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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

  • #38,341
  • Jul 22, 2009 4:36am Jul 22, 2009 4:36am
Quoting bfd
[size=2]I think thats the problem....to be successful it seems like you have to wait for the best setups which only come around rarely and if you only have a small account then you're only going to make a small amount of money on each trade.
So if you end up doing say 1 trade per week then thats hardly any profit. It seems like its only worth using this method if you have a large account so that you can wait for the perfect setups in the knowledge that each trade will net you hundreds or thousands.
So maybe its the case that success with this method...
Note these numbers are hypothetical but not unrealistic if you demo properly imho. If im out of line with the numbers someone can let me know.

Well lets look at it. Say you have demoed for a year on daily/weekly and are profitable for the last for 3-6 months.

If you then open a live account with say half your savings say 10k.
So your risk per trade is 3% (Which is the highest I would go but reduce as account gets bigger) then you are are risking $300 per trade. Once you get good at this you can reduce your stops a bit on daily by taking retraecments entries etc.

So maybe you can get your stops at 100 pips say, this will work out at roughly 3 bucks a pip. If it runs for a 150 pips your taking about 450 bucks a few of them a month with compounding and a few runners then your account size will grow. After 3 months add on the other 10k, now your at say 23k.

3% is $690 now you are getting nearly 7 bucks a pip (with 100 sl) now a few good trades could be netting you a 1-2 k a month.

Now you start on the 4 hour afer demoing 3 months profitably and risk maybe 2% per trade. Now your account is at 25k and your getting $500 per trade and your s/l on this lower timeframe is 50 pips say now you are getting 1 lot or $10 per pip, you'll get more trades on 4hr plus your dailies then you can be pulling in good returns, compound this for a few years add some other markets or timeframes after demoing and you are on your way to financial freedom.
I hear and I forget. I see and I remember. I do and I understand.
  • #38,342
  • Jul 22, 2009 4:38am Jul 22, 2009 4:38am
Quoting nasir.khan
I entered long in GU. Entery was based on 1h.

I am anticipating this sHs.
When did forex.com go mt4?

Anyways looks good Nasir,

except that I don't see you waiting for the break of the IB?

Ghous.
I believe . . .
  • #38,343
  • Jul 22, 2009 4:39am Jul 22, 2009 4:39am
there is no doubt that its easier to trade a larger account. being under capitalised in this game is a killer, it means you end up taking larger risks and eventually get wiped out.

unfortunately as I have found there is no real answer to it, demo trade for a few years while funding a larger accoutn maybe ?...at least when you do go live you will at least have some screen time behind you

you've heard of the phrase "money makes money..."


Quoting bfd
[size=2]I think thats the problem....to be successful it seems like you have to wait for the best setups which only come around rarely and if you only have a small account then you're only going to make a small amount of money on each trade.
So if you end up doing say 1 trade per week then thats hardly any profit. It seems like its only worth using this method if you have a large account so that you can wait for the perfect setups in the knowledge that each trade will net you hundreds or thousands.
So maybe its the case that success with this method...
  • #38,344
  • Jul 22, 2009 4:42am Jul 22, 2009 4:42am
Quoting ghous
they along with some $ crosses are struggling for momentum...still...
the jpy crosses are not singing the same song. some are moving slowly, some moving a lot, & probably some doing nothing much.

Quote
When did forex.com go mt4?
Not sure, but probably just this year



Quoting nasir.khan
I entered long in GU. Entry was based on 1h.
I am anticipating this sHs.
the horizontal blue line is the area of the daily pivot (1.6438ish).
price may or may not reach that area; price may or may not form that H&S.
also, it's better to react than anticipate.
So, proceed with caution.
  • #38,345
  • Jul 22, 2009 4:43am Jul 22, 2009 4:43am
Quoting ghous
When did forex.com go mt4?

Anyways looks good Nasir,

except that I don't see you waiting for the break of the IB?

