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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

  • #30,661
  • May 20, 2009 11:34pm May 20, 2009 11:34pm
Bundyraider, thanks so much for your post on the formations behind the pins. As a newbie learner, I'm definitely going to brush up my formation knowledge and take a look at the "behind the pins" action. Thanks so much for sharing

Mike, I'm also interested in hearing why you have a 60% win rate, is it because you don't move stops to BE, waiting for the big move? In terms of moving stops, I've found that I prefer to either catch a move or get stopped. So often price retraces beyond the BE point and then moves on. Of course, I'm still in demo so this may change when I start on my micro account, but I've found that I'm psychologically happier with a better R:R.

The two bad things about trading from Australia: 1. when I wake up and take a position, it's the slow Asian session, so price doesnt move drastically, making me doubt my position. I think it's important for me to recognize this and stay put till I'm take out or London opens.
2. I wake up and see a gazillion more posts on this thread, while most of the posters are asleep! Love starting my day by going through the new posts though
  • #30,662
  • May 21, 2009 12:01am May 21, 2009 12:01am
You make some good points Jlr. Also Alter has some valid questions...We should all question any part of any method as we learn and grow better when we do.

Taking accountability for ones mistakes is all good and fine. However, an issue that is unique with trading is: Can you successfully teach a trading method which is very subjective to the trader in terms of defining the proper set-up and exiting? We often hear one mans A+ trade is somebody's B trade because there are no strict requirements for A+ trades. So the real question is can you effectively and successfully teach this method through this forum, PF etc. to each student that really wants to learn. I'm sure there are success stories out there...I'm just not sure what percentage really make it. I would guess the same as the success rate in trading which is around 5%.

I know the Turtles were successful back in the day to learn a very basic trading system (which no longer works I believe :-)). I recently read an interview with a famous trader named Marty Schwartz and he tried to coach 3-4 students and gave up because he couldn't teach them his stomach even though he could teach them his rules.

Rubin.


Quoting Jlr
I've been here 3 months now, and the AUD/USD trade was the first trade I was actually surprised to see fail. Countless other good PA set ups have all done really well. The USD/JPY trade, was not a great PA set up, though it was perfectly fine. I bet any good trader that took it though, was either at B/E at that 96.5 level, or were taking some profits. Sorry if this last comment is in anyway offensive, but, I think is very important for you to realize. I haven't done well myself here, but I have absolutely np taking accountibility for my mistakes....
  • #30,663
  • May 21, 2009 12:12am May 21, 2009 12:12am
Hi Rubin

As a hopeful (!) newbie/learner, this is what I'm trying to learn: not a method per se, just a way of identifying PA. I'm excited about this method because the more I backtest and demo, the better I'm becoming at understanding how price behaves at certain S/R. I am not aiming to be like Mike or Jim. I am aiming to better understand the behaviour of price, so that I can be a good trader in my own right.
I really admire Raczek and RustyJeff's trading methods - plus there was another guy (forgot his name, sorry) who was trading 5min using this method. I wish I could become like them overnight but I can't. I'm trying to learn enough to develop my skills so that I can be confident in my own system.

I agree that you should question the success of being able to teach this method to others. But I personally don't care about that: I am happy with this system (and I've been around the block checking out a whole heap of others, backtesting+demoing, so I have reason to be happy and confident). The only thing I care about is whether I personally can become good at it.

So in short, maybe the success rate of teaching this method to others is low. It might not suit you personally. But I think only the trader can decide that.

(And I really hope I haven't offended anyone with this post. I am a newbie, which is why I feel closer to newbie psychology! And I really just want to help.)
  • #30,664
  • May 21, 2009 12:12am May 21, 2009 12:12am
Quoting supremeChaos
Jlr,
our buddy bundy speaks gold again...

