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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

  • #41,421
  • Aug 18, 2009 8:11pm Aug 18, 2009 8:11pm
Quoting woolley
Hi people not posted for some time but always been lurking and learning,
it looks like a pin bar forming on eur/gbp I know the nose is not the longest but the fact it is formed directly on the 61 fibbo level gives it a good chance IMHO based mainly on the location.

your opinions please
Hey woolley! Long time, no see. How are you buddy?

61.8 Fib retracement can be a nice level to find some PA. As josh said, it would be nice if the size and structure was big enough to compensate the recent move down.

If that nose went down to the .8500 and then formed a Nice PB at the 61.8 fib, now we're talking. Size and some confluence.

Daily PPZ level looks to be around the .8550. Watch out for this area if you trade it. (Sorry I can't post charts now)


Edit : Looks like it got a bounce at that 61.8 fib and 4 hour PPZ level from what I can see.
Indicators show the past. Price Action "Indicates" the future.
  • #41,422
  • Aug 18, 2009 9:01pm Aug 18, 2009 9:01pm
Quoting StoragePro
...Isn't it true that no one is as insufferable as a person who is good at something, but makes sure you know it? Humble persons are gentle and kind...
Hey everybody! I was the second guy to vouch for SP! I can pick'em huh? Hell yea! Am I good or what? Seriously though, well written and right on. Also enjoyed your post about committment a while back. These are some of my favorite subjects. Thanks again.

K.I.S.S.
  • #41,423
  • Aug 18, 2009 9:09pm Aug 18, 2009 9:09pm
Quoting dhh
it's not a pin BY DEFINITION. it gapped down at open, the open(and close) needs to be within the prior bar.
No, you are right - I guess, technically, it would be some kind of island reversal pin crossbreed.

But, to me at least, it says the exact same thing. Especially on a gappy instrument like soft futures. So I would be comfortable trading it as a pin.

definitions are all well and good, but I dont think they are set in stone.

Good pickup though, thanks - completely missed that one!
When you have to shoot, shoot. Dont talk.
  • #41,424
  • Aug 18, 2009 9:20pm Aug 18, 2009 9:20pm
Quoting joelcf
No, you are right - I guess, technically, it would be some kind of island reversal pin crossbreed.

But, to me at least, it says the exact same thing. Especially on a gappy instrument like soft futures. So I would be comfortable trading it as a pin.

definitions are all well and good, but I dont think they are set in stone.

Good pickup though, thanks - completely missed that one!
That's the kind of chart that gets me really excited. I've dabbled in soft futures, just watching...and this stuff really does work.

It doesn't look like a failure to me, didn't come remotely close to the pinbar nose. Just took a while to take off.

And I too am looking forward to my first pork belly futures trade. And orange juice. So I can feel like the guys from Trading Places.

Ultimately, with indices, futures, forex and a few high volume stocks, the dailies and weeklies can produce a ton of super opportunities a month.

And I want to be there to capitalise on them....
  • #41,425
  • Aug 18, 2009 9:23pm Aug 18, 2009 9:23pm
Hello,

Anyone can please send me the link for the price action Pdf in which i have found it in here, but i Lost the file. The Pdf consist of all the price action BUOB, BEOB and etc.. Thanks
  • #41,426
  • Aug 18, 2009 9:31pm Aug 18, 2009 9:31pm
Quoting aLLerGic
Hello,

Anyone can please send me the link for the price action Pdf in which i have found it in here, but i Lost the file. The Pdf consist of all the price action BUOB, BEOB and etc.. Thanks
Just click on the paperclip. When the popup appears click on 'hide images'
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Don't wish it were easier, wish you were better. ~ Jim Rohn
  • #41,427
  • Aug 18, 2009 9:32pm Aug 18, 2009 9:32pm
Quoting raczekfx
You never give up, do you.. Like the picture of your house btw.

This is an example of one of my test accounts.
I don't demo, but open small live accounts for purpose of testing ideas. This is live testing of something I called RDB and RTL methods... nothing special but i liked the equity curve.

