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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

  • #41,961
  • Aug 24, 2009 6:59pm Aug 24, 2009 6:59pm
Quoting nasir.khan
Hello every one you won't find me or ghous online at this time cause its 4:40 AM here(not sure if he would come online now).


But except for another 28 days cause i am awake to have my meal for the FAST.
Wrong...

Won't miss the action here for anything,

g
I believe . . .
  • #41,962
  • Aug 24, 2009 7:05pm Aug 24, 2009 7:05pm
Quoting nasir.khan
if i may say this is something similar but did't work. Any comments.
This is what you will really have to understand Nasir,

A good pin bar is just isn't any bar with a long nose at one end,

Factors like "a large nose" a "smallish body"(gap between open and close) and most importantly "protruding out of the vicinity of PA" i.e poking out from the range of the bars right next to it...can be extremely crucial.

+

...obviously what Joel said...

g
I believe . . .
  • #41,963
  • Aug 24, 2009 7:08pm Aug 24, 2009 7:08pm
Quoting ghous
Wrong...

Won't miss the action here for anything,

g


Sorry I generated the results from the PM.

so i am not alone.

a couple of.:nerd: :nerd:

  • #41,964
  • Aug 24, 2009 7:17pm Aug 24, 2009 7:17pm
Quote
This is what you will really have to understand Nasir,

A good pin bar is just isn't any bar with a long nose at one end,

Factors like "a large nose" a "smallish body"(gap between open and close) and most importantly "protruding out of the vicinity of PA" i.e poking out from the range of the bars right next to it...can be extremely crucial.


Quote
The pin is too small, it followed a huge bearish bar and it barely broke the previous low If you did want to risk it, which you shouldnt, you would want the hardest break ever.

This is a failed setup to me anyways, as it wasnt confirmed by the next bar (I use a 10pip break of the pin for confirmation.. think i stole it off jaroo, maybe). Not sure how everyone else does it.

Also, the two previous pins at the peaks are gorgeous.


Thanks guys.

Btw i did not wanted it to work cause i am short on this one (4H box breakout from another thread).
  • #41,965
  • Edited 8:03pm Aug 24, 2009 7:19pm | Edited 8:03pm
I did not see the 'mortal lock' trade today. Boo hoo hoo... Mostly eyeballed the 4 hour.. I'll know for sure within the hour if it stays that way.

Sheesh - this place needs a couple of Olde English fonts. It would help immensely to make a point if I could use one.

Where is Merlin when you need him?

9PM EDIT

Nada. Good night all. There were a couple of borderline trades I skipped today in the Yen pairs. They had resistance right below and were not at the extreme of the swing. Tomorrow.
I'm pretty much done with all this ...
  • #41,966
  • Aug 24, 2009 9:17pm Aug 24, 2009 9:17pm
Far from A trade, but with tight management gave some green pips
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  • #41,967
  • Edited 9:52pm Aug 24, 2009 9:39pm | Edited 9:52pm
Quoting benji533
The pullback to the previous support is almost done.
Lets see if I can get any bearish PA confirmation on that line

I do not have any EMAs or fibs that line up with that orange line...however I have confidence in that level to be acting now as resistance, cause it was a strong support area for a long time. See all those bar lows and then the hard breakout.
Price is also trending down...making lower lows...we have the pull back...I think all those factors plus hidden divergence plus PA confirmation (if will be any) is enough for me to take it.
If...

http://img134.imageshack.us/img134/2826/1k2pp33.jpg...
Didn't have any trades today...boring charts, so I went out most of the day.
Here is an update to this breakout trade, which I am carrying from last week.

This is a clear pattern IMO, broke that heavy support area, pulled back and formed a pin bar. Basically that isn't a beauty pin, and I wouldn't play it alone....but the location here was more important for me. I believe I have placed my stop far enough into the traffic. That old heavy support will do it's resistance work now, IMO. So I have confidence in this trade. I have also the 365ema, divergence and fibs supporting me here.

Basically I am looking to cry this trade until I hit the pink line, which is my target. Didn't move my stop yet...I am waiting for price to break the last low so I will have something to relay on before I cut some of it's space to move.
My plan is to trail my stops based on PPZs, round numbers and PA bars on the way. I will start moving my stop right when the last low will break.