the "candle development" (as some call it) tells a lot of tales. it may, for example, explain why a huge Daily bullish PB or BUOB was followed by an immediate reversal. in this particular example, u might see in a lower time frame, 4-hour or even 1-hour, that price has stalled/ranged for several bars (around the highs of the bullish PB or BUOB) as price was not able to penetrate an immediate resistance, which in turn caused an immediate reversal on the next Daily bar/candle....
Thanks, thats good info to know, much appreciated. Not exactly what I meant though. What I meant was, taking a daily PB, and checking the 1hr timeframe, or 4hr, to see how exactly it was formed. Was it formed with 23 hours of buying, and then 1 hour of a huge reversal, forming a PA bar. Or was it a more gradual turn around? Now that I think about I remember raz talking briefly about " perfect arch's". Probably need to study the charts more. I wonder how much more strength these perfect reversals have. I've seen some nice ones lately and they shot hard.
  • #30,665
  • May 21, 2009 12:19am May 21, 2009 12:19am
Quote
Thanks for your take SupremeChaos. I will admit that fundies are my weak point. Besides the fact that this trade may be invalidated before it starts (pin nose may be breached as I post), I do take profits rather quickly as I do not take my eyes off a trade once is is executed. I do not have an issue trading counter trend if I like the look of the chart. Now for the gold nugget-------I did not realize that a "grade A" pin at swing low needed to have a higher close than open but it certainly makes sense doesn't it? Excellent info and mucho...

KissFan,
LOL, part of my post may have sounded fundamental-ish (what a word ), but i based my observations on Crude oil & $ index charts.
Regarding countertrend trades, i have no doubt in my mind that u are capable of taking & profitting from those trades. in fact, i think u do profit from them better than i do.

With regards to PA & trade "classification", i'm not particularly keen on it. As such, i try to avoid classifying setups as A, B or, C as it is mostly subjective in nature. So, i'm not saying the $cad with such & such PB criteria met is A-grade.
Also, i just checked $cad daily chart & saw the huge daily bar/candle which just formed, preceded by 2 equally huge bars/candles. the 2 4hr bars preceeding the PB is also fairly bigger than the PB. (again, an issue of the trend being down)

Who knows, we might go into a range from here, before we get another PB or BUOB for an upmove. But as it is, there are a lot of traffic/resistance above (1.15-1.18 area) but LESSER immediate roadblocks below (1.13 then..... 1.08 range highs last Sept! ; possible ppz's/support prior Aug'07 may also exert some influence)




Alexandra,
let's see where the train goes


Glad to have u both on board here on j16
  • #30,666
  • May 21, 2009 12:25am May 21, 2009 12:25am
Quote
Thanks, thats good info to know, much appreciated. Not exactly what I meant though. What I meant was, taking a daily PB, and checking the 1hr timeframe, or 4hr, to see how exactly it was formed. Was it formed with 23 hours of buying, and then 1 hour of a huge reversal, forming a PA bar. Or was it a more gradual turn around? Now that....

Jlr,
LOL, i was referring to the same issue (as above example) u are referring to. Maybe i rambled a bit & that made u confused.
It's all good.
  • #30,667
  • May 21, 2009 12:34am May 21, 2009 12:34am
Quote
Mike,
I was very surprised to hear that your win rate is in the upper 60%, because you are so picky about your entries. I imagined that your win rate would be closer to 90%. Is this because you aim for higher R:R and/or do not move your stop to BE quickly.


PipGator,
That's not surprising. I think it's just his guesstimate. or if indeed it is 60+%, i still think it's a very good win rate for his caliber. I'm pretty sure several factors come in & cause a 60% win rate rather than your-expected 90%.

Did i make sense? Maybe i'm just rambling. maybe what i'm trying to say is whatever the win rate of a good trader is, is good enough.
  • #30,668
  • May 21, 2009 12:38am May 21, 2009 12:38am
Quoting gorubin
You make some good points Jlr. Also Alter has some valid questions...We should all question any part of any method as we learn and grow better when we do.

Taking accountability for ones mistakes is all good and fine. However, an issue that is unique with trading is: Can you successfully teach a trading method which is very subjective to the trader in terms of defining the proper set-up and exiting? We often hear one mans A+ trade is somebody's B trade because there are no strict requirements for A+ trades. So the real question is can you effectively...
Probably not, because trading really isn't that easy. When money is on the line, people act irrationally. People don't abide by their own rules. People exceed their means, and they exceed the amount of trades they should be taking, I've done it myself quite a few times myself, I imagine it is natural. I'm sure, however, there are plenty of responsible people doing just fine. If you are cautious, and patient with this method, I do believe it'll work. I just don't think it is easy for people to do that.

