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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

  • #20,741
  • Feb 7, 2009 12:19pm Feb 7, 2009 12:19pm
Quoting Jduester
We have a possible pinbar on the daily EUR/GBP. Here is my thought process on paper as to whether this is a good trade candidate or not . Please let me know if this makes sense to you guys.

Pros:
1. Swing Low
2. O/C within Previous bar
3. Bounced off minor PPZ
4. At 50% FIB (10/20 to 12/30)

Cons:
1. O/C not in top 1/3 (close was 40% from top), making this more of an "indecision only" bar
2. Bar range is smaller than previous few bars, which were strongly bearish.
3. Would be running into another PPZ zone around 0.8800. To me this signals that...
Hey Josh,

Jig will do a chart better than me but here's a try...

So looking at my chart it's not a Pb first of all, but ignoring the shape let's bring into consideration the location..

Location test is an division of 2 things for me.

1) analysis of why the PA setup occured
2) Space a potential trade may have.

In the light of the first test, I look at my charts and find some interesting stuff. The 50 fib which you already pointed out and 2 sets of bar highs from history (both marked by the magenta dash) If you ask me fair enough if the bar shape is good.

Coming to the second part of location test is what helps me conclude that the trade would be a real mistaken one (has a probablity of failing) The answer is in my chart illustarted with the 3 yellow dashes.
For a moment I'd like you to ponder over this fact...

"Price only just broke out of a triple bottom, a level it tested three times and failed, now that it has broken it the fourth time do you want to believe it will want to pullback to the 0.88 level which gave the three lows??"

You are extremely smart if your answer is a "Yes", the question then is, a good daily trade should demand the break of this level this time to the upside. "Do you want to believe a retest will break the 0.88 level, and all the hell of resistance around it??"

If your answer is a "No" you once again prove to be a smart operator

To conclude make sure you also take note of a potential trade entry as per James rules. 10 pips above the high of the Pin Bar, see where it lies...

Regards,
Ghous.
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I believe . . .
  • #20,742
  • Feb 7, 2009 12:34pm Feb 7, 2009 12:34pm
Quoting jarroo
My data feed is magical and breakout has already occurred.
lol
I believe . . .
  • #20,743
  • Feb 7, 2009 1:01pm Feb 7, 2009 1:01pm
Look at this for location....

Regards,
Ghous.
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  • #20,744
  • Feb 7, 2009 1:03pm Feb 7, 2009 1:03pm
Quoting ghous
Hey Josh,

Jig will do a chart better than me but here's a try...

So looking at my chart it's not a Pb first of all, but ignoring the shape let's bring into consideration the location..

Location test is an division of 2 things for me.

1) analysis of why the PA setup occured
2) Space a potential trade may have.

In the light of the first test, I look at my charts and find some interesting stuff. The 50 fib which you already pointed out and 2 sets of bar highs from history (both marked by the magenta dash) If you ask me fair enough if the...

Ghous, Great explanation. So it looks like I got the answer right (Don't trade it long) but didn't fully realize why. Regardless of the formation (which on my chart is not a pin because of close not being in top 1/3), the location tells us not to take this trade long...
Perhaps we will rally back to 0.88 and then have PA telling us to resume downward... aka- old support will become new resistance.

Under different location parameters, I wonder how you and Jig would have looked at my chart differently. Ie- I'm not sure you figure out where the O/C fits as a % from high (do you?). Just looking at it makes it look more like a neutral bar than a pinbar though. And when in doubt, stay out.

Time to go out and enjoy the nice weather (40s (F) in Wisconsin in February...
  • #20,745
  • Feb 7, 2009 1:12pm Feb 7, 2009 1:12pm
Quoting Jduester
Ghous, Great explanation. So it looks like I got the answer right (Don't trade it long) but didn't fully realize why. Regardless of the formation (which on my chart is not a pin because of close not being in top 1/3), the location tells us not to take this trade long...
Perhaps we will rally back to 0.88 and then have PA telling us to resume downward... aka- old support will become new resistance.

Under different location parameters, I wonder how you and Jig would have looked at my chart differently. Ie- I'm not sure you figure out where the...
40F sounds cool, we never get such weather here in Pak

Anyways yeah I don't have a specific criteria in terms of the ratio of the O/C with the H/L to identify a decent shaped Pin bar. I just let my naked eyeball do the job for me, if you keep looking at the A+ shapes and compare them with the A ones and the B ones and the C ones in time you'll know exactly when an A+ will jump out at you, and with some practise I can bet you won't even need to think real hard on the proportions of it's parts, it becomes instinct. But for now I agree with the idea of formulating such a specific criteria to identify them...