Be nice, show some respect to fellow traders and maybe you'll earn the right to see parts 2 and 3... and perhaps make few friends here.
.
back to no-man's land
.
r
Wow rac... Are you back? See you have not been posting here very often??? Missing your great posts here in FF. Have you been keeping busy with other stuff??
  • #41,428
  • Aug 18, 2009 9:48pm Aug 18, 2009 9:48pm
Quoting LasVahGoose
Just click on the paperclip. When the popup appears click on 'hide images'

Thanks, I appreciate it.
  • #41,429
  • Edited Aug 19, 2009 2:04am Aug 18, 2009 10:03pm | Edited Aug 19, 2009 2:04am
Quoting dengzhi
you cannot rush from 500bucks to 100k trading hourly and 4HR..
you need to be realistic about your gains..

trading forex will not make you rich
in most cases it will make you poorer than when you started
...
it will not replace your daytime job..
I know you got alot of heat for this, but I agree 100%.

I probably wont ever trade as a replacement for my day job. Mainly because I love what I do, and I dont have $250k in capital... being poor sux

I treat my trading like I treat my poker. I love playing, I love learning, but I'm not going pro anytime soon. Its better as a supplement to income than as a sole income source. But there is real money involved, and it is a business to me. It builds my savings faster, gives a bit of alpha to my portfolio, and gives me some extra spending money. Hell, I bought these the other day with the profits from that AUDUSD pin.

I know a ton of people want to make this their 'living', but without enough capital to start with, it just ist gonna happen.

Either way, you either treat this stuff like a business, or you treat it like a gamble. If you want to treat it as a business, you manage your risk. Period. This entire building I am in is basically dedicated to managing risk. Profits look after themselves.

The main problem here is that if you want to be in business, you need capital. Not only that, but you need adequate capital. How much is adequate? Like Mike, or Fiji, or Van Tharp, or any of the other guys will tell you - it depends on your risk. On Oanda, a hundred bucks can be traded with proper money management. But you wont be a millionaire in two months. Sorry.

I'll touch on this below under risk of ruin, but you WILL make losses, and you need to have enough of an account to survive the drawdowns. The best traders in the world lose on trades. Jim and Mark have both talked about times they took losses, and touched on what kind of win rate they have. James' story about the power outage is the best example of how you can do everything right and still get your ass kicked. Same with the loonie last week (or the week before) when it schooled a bunch of people with a huge spike.

Remember kids, compounding works in reverse too - at 8% risk, just three losing trades in a row means you now need a 28% trade just to get back to breakeven - thats 3.5R. How many 3.5R runners do you really get?

Then you have to be realistic in your projections. If you are withdrawing, you ARENT compounding. Warning: massive simplification follows:

Assume you really do manage to compound your account to 100k, and you think you can live on that 6% a month.

Oops, make that 4% after the taxman gets done with you.

Or 3.5%, after you take out the constant returns you are going to need to keep up with inflation.

But that's fine, you still think you can live on that much. Awesome. Your risk of ruin just went through the roof. Why? Because, when you withdraw your living expenses every month, you are effectively cutting your return to zero. Which means you have a massively negative expected value.

On the other hand, if you are only interested in how quick you can build your account, you are more likely to be treating it like a gamble. Which is fine, honestly... just dont fool yourself into thinking it is a retirement solution.

Quoting markf45
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....
There have been a bunch of studies done (I think Van Tharp even talks about one in one of his books, the position sizing one I think) that have shown there is no correlation between a trader's feelings about the probability of the trade at hand and the actual returns

Fiji's stuff on psychology has really turned my brain around on how I think about stuff like this. Cant recommend it highly enough.

ps: I really hope no one does bash you, because it takes some guts to go against the consensus opinion and present your own point of view. It wouldnt be a very good discussion if we all agreed

Quoting markf45
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.
You can, but you are absolutely right here - eventually, you probably will blow up your account. The problem is that you run into risk of ruin issues - ie, eventually you will hit 100% drawdown and have no capital to trade with.

I made a quick couple of charts... hopefully, they help explain why 2% is a good recommended risk level.

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The calculations involved are non-trivial, best reference if you are interested in this kind of stuff is Trading Risk: Advanced Profitability Through Risk Control or Portfolio Management Formulas - mathematical trading methods for futures, options and stock markets, both by Ralph Vince. His models arent perfect (complete RoR calcs are ridiculously complex, and are generally just done via a Monte Carlo simulation). Also, if you hate math, dont even bother... you will want to kill yourself after a few pages

There are a few simplified models floating around on the web, based on 'edge', but they have far more serious shortcomings. I wouldnt rely too much on them.

There are a bunch of assumptions involved, so I have modeled these ones off my own data.

The main point to take away, though, is that you CAN go broke with a profitable system if you dont manage your risk.
When you have to shoot, shoot. Dont talk.
  • #41,430
  • Aug 18, 2009 10:12pm Aug 18, 2009 10:12pm
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.

