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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

  • #40,061
  • Aug 6, 2009 3:51am Aug 6, 2009 3:51am
Quoting tradertt
How do you guys play BEOB or BUOB? Is is following the break of the bar or at the close of the bar?

IF it is a bUOB, where should the PPZ be?

Yes we do and its always at the break.

The PPZ level should at the bottom or within the BUOB, preferably.
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Indicators show the past. Price Action "Indicates" the future.
  • #40,062
  • Aug 6, 2009 3:53am Aug 6, 2009 3:53am
Quoting kk007
Hi Jarroo,

Is the Fib level on your chart not updated yet? The recent high was not included in your fib.

cheers,

kk
No its not updated, I was showing the 7-29-09 BUOB.
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Indicators show the past. Price Action "Indicates" the future.
  • #40,063
  • Aug 6, 2009 4:11am Aug 6, 2009 4:11am
Quoting tradertt
How do you guys play BEOB or BUOB? Is is following the break of the bar or at the close of the bar?

IF it is a bUOB, where should the PPZ be?
I'll answer your pm via this post of yours tradertt as you've almost asked the same thing here...

Outside bars do work...in fact on the reliability scale they are next after pin bars which take up the first place...

They are played at the break of the bar high/low.

But just like pin bars, a bar that takes the shape of an outside bar isn't all that matters...location including evidence of ppzs and confluence intensities all will point to or against a potential trade.

Importantly if for some reason you do find yourself uncomfortable with this particular variation of PA bars you are more than free to avoid trading them for now, and instead just watch them where they occur and how they play out, if even after that you don't feel like trading them, ignore them from there on...

Being comfortable with whatever you do while trading is the KEY. I get rid of my pants sometimes when it's hot as hell and I can't stop thinking abt the itching my tight jeans can cause...when it comes to trading...you have to be absolutely complacent.

Take Ryan for example, we have quite a few of his followers trading or wanting to trade other pa setups along with the pin bars he takes, but for him....it's the pin bars that he is most comfortable with, and he doesn't give a damn abt anything else and neither should you, if that's how you want to operate.

Ghous.
I believe . . .
  • #40,064
  • Aug 6, 2009 4:20am Aug 6, 2009 4:20am
Quoting joelcf
You seem to be a pretty eager learner/studier, and that is commendable - you seem to put in alot more hours than people who are looking for an 'easy fiux' - but I honestly think you could benefit from slowing your roll a little.

You are still demoing, so demo the 4H instead of the 1H. Before you take a trade, make a copy of the chart, draw your PPZs in, look at what price might do. Write a trade plan - there are tons of examples in this thread where people lay out each potential roadblock and each potential TP, and your plan for what happens...
Instant great post Joel!

I am long time lurker here and past demoing already but I feel that I have to change something just for changing my routine. And this was a great reminder of an idea that I had but I did forget. I hope I got the idea right- I have to take a printscreen at the current situation to look back at it later after the fact and compare the things I see then that I did not see before, right?
Am I catching the idea?

And quick Q- I did not get this, what was the thing that increased your winrate? going to higher TF or this what I wrote above?

Thanks!
  • #40,065
  • Aug 6, 2009 4:35am Aug 6, 2009 4:35am
Quoting kk007
Hi Joelcf,

Thanks a lot. Your reply was a very good detailed one indeed, although a bit personal.

I use 2-3 pip for H1 was to scale down the 10 pip for D1.

I seldom look at the daily pivot, but yes, I have to learn to look at it now.

The Fibo 61.8 was not some too exact here. It is just representing that more than half have gone.

I have to decide to use H1, until I master it. If someone can do it, I can too. Perhaps, it may take a bit longer.

If enter on retracement in your method, the inner end of the pinbar may not be...
Hi KK,

I'm not sure if you have done the following things, however I will mention them anyway as they are so important. Read the first 100 pages of this thread a few times. Read the first post by jim and make plan based on it. I wasted 3 months after Reading jims advice chasing lower timeframes and fasttrack ways to become profitable. The good news for you my friend is that it is very possible to become a consistent trader. It requires though you trade demo for at least three months on dailes. In that time if you are parrallelling that with Reading this thread, you should become profitable. I plan to demo trade for a year and the lowest I will going is 4 hr.