Ghous.
Hmmmmp IB
1- IB would break at 1.6412 and my target is 1.6435

2- I actually would like to trade against the IB rather than trading brake.
  • #38,346
  • Jul 22, 2009 4:43am Jul 22, 2009 4:43am
Quoting bfd
I think thats the problem....to be successful it seems like you have to wait for the best setups which only come around rarely and if you only have a small account then you're only going to make a small amount of money on each trade.
So if you end up doing say 1 trade per week then thats hardly any profit. It seems like its only worth using this method if you have a large account so that you can wait for the perfect setups in the knowledge that each trade will net you hundreds or thousands.
[size=2]So maybe its the...
There is truth in what you say bfd I have only been trading live with a tiny account (£200) for 5 weeks or so and yes you do have to be patient even with the small accounts. I have had a 12 day period with no trades in this 5 week period!! - this I found difficult but remember we're snipers not farmers with shotguns!!

But my thoery is that if I can't make it work on a £200 account I never will on a larger account.

Once you have proven your technique (edge, system whatever you want to call it) (3 profitable months, double the account whatever your chosen marker is) then you will need to face the harsh reality that you will need to find a reasonable lump to stick in your trading account.

Amounts are a very personal thing by their very nature and it depends on what you need but if you want £1000 a month pocket money then you could probabely get by with an account the size of a nice(ish) new car.. if you want 30k a month then you gonna be looking at an acct of over .5M I would think...

having said that you can easily trade dailys and maintain a full time job. I would (and intend to myself after proving my trading) consider adding to an account on a monthly basis... even if its just £50-£200 a month the compounding effect of your trading will in just a handful of years get you to the pocket money range... if you want to go further then at that point I guess you'll know what to do..

Just my newbie thoughts....

Fat Tom
  • #38,347
  • Jul 22, 2009 4:46am Jul 22, 2009 4:46am
Quoting Jduester

Patience. Discipline. Commitment. Direction. Sacrifice. Will. Determination. Dedication.

Josh
Amen Josh.

I have filled about three large notebooks with notes on this material. And each one has some combination of those words on the cover.

Great to have verbal and visual reminders of what I need to do to succeed, and what I am aiming for once I do succeed.
  • #38,348
  • Jul 22, 2009 4:48am Jul 22, 2009 4:48am
Quote
So maybe its the case that success with this method will only come to those who are already rich, kind of depressing really.

Chin up bfd.
Think of it as building character.I know for one thing that if you make it big from starting with pretty much zip,the story you could tell the grand kids will be A grade.
It will make you feel better too knowing that you didn't make it because you were silver plattered(large capital base) but you made it because you weren't taking no for an answer.
Believe me,this thread will get you where you want to go.
Your in fine company champ.

Cheers
Steve
  • #38,349
  • Jul 22, 2009 4:50am Jul 22, 2009 4:50am
Quoting nasir.khan
Hmmmmp IB
1- IB would break at 1.6412 and my target is 1.6435

2- I actually would like to trade against the IB rather than trading brake.
there is no for and against with an IB Nasir,

You can play it either ways long or short.

and Both ways we give special importance to the break, so for a lon like in your case your order (pending) should have been 5 pips (it's the hourly chart) from the high of the Ib.

(for a short your sell pending order should have rested 5 pips below the low of the IB)

What else can I say...waiting for the break of a PA bar setup is probably the most important aspect of trading successfully with this method.

Maybe you just used the IB as an additional confirmation to your 4H Nel's macd signal in which case the trade is probably ok then...but then it won't be a J16 trade though.



Ghous.
I believe . . .
  • #38,350
  • Jul 22, 2009 4:51am Jul 22, 2009 4:51am
Quoting supremeChaos
the jpy crosses are not singing the same song. some are moving slowly, some moving a lot, & probably some doing nothing much.


