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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

  • #39,521
  • Jul 30, 2009 6:56pm Jul 30, 2009 6:56pm
Quoting joelcf
Sorry, it wasnt showing up - see it now though.

I think it is a nice breakout trade, but it isnt really a j16 type trade. You have a break of a strong PPZ, but nothing else to support it - no real PA (unless there was something on a lower TF?).

There are some guys here that do alot of touch trading/blind entries - but I dont see any of them here right now.

Breakout trades are kinda dicey, because they fail way more than they succeed.

Nice trade management though, your exit is textbook stuff.

I don't know what exactly Jim is teaching in the PF, but from my tour in this thread, I have seen he was playing breakouts of double bar highs or lows. He was treating it like a PA pattern...at least that's what I have understood (am I wrong?).


Here, look at this chart of Jim...at the right there is a highlighted pattern and he wrote next to it "matching lows trend breakout". I remember more clearer posts of him talking about it, but can't find them now. I'll do a little search.

Ben
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  • #39,522
  • Jul 30, 2009 6:57pm Jul 30, 2009 6:57pm
This is actually a j16 style trade, but just what I would consider more advanced to be honest in its understanding and implementation. Towards the more earlier stages of this thread James explains TBH, TBL or multiple bar highs/lows as breakout plays. I rarely trade these as pure breaks. The times I will is when you have multiple bar highs and lows lining up in a more condensed amount of time. This is almost always good for at least a "burst" breakout that gives time for profit or at minimum stop to b/e.

Here is an example chart


Best
Mike

Quoting joelcf
Sorry, it wasnt showing up - see it now though.

I think it is a nice breakout trade, but it isnt really a j16 type trade. You have a break of a strong PPZ, but nothing else to support it - no real PA (unless there was something on a lower TF?).

There are some guys here that do alot of touch trading/blind entries - but I dont see any of them here right now.

Breakout trades are kinda dicey, because they fail way more than they succeed.

Nice trade management though, your exit is textbook stuff.
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  • #39,523
  • Jul 30, 2009 6:59pm Jul 30, 2009 6:59pm
another example on the weekly

The reason these work is b/c no matter the kind of orderflow on the other side it gives action which draws a movement in the most simplistic sense. Sp for me the more in a row or in a shorter period of time the better the trade
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  • #39,524
  • Jul 30, 2009 7:08pm Jul 30, 2009 7:08pm
Quoting rustyjeff
this is not to bad either BUT I dont like that it closed above 1.53.
would rather wait & see if it closes as a pin & lower then 1.53 on the daily.

Went right to 1.53. before now retracing to the 50/61.

still waiting to see if we get pa to show the way..
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  • #39,525
  • Jul 30, 2009 7:15pm Jul 30, 2009 7:15pm
Quoting mbqb11
This is actually a j16 style trade, but just what I would consider more advanced to be honest in its understanding and implementation. Towards the more earlier stages of this thread James explains TBH, TBL or multiple bar highs/lows as breakout plays. I rarely trade these as pure breaks. The times I will is when you have multiple bar highs and lows lining up in a more condensed amount of time. This is almost always good for at least a "burst" breakout that gives time for profit or at minimum stop to b/e.

Here is an example chart


Best
Mike...
Yes, I have posted one of Jim's charts a few seconds before your post.
I remember Jim trading them so I treat them the same as other PA patterns.

I have checked them back on my charts and they work well.

Ben
  • #39,526
  • Edited 8:03pm Jul 30, 2009 7:50pm | Edited 8:03pm
Quoting mbqb11
Towards the more earlier stages of this thread James explains TBH, TBL or multiple bar highs/lows as breakout plays. I rarely trade these as pure breaks.
Oh, dont get me wrong, I know the big guy does trade linebreaks. I just meant that I've only ever seen him do it with some kind of confluence - a big round number, lower low / swing low, a string in a row, etc. My notes also tell me that they are almost always with the trend...

..not two interspersed non-matching touches of a ppz which has been violated multiple times in the middle of traffic in a ranging market

Maybe I worded my response badly, apologies if there was any confusion.
When you have to shoot, shoot. Dont talk.
  • #39,527
  • Edited 8:23pm Jul 30, 2009 7:57pm | Edited 8:23pm
Quoting mbqb11
Hey Cyrus

You are new to this stuff, and you nailed it that perfect? Man you are going to have no problems, just a matter of time and gaining that experience. Once you are able to effectively spot these areas, then it just becomes understanding yourself and what is comfortable. Most people are maybe partial off there stop to b/e. Others stop to b/e see if it breaks etc.