You're doing good Josh, hope you can keep up with it

All the best!
Cheers.

PS abt the Eur/Gbp setup, I did'nt even go into the bar shape. location is far more important and it's easy to see the mediocrity of the location of this setup...let alone the poor overall look of the bar

Regards,
Ghous.
I believe . . .
  • #20,746
  • Feb 7, 2009 1:26pm Feb 7, 2009 1:26pm
Quoting ghous
Look at this for location....

Regards,
Ghous.
Shape's perfect on Fxpro feed, was'nt as great on the Fxopen mt4...

Ah so well that makes it clearly an A+ setup IMO...

Regards,
Ghous.
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I believe . . .
  • #20,747
  • Feb 7, 2009 1:33pm Feb 7, 2009 1:33pm
Quoting ghous
Shape's perfect on Fxpro feed, was'nt as great on the Fxopen mt4...

Ah so well that makes it clearly an A+ setup IMO...

Regards,
Ghous.
I told you that feed is magical.
Indicators show the past. Price Action "Indicates" the future.
  • #20,748
  • Feb 7, 2009 1:37pm Feb 7, 2009 1:37pm
Plan the trading, Trading the plan
I like it Josh, look forward to still seeing you here in 2010.
Tony


Quoting Jduester
Jig,

On my list:
1. Finish this thread (up to post 8355 and am reading 500-600posts/day). (this is the priority and has a March 6th goal).
2. Get Metatrader demo account to be used for backtesting the 90s on all majors (dailys, weeklies, monthlys). (soon, so i'm ready to move from #1 to #2)
3. Get a trading plan finalized using what I've learned in this thread. Have been jotting down things and have a trade journal, but am still developing/rewriting rules. (in the process, but should be complete before I start #2)
Thanks to everyone who posts...
On-site guru & also FF member's' psychiatrist, when not drinking tea
  • #20,749
  • Feb 7, 2009 1:38pm Feb 7, 2009 1:38pm
Quoting jarroo
I told you that feed is magical.
Sorry for pricking the voodoo bubble

...

EDIT: I like "all" my bars to be inside the trendline as far as possible...I guess that's the magic here, agree on the Pin bar thingie though, I was abt to discard the setup lol!
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I believe . . .
  • #20,750
  • Feb 7, 2009 1:50pm Feb 7, 2009 1:50pm
if there is a divergency in the 1HR tf should we expect a divergency in 4hr tf any time soon or no?
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  • #20,751
  • Feb 7, 2009 1:51pm Feb 7, 2009 1:51pm
Hi ghous,

One question about the GBPCAD chart that you posted. There's a PPZ (red line that I drew) just under the PB that you considered as A+ trade. Can you explain what you'll do if you found PB with nice location (like G/CAD) but with PPZ just below the it. I mean what would you consider before taking it. Maybe because I'm lack of experience that's why I see every PPZ as major PPZ. Hope you understand what I'm saying as I dunno how exactly to explain it to you.
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  • #20,752
  • Feb 7, 2009 1:56pm Feb 7, 2009 1:56pm
Quoting goldbird22
if there is a divergency in the 1HR tf should we expect a divergency in 4hr tf any time soon or no?
My answer would be no. For Elliotician, whenever there is divergence it means it is the end of wave 5 of certain degree. But when you look at larger TF like 4H or daily, you just see the whole picture or larger degree of wave. So the divergence might means end of wave 5 of wave 1 or 3 or 5 on larger TF. Yes, it might sounds complicated lol that's why I no longer count waves (just used basic principle). So it means, the price might only change direction on the 1H or lower TF but on larger TF, it might just be a retracement or pullback but still move in same direction.

Anyways, JMHO.
  • #20,753
  • Feb 7, 2009 2:21pm Feb 7, 2009 2:21pm
Quoting ghous
Sorry for pricking the voodoo bubble

...

EDIT: I like "all" my bars to be inside the trendline as far as possible...I guess that's the magic here, agree on the Pin bar thingie though, I was abt to discard the setup lol!

