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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

  • #41,321
  • Aug 18, 2009 10:29am Aug 18, 2009 10:29am
Quoting joelcf
There is a failed pin in there that is bugging me, it seems like it should have worked (and if I had been patient, it did)... and that great bearish outside bar could have actually been a multi-period pin with a way better entry, but I guess that is why I am demoing it still

(specs: http://www.wikinvest.com/futures/Cotton_Futures )
it's not a pin BY DEFINITION. it gapped down at open, the open(and close) needs to be within the prior bar.
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  • #41,322
  • Edited 11:34am Aug 18, 2009 10:29am | Edited 11:34am
Anyone looks at those exotic pairs?
Why not trading them? A chart is a chart, PA is PA, isn't it?

Here is a trade I am considering to take if the current bar will close as a pin (like it is now).

with the trend, very clear PPZ ( also in the past), off 60EMA, exact four fib confluence long term 50%, short term 50%, 61.8% and 23.6%, reasonable nose length sticking out above the resistance.

This is also a breakout pattern. Long term downtrend, price broke through strong support, pullback occurred, now lets see if it will close as a pin and get the PA confirmation.

Ben

http://img89.imageshack.us/img89/4543/1k2pp333.jpg
  • #41,323
  • Aug 18, 2009 10:33am Aug 18, 2009 10:33am
In this conversation going on last 2 pages i see that every one mention daily and weekly for higher TF examples and than they directly come down to 1h and 15 min for lower TF examples.

So where does 4H stand's. I actually trade 4H mixing Pin bars and MACD patterns. But i find my entries earlier with help of 1H (don't go under 1h).

Doing that i get early into the trades, catch some extra pips and my stops get squeezed automatically too.

I have been only doing it live for past two week's (Demo for two months) and i have tripled my 90$ account risking about 6%-8% on each trade i know i am risking to much but i don't compromise my Stops. Even trading 1K lots risk gets around that.

Now i am not bragging about my trading style or skills. I know my pairs(EU,GU,GJ,EJ) are trending pretty good and i don't know what would happen to my equity when they will get in a range.

So i want to know is that which guy you suspect am I.

One who blows his account?

or the one who also blows his account?

Thanks.
  • #41,324
  • Aug 18, 2009 10:45am Aug 18, 2009 10:45am
Hey Nasir

I commend you for asking for our honesty here. Not many people can handle the brutal truth.

Firstly your question on 4hr timeframe I consider it a lower timeframe, and one that should not be attempted until the J16 process on the daily/weekly is taken seriously and conquered. Of course at the end of the day, myself, james, the other vets can't tell you what to do. We can only give you all what we have been through, our experience, to try our best to get you there. This is what we teach, beyond the basics.

As for will you blow your account. Unfortunately my answer is probably. Well the reason I say that is 6-8% risk is just way to high. And two weeks as a determination of future profit is way to low. What you did the last 2 weeks, could be nothing more then a fluke. And to be honest even if you did it over a period of a few months on demo, that will more then likely not be satisfactory enough to be risking that amount. A few losses and you are in a HUGE hole very quickly. The kind of hole that makes people make irrational decisions.

My real advice is to simply trade your demo account with a more conservative risk. And take the rest of the game at the pace that your lifestyle permits. Don't be on the 1 year plan, or even the 5 year plan, be on the long term plan. I suspect there are others here that have tried to push things, but due to some simple common errors such as risking to much they couldn't remain in it long enough. It's like the PM/email I get every few months, about the person who says they have been doing great on demo, they know what they have to do, but they only have a few thousand to trade with so they are going to be super picky and risk 8-10% a trade. I warn the same thing I said to you above. So far all those have came with another email and a blow, or near blow account.

Hope you don't mind my honesty, as I feel anything less would be wrong to YOU and others here and thanks for allowing me to speak my mind too

Mike

Quoting nasir.khan
In this conversation going on last 2 pages i see that every one mention daily and weekly for higher TF examples and than they directly come down to 1h and 15 min for lower TF examples.

So where does 4H stand's. I actually trade 4H mixing Pin bars and MACD patterns. But i find my entries earlier with help of 1H (don't go under 1h).

Doing that i get early into the trades, catch some extra pips and my stops get squeezed automatically too.

