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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

  • #42,021
  • Aug 25, 2009 8:48am Aug 25, 2009 8:48am
Quoting StoragePro
So why not me...?

EJ discussion whilst I slumbered... I got up this morning and saw the retrace was on. Nice opportunity.

Back to the basics -

PB off of a minor round number that attracted attention in the recent past (AKA a PPZ)

Bounce off of the 365 EMA. First time back also.

Right off a trend line, and with the daily (shallow) trend.

What is not to like? At a minor PPZ right now - just above the 135. PB is smallish.

Lock in your pips if you are in. Behind the 150 EMA is a nice spot. (But that it YOUR call)

They say that this...
I've been meaning to ask, what is the significance of the 365 ema on a H4 chart? I can understand the daily because its a simple way of averaging a years worth of price data (even though there's actually only 5 or 6 bars per week), but what's important about three hundred and sixty five 4 hour bars?
  • #42,022
  • Aug 25, 2009 8:49am Aug 25, 2009 8:49am
Here is a pair I rarely trade. The last trade was a dinger!

A hourly PB just formed off of the 1.9500 and in the area of some older-than-dirt lows (May of '96). Not going to trade this particular bar, I would rather hit the 4hr or daily for this pair.

It is on the watch list now....
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I'm pretty much done with all this ...
  • #42,023
  • Aug 25, 2009 9:03am Aug 25, 2009 9:03am
Quoting pmn100
I've been meaning to ask, what is the significance of the 365 ema on a H4 chart? I can understand the daily because its a simple way of averaging a years worth of price data (even though there's actually only 5 or 6 bars per week), but what's important about three hundred and sixty five 4 hour bars?
I used to scratch my head about this as well but I think the best evidence is to put a 150 and a 365 on your 4h chart and scroll back. See how many times a 4h pinbar appears off the 365 for example.

The thing is, using the 'days in a year' logic, even a 365 EMA is meaningless on a daily because we only get bars 5 days a week on the charts so a true average of the last year's price would be a 260EMA. And even if it was an average of the last year's price, that in itself doesn't mean anything unless it's respected.

Jim introduced the 365 and 150 to the group saying that across the years he had found these two to be the most meaningful.

What helps me is to think of the EMAs as "equilibrium points". The average of a certain number of bars creates a sort of median line around which price bounces and comes back to. And my guess about the 365 and the 150 is that the reason they work so well is that they are adaptable to any timeframe. It's almost as if 365 4H bars and 365 daily bars and 365 1H bars all produce an interesting "median point". You could probably do some divisions and work out what the exact periods were but you should always be asking yourself the question "so what". If a 24EMA on the 1H produces the average of price over the last day, so what? The only evidence is whether it has been respected or not over time.

It's a little difficult to describe what's in my head around all this, but I think the 365 and 150 on each time frame actually reflect a lot of different EMAs that traders are watching. I haven't done the math but I bet on a bored weekend someone could come up with a very interesting study of how the 365EMA on the 4h is in exactly the same place as the daily 100 or something like that. My feeling is that these EMAs line up very nicely with a ton of others on different timeframes because of their multiples.

My feelings of course matter not a whit. Any cursory glance at the 365 on the 4H for example will show how useful it is. It's one of my favourite pinbar confluences.

It's the same as asking what causes a pinbar. There are so many different reasons, and if it helps to give you comfort trading, then by all means look into it. But ultimately, they work because they work. And when you watch them work time and again, you gain a confidence that no amount of theory ever gave me.

I hope some of that helps. It's really only idle musings on my part but I have found my trust of EMAs has really grown when I think of them as "equilibrium points".

Aaron
  • #42,024
  • Aug 25, 2009 9:04am Aug 25, 2009 9:04am
Quoting StoragePro
Here is a pair I rarely trade. The last trade was a dinger!
Wow. So, the best thing I learned today was that dinger does not mean the same thing in america as it does here..

http://en.wiktionary.org/wiki/Wikisaurus:condom

Quoting pmn100
I've been meaning to ask, what is the significance of the 365 ema on a H4 chart? I can understand the daily because its a simple way of averaging a years worth of price data (even though there's actually only 5 or 6 bars per week), but what's important about three hundred and sixty five 4 hour bars?
It doesnt mean anything, per se.