Well I have closed last week with my second loosing trade. the daily GBPNZD pin bar...but managed to cut it almost to a half. I still think it was a good setup...but I have learned that sometimes trading against the trend can be a killer no matter about other factors. In addition...I do not really like that choppy pair...it moves maybe a few pips a week...lol.
Anyway that lose isn't a big deal for me, moving on.

Ben
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  • #41,968
  • Aug 24, 2009 10:51pm Aug 24, 2009 10:51pm
Quoting datogio
Far from A trade, but with tight management gave some green pips
Nice one datogio.

How did you do on that 2 Day PB on the Cad? Nice little runner.
Indicators show the past. Price Action "Indicates" the future.
  • #41,969
  • Aug 24, 2009 10:53pm Aug 24, 2009 10:53pm
Quoting scott_9600
Hi. First post ...

I was wondering if someone could comment if they consider this a good or bad setup. It lost, ... but was I just unlucky on this one ?

- Pin Bar of ppz and round number (1.7600)
- No congestion above PB so room to move, and looking very much like a double-bottom

Thanks,

Scott
Hi there Scott,

This is something I just have become more conscious about.

I posted a similar question yesterday.
Check out #41896 and in particular Mike's reply on page 2794.

Looks like a similar situation IMO.
The downtrend was sharp.
The PB was abit too small relative to the recent candles of the downtrend.

Like Benji said in post #41916, it might very well have been profit taking since it is a round number + it's the 1 hour.
The lower the TF, the more stuff you gotta worry about.

If you check out the 4hour, it's in an obvious downtrend too.

You read the first about 200 pages of this thread yet?
BEST place in the world to get started in trading.
One Mind, Any Market
  • #41,970
  • Aug 24, 2009 11:03pm Aug 24, 2009 11:03pm
Quoting jarroo
Nice one datogio.

How did you do on that 2 Day PB on the Cad? Nice little runner.
Tell me about it! It's the third trade I make based on this thread and I think it's one of the best trades I had so far in my forex career!

Starting to see the light here :-)
  • #41,971
  • Aug 24, 2009 11:12pm Aug 24, 2009 11:12pm
Quoting jarroo
Nice one datogio.

How did you do on that 2 Day PB on the Cad? Nice little runner.
thanks Jim

still holding USD/CAD, I never close second half manually, always trail it to the moon, if it goes there of course. lol
  • #41,972
  • Aug 24, 2009 11:16pm Aug 24, 2009 11:16pm
Quoting faces
Tell me about it! It's the third trade I make based on this thread and I think it's one of the best trades I had so far in my forex career!

Starting to see the light here :-)
That 2 Day PB had some good points to it: at a swing high, entry was below a strong PPZ level and round number, 1.1000, with the down trend, etc.

The tight management of the trade that I'm sure datogio implemented made it a very easy and safe trade.
Indicators show the past. Price Action "Indicates" the future.
  • #41,973
  • Aug 24, 2009 11:17pm Aug 24, 2009 11:17pm
Quoting datogio
thanks Jim

still holding USD/CAD, I never close second half manually, always trail it to the moon, if it goes there of course. lol

Well done, sir.

This is how we roll.
Indicators show the past. Price Action "Indicates" the future.
  • #41,974
  • Aug 24, 2009 11:19pm Aug 24, 2009 11:19pm
Quoting jarroo
That 2 Day PB had some good points to it: at a swing high, entry was below a strong PPZ level and round number, 1.1000, with the down trend, etc.

The tight management of the trade that I'm sure datogio implemented made it a very easy and safe trade.
Yep, I assure you It came out of a veeery tight management
  • #41,975
  • Edited 11:41pm Aug 24, 2009 11:26pm | Edited 11:41pm
Quoting benji533
Hi Cyrus,

I am glad to see a post on this one, cause I was looking at it as well.

Eventually I didn't take it, most of the reasons you and mike already gave:

Many times you can see very nice shaped pin bars at the 1H and 4H but they do not work. IMO it is because there is nothing that really supports them, and alone they are never strong enough sign, especially at lower TFs where the data is very small.
For example a 1H pin bar can be created by the price hitting many SL or TP orders, but that doesn't mean fresh sellers or buyers are coming in...
Benji, thanks for your post. Appreciate the effort taken to write it all out.
(and I still can't get over that you're @ this level @ 16. you're making me feel older than I am)

For PBs & round numbers on smaller TFs, from my observation there're 2 factors which seem to be help to differentiate whether it's stop gunning/profit taking or actual build of new positions.