I think I've heard of turtles, some trend trading system. Know someone that did that for a living I believe, seemed to be successful.
  • #30,669
  • May 21, 2009 12:47am May 21, 2009 12:47am
Quoting bundyraider
I do this pretty much every time Jlr. I believe it makes a big difference.

It does go hand in hand with location though. For example, on a clean chart with no lines etc, I will look at an inside bar formation, head down the time frames to check it out and know from that sub-formation that the inside bar is a reaction to a trend line(or ppz etc)...
This is really great info, ty bundy
  • #30,670
  • May 21, 2009 12:56am May 21, 2009 12:56am
Quote
The two bad things about trading from Australia: 1. when I wake up and take a position, it's the slow Asian session, so price doesnt move drastically, making me doubt my position. I think it's important for me to recognize this and stay put till I'm take out or London opens...

Quote
As a hopeful (!) newbie/learner, this is what I'm trying to learn: not a method per se, just a way of identifying PA. I'm excited about this method because the more I backtest and demo, the better I'm becoming at understanding how price behaves at certain S/R. I am not aiming to be like Mike or Jim. I am aiming to better understand the behaviour of price, so that I can be a good trader in my own right.....
So in short, maybe the success rate of teaching this method to others is low. It might not suit you personally....

pricey,
Being in Australia doesn't mean u have to trade Australian time. u can opt to trade late Asia/early Europe onwards.
Also, don't forget a positive for being in Australia: sometimes, there is late US volatility which starts/is ongoing during your time! This sometimes is a precursor for a big trend that lasts until the London/US open/close & u can take advantage of this!!

it's expected for me to hear newbies saying "I am not aiming to be like Mike or Jim". This is partly humility with a huge dose of under-self confidence. No problem with that. But, it would be better if u do aim to be Mike, Jim, or some other seasoned traders here. Why? because u get inspired, u get pumped up by their success, u play catch up, u get more focused, disciplined & patient so as to get better as they presently are.

Contrary to the underlined phrase above, i do think the success rate is high. Very doable & easily duplicated. Just look at all the posts here, from then til now. Usual factors to consider are patience(in taking& not taking a trade), focus (on the j16 method & eventual trading success), discipline (in using the j16 method), & determination (as opposed to quitting FX or the j16 method & taking on another method/system)

Newbie psychology? why not jump over it, s kip it & go directly to professional trader mindset/psychology even if u are a newbie? That would be best.
  • #30,671
  • May 21, 2009 1:15am May 21, 2009 1:15am
Quote
Whats about USD_JPY PB confluent with fibo 50?

Greetings masut,
looking at your $jpy chart, the PB u mentioned is fairly smaller than the 3 previous bars. Also, the PB's close is lower than the open.
possible immediate resistance are around 95 & 95.50. looks far-fetched that price will breach past 96-97 short/medium term. $ is weak; $jpy trend is down.
$jpy has been in a range since march 22, & we have broken &closed below that range's low @ 95.50-ish last week, & we may now possibly test the March15-week spike low @ 93.50-ish.

Almost similar issue with $cad (see earlier KissFan's &related posts). let's see...
  • #30,672
  • May 21, 2009 2:08am May 21, 2009 2:08am
Hi Chaos, thanks for your posts.
What I mean by newbie psychology is, I/we are not trading large lots, more looking at learning the methods, getting good at it. Once real money is on the line, there's a change in psychology.
  • #30,673
  • May 21, 2009 2:20am May 21, 2009 2:20am
pricey,
I see.
Still, u can skip past our previous mistakes, really get good at this on demo, so as to minimize & avoid replicating numerous & repetitive mistakes we've made, & therefore become really confident & consistent & well-armed with good traits (discipline, patience, focus, etc) as u go on live. U can try this path, even if u are currently already live trading.
change in psychology will be reduced/eliminated via preparedness.
  • #30,674
  • May 21, 2009 3:26am May 21, 2009 3:26am
Got stopped out at b/e @94.50 nature of the beast undeterred thought I was golden 4 a bit. Tryin hard to position myself 4 second entry aint easy at the moment got hung up on a longer term 50 fib here we go again
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  • #30,675
  • May 21, 2009 3:53am May 21, 2009 3:53am
i have been waiting and waiting for a setup, seems like something might happen today..... some good looking beob and buob's around
  • #30,676
  • May 21, 2009 4:11am May 21, 2009 4:11am
Quoting Alexandra
It concerns me that I see so many posts here about PB's against the major trend. Yes, they do appear frequently, and, while they can give occassionaly lucrative profits, I find one is better to patiently wait for PA that supports the major trend. One can create a PPZ where one wants at times! Why surf the ripple when one can surf the wave?

