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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

  • #42,041
  • Aug 25, 2009 11:39am Aug 25, 2009 11:39am
Thanks SP, but I am not trying to look at if the spread is costing me anything i understnad that it is. What I am getting at (and I know my messages are wordy) is price never hit my sl but it got taken out. and was wondering it it had to do with the spread.


Quoting StoragePro
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'.
  • #42,042
  • Aug 25, 2009 11:43am Aug 25, 2009 11:43am
Quoting dmc
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...
yes this is correct D, you sell at the bid and buy at the ask. So you would have to add that back in to prevent your stop from being hit. This is something I am always aware of.

Best
mIke
  • #42,043
  • Aug 25, 2009 12:09pm Aug 25, 2009 12:09pm
Quoting ghous
Eur/Jpy looks swweeet!

365 ema
trend line
ppz
with the current time frame trend
lot's of space.
It still did what one would have hoped for...

PA will always hold true...

g
Attached Image
I believe . . .
  • #42,044
  • Aug 25, 2009 12:11pm Aug 25, 2009 12:11pm
thanks, I need to be aware of that I could still be in at 3:1 :-(

Quoting mbqb11
yes this is correct D, you sell at the bid and buy at the ask. So you would have to add that back in to prevent your stop from being hit. This is something I am always aware of.

Best
mIke
  • #42,045
  • Aug 25, 2009 12:14pm Aug 25, 2009 12:14pm
Quoting dmc
thanks, I need to be aware of that I could still be in at 3:1 :-(
No need to frown, one trade has taught you something for a lifetime of trades. Seems pretty good deal to me
  • #42,046
  • Aug 25, 2009 12:44pm Aug 25, 2009 12:44pm
Quoting ghous
It still did what one would have hoped for...

PA will always hold true...

g
Good call, good explanation. I made some pips as well!! I think I have learnt more about patience these few days than ever before. Watching the CHF JPY which on my charts had a big 4H bearish PB at resistance. Has dropped 30+pips & normally would have just jumped in after PB closed but waiting for retrace. If it doesnt retrace, oh well, look for next set up.
  • #42,047
  • Aug 25, 2009 1:32pm Aug 25, 2009 1:32pm
Here is one of the EMA's in action. the 150. Not every trader uses these, but I use them for specific kind of entry - as confluence with PA and a PPZ.

In this case, the 150 EMA and a PPZ. Confluence of factors make the difference and price boinked right off it.

Notice the 61% fib as well.

Not every trader uses these tools in conjunction, or at all. PA & S/R is bedrock. EMA's - some use them. Fib's - Some use them.

the trick is to look for areas of confluence using factors known to work.

...
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I'm pretty much done with all this ...
  • #42,048
  • Aug 25, 2009 1:37pm Aug 25, 2009 1:37pm
very nice.

imho the concept behind this post is the only value a moving average has.

period.

jim

Quoting StoragePro
Here is one of the EMA's in action. the 150. Not every trader uses these, but I use them for specific kind of entry - as confluence with PA and a PPZ.

In this case, the 150 EMA and a PPZ. Confluence of factors make the difference and price boinked right off it.

Notice the 61% fib as well.

Not every trader uses these tools in conjunction, or at all. PA & S/R is bedrock. EMA's - some use them. Fib's - Some use them.

the trick is to look for areas of confluence using factors known to work.

...
  • #42,049
  • Aug 25, 2009 1:50pm Aug 25, 2009 1:50pm
Quoting mbqb11
No need to frown, one trade has taught you something for a lifetime of trades. Seems pretty good deal to me
That's the way I look at it. I always get something, either money or education.

Dmc,

The reason we need to be aware of spread as you mentioned is those ugly times when we get taken out even though our stop wasn't hit.

I always have a mantra in my head "Buy at the ask, sell at the bid, bid price shown". Which means my charts are based on bid price. So I am fine when selling (or taking profit on a buy order which is also a sell order). But any time I am buying, I will be buying at a price not reflected on my charts. So I need to factor that in.

So what I do is, say I have a stoploss for my sell order set at 145.90. Well I based that stoploss on the charts which are based on the bid price. But because it is effectively a buy order it will be triggered when the ask price hits 145.90. So I just allow for spread. If the spread is 5 pips, I put my stoploss at 145.95. That way when the charts hit 145.90 the stoploss will be triggered.