Yep even at 100% a year you are not going to make a million unless you have 300k+ to start and that is rare. I started with 20k blew up, 20k more blew up, sold everything got a 2nd job, blew up 10k and that was a long time ago. I know most ppl here think doing 50-70 or 100% a month is not real but I tell you I have done it and see others do it that trade the 3-5min stuff, I posted it here in the past so it's not BS. The hard past is running the trades with 0 emotion and not having a care about the trade.

Goto a forum like avidtrader and just read, I have been on it about 12 years now and just look at how tuned in those people are and 90% of the scalp and some of the traders have 7+8 figure accounts, hell one of the older guys is the host on CNBC europe


P.s. I have not posted in a while because nothing is new just same crap different day.


P.s.s I am back to the 5min LOL
Keep taking CT trades, I need more money
  • #41,431
  • Aug 18, 2009 10:19pm Aug 18, 2009 10:19pm
Quoting Eclipse
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....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...
Those are nice numbers, but they are pretty unrealistic. You cant just say that daily bars offer 1:7 and 5mins give 1:3. I took a quick look through my trading log, and I couldnt find a single daily setup that I took with 30 pips risk. It was closer to 150. Maybe with some small inside bars or something, I guess.

*edit* I lie, there was this small crappy pin bar (love that term) that I took as a test. It worked out well for 23 pip risk.

The other thing that people ignore is the impact of random noise. The markets arent an orderly series of bars. They are a bunch of guys (many of whom, amusingly, actually do wear suspenders and striped shirts with white collars) yelling at each over over a thousandth of a cent. There are banks hedging exposure, clearing inventory and scalping. There are a ton of algorithms constantly buying and selling. There are all of us, buying 1/10th of a contract at a time. Orders are constantly going back and forth.

The stuff that shapes the weekly chart (ie, the bars you actually see) is a subset of the stuff that shapes the daily, which is a subset of the stuff shaping the hourly.

When it gets down to it, setups will fail more on the 5 minute than the 15 minute. Not because of reaction times (although they come into it), but mainly because there are a bunch of people doing a bunch of different things. These get smoothed out on a longer timeframe, so you can actually see what is happening.

Can you trade the 15m or the 5m? Definitely. Without a doubt. Look at how kickass some of the guys here that specialise in those charts are. I dont know the guy, but looking at Ryan's charts is pretty awe inspiring.

But is it the same as taking pins on a daily? No.

Quoting TiaForex
To summarise:

The profitability of your system (win rate, average winner etc) which some call expectancy

Your money management so that each trade is a fixed percentage of your account, and one that doesn't spook you into messing with your system.

Your psychological tolerance for your trading style.

These are three separate things and need to be worked on separately. It strikes me that you might be confusing the purpose and effect of the three.

Hope that helps.

Aaron
Aaron, your posts are always awesome and insightful. Always. Thanks for making this a better place to learn
When you have to shoot, shoot. Dont talk.
  • #41,432
  • Aug 18, 2009 10:22pm Aug 18, 2009 10:22pm
Quoting james16
i got news for you benji my friend.

money makes things easier and thats about it.

whats the greatest thing money ever did for me?

when i finally had some i still felt totally unfullfilled and it triggered a spiritual search in my life and i dont mean religion.

a journey inwards instead of outwards.

im convinced life is just a "school" and im also convinced when its over we will have a good laugh at how silly it was for so many of us to be so neurotic about everything. me included.

True about the money, That's why I started working out that's something money can not buy and it's a challange
Keep taking CT trades, I need more money
  • #41,433
  • Aug 18, 2009 10:29pm Aug 18, 2009 10:29pm
Quoting aLLerGic
Thanks, I appreciate it.
No problem. Sometimes when I'm board I go through treads and check out the attachments. Find all kinds of goodies here and there.
Don't wish it were easier, wish you were better. ~ Jim Rohn
  • #41,434
  • Aug 18, 2009 10:34pm Aug 18, 2009 10:34pm
Just thought I'd offer an opinion the short term / long term stuff.

Someone brought out the point about being able to make more trades on the shorter time frames, thus more "opportunity". It was stated that that presents more opportunity to win, as well as more opportunities to lose. I don't think anyone can argue with that.

