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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

  • #13,501
  • Sep 7, 2008 5:52am Sep 7, 2008 5:52am
Mr Smith

Thanks for your reply.

I didn't just ask about back testing. I asked you if this method of trading has a discernible edge with a proven, positive, expectancy and if you use asymmetric leverage (as you said only 1/4 risk on this trade).

You referenced my previous posts in this thread as "BS, whining and blablabla" but I assure you it is not my intention to go against the grain. Only to do the necessary research and development for my trading business.

This diligent way of approaching things has stood me in good stead so far in my life from a financial perspective.

I look forward to your real time journal.

regards

FXP



Quoting Mr Smith
I haven't back tested, it only broke by 13 pips, so it's debatable whether it truly failed or not, I mainly only do this in these occasions where it's easily conceivable that we get some pull back from all this usa strength, nothing goes one direction forever without retraces, so it's more a discretion thing, something I'm personally no good at back testing, if one looks at weekly, there is clear arguement that it's just to bullish, closed above etc, so I wouldn't recommend anyone taking this trade. I think I'll start a journal to show how I use j16 material in my trading as to not clutter this thread with ideas like this. I'll post a link here soon, when I get it up and running for anyone interested.
  • #13,502
  • Sep 7, 2008 7:11am Sep 7, 2008 7:11am
Quoting Mr Smith
I haven't back tested, it only broke by 13 pips, so it's debatable whether it truly failed or not, I mainly only do this in these occasions where it's easily conceivable that we get some pull back from all this usa strength, nothing goes one direction forever without retraces, so it's more a discretion thing, something I'm personally no good at back testing, if one looks at weekly, there is clear arguement that it's just to bullish, closed above etc, so I wouldn't recommend anyone taking this trade. I think I'll start a journal to show how I use j16 material in my trading as to not clutter this thread with ideas like this. I'll post a link here soon, when I get it up and running for anyone interested.
im interested
We leave no soldier behind.
  • #13,503
  • Sep 7, 2008 10:48am Sep 7, 2008 10:48am
Hello all. Just a few things I have found over the years.
1) if doesn't work in the past , odds are it wont work in the future.
2) if it did work, it can quite working anytime in the future.
3) some things work for a while then stop working then work again etc
the trick for me is knowing when to apply the tool.

Mr.Smith if you want me to back test your setup I would be happy to over next week. Just provide entry / exit rules and percent traded based on equity. Also activity as a function of equity change is a good one. Finally state the pairs you want tested.

Good trading

Jason
May the fish in your stream of life always bite.
  • #13,504
  • Sep 7, 2008 1:13pm Sep 7, 2008 1:13pm
Has anyone posted what they trade real time before and made money? I have on Avidtrader and on the J16 site before I left it. I want to see if people that are "Pros" can make money doing this REAL-TIME, anyone can post what "Can" work, very few can show it as it happens. I will post realtime as long as some others do so we can see who is doing what and maybe learn from it.
Keep taking CT trades, I need more money
  • #13,505
  • Sep 7, 2008 1:26pm Sep 7, 2008 1:26pm
Hi all first post here, just wanted to contribute a bit. . . Thanks to Jim and all who came before me for giving up hundreds of thousands of dollars of info!

I am watching USD/CAD today close to see what it is going to do. There are multiple levels of confluence lining up (Multiple fibs and pivots), as well as perhaps the chance of testing the old high which would of course mean breaking the TL which would be a major break out..... I just cant wait for the market to open really!

[IMG]http://i37.tinypic.com/i2irfm.jpg[/IMG]
  • #13,506
  • Sep 7, 2008 1:43pm Sep 7, 2008 1:43pm
Quoting mbqb11
Attached also is the gbp/jpy with what I consider a high probability trade. I have multiple long positions already built from the gap, but because we have such a beautiful pinbar and still a gap to close(highlighted in blue), I will even add more on the pinbar.
Mike,

Are you trying to tell us that you went long because of the gap and you are still holding 1,000 pips lower?
  • #13,507
  • Edited 2:23pm Sep 7, 2008 1:53pm | Edited 2:23pm
Quoting the_wizard
Mike,

Are you trying to tell us that you went long because of the gap and you are still holding 1,000 pips lower?
no my gap plays are completely different then then what is discussed on this thread. I scale into my gap positions in very small chunks and is the only time i do this.

Mike

here is my post from the j16 site for those interested

Quoting mbqb11
This is a continuation of a question from another thread.


Gap trading can be extremely profitable. It has treated me and many others on this site very well. One trader(rockrat - check out his journal for another way to play them) ONLY(as far as I remember) trades gaps. Like everything else in the trading world, everyone is going to have their own take on it.

But I will give you the run down on how I trade gaps. It really is the most discretionary part of my trading.

Firstly I only trade large gaps. large enough that you can see the gap on the 4hr chart. A lot of times you get these 20 pt gaps around and they usually fill too, but I have a problem with trading them. Liquidity is usually very thin during the opening on sunday which means wide spreads, and slippage. So they aren't worth it to me.

