since i'm on demo paradoxally i've stayed more disciplined , i make notes about every trade (Why did i enter? How did i manage it? Why did i lost/won?). I'm carefull in pulling the trigger now , for the first time i am able to wait days for a good signal and even on demo it's always pain to get in but slowly it's getting better. This is from the guy who still is on demo ;]
  • #12,808
  • Aug 19, 2008 9:38am Aug 19, 2008 9:38am
Quoting Greenhaze
I'm back on demo after blowing my mini account. It was real emotional rollercoaster ;]. Overtrading , to big expectations , no discipline and no plan. I'm thinking the only way to be less emotional is to have a plan for every possibility you can imagine before entering a trade - where would you put/move stop loss , when would you put it @ b/e , t/p expectations...
Never let the market surprise you in a bad way. Since i'm on demo paradoxally i've stayed more disciplined , i make notes about every trade (Why did i enter? How did i manage it? Why did i lost/won?). I'm carefull in pulling the trigger now , for the first time i am able to wait days for a good signal and even on demo it's always pain to get in but slowly it's getting better. This is from the guy who still is on demo ;]
No worries ... I'm happy to hear something honest about the barriers we all will encounter someday. This is the way we all have to pass.

I wish great successes for you
Discipline + Patience - Fear - Greed = Success
  • #12,809
  • Aug 19, 2008 9:40am Aug 19, 2008 9:40am
I have been a student of j16 for a few months now and from my experience
the location of the pin whether on daily or 1h is the most important factor.

Even if the pin doesn't look that good if it is sitting on a strong ppz from a few months ago or even years there is a very high probability u will get some reaction problem is a lot of people expect big reactions, and a lot of the times you don't get those big moves.

Thats why proper risk 1-4%, and stop to break even ASAP.
  • #12,810
  • Aug 19, 2008 10:14am Aug 19, 2008 10:14am
Quoting Jankone
Thx for your opinion, but tell me, what to do ? I'm good on demo. But real is hard fight yet
I endorse James' plan myself, but if you are determined not to follow it then I suggest opening an account with a broker that allows micro lots and throwing in maybe $50-$100, or whatever money you can afford to lose.

You'll be playing live but you'll also be playing with very small amounts per pip. Set a plan. 2 months of consistent growth allows you to add to your account.

That might help. The goal is to ease your transition from demo to live so that it feels no different. I've heard from a lot of experienced traders who say they can regularly and consistently achieve results in their demo accounts that are hard to achieve live. Live is a battle, and you need to be fully prepared and tooled up when you enter the fray.
  • #12,811
  • Aug 19, 2008 11:02am Aug 19, 2008 11:02am
Quoting NuckingFuts
1) Demo trade for at least 3 consecutive profitable months. The main objective here is confidence and proficiency in your strategy/system and keeping to strict MM. It's an added bonus if you can grasp the psychological aspects too.
One could (potentially) "cut corners" with a programme such as ForexTester. It allows you to practice and improve your skills in a shorter period of time. BUT! One has to be "honest" as it's easy to fool oneself by "steping back" via "undo" function.

Also, such a programme allows you to feel the market better as you can see daily moves in 20-30 seconds. So, that way you DO learn to place your order (with TP and SL) and just sit back and wait for the market to move. It's hard to do (initially) with live market (with H4 TF, let alone daily). However, after demoing with ForexTester one shouldn't forget this skill of waiting when you go live.
One Chart is Worth Ten Thousand Words.
  • #12,812
  • Aug 19, 2008 11:05am Aug 19, 2008 11:05am
Quoting Greenhaze
I'm back on demo after blowing my mini account. It was real emotional rollercoaster ;]. Overtrading , to big expectations , no discipline and no plan. I'm thinking the only way to be less emotional is to have a plan for every possibility you can imagine before entering a trade - where would you put/move stop loss , when would you put it @ b/e , t/p expectations...
Never let the market surprise you in a bad way. Since i'm on demo paradoxally i've stayed more disciplined , i make notes about every trade (Why did i enter? How did i manage it? Why did i lost/won?). I'm carefull in pulling the trigger now , for the first time i am able to wait days for a good signal and even on demo it's always pain to get in but slowly it's getting better. This is from the guy who still is on demo ;]
perfect approach Greenhaze, ppl liek you you will never fail...

some great person once said:

Fight one more round. When your arms are so tired that you can hardly lift your hands to come on guard, fight one more round. When your nose is bleeding and your eyes are black and you are so tired that you wish your opponent would crack you one on the jaw and put you to sleep, fight one more round - remembering that the man who always fights one more round is never whipped.

