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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

  • #40,561
  • Aug 11, 2009 12:30am Aug 11, 2009 12:30am
USDCHF H4
Your thoughts please

BEOB Formed for short
At PPZ Level, at 365EMA, Space below(Not trading into traffic), at recent swing high

1st TP 150EMA (Red MA)
Stop loss: Above BEOB Bar
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  • #40,562
  • Aug 11, 2009 12:31am Aug 11, 2009 12:31am
Quoting jarroo
Hey tradertt.

When a high quality PA setup presents itself, what makes it "high quality"?

There's Location (PPZ Levels), supporting confluences, (Swing highs/lows at fib levels, 50% retrace levels, etc. )

Another "high quality" characteristic that a setup must have, that Mike and others talk about all the time, is "Low Traffic". What is traffic? Its the previous Highs and Lows that the setup is trading into. The Highs and Lows meet together formimg S/R levels or PPZ levels. We don't want to be trading into many of these levels, the...
Hi Jarroo,

I understand it better now. If we are trading short after a recent strong run up or trading long after a recent strong run down, we will be having space below and above respectively. What we do not want is to be trading into price in a consolidation as there will be many highs and lows?

But could you clarify a little bit more on traffic as there are SO MANY bars that we can draw the high and low points off
  • #40,563
  • Edited 12:51am Aug 11, 2009 12:32am | Edited 12:51am
Quoting jarroo
Hey tradertt.

When a high quality PA setup presents itself, what makes it "high quality"?

There's Location (PPZ Levels), supporting confluences, (Swing highs/lows at fib levels, 50% retrace levels, etc. )

Another "high quality" characteristic that a setup must have, that Mike and others talk about all the time, is "Low Traffic". What is traffic? Its the previous Highs and Lows that the setup is trading into. The Highs and Lows meet together formimg S/R levels or PPZ levels. We don't want to be trading into many of these levels,...

This Traffic of a setup is not only what we view when considering what we are trading into, but it also shows us where a potential Price Target could be reached. Or where Price will most likely reverse on us when reached. This is more to your point of what SP and LVG was getting at . . . on why your PB reversed.
Indicators show the past. Price Action "Indicates" the future.
  • #40,564
  • Edited 1:20am Aug 11, 2009 12:36am | Edited 1:20am
Quoting tradertt
GBPJPY H4

Pro: BEOB Formed, High of BEOB at Whole Number and PPZ, Low of BEOB (entry level) is below a PPZ so if entry at 158.80 should miss recent low and PPZ, 1st take profit level 150EMA (Red MA)
Con: Not swing high, used as continuation pattern
Howdy,

Assuming you take the break below the PPZ (which you have marked in around 158.90ish), it looks like a pass.

Personally, I wouldnt take this one - I am a bit of a girl about BEOB/BUOB patterns, and if it doesnt close near the bottom I pass on it. Ideally, bottom quater of the bar, but I will take bottom third if it is a nice location.

..but I am sure many arent as discerning/wussy about it.

The problem is that the pair is going sideways. If it breaks downwards, as you are expecting, it could be nice. But it could very well just move back up to the top of the range again. I'd want to see a pretty damn strong break through that PPZ that is forming the bottom of the range.

As for the 'not at swing high' part, I like to play these bars as trend continuations, rather than hoping for a reversal - in my mind, that is the best way to play these patterns. Especially when it isnt a 'strong' bar shape, like this one is.

I'd also watch out for this PPZ (in yellow), since it could cause probs before you get to your EMA target.

Overall? Pass for me. If you do take it, guard your grill

*EDIT* added some pictures to explain what I mean about bar shape, demonstrating the artistic flair of a 4 year old

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When you have to shoot, shoot. Dont talk.
  • #40,565
  • Aug 11, 2009 12:41am Aug 11, 2009 12:41am
Quoting joelcf
H
Personally, I wouldnt take this one - I am a bit of a girl about BEOB/BUOB patterns, and if it doesnt close near the bottom I pass on it. Ideally, bottom quater of the bar, but I will take bottom third if it is a nice location.
This is a very important point to take note of TT. You are at the early stages, so all these questions and what not are perfectly expected. But to save you time, I would first suggest to get ride of that PA indicator. I think it is going to distract you from finding the really GOOD bars, vs just what might qualify as a bar. Many of those BEOBs you posted like the usd/chf are very neutral bars. They don't really give us much info. We can't forget that we are trying to get an idea of where price may go. This comes back to the post James made about poodle bars(small) vs pitbull bars(big). It is just another analogy for what we talk about as a BIG OBVIOUS BAR. Most people begin to recognize any bar as fitting a criteria to be called a pinbar, or an outside bar, and then find reasons to trade it. Instead of finding key areas and then waiting for great PA to slap you in the face.