Which is a very long and convoluted way of saying... add the spread to your entries on buy orders (and SLs and TPs for your sell orders).

Pm me if you need any more help.
  • #42,050
  • Edited 4:54pm Aug 25, 2009 1:58pm | Edited 4:54pm
Quoting ghous
Your charts are improving by the day Ben,

So much so...I have to scroll back to the beginning of the post every time I see your chart/s...they strongly remind me of Mike's,

Nice, Clean and dirt simple stuff every time you come up with one.

This is how we do it folks!

g
Hey thanks for the comment bro!

By the way, I am saving a log of all my trades.
As long as I have a plan, reasons, knowledge of support, resistance and price action, I am never wrong.

I save a log of all my trades in separate folders, with my thought process, conditions, pictures size of bar, etc.....and at the end of every trade I go and write my results plus comments and what I have learned.

That trade is on my demo, so it's ok whatever will be the result, I'll learn from it.

My plan is to save enough money so when I'm ready, I will be able to be picky with my trades.

Most of my money is stuck in HYIPs....I was poor for a long time now (LOL) but last week I got a payment of one of my longer term investments....2,500$..to play with ...unfortunately most of my money is still stuck...hope to get all my other payments in the following month of September.

Ben
  • #42,051
  • Aug 25, 2009 2:29pm Aug 25, 2009 2:29pm
EDIT - Got it now..

SP - Where did you plot your FIB RET?

I've placed mine a few places, but the 61.8 isnt lining up like yours. The 50 level lines up on mine..

Thanks!


Quoting StoragePro
Here is one of the EMA's in action. the 150. Not every trader uses these, but I use them for specific kind of entry - as confluence with PA and a PPZ.

In this case, the 150 EMA and a PPZ. Confluence of factors make the difference and price boinked right off it.

Notice the 61% fib as well.

Not every trader uses these tools in conjunction, or at all. PA & S/R is bedrock. EMA's - some use them. Fib's - Some use them.

the trick is to look for areas of confluence using factors known to work.

...
  • #42,052
  • Aug 25, 2009 2:32pm Aug 25, 2009 2:32pm
Funny, but I look at my trade record and nothing ever came 'close' to not taking my stop. It has blown through it with some authority, but never nicked at or it inside the spread.

I must be a mutant of some kind, but I've never really cared about it. I bet on the 15 minute charts I would though.

Something me to ruminate on.

Ok - done with that. I still don't care... I'll pay for that I am sure...

Quoting TiaForex
That's the way I look at it. I always get something, either money or education.

Dmc,

The reason we need to be aware of spread as you mentioned is those ugly times when we get taken out even though our stop wasn't hit.

I always have a mantra in my head "Buy at the ask, sell at the bid, bid price shown". Which means my charts are based on bid price. So I am fine when selling (or taking profit on a buy order which is also a sell order). But any time I am buying, I will be buying at a price not reflected on my charts. So I need to factor...
I'm pretty much done with all this ...
  • #42,053
  • Aug 25, 2009 2:34pm Aug 25, 2009 2:34pm
Quoting layton
EDIT - Got it now..

SP - Where did you plot your FIB RET?

I've placed mine a few places, but the 61.8 isnt lining up like yours. The 50 level lines up on mine..

Thanks!
From the LAST swing high to the swing low...

1AM on Aug21 on my chart to the bottom of today.
I'm pretty much done with all this ...
  • #42,054
  • Aug 25, 2009 2:40pm Aug 25, 2009 2:40pm
Quoting joelcf
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,...
wow Joel I appreciate your comment.
That is quite interesting. I always thought it may have something with the human natural psychology of being simple, round..or absolute? I mean. every time when we think about something in our daily life, we use round numbers to describe it (like saying the time...we round the minutes to hours or half an hours).

You have pointed an impotent thing in your post..about the fact that most traders do not understand that there is an order flow at both sides. That is right. IMO that is the biggest problem of breakout traders, or any trader that doesn't have the knowledge of price action. If we can read the bars, we can understand what is currently going on in the market.

I am trying to make a point of using our price action knowledge in order to benefit from the order flow on both sides of round numbers. That is actually my (probably I am not the first to think about it f course though), that by price action off those areas, we can see which side had more orders...or SL, TP, whatever.