Next what I do is see how large the gap is about. For example the gbp/jpy is around 150 pips. I use this as my starting point. I then take that ~ stop size and get a position size. Usually 2%. I then cut that into quarters and put my first position on right when I am at my computer/broker opens.

So the key to me for gap trading conservatively is to scale into your position. Instead of sticking the whole 2% on right at the open, scale in and feel it out. This way when it tumbles you don't panic. You can simply wait it out. And use fibs/ppzs/PA to begin to try to time entries with each piece of your risk. If it ever comes to the point where I have around 3% almost about to be hit in the negative, I tend to throw on one last position and max out around 4-5%. With that said only once have I ever taking a full loss, and it was I just couldn't take the pain of the trade anymore during a summer gap I believe. Shortly after it filled.

So yes a lot of times you put your first .25% on and it closes and you make very little. But I would always rather be safe then sorry. There are a few other things I do here and there, but really I think that is all I need to explain as far as how I do it. No exact science, and I tend to never wait for a complete fill. Sometimes I build up such a nice position I don't even wait for a fill cause I might end up +4-6% because I scaled in so well.

So overall, wait for larger gaps. Enter your first position. Then scale in y our other positions slowly and spaced out. This way even 300-400 pips on a pair doesn't bother you. Of course the other way is to just try to put all your position at once and draw a line in the sand(s/r or ppz for a stop like anything else). I just think you are going to have much larger drawdowns that way.


Mike
  • #13,508
  • Sep 7, 2008 2:02pm Sep 7, 2008 2:02pm
Thanks for the offer, but it's not possible to backtest this particular trade as there is no clearly defined rules, it comes down to feeling and sentiment and area at the time it's all happening. Might sound like crap to some, that's ok, also comes down to at time that I'm actually entering I sit there and watch how price is reacting to the level it's at, not sure exactly how to describe it, it comes from watching the market alot at certain areas.

To Fxproccesor, I make money over time doing dirty entries like this, not sure whate else to say about it. But for sure, if you're not successful trading plane daily pinbars and beob's etc, then I wouldn't be considering dirty entries like this. Hopefully my journal can answer more questions.


Quoting aSandman
Hello all. Just a few things I have found over the years.
1) if doesn't work in the past , odds are it wont work in the future.
2) if it did work, it can quite working anytime in the future.
3) some things work for a while then stop working then work again etc
the trick for me is knowing when to apply the tool.

Mr.Smith if you want me to back test your setup I would be happy to over next week. Just provide entry / exit rules and percent traded based on equity. Also activity as a function of equity change is a good one. Finally state the pairs you want tested.

Good trading

Jason
  • #13,509
  • Sep 7, 2008 2:24pm Sep 7, 2008 2:24pm
No problem Mr.Smith, I kinda had a feeling it was based on feel. The fact that it is a trade that most people would not take makes is sound like a good setup. The real Thing said something in his blog that struck a cord with me. An old pit trader told him " we only make money taking trades others cant or are unwilling to take. " I feel the failed PB entry would defiantly be one of those.

Jason
May the fish in your stream of life always bite.
  • #13,510
  • Sep 7, 2008 2:26pm Sep 7, 2008 2:26pm
http://forexfactory.com/showthread.p...90#post2205090

Here is my journal for all interested, its not a signal service, so pls use common sense, after all it's your money.
  • #13,511
  • Sep 7, 2008 2:35pm Sep 7, 2008 2:35pm
I just shorted uchf at 1230 stop at 1270 , I'm on oanda if your wondering how I was able to get in.

Good chance by regular market open, price will be back down where we closed on friday.
  • #13,512
  • Sep 7, 2008 3:32pm Sep 7, 2008 3:32pm
Quoting mbqb11
no my gap plays are completely different then then what is discussed on this thread. I scale into my gap positions in very small chunks and is the only time i do this.

Mike

here is my post from the j16 site for those interested
Hey Mike,

Thanks for your post. So can you briefly tell me what happens when you are long GBP/JPY and it gaps up over 100 pips like it just has done? Do you cut and reverse until the gap is filled and then cut and reverse again? lol

Cheers,

Wiz (Tom)
  • #13,513
  • Sep 7, 2008 3:36pm Sep 7, 2008 3:36pm
Quoting the_wizard
Hey Mike,

Thanks for your post. So can you briefly tell me what happens when you are long GBP/JPY and it gaps up over 100 pips like it just has done? Do you cut and reverse until the gap is filled and then cut and reverse again? lol

Cheers,

Wiz (Tom)
Hey Wiz this is the first time I can ever remember seeing this with another significant gap. You could just have short gaps open, but since I am up quite a bit(biggest right now is over 600 pips) I am just going to hold my long gaps only so hoping for the gap to close down then pop back up

I will get in on other gaps not on the pairs I am already in(for example short eur/chf

I also closed out my gbp/chf gap longs just now(and eur/gbp shorts fri). I don't wait for a perfect close ever. When the rest close up it will be quite some nice gains

Mike
  • #13,514
  • Sep 7, 2008 3:39pm Sep 7, 2008 3:39pm
Question for the vets, How do you determine which part of your trade program is discretionary vs rule based? This is the one question I have struggled with for years. Does it all come down to personal choice and what feels right for each trader? For example Mike has rules that must be filled before he enters a pinbar. ( correct me please if im wrong Mike) But he uses descretion to manage the exit. Your thoughts would be much appeciated.