Just thought I would add that to the great posts from Jarroo and Joel above

Mike
  • #40,566
  • Aug 11, 2009 12:42am Aug 11, 2009 12:42am
Quoting tradertt
Hi Jarroo,

I understand it better now. If we are trading short after a recent strong run up or trading long after a recent strong run down, we will be having space below and above respectively.

1. What we do not want is to be trading into price in a consolidation as there will be many highs and lows?

2. But could you clarify a little bit more on traffic as there are SO MANY bars that we can draw the high and low points off

1. Yes that's it. We don't want our setup trading into a mess of highs and lows of the previous candles.

2. You answered your question. lol If there are SO MANY bars that we can draw high and lows from that means there is TOO MUCH traffic and we pass on the trade.
Indicators show the past. Price Action "Indicates" the future.
  • #40,567
  • Aug 11, 2009 1:20am Aug 11, 2009 1:20am
Quoting mbqb11
This is a very important point to take note of TT. You are at the early stages, so all these questions and what not are perfectly expected. But to save you time, I would first suggest to get ride of that PA indicator. I think it is going to distract you from finding the really GOOD bars, vs just what might qualify as a bar. Many of those BEOBs you posted like the usd/chf are very neutral bars. They don't really give us much info. We can't forget that we are trying to get an idea of where price may go. This comes back to the post James made about...
Thanks Mike.

I have great teachers in you and Jim.
Indicators show the past. Price Action "Indicates" the future.
  • #40,568
  • Aug 11, 2009 1:31am Aug 11, 2009 1:31am
Quoting joelcf
Howdy,

As for the 'not at swing high' part, I like to play these bars as trend continuations, rather than hoping for a reversal - in my mind, that is the best way to play these patterns. Especially when it isnt a 'strong' bar shape, like this one is.

Attachment
Joel, quick question pse.

How do you define "trend"?
I had a similar thought about trading pinbars which are in the direction of the trend over the weekend... but was wondering how to define it.

My 2 pips was the daily trend for 4 hour charts.
I typically have been using 34 and 55 MA as trend indicators.

Mike:
I think I traded into a poodle bar.
One Mind, Any Market
  • #40,569
  • Edited 1:54am Aug 11, 2009 1:35am | Edited 1:54am
Quoting Cyrus
Joel, quick question pse.

How do you define "trend"?
I had a similar thought about trading pinbars which are in the direction of the trend over the weekend... but was wondering how to define it.
Generally, I look at the TF I want to trade, and then the one above it. Then I employ my highly technical system:

If it starts at the bottom left and finishes in the top right, its an uptrend.
Top left to bottom right? Downtrend.

I really like to trade with the daily and 4H in my favour. That's bingo time. If they disagree, I might take a trade in the direction of the 4H (ie, against the D1 trend) if it was a great setup, but I would keep my stops pretty tight.

I experimented with a few indicators, EMAs, etc - but all they ended up doing was telling me what I should have been able to see on the chart. I figure if it doesnt jump out at you, it isnt a strong trend.

If you *had* to use something, ADX/DMI and a smoothed Rate Of Change are decent.

(most of the indicators I looked at were basically either a 1st/2nd derivative of an EMA, or a difference of 2 EMAs anyways, with different MA/AMA/etc smoothing applied to make them pretty)
When you have to shoot, shoot. Dont talk.
  • #40,570
  • Aug 11, 2009 2:18am Aug 11, 2009 2:18am
Quoting mseaz9
Your thoughts ...why this went wrong not yet but i feel like this PIN will fail.

I am still holding short n e one else in the same boat???
Yeah im in this, I added another position when it retraces to 61.8, for a smaller stop (im less that 2% in total though). A lot of pin bars retrace before breaking, just be patient. If it fails then analyse why and learn.

Regards

Mark
I hear and I forget. I see and I remember. I do and I understand.
  • #40,571
  • Aug 11, 2009 3:22am Aug 11, 2009 3:22am
Thought I'd throw up some sideways market action for you guys... Charts a bit of a mess but readable I hope Not convinced it will make it to my TP but a free trade none the less. Hopefully stays good for a few pips.

Nice Pin
PPZ
365 EMA
Divergence
Trendline

Just thought I'd tell you guys how I see it
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Time for a new chapter
  • #40,572
  • Aug 11, 2009 3:46am Aug 11, 2009 3:46am
Quoting markf45
Thought I'd throw up some sideways market action for you guys... Charts a bit of a mess but readable I hope Not convinced it will make it to my TP but a free trade none the less. Hopefully stays good for a few pips.

