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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

  • #30,741
  • May 21, 2009 4:38pm May 21, 2009 4:38pm
I have a quick question about backtesting.
Since the most important point of this PA is location, how do you identify PPZ when you are backtesting? Otherwise you will put some orders when you will never in real life and that will skew your PNL in the wrong direction...
  • #30,742
  • May 21, 2009 4:42pm May 21, 2009 4:42pm
Quoting TotalNewbie
I think I might just have had my first aha moment so I thought I'd share it on here in case it helps other rookies like myself.

A bit of history:
Like many people, I came to forex expecting to make easy money daily. I had purchased some software that threw out indicators and all I had to do was watch the money grow.

You can guess what happened. The software threw out as many bad indicators as good and I soon ended up with a loss. Luckily, the software came with a 30 day money back guarantee so I returned it and got my money back. Undaunted,...

There are many more "Ahha" moments to come. This is a big one.
Indicators show the past. Price Action "Indicates" the future.
  • #30,743
  • May 21, 2009 4:46pm May 21, 2009 4:46pm
Quoting Lapin
I have a quick question about backtesting.
Since the most important point of this PA is location, how do you identify PPZ when you are backtesting? Otherwise you will put some orders when you will never in real life and that will skew your PNL in the wrong direction...
Hi Lapin,

Not sure I understand, you identify them the same way you do normally, you can hide the future bars by turning chart shift off and use F12 to move one bar at a time. I am backtesting pin bars on daily since 2000 (starting on U/J) I will record any pin bar that looks good regardless of location, confluence, however I record the locvation, trend, direction confluences, then record the results of various exit strategies.

Mark
Economists have forecast 9 out of the last 5 recessions
  • #30,744
  • May 21, 2009 4:46pm May 21, 2009 4:46pm
Quoting TotalNewbie
Then I can look for PA to confirm that the PPZ is acting as support or resistance.
Can I steal this line, TN?
Indicators show the past. Price Action "Indicates" the future.
  • #30,745
  • May 21, 2009 4:48pm May 21, 2009 4:48pm
Quoting TotalNewbie
I think I might just have had my first aha moment so I thought I'd share it on here in case it helps other rookies like myself....
Thats a good way to do it, however I look for PA first then PPZ etc I find it easier, without PA theres no trade however PPZ can be minor or major and you cant mark all of them.
Economists have forecast 9 out of the last 5 recessions
  • #30,746
  • May 21, 2009 4:49pm May 21, 2009 4:49pm
Tx markmm
I thought it was automatic backtesting. Anyway I didn't know this function.
Looks like a busy weekend ahead
  • #30,747
  • May 21, 2009 4:51pm May 21, 2009 4:51pm
Quoting Lapin
Tx markmm
I thought it was automatic backtesting. Anyway I didn't know this function.
Looks like a busy weekend ahead
Sadly not, with this method its best to do it eyes only. Can be tedious but you will learn loads just by going through hundreds of setups.
Economists have forecast 9 out of the last 5 recessions
  • #30,748
  • May 21, 2009 4:52pm May 21, 2009 4:52pm
Indeed... I am learning better by example
  • #30,749
  • May 21, 2009 4:54pm May 21, 2009 4:54pm
A great deal of simple yet powerful truths to this post that will simply be missed by many that are not ready in their journey to take in yet

Thanks Rubin

Mike

Quoting gorubin
Thanks for sharing your numbers Mike.

I think I'm realizing more and more that the huge 5:1 R:R and 90% win rate are not within reach of us regular mortal traders.