Given that a major trend does not move in one direction and moves in waves and these waves (or retracements) sometimes go 20% or 50% or 61% of the move (fibs retracements). There is money to be made trading counter trend, as you say you won't usually catch a big move, however you can get 1 or 2 RR easily. If not with good trade management being aware of the major trend you can have a tighter exit strategy (move to BE quickly) for counter trend trades. I feel you are mixing Jackos method and James16, fine, but its not the only way and I feel you will miss a lot of good trades.

You did raise a good point though to remind people to be aware of the trend, and zoom out a bit in your analysis.
Economists have forecast 9 out of the last 5 recessions
  • #30,677
  • May 21, 2009 4:15am May 21, 2009 4:15am
Quoting bundyraider
I do this pretty much every time Jlr. I believe it makes a big difference.

It does go hand in hand with location though. For example, on a clean chart with no lines etc, I will look at an inside bar formation, head down the time frames to check it out and know from that sub-formation that the inside bar is a reaction to a trend line(or ppz etc)...
Added to my 'special' posts!
  • #30,678
  • Edited 5:01am May 21, 2009 4:16am | Edited 5:01am
was watching GBPCHF, was expecting a pullback due to the distance from ema (from Alexander Elder) and the PB... But I thought it wud go upto 74 before a retrace... missed the big move... *sigh*

if this had been realtime and I'd gone short at the bottom of the PB, would my order even have been filled? I know, not every trade is mine... but still...

should I have watched out and been aware of the upcoming news, or was I just unlucky?

EDIT: I'm talking about the bar just before the drastic down move, I realize now that my post is a bit rambling and unclear. I'm talking about "the one I did NOT take and ultimately moved megapips" which is at least better than "the one I took through poor analysis and lost money" etc. Sorry about not being clear before.
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  • #30,679
  • Edited 4:40am May 21, 2009 4:28am | Edited 4:40am
Quoting PipGator
Mike,

I was very surprised to hear that your win rate is in the upper 60%, because you are so picky about your entries. I imagined that your win rate would be closer to 90%. Is this because you aim for higher R:R and/or do not move your stop to BE quickly.
Pricey is on to it.

There are two major options. As you probably realise....

High win rate low targets.
Low win rate higher targets.

A rookie mistake to forget that sometimes, but you need to realise that the 60% method NEEDS picky entries. It's the super picky entries that have the "large run" potential.

I'm not comfortable saying "NEEDS picky" is exclusive to that method of management, as you should always be picky. But you really need to be ultra-conservative when aiming for those long-run trades. Some can go on for weeks/months and give returns well beyond the 1 : 1 risk. ...but you can pay for it in the win rate, which a lot of people struggle to cope with and lose their patience.
.
Bundy's status today: "Waiting..."
  • #30,680
  • May 21, 2009 4:35am May 21, 2009 4:35am
Quoting pricey
was watching GBPCHF, was expecting a pullback due to the distance from ema (from Alexander Elder) and the PB... But I thought it wud go upto 74 before a retrace... missed the big move... *sigh*

if this had been realtime and I'd gone short at the bottom of the PB, would my order even have been filled? I know, not every trade is mine... but still...

should I have watched out and been aware of the upcoming news, or was I just unlucky?
Hi Pricey,
Few things. I don't think many/any people on this thread trade or even knew about any news. They don't post it here anyway. I would say that I very rarely look at the news...The only news I make sure to keep in mind is each currencies' rate decisions. I set an alert a day or two before the decision so that I consider it when I might take a trade on the daily...So from that standpoint, I would say if you were long, you were just unlucky... however...

As for the pinbar... I"m not seeing where your pinbar is...yesterday's daily was a strong bullish bar on my chart... I know some brokers might have it differently though... could you post a chart of yours?

EDIT... Missed your chart... will look now.
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