I like the fact that it broke 122.00. I'm not a big trendline guy but when they add to the confluence of set up all the better.
Indicators show the past. Price Action "Indicates" the future.
  • #20,754
  • Edited Feb 8, 2009 12:49am Feb 7, 2009 2:34pm | Edited Feb 8, 2009 12:49am
Quoting arcus
Hi ghous,

One question about the GBPCAD chart that you posted. There's a PPZ (red line that I drew) just under the PB that you considered as A+ trade. Can you explain what you'll do if you found PB with nice location (like G/CAD) but with PPZ just below the it. I mean what would you consider before taking it. Maybe because I'm lack of experience that's why I see every PPZ as major PPZ. Hope you understand what I'm saying as I dunno how exactly to explain it to you.
Check this great post from James16 (the big guy) it has helped me very much.

http://www.forexfactory.com/showpost...ostcount=15568


I like #2 and/or #4 concerning the Gbp/Cad PB.
Indicators show the past. Price Action "Indicates" the future.
  • #20,755
  • Feb 7, 2009 2:41pm Feb 7, 2009 2:41pm
Quoting jarroo
Check this great post from James16 (the big guy) it has help me very much.

http://www.forexfactory.com/showpost...ostcount=15568


I like #2 and/or #4 concerning the Gbp/Cad PB.
Thanks Jarroo. Helpful as usual Anyway, according to you, what would you rate the PB in term of formation (which I think is A+) and the location.
  • #20,756
  • Feb 7, 2009 2:59pm Feb 7, 2009 2:59pm
Quoting arcus
Thanks Jarroo. Helpful as usual Anyway, according to you, what would you rate the PB in term of formation (which I think is A+) and the location.
I can't post my own charts right now so I'll borrow yours.
Its in the A catagory to me. You pointed out the main resistence (PPZ level) that this trade has to overcome.

Also the PB is off the 1.8400 level which has shown some strong down move when hit. Ergo, the PB from that level. It just may want to continue down. We shall see.
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Indicators show the past. Price Action "Indicates" the future.
  • #20,757
  • Feb 8, 2009 12:47am Feb 8, 2009 12:47am
Quoting arcus
Hi ghous,

One question about the GBPCAD chart that you posted. There's a PPZ (red line that I drew) just under the PB that you considered as A+ trade. Can you explain what you'll do if you found PB with nice location (like G/CAD) but with PPZ just below the it. I mean what would you consider before taking it. Maybe because I'm lack of experience that's why I see every PPZ as major PPZ. Hope you understand what I'm saying as I dunno how exactly to explain it to you.
I am looking at that ppz as the 1.79 price level. My pin bar's low is at 1.7983, a trade should well have abt 70 pips before it hits 1.79....

I'll be taking the trade on the break of the Pin bar and probably just move my SL to breakeven and perhaps even book some profit at 1.79....

Regards,
Ghous.
I believe . . .
  • #20,758
  • Feb 8, 2009 1:20am Feb 8, 2009 1:20am
Quoting ghous
I am looking at that ppz as the 1.79 price level. My pin bar's low is at 1.7983, a trade should well have abt 70 pips before it hits 1.79....

I'll be taking the trade on the break of the Pin bar and probably just move my SL to breakeven and perhaps even book some profit at 1.79....

Regards,
Ghous.
I won't be playing this as my feed doesn't show it... but draw up the round numbers (1.79 & 1.77) see where they land, could see some ranging in that area.
  • #20,759
  • Feb 8, 2009 2:04am Feb 8, 2009 2:04am
Quoting ghous
I am looking at that ppz as the 1.79 price level. My pin bar's low is at 1.7983, a trade should well have abt 70 pips before it hits 1.79....

I'll be taking the trade on the break of the Pin bar and probably just move my SL to breakeven and perhaps even book some profit at 1.79....

Regards,
Ghous.
Looking at my own charts, it looks even better.

I like your plan ghous. Spot on brother.

(I think I drew the trendline correctly this time. )

Jim
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Indicators show the past. Price Action "Indicates" the future.
  • #20,760
  • Feb 8, 2009 5:17am Feb 8, 2009 5:17am
Quoting TraderX
I won't be playing this as my feed doesn't show it... but draw up the round numbers (1.79 & 1.77) see where they land, could see some ranging in that area.
Great descision!

If you're uncomfortable with it, you should pass...

Regards,
Ghous.
I believe . . .
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