Not sure, but probably just this year





the horizontal blue line is the area of the daily pivot (1.6438ish).
price may or may not reach that area; price may or may not form that H&S.
also, it's better to react than anticipate.
So, proceed with caution.
But i think i reacted also take a look at this chart.

1- 50% retracment
2- 89 SMA
3- Trendline.
Attached Image (click to enlarge)
Click to Enlarge Name: gbpusd 4h.gif Size: 36 KB
  • #38,351
  • Jul 22, 2009 4:56am Jul 22, 2009 4:56am
Quoting ghous
there is no for and against with an IB Nasir,

You can play it either ways long or short.

and Both ways we give special importance to the break, so for a lon like in your case your order (pending) should have been 5 pips (it's the hourly chart) from the high of the Ib.

(for a short your sell pending order should have rested 5 pips below the low of the IB)

What else can I say...waiting for the break of a PA bar setup is probably the most important aspect of trading successfully with this method.

Maybe you just used the IB as an additional...
Take a look at this and you will know how i like to use it.

http://www.forexfactory.com/showthread.php?t=163444
  • #38,352
  • Jul 22, 2009 5:00am Jul 22, 2009 5:00am
Quoting fat_tom
There is truth in what you say bfd I have only been trading live with a tiny account (£200) for 5 weeks or so and yes you do have to be patient even with the small accounts....

I agree, the way to look at it is get good on demo as per Jim says and somehow get the money to start with a decent account size, its personal thing but $20k for me is a good figure to start live. With compounding at say 5% a month (which is realistic after a year or so demoing and getting good imho) in 6 years you could have 500k which is enough to go full time and maybe try lower TFs (after demo). That is my Goal ill be 40 by then.
I hear and I forget. I see and I remember. I do and I understand.
  • #38,353
  • Jul 22, 2009 5:04am Jul 22, 2009 5:04am
Quoting nasir.khan
Take a look at this and you will know how i like to use it.

http://www.forexfactory.com/showthread.php?t=163444
But since the EA's written on it were not profitable i left it but i use it for some filtering.
  • #38,354
  • Edited 5:20am Jul 22, 2009 5:06am | Edited 5:20am
Quoting nasir.khan
But i think i reacted also take a look at this chart.

1- 50% retracment
2- 89 SMA
3- Trendline.
No cheating allowed.

lol

Your fibs and trend lines need to be re drawn correctly after which they won't give you this "false confluence"

For a fib ret, you need to target a major swing high and a low.

The high was valid the low you used was not, the low you used was not a major, the one before it was and precisely where your fibs should have started.

Secondly for a valid trendline, price must not penetrate the trendline in a way that it closes beyond the trend line and carry on from there...

One of the trend lines you say come into confluence was invalidated twice after which it must loose all it's worth. (refer to the chart below)

Cheers.
Ghous.
Attached Image (click to enlarge)
Click to Enlarge Name: gu 4h.gif Size: 39 KB
I believe . . .
  • #38,355
  • Edited 5:21am Jul 22, 2009 5:07am | Edited 5:21am
Quoting jarroo
Yes, I usually add the spread.



Once Price hit the 1st TP (blue) I will take half off and move to break even, most of the time.

1st half gave up about 30 pips and the BarBreak stop loss would be about -20 pips on the 2nd half. I may at times instead of moving to break even I will use the BarBreak when it still nets me positive pips, in this case it would have been a net 10 pips. That's if I got every inch of the move which is not likely.

The quality of this Usd/Jpy Daily PB was not an A+ setup by any means. So my approach, if...
So glad you posted this Jim. This was exactly how I played this. I thought "Not an A+ setup so play tight and go to break even at the previous highs." At the highs I went to break even minus 10 (because of the strength of the break I wanted to give it a little room) and then it stopped me out for a small loss before moving on to a 1:1 plus return. On my "Jarroo demo" account I had a similar result. Tighter stops but still the same approach and quick to break even.