Regards,
Ghous.
I believe . . .
  • #12,813
  • Aug 19, 2008 11:52am Aug 19, 2008 11:52am
All this discussion has me wondering what people believe is the hardest thing to pick up about the J16 method. The methods are fairly simple. Watch and read the bars. Find PPZ's and certain other S/R levels. Determine market direction. Find confluence.

Trading on a D1 timeframe should give you plenty of time to sit down every day to determine what to do. Once you save your first day analysis to find those S/R levels all you really need to do is keep checking to see if price moved in such a manner that now puts it at a prime buying opportunity.

Forgive me if I'm wrong, since I'm still going through the video's and tutorials. My questioning is certainly more from the aspect of, "ok I understand all I mentioned above, what is the next thing I'm going to learn when demo'ing this for 2-3 months?" Is that simply going to be my efficiency at reading the chart or simply an ability to better read the signals and grade them A, B, C, D, F? What is everyones general hurdle to overcome that will take them 2-3 months of demo trading?
  • #12,814
  • Aug 19, 2008 12:17pm Aug 19, 2008 12:17pm
Quoting permanentjaun
All this discussion has me wondering what people believe is the hardest thing to pick up about the J16 method. The methods are fairly simple. Watch and read the bars. Find PPZ's and certain other S/R levels. Determine market direction. Find confluence.

Trading on a D1 timeframe should give you plenty of time to sit down every day to determine what to do. Once you save your first day analysis to find those S/R levels all you really need to do is keep checking to see if price moved in such a manner that now puts it at a prime buying opportunity.

Forgive me if I'm wrong, since I'm still going through the video's and tutorials. My questioning is certainly more from the aspect of, "ok I understand all I mentioned above, what is the next thing I'm going to learn when demo'ing this for 2-3 months?" Is that simply going to be my efficiency at reading the chart or simply an ability to better read the signals and grade them A, B, C, D, F? What is everyones general hurdle to overcome that will take them 2-3 months of demo trading?
Demo trading is good place to build the trading behaviour and structurize it in this environment. Yes , the system looks simple but there is a lot to learn under the surface and those details make all the difference for me.
How much easier it would be to play on live account knowing that you got what it takes to ride the winners and cut the losers early using your predefined rules with minimal emotional reaction.
  • #12,815
  • Aug 19, 2008 12:28pm Aug 19, 2008 12:28pm
'cut the losing trades short'

I have heard this phrase al0t everywhere .
In my definiti0n the trade loses when my sl is hit(in case of pin my sl is bel0w the n0se)

So i leave it untill the sl is hit
S0 h0w do i cut losing trades short in case of pinbars?
I am n0t sure what ppl mean by saying that phrase

If it means to sh0ot the trade if it retraces t0ward the sl to minimize the l0ss
then I Am COMPLETELY AGANIST THAT PHRASE
  • #12,816
  • Aug 19, 2008 12:36pm Aug 19, 2008 12:36pm
Quoting ezz
'cut the losing trades short'

I have heard this phrase al0t everywhere .
In my definiti0n the trade loses when my sl is hit(in case of pin my sl is bel0w the n0se)

So i leave it untill the sl is hit
S0 h0w do i cut losing trades short in case of pinbars?
I am n0t sure what ppl mean by saying that phrase

If it means to sh0ot the trade if it retraces t0ward the sl to minimize the l0ss
then I Am COMPLETELY AGANIST THAT PHRASE
This phrase means different things to different traders. For me cutting my losses short and letting my winners runs is built into my exit plan. I am a trailing stop trader so I look to minimize risk but at the same time allow for the chance at the bigger move. Having an initial risk of say 1% on a trade, and coming out with a .1/4% loss is a great thing for me.

To some cutting your losses short can mean just having your initial stop in place with your risk and when it's hit its hit. You cut your losses at point X.