For (1), I've noticed that when the gradient gradually slows down, and at the high/low of a move, there's a PB...it's something like a blowoff top/bottom.
I think GBPUSD had something to this effect during the 1st wk of August.
Plenty of tails pointing upward for this one... so it was kinda hinting that it positions were being built to the short side?
Was @ wR2 + 1.7000 region also.
So that should have been a huge ass heads up.

(2) When it's a second high --> Looks like a double top + PB @ the swing high. Eg: AUDUSD 14Aug09.

(3) Would be what Mike pointed out to me i think last week or wk b4, which is like branded in my head:
If there's a weekly or even daily PB off PPZ. All the non-pitbulls in the 4hour counter to it are gonna get SQUISHED. LOL
Small weekly PB can = Strong trend in 4hour.

I actually think of PBs off PPZ in terms of physics --> Impulse signals.
When there's a big enough impulse, you can ride it, even if it's counter trend. Just know that it wont last forever.
OR
Perhaps it's akin to waves and tide. A big pitbull + PPZ + confluence creates waves, so until that wave dies out, it can move counter tide (trend). If it's with the tide, you catch a nice big wave (which leads to the 2nd part of below...)

In a nutshell, i've been watching the daily and weekly alot more after Mike pointed out tt mistake of mine.
Saved my ass from going long on USDCAD as well. [yes, thanks again Mike! =)]

I hope I'm making sense.

----------------------------

Quoting benji533
I am wondering if there is any style that has a large win rate, and a large R:R ratio as well?...
Large Win Rate + Large R:R ?
You know, I have been thinking about this.

I've noticed that when the daily trend and 4hour trend are BOTH in the same direction + 4hr Pins in the same direction w a heap of confluences there can be pretty sweet risk/reward.

Noticed that when there're PBs that are relatively large (the pitbulls), price often retraces 50% or to the nearest S/R before price takes off.
Either way, if you place limit orders on PBs @ pullbacks in the direction of the 4hour & daily trend. I think tt's a high win- high R:R type of setup. IE: instead of risk 50pips, you risk 30pips?
For me, i fix my $ risk using Oanda. So smaller pip risk = more bang for buck in terms of $/pip

This was one I noticed. I'm not THAT sure about the PB quality (probably a bigger poodle? =P) but it was off weekly Pivot + PPZ congestion.
Limit placed --> total pip risk aft spread = 25pips. Ran up 300pips... could have t/p @ 8400 the week after for a decent high 200+ pips?

Just throwing out the main idea of PB + confluence of S/R in 4hour in the direction of a strong 4hour/Daily trend = Great Risk/Reward.

AUDUSD 4hr. Possible Big Swinger? (attached below)
[PPZ was actually the entire length of PB below weekly Pivot (pink dotted line) pardon me]
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One Mind, Any Market
  • #41,976
  • Edited 12:38am Aug 25, 2009 12:01am | Edited 12:38am
Quoting benji533
Another thing...I would like to ask here the seniors or whoever know the answer - does bigger round numbers mean bigger order flow? I guess yes. but it will be nice to get a confirmation.
I'm not a 'senior' by any means, but my answer to this would be a qualified 'generally yes'.

Big orders get clustered around xx00/xx50 numbers for ease of communication (whether this is as relevant as it once was is a matter of debate), and because the types of people putting in an order like this often dont need it to the nearest pip. They just wanna hedge an exposure, and so they pick a round number at an acceptable level. On top of that, you will get a clustering of trader orders, because big numbers make big dumb obvious profit targets.

Remember, you arent talking about pips here - you are talking about cents. The reason you see orders at 0.8100 is because it is $0.81...

This follows through to the next level, but the effect isnt linear. Yeah, you will see more orders around .x000, but not like ten times more orders or anything - because there isnt rarely a reason to round off to the nearest ten cents. But what you will see is an increase in trading orders, because it is a bigass number, with a big psychological effect. So you get people putting orders around there, and then you get other people trying to take advantage of the orders there, and so on. Generally, this leads to choppiness, rather than big clear jaroo-esque moves.

What you are definitely going to see is a far larger number of stop loss orders - 'if this trade hits 0.8000', ima kill it! and then myself!'.

And as to whether this extends to the big ones - 1.0000... well, hell if I know I'd wager, though, that it will continue in the same manner - more important, but not ten times more important.