You shouldnt be touching the hourly until you have a year or twos experience on the higher timeframes. Move to dailes and demo now and trade them till you can pick winners in your sleep. Time is something most of us have a lot of, 2 years from now you will either be another member of the 95%,or have 2 years pa trading experience with consistent profits and a savings pot bug enough to make good profits.

Hope this helps, but it important you take jims advice he has been through the 20 years road .

Mark.
I hear and I forget. I see and I remember. I do and I understand.
  • #40,066
  • Edited 5:16am Aug 6, 2009 4:51am | Edited 5:16am
Quoting idejs
I hope I got the idea right- I have to take a printscreen at the current situation to look back at it later after the fact and compare the things I see then that I did not see before, right?
Am I catching the idea?
Yup, pretty much! I do a review before and after though.

Before I do the trade, I always save a copy of the 'setup' (MT4 lets you export the graph directly now), as well as my trade plan, which has outlines of all the key levels (confluences, entry points, potential roadblocks, targets). If price is being cooperative and giving me time, I sometimes post it here or email it to a friend for a second opinion.

I've found that doing that forces me to analyse the trade before I enter it and commit my capital. Which means I can grade the trade and decide whether I should take it or not, as well as how tightly it has to be managed, what kind of entry is appropriate (hard break, retrace, PA on lower timeframe, etc).

Not to mention that the regular guys in here are damn good at this, and they spot stuff I miss constantly. A second pair of eyes really does help.

Before, I was more 'OMG, PINBAR! BUYBUYBUY!@#', and then looking for PPZ/confluence/roadblocks afterwards. Needless to say, I screwed up a ton of trades that way

I do something similar each time I change it - like, if i move my stop - and when I exit. So I build up kind of a 'trading diary' that lets me review what went wrong and why, or *hopefully* why the trade worked. And hopefully lets me learn from my screwups and not make the same mistake twice.

Kinda stole the idea from my poker reviews, where going over hand histories outside 'the heat of the moment' is the best ways to learn

Its probably not for everyone - I guess asking ten traders how they plan their trades will get eleven different responses - but I figure if I am (potentially) committing a couple thousand dollars to a trade, the least I can do is spend a few minutes analysing it first.

I dunno, it suits my nature I guess, so it works for me.

Quoting idejs
And quick Q- I did not get this, what was the thing that increased your winrate? going to higher TF or this what I wrote above?
both

Going to a lower timeframe just makes me 'shoot from the hip' alot more. Which is fine for someone like James or Ryan, who know this stuff inside out and have a 6th sense for price action - I'm just nowhere near that good yet!

Going to the 4h gives me enough time to think through my trades before committing, get advice if I need it, and then the freedom to manage them if needed.

Going over it later and reviewing it really makes you think about what you did, why, and whether it was a good idea.

I guess either way, you end up thinking about things more. And for me, its a good thing.

My overall winrate on the 4h is almost double what it is on the 1h... and I am yet to take a full bar loss on the daily. I know it is probably a limited sample size and unsustainable, but it is working so far

Plus, it means I dont have to spend so much time staring at the screen, and I dont overtrade out of boredom.
When you have to shoot, shoot. Dont talk.
  • #40,067
  • Aug 6, 2009 5:03am Aug 6, 2009 5:03am
just wondering if you took this trade? you highlighted it as a pin bar but isnt it the wrong way around to take the bullish movement seems there was a big rejection down..??

thanks
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  • #40,068
  • Aug 6, 2009 5:11am Aug 6, 2009 5:11am
Quoting jarroo
No its not updated, I was showing the 7-29-09 BUOB.
Thank you I understand it better now.
  • #40,069
  • Aug 6, 2009 5:11am Aug 6, 2009 5:11am
Quoting kk007
Hi Joelcf,

Thanks a lot. Your reply was a very good detailed one indeed, although a bit personal.
Hey mate,

Sorry if I was rude or abrupt, didnt mean to be. Just had a couple of minutes spare so was trying to get done before my boss came back from his meeting and waved his arms around and yelled a bit

no offence intended.