Different strokes for different folks

Mike
  • #12,817
  • Edited 1:48pm Aug 19, 2008 12:37pm | Edited 1:48pm
Quoting NuckingFuts
Darkstar covers some of this in detail in this thread about brokers:

http://www.forexfactory.com/showthread.php?t=7484
Darkstar said: "Trading has been characterized as a zero sum game, and rightly so. If trader A sells a security to trader B and the price goes up, trader A lost money that they otherwise could have made. If it goes down, Trader A made money from trader B’s mistake. Even in a huge market like the Forex, each transaction must have a buyer and a seller to make a trade and one of them is going to lose. In the general realm of trading, this is materially irrelevant to each participant. But there are certain situations where it becomes of significant importance. One of those situations is a news event."

That's not always (or maybe even rarely) true - when I go long, it's not because the seller "screwed" up (e.g. covering his bad short position). It could be simply that seller is closing his (short or long) position which was open l-o-o-ng time ago. Or it could be, as Darkstar mentioned earlier, that Toyota simply needs to sell the currency - right there and then - which I need to buy.

So, I am not making money at somebody's expence. When it comes to closing my position, the above logic would apply - I will close position profitably and at the same time another trader would open his (which could become profitable too).
One Chart is Worth Ten Thousand Words.
  • #12,818
  • Aug 19, 2008 12:50pm Aug 19, 2008 12:50pm
Quoting permanentjaun
All this discussion has me wondering what people believe is the hardest thing to pick up about the J16 method.
More of an adaptable system really.

We'll see why in a second

Quote
The methods are fairly simple. Watch and read the bars. Find PPZ's and certain other S/R levels. Determine market direction. Find confluence.

"ok I understand all I mentioned above, what is the next thing I'm going to learn when demo'ing this for 2-3 months?"
Well let's see, you've picked out a lot of good criteria on how to ENTER the market...what's that other bit we need to do afterwards?

Another piece of a simple answer is what you already said.
You can assume you're perfect after getting it right 3-4 times in a row, or, you can see whether you remain doing well for at least a more moderate amount of time.
It's a bit like wondering what the next month will be like before it happens. I would have no idea. No month is the same.
Although with that logic one could just as easily argue you should demo a lifetime first in order to've seen it all, so I'd say 3 months is a fair compromise between having seen something to begin with, and not knowing what to expect at all

And the above is just the theoretical side of it.
In practice you need to be able to see whether the "it sounds as simple as 1-2-3" theory on paper is as simple to cope with emotionally and practically once you see the numbers tally up and down on your screen as well.
Misinterpreation, temptation to overstake, close out too soon, hash around, etc pp. Some may dismiss this, with a "Hah, that would never happen to me", and some might psychology the worst sticking point they will encounter.

3 months is just a rough "more than 5 minutes, but less than a lifetime" guideline if you ask me(as in more practice will most likely not hurt), but I doubt many go "from zero to hero" in 12 weeks either way

And to come back to the opening words - the question is how you want to piece it all together into one whole "something I can trade" approach for yourself. This varies strongly from person to person imho, and it's during this time that you'll be able to play with whatever idea without damaging anything for real.
But sure, if you've traded for x years already and feel this is just a final piece, you may just adapt to it a lot faster etc..but one needs to start with something, no?
Trust price. Know yourself.
  • #12,819
  • Aug 19, 2008 12:51pm Aug 19, 2008 12:51pm
When to exit a trade is certainly one thing.

Quoting permanentjaun
My questioning is certainly more from the aspect of, "ok I understand all I mentioned above, what is the next thing I'm going to learn when demo'ing this for 2-3 months?"
  • #12,820
  • Aug 19, 2008 1:20pm Aug 19, 2008 1:20pm
Quoting fxprocessor
When to exit a trade is certainly one thing.
FXprocessor and seakinglight are correct in pointing out my omission of an exit strategy. I haven't gotten to that part of the J16 tutorials yet. I imagine they are equally as simple however. I've seen hints at the two bar method, which can be ignored if you look for other signs such as broken support when you're long or perhaps price moving beyond a high/low in the opposite direction of a bar that you based your entry off of.

Then there is riding out a winning trade by reading the PPZ's to predict where the next level price will have difficulty trading through. You can trail the stop by the 2 bar method or again by using other methods like having a discretionary trailing stop if price were to break through some more minor levels of S/R; waiting to see if there is a bounce or break through the MA's, etc..

My point is, the J16 method isn't very difficult to understand. It's not like someone trying to explain how to calculate and build a neural network. It sounds to me like the 3 month demo period is more about getting the emotions under check primarily, cleaning up your skills in reading a chart with J16 methods, and getting used to the speed that the market produces signals.
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