However, I think that when you find your edge in trading it will be a small edge. Sort of like the casinos having a 51% edge on the Roulette wheel. They lose a lot of times...but they always come back on top due to their small edge. I feel that this might be the "secret" of trading if there was one. If you give a small trader a nice but small edge he won't know what to do with it...
  • #30,750
  • May 21, 2009 4:57pm May 21, 2009 4:57pm
Quoting TotalNewbie
I think I might just have had my first aha moment so I thought I'd share it on here in case it helps other rookies like myself.
.
it was an eye opener for me too, I'm sure your post will benefit those that comes after us in this thread.
  • #30,751
  • May 21, 2009 5:01pm May 21, 2009 5:01pm
Quoting jarroo
Can I steal this line, TN?
It would be an honour, sir.
  • #30,752
  • May 21, 2009 5:26pm May 21, 2009 5:26pm
Great post TotalNewbie! From my perspective, once I understood this basic methodology, I have been working on rules and reasons to take/not take a trade as well as entry and exit. I did start off much like you and now I can at leats find my butt with both hands. I'm not where I want to be but I'll improve a little every week. Have a good weekend bro!

K.I.S.S.

Quoting TotalNewbie
I think I might just have had my first aha moment so I thought I'd share it on here in case it helps other rookies like myself.

A bit of history:
Like many people, I came to forex expecting to make easy money daily. I had purchased some software that threw out indicators and all I had to do was watch the money grow.

You can guess what happened. The software threw out as many bad indicators as good and I soon ended up with a loss. Luckily, the software came with a 30 day money back guarantee so I returned it and got my money back. Undaunted,...
  • #30,753
  • May 21, 2009 7:19pm May 21, 2009 7:19pm
Quoting jarroo
Can I steal this line, TN?
Yes, too many get this backwards.

Chaos, the train filled up back at the station 1.1475

Interesting areas for USD/JPY and EUR/JPY in here.
  • #30,754
  • May 21, 2009 7:22pm May 21, 2009 7:22pm
Day candles just closed on my feed, nothin screaming but I am watching U/C 1.1300 for a bounce I know its back into some tiger jaws but Ill still look, looks like E/G is heading down if it pulls back to 8800 ppz will look at pa to short Liked the way U/J closed bearish that 50fib proves resistance 94.27 nice place to add on short which its presently doing this pair is on the ledge imho hope everyones doing well ciao.
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  • #30,755
  • May 21, 2009 7:47pm May 21, 2009 7:47pm
Hi all. Yesterday I found a pin bar on AUD/JPY H4 chart but it failed terribly. Appreciate if anyone could tell me what's wrong with this pin bar. Thanks a lot.
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  • #30,756
  • May 21, 2009 7:50pm May 21, 2009 7:50pm
Hi mate, in my oppinion it was in a very bad location, and the nose wasnt very big, you were trading into a strong resistance
  • #30,757
  • May 21, 2009 8:03pm May 21, 2009 8:03pm
Quoting ngb
Hi all. Yesterday I found a pin bar on AUD/JPY H4 chart but it failed terribly. Appreciate if anyone could tell me what's wrong with this pin bar. Thanks a lot.

What about the current daily PA? Perhaps you were correct but early??
  • #30,758
  • May 21, 2009 8:08pm May 21, 2009 8:08pm
To add to what Sertio stated, a few things, I noticed about this setup

1.) Not at a swing high or low
2.) Questionable location, looks like maybe the 50 Fib Line which isn't always a bad location but in this instance I would say it was

Also, was their any confluence/divergence to support this trade?
  • #30,759
  • May 21, 2009 8:08pm May 21, 2009 8:08pm
Quoting ngb
Hi all. Yesterday I found a pin bar on AUD/JPY H4 chart but it failed terribly. Appreciate if anyone could tell me what's wrong with this pin bar. Thanks a lot.
ngb,

As Sertio has already mentioned, that pinbar was up against a lot of bar lows.
Attached Image
  • #30,760
  • May 21, 2009 8:13pm May 21, 2009 8:13pm
Quoting Rosco_P
To add to what Sertio stated, a few things, I noticed about this setup

1.) Not at a swing high or low
2.) Questionable location, looks like maybe the 50 Fib Line which isn't always a bad location but in this instance I would say it was

Also, was their any confluence/divergence to support this trade?

Overhead resistance at that time - agreed. Not just the formation, but the road ahead is important. Give it another longer term look though.
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