Basically, most charting packages are dumb. Or were dumb - high end stuff is smarter now, but most retail type stuff isnt. They treat MA/EMA/etc lines as a x period moving average. So, while the 365 line makes sense on the daily (and is heavily used), it doesnt really make any sense on the lower timeframes.

But, everyone else is using the same charting packages too. So you are pretty much banking on it having meaning because everyone else is looking at the same screen and saying 'oh shit, 365EMA!' and trading based on that. Which is why they are now so ingrained in trader's minds... in effect, they mean something because everyone thinks they do.

Personally, I dont really use EMAs on my charts under the daily. I think I have them setup, but I will only really look at them on the daily because I *know* everyone is using them there. So they are definitely a factor/confluencegiverofpips.

On lower timeframes, if there are a bunch of big EMAs clustered I will take notice, since it is entirely likely that a bunch of people are going to trade off at least one or two of them... but as for one all on its own? Its minor to me. I'll look, but I dont much mind ignoring it if I like the setup.

But alot of people use it. And it cant hurt to at least consider it as part of the puzzle.
When you have to shoot, shoot. Dont talk.
  • #42,025
  • Aug 25, 2009 9:04am Aug 25, 2009 9:04am
Quoting pmn100
I've been meaning to ask, what is the significance of the 365 ema on a H4 chart? I can understand the daily because its a simple way of averaging a years worth of price data (even though there's actually only 5 or 6 bars per week), but what's important about three hundred and sixty five 4 hour bars?
Just something that works as S/R. There are a couple of trade setups using the 365 and/or 150. It also adds a nice layer of confluence. And that is the key - Confluence. This setup may be discussed (?) somewhere in this thread. Anyone have a pointer?
I'm pretty much done with all this ...
  • #42,026
  • Aug 25, 2009 9:08am Aug 25, 2009 9:08am
Quoting joelcf
Wow. So, the best thing I learned today was that dinger does not mean the same thing in america as it does here..

http://en.wiktionary.org/wiki/Wikisaurus:condom

Joel - I am always here to help. And if you think of it, it was a safe trade...


Have you heard the expression "Hum Dinger"? Not the same either - but then again, it IS a good thing ...
I'm pretty much done with all this ...
  • #42,027
  • Aug 25, 2009 9:09am Aug 25, 2009 9:09am
Woops, some big rejections here on the yens. Protect your profits guys and be careful. This could turn ugly :-)
Always wait for the opportune moment… just be careful not to miss it.
  • #42,028
  • Aug 25, 2009 9:24am Aug 25, 2009 9:24am
Nice rejection... these hard moves makes it hard to swing trade.
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Always wait for the opportune moment… just be careful not to miss it.
  • #42,029
  • Aug 25, 2009 9:29am Aug 25, 2009 9:29am
Quoting fxvision
Nice rejection... these hard moves makes it hard to swing trade.
Thats 5m right?
  • #42,030
  • Aug 25, 2009 9:30am Aug 25, 2009 9:30am
Quoting fxvision
Woops, some big rejections here on the yens. Protect your profits guys and be careful. This could turn ugly :-)
Yes it can..
Probably sellers at a huge discount. I did not participate in the discount selling, i swear..
Let's see where it goes.


Quote
Nice rejection... these hard moves makes it hard to swing trade.
must be due to lack of (?) or influx (?) of volatility tied to the summer vacation (in North America, Europe?) winding down.
  • #42,031
  • Aug 25, 2009 9:34am Aug 25, 2009 9:34am
Quoting nasir.khan
Thats 5m right?
Yes, sry.. just cut it out quickly. Got a nice entry on it above 155. Gonna see if that bottom range on the 4H is going to be challenged. If you were standing in a dealer room these minutes you would be hearing screaming and yelling and phones and computers sweating liquid metal...
Always wait for the opportune moment… just be careful not to miss it.
  • #42,032
  • Aug 25, 2009 9:35am Aug 25, 2009 9:35am
Thanks Aaron, Joel and SP. So its kind of a 'everyone else uses them' thing.