However, lets think about it from this perspective. Lets say in the long term your method gives you a 50/50 win/lose rate, but with an adequate R:R to be profitable in the long run (lets not get into an R:R discussion, that has been beaten to death...what I'm talking about is R:R data from taken trades). Similar to flipping a coin, 50/50 implies that over the LONG RUN you will end up with 50% wins and 50% losers. That doesn't necessarily mean that in 10 trades you will have 5 winners and 5 losers. However, the more times you trade with that method, the closer you get to your 50/50 win/lose rate. This is the same principle that is applied in blackjack-- because you are working with a small edge, the more hands you play with your winning method, the better the chances you are of making money. Thats because in a 100 hands or trades, your method will work itself out compared to 10 hands or trades. However, the more trades you are taking, the more important it is to employ your risk control. It will be much easier to blow an account without proper risk control over 100 trades compared to 10...because in those 100 trades, you could have 30 in a row that are losers, but still end up with 70 that are winners that equal it out. However your risk profile has to be such that you can withstand those losses without blowing the account so you can take those 70 winners. How many people could stand 10 losers in a row, and just trust that their system will work in the long run? I'd venture to say, not many. The most likely out come is after 10 trades in a row, that trader will think something is "wrong" with their method, and start looking elsewhere. This totally throws the above analogy out the window.

So IF you have a proven method (+expect), I would argue that the more opportunities/trades you take FOLLOWING THAT WINNING METHOD (which takes discipline) the better the chances of you have of ending up a winner. The distinction we have to make is, most people that drop down to lower time frames (where more "opportunities" exist) don't do it with the same discipline as when you look for your 3-5 (or whatever) trades in the longer term. If you can stick with that same discipline in the shorter time frames, it will be more profitable.

In the end, the biggest determining factor like has been stated again, and again will be your ability to stick to your rules and trust they will work out in the long term.
  • #41,435
  • Aug 18, 2009 11:40pm Aug 18, 2009 11:40pm
Quoting benji533
Guys, I know many of you may think trading psychology, or psychology in general is bullshit. But I want to share to books witch improved my way of handling my trades dramatically. Everyone is more that advised to take his time to read them during the weekends.

Ben
Great post, and I know you mean well... but I am gonna take a shot in the dark here and suggest that sharing copyrighted materials is probably not kosher. or halal. Or, as we say here, beer.

When you have to shoot, shoot. Dont talk.
  • #41,436
  • Aug 18, 2009 11:42pm Aug 18, 2009 11:42pm
Quoting raczekfx
You never give up, do you.. Like the picture of your house btw.
This is an example of one of my test accounts.
I don't demo, but open small live accounts for purpose of testing ideas.....
just got up a few hrs ago...
woohooo! what a way to start reading this thread.
Literally almost identical to my beginning balance.... LOL
& possibly the same look of my future balance.

Truly awesome idol! Appreciate u sharing it with us, serves as a great inspiration & 'blueprint'
when's Part 2 & 3???!
  • #41,437
  • Aug 18, 2009 11:49pm Aug 18, 2009 11:49pm
Good morning guys. how about this one.
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  • #41,438
  • Aug 18, 2009 11:56pm Aug 18, 2009 11:56pm
Quoting nasir.khan
Good morning guys. how about this one.
Nailed it Nasir, right where it would likely stall with a small pin that 156 mark. Did you take profit? Move stops to b/e? Get some off the table?

Mike
  • #41,439
  • Aug 19, 2009 12:09am Aug 19, 2009 12:09am
Quoting StoragePro
I'm in cruise control mode right now......
Serious
Quoting StoragePro
Porn Star?
Hilarious

Quoting KissFan
Hey everybody! I was the second guy to vouch for SP! I can pick'em huh? Hell yea! Am I good or what?
So that makes me the 3rd guy to vouch for him...
so far my prized vouch is this guy below....

Quoting joelcf
I know you got alot of heat for this, but I agree 100%.
I probably wont ever trade as a replacement for my day job. Mainly because I love what I do, and I dont have $250k in capital... being poor sux
.....
Nice posts.
Hey, if u say u are poor, then what am i called?
  • #41,440
  • Aug 19, 2009 12:20am Aug 19, 2009 12:20am
Quoting mbqb11
Nailed it Nasir, right where it would likely stall with a small pin that 156 mark. Did you take profit? Move stops to b/e? Get some off the table?

Mike
Thanks Mike. As you know i only trade 1K so i can't take partial profits and i also don't put TP's.
I have found my strength in letting it run i have gain 270 pips in a single trade this week.
I would have put it on BE and i would have got out of it with zero pips as you can see it came back to my BE.

But i spotted the IB in 1H TF so knew it would go up, touch the high of IB and will come back so i did not put a BE and it worked.
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