Quoting kk007
I use 2-3 pip for H1 was to scale down the 10 pip for D1.
See, I dont know if it really works that way. On one hand, I guess a smaller bar (on the hourly as opposed to the daily, for instance) means that a confirmation signal (like a break) probably is a smaller distance, as you say.

On the other, 3 pips just seems a bit tight... especially when i could be trading something with a 5 pip spread! I want something more than random noise to signal an entry to me.

And hey, I stole the 10 pip thing off someone else here (possibly Mike or Jim, I think). It has worked for me, saved me from a few false moves. I dont think it is a James16 rule or anything, but he can probably answer that better than me

You do raise an interesting point though, so I think ima definitely look into it in future (possibly after learning more about MACD/divergence, IPBs, 14Bs...). Maybe you could come up with something based on average bar size/volatility/etc which can be scaled to timeframe, but I dunno... 10 pips is a hell of alot easier and more practical, for me anyways.

Quoting kk007
The Fibo 61.8 was not some too exact here. It is just representing that more than half have gone.
yeah, that's the way I see it. Basically, if I want to take a short, but there is a 'battle' of buy and sell orders at my entry point, I want it resolved one way or the other before I commit. So if price goes up, then stalls and heads back down, I take it as a sign that buyers have been overwhelmed by sellers, and so my short should be good.

Quoting kk007
I have to decide to use H1, until I master it. If someone can do it, I can too. Perhaps, it may take a bit longer.
If that is what you are set on, fair enough. I dunno, if someone with 25 years experience like james tells me to start on the daily charts and then work down, i start on the daily


Quoting kk007
If enter on retracement in your method, the inner end of the pinbar may not be broken, even if it break 38.2? Right?
Yeah, completely right. That is the risk of an agressive entry, I guess. If I do that kind of entry, I generally look for some kind of PA on a lower timeframe and use that to finesse my entry.

But like I said, at this point in my trading 'career', I generally just wait for a second break if I think price might retrace a bunch before coming back.

Quoting kk007
Your winrate shot through the roof. Congratulation! Can you reveal your winrate and average R:R.
It went from below 40% to above 80%. Confirmation enough for me.

r:R is a little more complex, since I tend to manage alot of my entries once I am in them, and so initial risk is never really a true indication of the loss I am prepared to take. And I always trail my stops, so reward is never going to be accurate either.

But I always do a rough expected value calc before I enter, and it is always positive.

I guess that is my biggest problem with people that focus on risk:reward ratios. Unless you set your stop and take profit, and never move them (ie, you sit there and take a full bar loss, or grab your profit as soon as you hit your target), it isnt an accurate measure of...anything. If you kill a trade if it looks to be turning bad, and let your profits run through your TP targets and beyond, you are way better looking at pips won : pips lost.
When you have to shoot, shoot. Dont talk.
  • #40,070
  • Aug 6, 2009 5:13am Aug 6, 2009 5:13am
I am fine with taking these bars except that I was confused about where the PPZ and confluence should be.

Just to check, for a BUOB, does price have to be in an uptrend (continuation) or can it act as a reversal pattern too like what Jaroo showed.

Quoting ghous
I'll answer your pm via this post of yours tradertt as you've almost asked the same thing here...

Outside bars do work...in fact on the reliability scale they are next after pin bars which take up the first place...

They are played at the break of the bar high/low.

But just like pin bars, a bar that takes the shape of an outside bar isn't all that matters...location including evidence of ppzs and confluence intensities all will point to or against a potential trade.

Importantly if for some reason you do find yourself uncomfortable with...
  • #40,071
  • Aug 6, 2009 5:14am Aug 6, 2009 5:14am
Quoting joelcf

My overall winrate on the 4h is almost double what it is on the 1h... and I am yet to take a full bar loss on the daily. I know it is probably a limited sample size and unsustainable, but it is working so far
Thanks Joel!

Yeah I agree, that for some one TF can be more better then others. I have found that this very depends of the individual.
  • #40,072
  • Aug 6, 2009 5:21am Aug 6, 2009 5:21am
Would assume that the bar in the picture is NOT a BUOB right?
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  • #40,073
  • Aug 6, 2009 5:36am Aug 6, 2009 5:36am
For your Expert approval on my drawing of PPZs.