P.S. Aaron, liking your H4 journal in the PF.
  • #42,033
  • Aug 25, 2009 9:46am Aug 25, 2009 9:46am
Quoting pmn100
Thanks Aaron, Joel and SP. So its kind of a 'everyone else uses them' thing.

P.S. Aaron, liking your H4 journal in the PF.
Thanks Paul. Glad to know people are watching...
  • #42,034
  • Aug 25, 2009 9:46am Aug 25, 2009 9:46am
Quoting fxvision
Yes, sry.. just cut it out quickly. Got a nice entry on it above 155. Gonna see if that bottom range on the 4H is going to be challenged. If you were standing in a dealer room these minutes you would be hearing screaming and yelling and phones and computers sweating liquid metal...
hahahah this is so true. My email box also starts going Ding Ding.
  • #42,035
  • Aug 25, 2009 9:48am Aug 25, 2009 9:48am
Quoting fxvision
Yes, sry.. just cut it out quickly. Got a nice entry on it above 155. Gonna see if that bottom range on the 4H is going to be challenged. If you were standing in a dealer room these minutes you would be hearing screaming and yelling and phones and computers sweating liquid metal...
In the same exact way as FXV here, Go figure got in lower though. Usually the knocking on the door with strong support above, means the market wants to clear what is underneath before going higher which is what I presume looks to be happening.

Mike
  • #42,036
  • Aug 25, 2009 10:05am Aug 25, 2009 10:05am
Quoting StoragePro
So why not me...?

EJ discussion whilst I slumbered......
Woo - like FX said, big reverse, but any orders hiding behind the 135 and EMA's are currently safe as a bug in a rug... for now.

... Keep your eyes open, Mike is out hunting stops ... ;-)

...
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I'm pretty much done with all this ...
  • #42,037
  • Aug 25, 2009 10:28am Aug 25, 2009 10:28am
Ghous, Tia.

Thank you for the heads up on limit entries. It's appreciated much. =)

I really appreciate this forum hey. It's just awesome.

Everyone doesn't hold back in helping each other out, and it's something I rarely ever see ANYWHERE.
One Mind, Any Market
  • #42,038
  • Aug 25, 2009 10:48am Aug 25, 2009 10:48am
Guys this is a newb question. But I took this trade and posted it yesterday. The pin as i stated in my post was not the real selling point of this trade to me, it was the1.75 level of heavy heavy heavy resistance. Lately I have been trading with the trend only and it has been great. I have been applying the 2 bar stop method and I like ti because it takes emotion out of it. One thing that I am doing though is moving my stop if a bar end up in a pin turning the opposite way. I put my stop where that red line is on my chart after that little pin bar formed at 1.74. It was never hit but it triggered and I am almost positive it was because of the spread. I know this has been discussed before but I just want to make sure.

If I wanted to put my stop at 1.7433 and the spread was averaging around 8 pips I should have pout an order for 1.7441? If I did this I would still be in the trade and it is a great trade(still took some nice profit tho).

Is the common practice just to add the spread to wherver you move your stops too? please let me know if I am being unclear.

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  • #42,039
  • Aug 25, 2009 11:00am Aug 25, 2009 11:00am
Quoting Cyrus
Ghous, Tia.

Thank you for the heads up on limit entries. It's appreciated much. =)

I really appreciate this forum hey. It's just awesome.

Everyone doesn't hold back in helping each other out, and it's something I rarely ever see ANYWHERE.
Totally, totally agree Cyrus. Incredible forum & the open honest advice is unprecedented. One big thanks to this community & particularly the people who have made a newbie like myself feel welcome & have taken the time to respond to my questions.
  • #42,040
  • Aug 25, 2009 11:08am Aug 25, 2009 11:08am
Quoting dmc

Is the common practice just to add the spread to wherver you move your stops too? please let me know if I am being unclear.
Good question - I'm not sure at all what most do, but I tend to ignore the spread - be it for good or ill, that is what I do. I kind of look at spreads as the 'cost of doing business'.
I'm pretty much done with all this ...
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