The thing I want to see happening in a round number area is a choppy price around it (you have said that it happens too). Why? because then I know that all the orders in it's area were triggered, and now it's a question of where will the order flow will push price. I can use price action to identify it.
For example, if I get a BEOB off a round number, I know the push will most likely be down. BUT, it will be important for me to see that BEOB goes as high as it can before retraces - simply to be sure it tested the high and was rejected. The second thing I want to see it the close below the round number - that is important to me, because I want to be sure it wasn't rejected there to.

Sorry for the ramble You have really helped me with this post by understanding the logic behind it. Now I'll take it to the next level by using bigger round numbers. I will get a bigger order flow, plus it will avoid me from over trading.


Ben
  • #42,055
  • Aug 25, 2009 2:56pm Aug 25, 2009 2:56pm
[quote]
Quoting joelcf
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.

It can be a good idea. The thing is that I try to keep my charts simple. That also means not mixing between time frames. I see every time...
That can be a good idea. I remember I have a PDF on this. I will consider practicing it

Quote
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.
Yea..I also see the big advantage of IBs referring to the R:R issue. That can be another good option. But personally I have decided to take it step by step. I have first traded only pin bars until I got a very big confidence in them. Now I am demoing outside bars. When I will get o IBs, I will remember this advice

Quote
(the other really huge r:R I get is with rac setups, but I am completely rubbish at those right now)
Who is rac? is there any thread or something I can get the info of how he trades?

Thanks again mate

Ben
  • #42,056
  • Edited 4:30pm Aug 25, 2009 3:00pm | Edited 4:30pm
Quote

Who is rac? is there any thread or something I can get the info of how he trades?

Raczekfx is a very very accomplished trader who posts in this thread. Look at his post history.

He doesn't spell it out but there's a lot of information in his charts and posts.
  • #42,057
  • Aug 25, 2009 3:18pm Aug 25, 2009 3:18pm
Quoting Cyrus
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....
Hi Cyrus,

Thanks for your comment.

First, for the idea of combining daily and 4H trends.
I have replied to Joel about this, but I want to sharp it a bit.

Mainly I do not like to combine time frames because I like everything simple, plus I do not think it is a wrong thing to do.
But I do understand the concept behind your idea - simply to catch a big trend and ride it all the way while entering at a small 4H bar, which means a much smaller pip stop size. I like this idea. I think that it is the target and wise of every trader...and to be honest, that is a great idea which I was trying to achieve in another way. When I look at my 4H chart, MOST of the time I can spot the main trend also.
That is one of my reasons for trading only with the trend, especially at lower time frames.
If I take an intraday trade off a round number, I will do it only with the trend, or at a clear reserval.

That makes me think. I thought I might always set targets on these lower time frames and not try to carry the trade by trailing stops...but now when I think about it...it can be a good idea trying to trail stops and catch larger trends with a small pip stop.

For entering on the retrace of the pin....as I have replied to Joel, I will consider that.

Thank you Cyrus,

Ben
  • #42,058
  • Aug 25, 2009 3:21pm Aug 25, 2009 3:21pm
[quote=TiaForex;2989978]
Quoting benji533

Raczekfx is a very very accomplished trader who posts in this thread. Look at his post history.

He doesn't spell it out but there's a lot of information in his charts and posts.
Thanks Aron, I'll sure check his post history ( I have a list now..lol)

Ben
  • #42,059
  • Edited 4:49pm Aug 25, 2009 3:50pm | Edited 4:49pm
Here is a nice simple setup.

Double bottom, divergence, Pin bar.

Didn't take it because: not off big round number, against the trend and the pin is a puddle (although I like it because it just rejected a smaller round number, and closed above it. That is what I think can be a good setup).

It is taking off nicely..Great to see though that it went to where it should.

If someone took it, I think it is a good idea moving stop to BE or taking full profit mow

EDIT: It has SPACE!! like mike says

Second EDIT: a nice 1H BEOB which is also a pin off a major round number and a PPZ, with strong divergence supporting took off nicely. How do I miss those?
I think I need to start a log of trades I didn't take lol.
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  • #42,060
  • Aug 25, 2009 3:56pm Aug 25, 2009 3:56pm
Guys (and girls)
Can i just clarify as to whether the 365 and 150 are simple, or ema?
On page 1 jim quotes the 365 as well as a couple of other ma's as being simple, yet somebody a few pages back mentioned a 365 ema.
So far i've had them as simple, and they work very well as an additional confluence!
Thanks.
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