But I felt a bit annoyed about it all day because of how it ran. This still happens to me but I have to remember this (and anyone new IMHO this is something to really tattoo on your brain):

You can't judge the success of a trade by whether it made money or not.

It'll drive you mad. Looking back over it and thinking "how could I have got into that move?" or "what was wrong with taking this trade? Why should I have left it and spared myself the loss?". This is mental curve fitting and will drive you nuts. Everyone takes losses. Start asking "Was my plan correct? Did I trade my plan?" and crucially "If I took a hundred of these setups and played them the same way then how would things come out?"

My first live trades were high probability setups on the daily and weekly that failed. Oh well. It set a few demons loose in my head, but I remembered that I am in this for the long haul.

Jarroo looked at that UJ and he didn't think "how could I have made money from that move?". He said "even though I didn't take this, I know that the way I trade I would most likely have been out for break even." That's maturity.

This is why we have good MM. Because some win and some lose and we come out on top. If you're scared about each individual trade being a loser, then maybe you're risking too much? I certainly think everyone should experience trading live with such a small amount that a loser doesn't matter and a winner doesn't matter. Maybe 0.5% risk for a while?

I admit the mental demons jumped on my head a little about my UJ, mainly because I have been perfecting exits and missing out on some big moves recently. Two of my four daily trades this month have run and run and run and I got out for about 0.5R between them. But the way I approach this is to keep a spreadsheet with various columns detailing different exit strategies, how far the trade went into drawdown after the breach etc so that I can perfect a SL and TP strategy from live data that I have comfort and confidence in.

After a few months, or whenever I feel comfortable, I will implement this strategy consistently. Spreadsheets with collected data on your live trades really are the most wonderful things for refining your trading.

Okay time for another round of 4H demo bars....

Aaron
  • #38,356
  • Jul 22, 2009 5:12am Jul 22, 2009 5:12am
Quote
...I am anticipating this sHs.
Quoting nasir.khan
But i think i reacted also take a look at this chart.
1- 50% retracment
2- 89 SMA
3- Trendline.
Quoting nasir.khan
Take a look at this and you will know how i like to use it....
I see...
No worries, i just 'reacted' to the above.
  • #38,357
  • Jul 22, 2009 5:16am Jul 22, 2009 5:16am
Quoting nasir.khan
Take a look at this and you will know how i like to use it.

http://www.forexfactory.com/showthread.php?t=163444
Ahhh I see...

It's got a nice "Dibbsy" touch to it...if you know what I mean



Ghous.
I believe . . .
  • #38,358
  • Jul 22, 2009 5:19am Jul 22, 2009 5:19am
Quoting ghous
No cheating allowed.

lol

Your fibs and trend lines need to be re drawn correctly after which they won't give you this "false confluence"

For a fib ret, you need to target a major swing high and a low.

The high was valid the low you used was not, the low you used was not a major, the one before it was and precisely where your fibs should have started.

Secondly for a valid trendline, price must not penetrate the trendline in a way that it closes beyond the trend line and carry on from there...

One of the trend lines you...
OK the trend line i use is kind of Andrews pitchfork but if i delete it i still have one left
IF i re-draw the fib 50% would become 38.2%.

Thank's.
  • #38,359
  • Jul 22, 2009 5:19am Jul 22, 2009 5:19am
Quote
No cheating allowed.
lol
ghous,
why so strict? lol
he seems to be using 'customized/hybrid' TLs/channels/Fib.

anyway, nasir.khan, if u haven't yet, u can check out aediaz's thread & posts, as well as belekas' posts for more on TLs etc.
  • #38,360
  • Jul 22, 2009 5:21am Jul 22, 2009 5:21am
Quoting supremeChaos
ghous,
why so strict? lol
he seems to be using 'customized/hybrid' TLs/channels/Fib.
anyway, nasir.khan, if u haven't yet, u can check out aediaz's thread & posts, as well as belekas' posts for more on TLs etc.
Wait till Jon (Gj) reads that.
I believe . . .
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