I have been only doing it live for past two week's (Demo for two months) and i have tripled my 90$ account...
  • #41,325
  • Aug 18, 2009 10:54am Aug 18, 2009 10:54am
In my opinion the central point it's not the account size, but the pickiness and R/R ratio.

1. On the daily, high quality setups need a 30 pips SL and, on average, they give you 200 pips of profit.
Let's imagine you have a 5000$ account (not a big one) and you risk 3% of it per trade (150$), you can open a 0,5 lots position so that your profit/lost is 5 $/pip (150/30). You have a R/R ratio of 1:7 (more or less) and with one trade you made +20%. Just take other 3-4 high quality trades looking at 20 corsses (not so difficult in a month) and you doubled your account.

2. Now let's considering the 5min. timeframe. Same account size, same risk percentage, same quality setups, but here you need a 10 pips SL, and, on average, the profit is 30 pips. You can open a 1,5 lots position so that your profit is 15$/pip. Your gain per pip is higher, but here you have an R/R of 1:3. You have to focus on 3-4 pairs (can you manage 20 for the whole day?), make extremely fast decisions and watching charts all day.
Well, nobody is saying you can't do it, but considering the n. 1 option, does it worth it? As Jim said, the choice is yours.

Just my modest opinion.
Have a nice day.
  • #41,326
  • Aug 18, 2009 10:58am Aug 18, 2009 10:58am
Quoting Eclipse

1. On the daily, high quality setups need a 30 pips SL and,Have a nice day.

They Do?
  • #41,327
  • Aug 18, 2009 11:00am Aug 18, 2009 11:00am
Quoting benji533
Bottom line, after you master the lower time frames, there is more money to be done there. But you need first, master those time frames, second, have a lifestyle that fits it, and third know how to control your emotions on those time frames that is harder IMO.
This is what people BELIEVE is the truth, but the reality is trading is what you make of it. To me there is no difference b/w any timeframe like that. If you watch daily timeframes and 100 different pairs/securities etc, you have 100 potential opportunities every day. The lower timeframes are good for those that watch less securities to allow for more opportunities. But if you think of it like this. I watch ~25 pairs on the daily, 20 on the 4hr, and 20 on the 1hr. That is about ~85 pairs, same 85 "opportunities". Now this is yes a bit of a generalization, but this is to get you guys thinking in the proper way.

When we start chasing numbers around to create that 30-50% a month return, you've gone way to far off tangent. This is like typing in those 10 pips a day spreadsheets to see how much you could risk to get to a million. It really is so unproductive for a trader. Stick to trading well. The rest takes care of itself. Many people never ever trade lower then a weekly timeframe, instead they expand what they watch. So no difference if you have 20 trades a month on the hour, or 20 a month on the weekly. Opportunity is opportunity and everything is relative. Stops to size moves etc.

I know this comes up about every 20 pages, but you will never see my answer change to it, and I don't expect anyone to agree, but like my last post, i'm gonna lay it out there

Best
Mike
  • #41,328
  • Aug 18, 2009 11:01am Aug 18, 2009 11:01am
Quoting nasir.khan
In this conversation going on last 2 pages i see that every one mention daily and weekly for higher TF examples and than they directly come down to 1h and 15 min for lower TF examples.

So i want to know is that which guy you suspect am I.

One who blows his account?

or the one who also blows his account?

Thanks.

Lol. I only posted my 15m trade because people were debating about timeframes. Like James' has always said, PA works on all timeframes. Trade whats comfortable for you.

With regards to your trading style, I actually find this useful too. eg. If I suspect a daily setup is likely to occur, I look at the 4hr for an early entry. If I suspect a 4hr setup is round the corner, I look to 1hr to pick an entry. This works well for me and happens to be my favourite type of trade because it allows me to add to my position, if the suspected longer timeframe setup occurs. It's great for trade management flexibility.

I know some people are gonna bash me about this but here goes...

With regards to your risk management I really don't see a problem once you learn how to trade this method. I personally have a very high win rate and I too risk up to 8% per trade (but only on the best setups). I've been doing this for a long time now and I am fully comfortable with risking that amount on certain trades. I've never, ever taken a loss on an 8% risk trade because I only risk this much on the best setups that I believe are extremely likely to work.