Jason
May the fish in your stream of life always bite.
  • #13,515
  • Edited 4:24pm Sep 7, 2008 3:42pm | Edited 4:24pm
Quoting mbqb11
Hey Wiz this is the first time I can ever remember seeing this with another significant gap. You could just have short gaps open, but since I am up quite a bit(biggest right now is over 600 pips) I am just going to hold my long gaps only so hoping for the gap to close down then pop back up

I will get in on other gaps not on the pairs I am already in(for example short eur/chf

I also closed out my gbp/chf gap longs just now(and eur/gbp shorts fri). I don't wait for a perfect close ever. When the rest close up it will be quite some nice gains

Mike
just for clarification, i had planned to play the USDJPY on the break, but i always wait until after the weekend to place my limit orders ... the pair has now moved well past areas where i would have already locked in profit and trailed my stop ... i think what you are saying is i might have another kick at the can by waiting for the gap to fill ...

... would it be better just to place orders on friday pins on friday rather than waiting on the open of tokyo on sunday to enter them? (i do this b/c i use oanda for my orders and the spreads increase to 10-30 pips on all pairs until tokyo open) ...
"Believe nothing you hear and half of what you see." Proverb
  • #13,516
  • Sep 7, 2008 3:44pm Sep 7, 2008 3:44pm
Quoting aSandman
Question for the vets, How do you determine which part of your trade program is discretionary vs rule based? This is the one question I have struggled with for years. Does it all come down to personal choice and what feels right for each trader? For example Mike has rules that must be filled before he enters a pinbar. ( correct me please if im wrong Mike) But he uses descretion to manage the exit. Your thoughts would be much appeciated.

Jason
Hey Jason,

Speaking purely for myself, I see discretion as that extra edge that comes from screen time and experience. The rule based part of my trading is simply to keep me structured and on the right path. The rules aren't set in stone they are merely a framework from which I work off of. Some traders will be more discretionary others more rules based. I think it is something you build up with over time. Such as being comfortable making certain plays over others, recognizing when they occur and trading them. So yeah I do believe it comes down to the trader to develop the style that best fits you and works too.

Best,
Mike
  • #13,517
  • Sep 7, 2008 3:45pm Sep 7, 2008 3:45pm
Quoting fxgrinder
just for clarification, i had planned to play the USDJPY on the break, but i always wait until after the weekend to place my limit orders ... the pair has now moved well past areas where i would have already locked in profit and trailed my stop ... i think what you are saying is i might have another kick at the can by waiting for the gap to fill ...

... would it be better just to place orders on friday pins on friday rather than waiting on the open of tokyo to enter them? (i do this b/c i use oanda for my orders and the spreads increase to 10-25 pips on all pairs until tokyo open) ...
I would always wait till sunday to place your orders, this volatility is simply b/c of all the other volatility we left off with last week and friday. This is the exception of a day rather then the norm.

Mike
  • #13,518
  • Sep 7, 2008 3:49pm Sep 7, 2008 3:49pm
Quoting mbqb11
I would always wait till sunday to place your orders, this volatility is simply b/c of all the other volatility we left off with last week and friday. This is the exception of a day rather then the norm.

Mike
so when tokyo opens, would it still be prudent to play the pin long if/when it fills the gap?
"Believe nothing you hear and half of what you see." Proverb
  • #13,519
  • Sep 7, 2008 3:53pm Sep 7, 2008 3:53pm
Quoting mbqb11
Hey Jason,

Speaking purely for myself, I see discretion as that extra edge that comes from screen time and experience. The rule based part of my trading is simply to keep me structured and on the right path. The rules aren't set in stone they are merely a framework from which I work off of. Some traders will be more discretionary others more rules based. I think it is something you build up with over time. Such as being comfortable making certain plays over others, recognizing when they occur and trading them. So yeah I do believe it comes down to the trader to develop the style that best fits you and works too.

Best,
Mike
Hey Mike,

Thanks for the fast responce! My data feed hasn't opened up yet but am looking forward to seeing all these new gaps you guys are talking about. I coded trading systems for years but could never go with it because it left no room for discretion. One of the things I really like about this thread is that their are still people here like yourself that were in at the start. The fact that Jim is still trading profitable, these things speak volumes to me. And the fact the methode alows for descretion. Thanks for your time and hope you guys make a bundle of this weeks gaps

Jason
May the fish in your stream of life always bite.
  • #13,520
  • Sep 7, 2008 3:56pm Sep 7, 2008 3:56pm
Quoting fxgrinder
so when tokyo opens, would it still be prudent to play the pin long if/when it fills the gap?
for me the ideal situation would be the gap fills up near 197.50 then we look to short back down and fill todays new gap

but ideal is hard to come by in trading
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