Well done man, really. If that doesn't put a smile on Jims face then I don't know what would

Mike
Mike, many thanks for the compliment.
(edit: oh yes, thanks too jarroo)

Your posts have helped me very much, I owe you thanks!
Can't quite get enough of this thread, it's incredible information.

I've made many rounds hunting and testing out systems again and again, many many many hours staring at charts and finding nothing consistent enough to really dig my heels into. Been going round in circles for a long time despite knowing how to read charts, support and resistance, divergences, etc etc.

This thread has been a MASSIVE "AHA!!!!!" for me.
It has made (is continuing to make!!) everything come together.

Like they say in poker, this is "the nuts"
Straight fwd concepts, elegant application. Beautiful.

Really appreciate how everyone helps each other out here.
Awesome stuff
One Mind, Any Market
  • #39,528
  • Edited 8:49pm Jul 30, 2009 7:58pm | Edited 8:49pm
Quoting mbqb11
Orderflow
This is exactly why this play works in a directional market. You are pretty much banking on there being an established trend with a built up orderflow, and then some big player (generally a corporate) needing to hedge an exposure at a particular number.

So the big order bounces the bars back off whatever particular number the corporate needs them at (generally a round number - not many treasurers are calling the dealing room and telling them they need Y200m @ 77.73862).

The break happens when the order is completely filled, and so the 'blockage' is removed, so to speak, and orders are now filled above that number. And so the established trend continues.

It is also why trying to play blind breakouts in a directionless market, or without multiple touches is an account killer. You are just going to get eaten up by the hedgies that put a big order just beyond the level where all the amatuers think there is a breakout trade, and fade their accounts into dust.

Of course, this leads to levelling, of sorts, where one big guy tries to fade the faders... and in the process, whipsaw the little guys to hell and back.

(sorry for the long post! ordeflow and market dynamics are just something that fascinates me... obviously you know all this stuff, but i notice not many new traders try to understand the why of PA.)
When you have to shoot, shoot. Dont talk.
  • #39,529
  • Jul 30, 2009 8:07pm Jul 30, 2009 8:07pm
Quoting supremeChaos
Mike,

btw, what timezone is MT4NF? these charts are AFB MT4 (similar to FXPro, GMT + 3)
I asked because i noticed the difference between the two MT4's with regards the lower pink line/channel. MT4NF's pink line is quite far from the price, while AFB's pink line skewered price around the PPZ.
supreme, i've had a similar annoying problem with 4hour charts in GMT+3.
When i look @ GMT+0 charts, some pairs give me real clean signals, while GMT+3 gives me noise.

I've found this indicator thanks to Hanover.

It creates synthetic 4hour charts and u can shift the GMT zone.

Here's how:
(1) Pop up 1 hour chart
(2) Line chart
(3) F8, make line chart colour "none"
(4) Stick on the indicator.

I'm using FXPro MT4 also. So the indicator is just nice to give GMT+0
synthetic charts.

I now watch 2 GMT 4hour closes, it helps give added perspective to price action.
Attached File(s)
File Type: mq4 CustomCandle6.mq4   9 KB | 671 downloads
One Mind, Any Market
  • #39,530
  • Jul 30, 2009 8:24pm Jul 30, 2009 8:24pm
Notice that if you use GMT +0 instead of GMT+3. You will find 3-hour sunday bar on D1 chart. This is a bit strange for me, so I prefer GMT+3

Cheers,

Quoting Cyrus
supreme, i've had a similar annoying problem with 4hour charts in GMT+3.
When i look @ GMT+0 charts, some pairs give me real clean signals, while GMT+3 gives me noise.

I've found this indicator thanks to Hanover.

It creates synthetic 4hour charts and u can shift the GMT zone.

Here's how:
(1) Pop up 1 hour chart
(2) Line chart
(3) F8, make line chart colour "none"
(4) Stick on the indicator.

I'm using FXPro MT4 also. So the indicator is just nice to give GMT+0
synthetic charts.

I now watch 2 GMT 4hour closes, it helps give added...
  • #39,531
  • Jul 30, 2009 8:37pm Jul 30, 2009 8:37pm
Quoting joelcf
This is exactly why this play works in a directional market. You are pretty much banking on there being an established trend with a built up orderflow, and then some big player (generally a corporate) needing to hedge an exposure at a particular number.