Anyway, I don't intend to encourage you or anybody else to risk more than 2% because most people will probably blow an account eventually by doing this. But it doesn't mean that you can't risk more than this if you are comfortable doing so.

Mark.
Time for a new chapter
  • #41,329
  • Aug 18, 2009 11:03am Aug 18, 2009 11:03am
Quoting Eclipse
In my opinion the central point it's not the account size, but the pickiness and R/R ratio.


2. Now let's considering the 5min. timeframe. Same account size, same risk percentage, same quality setups, but here you need a 10 pips SL, and, on average, the profit is 30 pips. You can open a 1,5 lots position so that your profit is 15$/pip. Your gain per pip is higher, but here you have an R/R of 1:3. You have to focus on 3-4 pairs (can you manage 20 for the whole day?), make extremely fast decisions and watching charts all day.
Well, nobody...
Hey Eclipse,

I think 5 min chart is too hard. I can say personally, even if I will do it for 50 years, it will be hard for me to see 3% of my account blown by a 10 pip move.

This is true only theoretically...for me at lest.

Making super fast decisions is always a factor for failure, also in life beyond trading, but especially trading.
It is when your emotion take their part and smash you. that's way J16 tells us to work our way down.

Anything under 1H will be too hard for me, so I even don't think about it as a possibility.

However I kinda agree with your theory. It reminds my last post on this subject.

Just my two cents..

Ben
  • #41,330
  • Aug 18, 2009 11:05am Aug 18, 2009 11:05am
Quoting nasir.khan
In this conversation going on last 2 pages i see that every one mention daily and weekly for higher TF examples and than they directly come down to 1h and 15 min for lower TF examples.

So where does 4H stand's. I actually trade 4H mixing Pin bars and MACD patterns. But i find my entries earlier with help of 1H (don't go under 1h).

Doing that i get early into the trades, catch some extra pips and my stops get squeezed automatically too.

I have been only doing it live for past two week's (Demo for two months) and i have tripled my 90$ account...
6-8% is very high based on your experience, and in general I would never trade more than 3% ever.
I hear and I forget. I see and I remember. I do and I understand.
  • #41,331
  • Aug 18, 2009 11:05am Aug 18, 2009 11:05am
Quoting ezz
They Do?
This emoticon makes me think you've never seen an A+ setup.
  • #41,332
  • Aug 18, 2009 11:07am Aug 18, 2009 11:07am
Quoting mbqb11
Hey Nasir

I commend you for asking for our honesty here....
Thanks it's great to have advice from someone like you. I have blown 8 accounts 3 of them are FXCM's free 50$ ones. I exactly got in that Huge HOLE you are talking about got some profits then a few losses and than blown the account in effort's to cover those losses none of them lasted more than 2 days (did not know about FF than).

I would have blown more but did not have any money to do that.

So i was demoing pretty good but suddenly i got bored of it cause i was consistently profitable. So left trading for a week, than i got even more bored so i funded again a mini account.

This account has lasted for longer then two days this time (and i am not trading 5M TF as i did before). I was risking around 7%-8% at 90$-160$ but now it's getting lower and lower as account is growing.
  • #41,333
  • Aug 18, 2009 11:18am Aug 18, 2009 11:18am
Quoting mbqb11
This is what people BELIEVE is the truth, but the reality is trading is what you make of it....
Hi Mike,

Thanks. I will tell you this...I do not trade anything under the 4H (rarely I look at the 1H, but mostly for finding better entries for breakout trades AFTER I MADE MY ANALYSIS ON DAILY OR 4H ONLY).
That is simply because I have tried it on demo and I know my emotions freak me out on these lower time frames. I am just not enjoying doing that, and feel really bad after it.

I do not made that post after thinking how can I maximize my profits. My original thought process was that I am too Bord on those weekly and daily charts. Months can pass and I will not enter even one trade...and I know that when it happens, I will start making bad decisions and take B trades. I do not want it to happen.

If I could watch much more pairs on daily I would be much happier. The problem is that there are not enough.
I hear people say look at commodities, futures, options etc, but honestly, I took a look on those charts and I went nuts only from looking at them. They are so messy, huge gaps everywhere. I know James says forex is harder to trade, but I don't see it that way. I do however look at exotic forex pairs which look reasonable.