Nice Pin
PPZ
365 EMA
Divergence
Trendline

Just thought I'd tell you guys how I see it
Very nice Mark. Who said Price is unpredictable. Looks like it went right where we thought it would and reversed and then to the next place we thought it would. ( I think that's a run on sentence. lol )
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Indicators show the past. Price Action "Indicates" the future.
  • #40,573
  • Aug 11, 2009 4:14am Aug 11, 2009 4:14am
hey guys I have just found a great thread with some valuable information not only for the beginners.

here is the link: http://www.forexfactory.com/t/178922...f-notes-1.html

you will not regret after reading it
  • #40,574
  • Aug 11, 2009 4:19am Aug 11, 2009 4:19am
Quote
Looks like it went right where..... ( I think that's a run on sentence. lol )

jarroo,
yes Sir, it was, sort of....
what's good about it, was that u knew it before/while u ended that sentence --- just like your exemplary knowledge in PPZ detections ("it went right where we thought it would and reversed and then to the next place we thought it would").

(FYI for others: run-on sentence)
  • #40,575
  • Aug 11, 2009 5:15am Aug 11, 2009 5:15am
Quoting tac
Yeah im in this, I added another position when it retraces to 61.8, for a smaller stop (im less that 2% in total though). A lot of pin bars retrace before breaking, just be patient. If it fails then analyse why and learn.

Regards

Mark
Looks like it heading down now, given I got in on retrace I am in profit now, lets see if it can break the bar now to confirm its pin bar status. Only 20-30 pips to go depending on your sell stop.

Regards

Mark
I hear and I forget. I see and I remember. I do and I understand.
  • #40,576
  • Aug 11, 2009 5:17am Aug 11, 2009 5:17am
Quoting triger88990
hey guys I have just found a great thread with some valuable information not only for the beginners.

here is the link: http://www.forexfactory.com/t/178922...f-notes-1.html

you will not regret after reading it
Yeah some good foundational stuff on the first page anyway, might delve deeper.
I hear and I forget. I see and I remember. I do and I understand.
  • #40,577
  • Aug 11, 2009 5:58am Aug 11, 2009 5:58am
Sometime we get a nice PB, with divergence at a nice location, and those pesky bar highs act like they often do. You can take these trades, but be aware that this can be the result.
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I'm pretty much done with all this ...
  • #40,578
  • Edited 6:23am Aug 11, 2009 6:12am | Edited 6:23am
Quoting Cyrus
This looks like a pretty decent short.

Shape looks great.
Location too, PPZ + wR1.
Space... might encounter some traffic on the way down @ PPZ below...
so thinking of taking profits earlier @ bottom range of PPZ around 1.0850.

I've got 1/3 of position size at 50% retracement mark of pinbar as well.

Any comments on how you guys would manage this trade please?

Thanks guys =)

Cy
Your PB did have me biting my fingernails....But I learned from my AUDCAD: If I traded on a weekly chart, I should stick to my guns according to the weekly chart (I got out of AUDCAD with +30 pips....it was taking sooooo long to break...and it broke...my fault for getting out early and for not sticking to my trade plan).

So anyways, I'm glad I stood firm with the USDCAD...I used the confluence of finance minister Flaherty's warning about intervention plus a mediocre Bullish PB on the weekly chart....if CAD can penetrate 1.0978, it has a chance to run hard....time to move SL to BE...

According to Martin Pring on Price Patterns, CAD has formed a possible 3 bar reversal pattern on the weekly....this is a good sign....if only it can pop 1.0978 resistance

GregB
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  • #40,579
  • Aug 11, 2009 7:03am Aug 11, 2009 7:03am
Nice tweezer top, 2 bar reversal set up forming on NZDCHF....could form a BEOB....We have nice divergence and also a bonus 4 touch rising wedge....

Time to stop and reverse soon I think....as long as the PA holds for the daily close....

GregB
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  • #40,580
  • Aug 11, 2009 7:10am Aug 11, 2009 7:10am
Quoting jarroo
Great Post Ben. Wow.

Add more supporting confluences to thoses patterns at PPZ levels and it will give stength to your setup.

Your the Man.

Jim

Hey bro, whats up?

I wanted to ask...do you play inside bars?

Here is an example of an inside bar at a swing high, off heavy resistance....looks good IMO. But I did not take it because of the heavy support the bar lows below created. Waiting for another A setup

GBPJPY Daily.

Take care

Ben


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