So the big order bounces the bars back off whatever particular number the corporate needs them at (generally a round number - not many treasurers are calling the dealing room and telling them they need Y200m @ 77.73862).

The break happens when the order is completely filled, and so the 'blockage'...
yeah as most know I very much enjoy this stuff and a lot of it from DS teaching me
  • #39,532
  • Jul 30, 2009 8:38pm Jul 30, 2009 8:38pm
Quoting Alexandra
Once again I will take your other half. The "created PB" against a weekly/monthly push higher is too much to risk a short term ripple for me. I prefer the wave.
LOL !!

The friends in Asia had nothing for me tonight. It is past lunch or getting to the noon hour over there, and nothing happened - so cancel it!

It happens. I love them two bar pins - with divergence at a PPZ - I'll take 'em everyday!

And you are correct - going with the flow is much easier! (Two of those from Wednesday...)
I'm pretty much done with all this ...
  • #39,533
  • Jul 30, 2009 9:12pm Jul 30, 2009 9:12pm
mbqb11 / mike thx for the time to answer my email

regard
suma
  • #39,534
  • Jul 30, 2009 9:17pm Jul 30, 2009 9:17pm
After my last attempt to use pinbar (http://www.forexfactory.com/showpost...ostcount=39216) two days ago. I have my second attempt and failed again today.

I like this one when I took it, in term of pinbar shape it is good. and in terms of position it piereced a PPZ and a clear trendline, unfortunately it failed.

It didn't hit my first take profit point at 16455, so it is a complete loss trade. I am doing demo trading.

May anyone suggest a lesson here.

cheers.
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  • #39,535
  • Jul 30, 2009 9:23pm Jul 30, 2009 9:23pm
Quoting kk007
After my last attempt to use pinbar two days ago. I have my second attempt and failed again today.

I like this one when I took it, in term of pinbar shape it is good. and in terms of position it piereced a PPZ and a clear trendline, unfortunately it failed.

It didn't hit my first take profit point at 16455, so it is a complete loss trade. I am doing demo trading.

May anyone suggest a lesson here.

cheers.
Hey K

My first suggestion is to start this on the higher timeframes. James and the rest of us suggest this for many important reasons.


This is the exact post I made in the PF today about the same trade. This is not a failed trade in fact it did exactly what we would expect going to the first trouble area in a very very very choppy market

Hope this helps
Mike


______________________________

[quote=mbqb11;32958]Hey Pat

Thank you for those nice comments and welcome to the forum. These are the posts that really are humbling.

Glad to hear you sticking to the higher timeframes this is defintely where we need to start. Now this trade was not a bad one. But these are the reasons most people get killed on the lower timeframes especially. I actually took a pic and was about to post it before I had to run out. The reason this is a tough trade is people forget to identify something like how choppy gbp/usd, then they miss the first trouble area, and end up taking a loss.

This pic should speak a thousand words.

Thanks again for the nice comments

Mike
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  • #39,536
  • Edited 9:49pm Jul 30, 2009 9:38pm | Edited 9:49pm
Quoting kk007
After my last attempt to use pinbar (http://www.forexfactory.com/showpost...ostcount=39216) two days ago. I have my second attempt and failed again today.

I like this one when I took it, in term of pinbar shape it is good. and in terms of position it piereced a PPZ and a clear trendline, unfortunately it failed.

It didn't hit my first take profit point at 16455, so it is a complete loss trade. I am doing demo trading.

May anyone suggest a lesson here.
*EDIT* hehe, what mike said ^^^

I think the main thing you could try in future is to look at your ppz as a zone, rather than a line - you expect trouble in that area, not at that specific level... and so you could plan your exit strategy accordingly.

If you look at the bars you are using for your ppz, notice how they dont really line up with where you have set your TP? They are in that general area.

Maybe something like this?
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When I see something like that, I generally like to move my stop to either BE (if the movement isnt big enough to care about), or to just above the zone so if it comes back, I get some drinking money and get to watch what happens to learn for next time.

Out of curiosity, what is the MA indicator you have on there with the different colours for positive/negative gradient? It is pretty cool looking.

Oh... and countdown to Supreme positing 'this is critical!' in 5...4...3...2...
When you have to shoot, shoot. Dont talk.
  • #39,537
  • Jul 30, 2009 9:54pm Jul 30, 2009 9:54pm
Hi Mike,

Thanks for you quick response.
I have marked my PPZ line slightly lower than you, and it did not get touch.