Ben
  • #41,334
  • Aug 18, 2009 11:22am Aug 18, 2009 11:22am
Quoting tac
The problem with trading dailies is you will never build a small account up just trading them, there are simply not enough trading oppurtunites, for account building you need to get down to 1hr or 15min charts, where you can get trades every day. However to get down to them you need to move down from daily to learn pa and gain experience. So it looks like

Small account - start on daily gradually move down to 15 mins to learn
Build account up to large account then move up to daily.
A-hem. Never??

That is not true. I long hill and a small snowball is all that is needed - and the vision to understand this. The trouble is the lack of patience and self control and a firm understanding - something few have, but if you do not have these things, you are doomed to lose anyway. No matter how much you have.

One more thing - add to the account monthly. Pay yourself.

Remember - the clock ticks at <roughly> the same rate for me as it does for you. Many cannot do the shorter time frames, hence daily and weeklies rule the day. Add in Stocks and/or futures, and it is clear that you'll have something every day.
I'm pretty much done with all this ...
  • #41,335
  • Aug 18, 2009 11:24am Aug 18, 2009 11:24am
I say, I have never seen such a bunch of self appointed Vet Traders all on one thread, way to go!

Show us your trading statements and i will show you mine, just want to be sure you actually trade the stuff the push on here and not just talking rubbish......narmean?
  • #41,336
  • Aug 18, 2009 11:25am Aug 18, 2009 11:25am
Quoting tac
I never said you cant build an account, it will take forever to take 500 bucks to 100k using only dailies, not many will have the patience to do this. Once you are at 100k then fine dailies becomes the obvious choice.
Since when is 10 or 20 years forever?? Many people work longer to have a crappy retirement. Grow your account over that time and retire in the South of France instead.
I'm pretty much done with all this ...
  • #41,337
  • Aug 18, 2009 11:37am Aug 18, 2009 11:37am
Quoting tac
6-8% is very high based on your experience, and in general I would never trade more than 3% ever.
Now if i have 90$ in my account and an A+ comes in but it requires a 60 pip stop loss and minimum lot size is 1K i will have to risk 6%-7%.

But as i am standing around 250$ i did not have increased my lot size (1K) so i am risking 2%-4% on those trades at the moment and as i said i am still cutting it down.
  • #41,338
  • Aug 18, 2009 11:40am Aug 18, 2009 11:40am
Quoting nasir.khan
In this conversation going on last 2 pages i see that every one mention daily and weekly for higher TF examples and than they directly come down to 1h and 15 min for lower TF examples.

So where does 4H stand's. I actually trade 4H mixing Pin bars and MACD patterns. But i find my entries earlier with help of 1H (don't go under 1h).
May i ask - for when using 4H charts, do you use 0000 hrs GMT as the start of the day, or you use the London open of 0700 hrs GMT? Assuming you trade the GBP and Euro pairs.
  • #41,339
  • Aug 18, 2009 11:40am Aug 18, 2009 11:40am
Quoting nasir.khan
Now if i have 90$ in my account and an A+ comes in but it requires a 60 pip stop loss and minimum lot size is 1K i will have to risk 6%-7%.

But as i am standing around 250$ i did not have increased my lot size (1K) so i am risking 2%-4% on those trades at the moment.
This is really the main problem is your account size and broker is determining the parameters. Instead of you having full control and being flexibile with granularity. Be it a 60pt or 600 pt stop loss I can always get my account size properly positioned so the 1% risk I use never changes. I think you said you understand this, but this is the reality for many people who don't understand this simple yet important topic

Best
Mike
  • #41,340
  • Aug 18, 2009 11:44am Aug 18, 2009 11:44am
looks good until now IMO.. lets wait until candle closes then.. mine will close in 1 hour and 20 minutes.

Quoting benji533
Anyone looks at those exotic pairs?
Why not trading them? A chart is a chart, PA is PA, isn't it?

Here is a trade I am considering to take if the current bar will close as a pin (like it is now).

with the trend, very clear PPZ ( also in the past), off 60EMA, exact four fib confluence long term 50%, short term 50%,...
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