This is my first step in setting up my charts daily.

I will start from the Weekly Timeframe, find 2 PPZs around price,

Move down to the Daily then to the H4

I tried to match the PPZs to the Whole numbers (ending with 00) as much as possible as I see from Jarroo charts, is that advisible or should I leave them at their odd numbers?

P.S. for the H4 time frame, I cannot find a Good PPZ level below the current price so I just used a Support level.

If anyone can advice if the drawings are correct, it would be great or if you have better places for the PPZs, do show it out in a chart.
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  • #40,074
  • Aug 6, 2009 5:48am Aug 6, 2009 5:48am
Last picture:

I then added Fibs into the picture to get confluence
So does it mean that if a PA forms at these 3 levels, it may be a good place to take the trade (Of course depending on what PA happens) but if a PA forms at 1.0900 as there is no confluence, I should not take the trade?

I keep getting confused about Confluence

If we see a PA happening only at a PPZ with no Fibs confluence, can we take the trade?

What if we see a PA happening at a Fibs level with no PPZ, can we take the trade?

What + What = Confluence?

I understand from a previous reply that PPZ comes first then add in Fibs, or Whole numbers

So PPZ + Whole number = Can take the trade
PPZ + Fibs = Can take the trade

PPZ + Swing High?

PPZ + Pivot Points?

PPZ + MA?

How about Fibs + Whole number?


PPZ + ???? what else?

Just wanted to confirm this.
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  • #40,075
  • Aug 6, 2009 5:49am Aug 6, 2009 5:49am
Hehe sorry just 1 more to ask:

It is regarding USDJPY H4 time frame
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  • #40,076
  • Aug 6, 2009 5:57am Aug 6, 2009 5:57am
Quoting supermatt
just wondering if you took this trade? you highlighted it as a pin bar but isnt it the wrong way around to take the bullish movement seems there was a big rejection down..??
thanks
maybe Sir jarroo highlighted that PB to emphasize the thought that not all PB's/PA setups work, specially in & of itself.

also, if u noticed in his chart, MACD was slowly turning up, meaning momentum is getting less bearish/more bullish. it's not clear to me but that PB seems to be in a location wherein the MACD histogram (the MACD black bars) was near '0' level. usually a breach of "0" level, whether upwards or downwards, means a change in trend.
  • #40,077
  • Aug 6, 2009 6:08am Aug 6, 2009 6:08am
Anyone checking eur/gbp
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  • #40,078
  • Aug 6, 2009 6:10am Aug 6, 2009 6:10am
Expected value is good too. So, what is your pip won: pip loss ratio, if you can tell?

cheers.

kk

Quoting joelcf
Hey mate,

Sorry if I was rude or abrupt, didnt mean to be. Just had a couple of minutes spare so was trying to get done before my boss came back from his meeting and waved his arms around and yelled a bit

no offence intended.




See, I dont know if it really works that way. On one hand, I guess a smaller bar (on the hourly as opposed to the daily, for instance) means that a confirmation signal (like a break) probably is a smaller distance, as you say.

On the other, 3 pips just seems a bit tight... especially when i could be trading...
  • #40,079
  • Aug 6, 2009 6:15am Aug 6, 2009 6:15am
Quoting tradertt
I am fine with taking these bars except that I was confused about where the PPZ and confluence should be.

Just to check, for a BUOB, does price have to be in an uptrend (continuation) or can it act as a reversal pattern too like what Jaroo showed.
Ok Great.

They can work great as reversal patterns too...(take a look at the weekly Cad/Jpy as an example)

Ghous.
Attached Image
I believe . . .
  • #40,080
  • Aug 6, 2009 6:18am Aug 6, 2009 6:18am
Quoting tradertt
Would assume that the bar in the picture is NOT a BUOB right?
that's right, those are just indecision bars. for an outside bar the body (i.e the gap between the open and close) needs to be of a considerably long so as to make it appear authoritative and pointing towards one of the 2 either the bulls or bears strongly, it's only then that the bar can be traded safely,

g.
I believe . . .
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