As a matter of fact, if a trade using R:R = 3:1, without any particular method, the chance of hitting take profit is 75% (assumpting spread = 0 and price movement is random). So, it is not sure if the pinbar play a role of indication here, since I was in drawdown 90% of time during the position.

I keep hearing suggestion telling me to demo trade higher timeframe. Nevertheless, I still don't understand what is the difference, as price action usage is the same between H1 and D1 as said by James. I am thinking if the charts in my last two trades were D1, I would have the same failure. It would be great if you can clear my confusion here.

Cheers,
K.K.


[quote=mbqb11;2918489]Hey K

My first suggestion is to start this on the higher timeframes. James and the rest of us suggest this for many important reasons.


This is the exact post I made in the PF today about the same trade. This is not a failed trade in fact it did exactly what we would expect going to the first trouble area in a very very very choppy market

Hope this helps
Mike


______________________________

Quoting mbqb11
Hey Pat

Thank you for those nice comments and welcome to the forum. These are the posts that really are humbling.

Glad to...
  • #39,538
  • Jul 30, 2009 10:09pm Jul 30, 2009 10:09pm
Hey K

The higher timeframes serve a few main purposes. The most important IMO is that the decision making process is slowed down. When new traders are trying to tackle the hourly when they don't fully understand the concepts they get hit with loss after loss, which usually leads to impatience lack of discipline which all leads to over trading and improper mgmt of trades just like this. I don't mean to pick on you(surely you know I am trying to help), but my post in the PF was made hours before you made this post and it was exactly the example of the trader I was speaking about and what I worry about with trading and this material.

Like joel said you have to remember these PPZ are zones, and actually even in the case of this chart, the nearest area was an actual line definied by clear bar highs. These can NOT be ignored in such a choppy market. At this point you must get your stop to b/e at the minimum or you will be taking too many losses.

Also your "math" really doesn't go very far in trading. These are some of the concepts people try to apply to trading and it is more theory then reality. This is why many people fail b/c we are all brought up in school of thought where things are orderly and proper. Trading is not the same. We can apply logic but must also understand what we are doing. Price is not random and with the knowledge of s/r and price action we can clearly prove that. So I suggest forget all that nonsense math stuff and just learn to do what many of us do here. It will help the absorption process and make learning to trade a lot easier. Goes back to KISS and really for a lot of people who come from various backgrounds forgetting what they think they know.

Hope that clears it up !

Mike
Quoting kk007
Hi Mike,

Thanks for you quick response.
I have marked my PPZ line slightly lower than you, and it did not get touch.

As a matter of fact, if a trade using R:R = 3:1, without any particular method, the chance of hitting take profit is 75% (assumpting spread =...
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  • #39,539
  • Jul 30, 2009 10:11pm Jul 30, 2009 10:11pm
Hi Joelcf,

Thanks. I certainly understand PPZ is a zone. But there have to be a particular level in the zone for action. I want to take low risk trade, if the profit target is too small in compared with the pinbar size, this trade will be extremely risky.

I understand that the higher the PPZ line I marked, the higher chance I will hit the profit target. But it is meaningless to set the line very high, I will undoubtedly lose in the long run.

I think the MA line in my chart is call slope direction line. http://www.forexfactory.com/showthread.php?t=18692

Yes, I have bookmarked "This is critical"!

cheers,

kk

Quoting joelcf
*EDIT* hehe, what mike said ^^^

I think the main thing you could try in future is to look at your ppz as a zone, rather than a line - you expect trouble in that area, not at that specific level... and so you could plan your exit strategy accordingly.

If you look at the bars you are using for your ppz, notice how they dont really line up with where you have set your TP? They are in that general area.

Maybe something like this?
Attachment

When I see something like that, I generally like to move my stop to either BE (if...
  • #39,540
  • Jul 30, 2009 10:34pm Jul 30, 2009 10:34pm
Quoting oltciter
I hope it will give me some easy pips!
Hey oltciter. How did that 8 hour PB on the Gbp/Aud turn out for you?

Last time we spoke it had a nice hard break. Looking at it now, it went right where we thought it would go.
A classic J16 trade.

Although we would like a more definable location and confluences for Pin Bars, i.e. at a Swing Highs/Lows off of a strong PPZ level, Fib retracement, etc., this one proved successful.
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