Also, one thing that people often miss is that there are orders on both sides of round numbers. They form strong support/resistance and usually reject price, but if price breaks through there are likely a bunch of orders (stop loss and/or buy stops hoping for a breakout) on the other side... I'll let you draw your own conclusions as to what that might do to price.

Mike did an awesome video on it, which I only just got around to watching this morning on the train. He basically explained everything I have ever said about order flow in one diagram and about two minutes, lol*.


*..can you tell I used to be a legal writer?

Quoting benji533
I am wondering if there is any style that has a large win rate, and a large R:R ratio as well?...
For me, it has always been getting into a PA setup on a lower timeframe. If I see price on the daily go right up to a PPZ, get rejected and start coming down, I'll drop to the 4H and see if a pin is forming there (often, you miss the peak). And sometimes even down to the 1H..

As a result, you can get into a 'daily' setup before it has completely formed, and get a killer r:R. Just pick the location.

Same goes for what Cyrus posted above - entering on a retracement can cut your risk down significantly. It's one of my favourite new tricks. Takes some practice to recognise the type that is going to work for this kind of play though - often, I prefer to wait for a retracement to come back through a previous level - so let price retrace to the 50, and then enter when it comes back down through the 38.2. Just dont mistake a retracement for a big move in the opposite direction!

On a pure single-timeframe-with-proper-confirmed-PA setup, looking at it logically I think inside bars should usually give you the best r:R, as they should have the lowest relative risk...assuming you are entering based on a break of the inside candle, with a stop based on the outside candle. Otherwise, most setups should offer the same risk, on average - a full bar.

Although, again, it really is all about location.

*edit* and, of course, a blind bounce of a big PPZ/round number is going to offer huge r:R, but I dont think that is really a j16 setup (although happy to be corrected). You can basically get in with, conservatively, 10pips risk (often less.. 5 pips seems common too) and huge potential reward. Obviously, the effectiveness (ie, sucess rate) is going to be entirely decided by how well you assess the strength of your levels. I wouldnt recommend it to my grandma to trade.

(the other really huge r:R I get is with rac setups, but I am completely rubbish at those right now)
When you have to shoot, shoot. Dont talk.
  • #41,977
  • Edited 12:24am Aug 25, 2009 12:05am | Edited 12:24am
A large number of potentially actionable signals at the moment - 4 hr JPY-based and longer term continentals.

The E/J 4/D/W dichotomy is of special interest.
  • #41,978
  • Aug 25, 2009 12:18am Aug 25, 2009 12:18am
recently I added a chart grid builder that you can set to display horizontal lines at round numbers at desired intervals. I kinda like it and is uncanny just looking back and seeing how price is attracted to these areas, even on daily charts.

but Im not sure if I am going to keep them on my charts, I kinda like things clean and not alot of clutter on my charts, im not sure at this stage. I notice alot of you here dont really have grid lines on your charts
  • #41,979
  • Aug 25, 2009 2:41am Aug 25, 2009 2:41am
Quoting Cyrus
This was one I noticed. I'm not THAT sure about the PB quality (probably a bigger poodle? =P) but it was off weekly Pivot + PPZ congestion.
Limit placed --> total pip risk aft spread = 25pips. Ran up 300pips... could have t/p @ 8400 the week after for a decent high 200+ pips?
You need to be extremely careful with these pull back entries...

A limit order towards the left eye is barely ever sufficient.

What's the point in trying to force yourself to 1:1 when you're compensating the MM risk with being overly aggressive?

I don't attempt these pull back entries anymore but I guess the safest way to play them is to wait for the break up first

I know that wasn't the main point of your post, but still felt I had to get this across Cyrus.

Happy trading,

G
I believe . . .
  • #41,980
  • Aug 25, 2009 2:44am Aug 25, 2009 2:44am
Quoting supermatt
recently I added a chart grid builder that you can set to display horizontal lines at round numbers at desired intervals. I kinda like it and is uncanny just looking back and seeing how price is attracted to these areas, even on daily charts.

but Im not sure if I am going to keep them on my charts, I kinda like things clean and not alot of clutter on my charts, im not sure at this stage. I notice alot of you here dont really have grid lines on your charts
I used to have grids before,

But I hate the way they remind me of "math" got rid of them...

If you don't suffer from mathophobia you could have them in a color that blends in nicely into your background and doesn't stand out to clatter your charts, I agree they can be useful...

g
I believe . . .
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