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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

  • #42,321
  • Aug 27, 2009 7:38am Aug 27, 2009 7:38am
Quoting joelcf
This might have to be my new favourite quote.

True, but I am also a massive nit when it comes to this stuff. Still somewhere in the concious incompetance stage of things - im a dumbass at it, but at least i realise it now - so I dont trust myself to take anything less than the A+++ trades

I skipped this one, for instance.


I really think i need to take a leaf out of your book and just commit when I see something that I know will work.
Don't go pasting my pages around your book, it will F it up.

I saw that trade too. Skipped it. Too much crap in the way and I hate the gas it gives me.

Flying by flight rules is what keeps us from hitting a mountain.



I fall prey to 'I wanna increase my take'. So naturally, business dictates that you would do more of what you do. More advertising, more sales, more products, more stores, just more.

Trading is completely opposite. Less is more. If you want more opportunity, we need more markets. And just how many can we handle? Limits exist.

Want to make 3 to 5% a week on the four hour charts? 2 or 3 trades a week. But you have to be ultra picky. We had some great examples posted here this week.

Go back and look at the great trades. What characteristics do they have? I bet you'll find commonality.
I'm pretty much done with all this ...
  • #42,322
  • Aug 27, 2009 7:40am Aug 27, 2009 7:40am
Quoting tradertt
Just wanted to clarify something though, how do we set rules on Location? I don't see how I can put it in words .... help needed or maybe someone can post their rule here hehe
Look at the first 20 pages of this thread. Then look at this weeks posts on great trades. Then you tell us. Seriously.
I'm pretty much done with all this ...
  • #42,323
  • Aug 27, 2009 7:41am Aug 27, 2009 7:41am
  •  krue
  • | Joined Mar 2008 | Status: finger scares cat, power of illusio | 410 Posts
stoploss set to BE. free trade now
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  • #42,324
  • Aug 27, 2009 8:16am Aug 27, 2009 8:16am
Quoting joelcf
The old me would have taken this one. Pinbar! Off support!

The new me sees a bunch of resistance 10pips above, choppiness, a small pin following a big bearish bar, selling pressure from two big pinbars in the last week, and going against the daily trend.

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Hey Joel,

Just thought to use your post in order to mention something.

A bad winner: is a so-so setup that doesn't fit your rules, but you still take, and it becomes a great winner. That is one of the most dangerous things IMO, because it can mess your mind up and lead you to take this kind of bad setup again....only that this time, you get a loss and do not understand why....no wonder why people think trading is complicated.
They keep taking these setups until they blow away their accounts.

That is more like gambling, not trading. We have the ability and knowledge of how to read price. Why do we need to gamble?
I'll quote James and say "treat this as a business". This is your business! If you do not treat it as a business, you are wasting your time, do not trade at all.


Many times these so-so setups WILL WORK. That can be a killer factor.
Many traders get upset and feel like they have missed a great opportunity when the setups they have skipped, eventually work.

Personally, when I see a setup that I didn't take becoming a winner, I am happy, cause I know that the method and logic behind it still works.
Just my two cents...

Ben
  • #42,325
  • Aug 27, 2009 8:27am Aug 27, 2009 8:27am
Quoting benji533
That is probably a part of your method or some thing I guess.

But just see where your trade stalled..major round number...on the pip..and also before:

By the way, most of the time these numbers create the PPZs...I guess?

Ben
Yes, most of the time, but not always.
Take the USDCAD as example. Look at 1.03 level. It's not a big round number, but look at how many times it acted as resistance. Then it became support and made the huge uptrend start.
In the USDJPY you can see this with more evidence. Look at the very nice pin bar which appeared in late april, it came off the 96 level, which acted as a very good PPZ in the past.
Considering this 96 PPZ, I wouldn't have taken any kind of fantastic pin bar off the 95 level, even if it is a major round number.

Just my 0.2c
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  • #42,326
  • Aug 27, 2009 8:31am Aug 27, 2009 8:31am
Quoting skfx
we have certainly been blessed with some setups of late peeps.
did anyone else get this one(gbpaud)?
this is a classic example how understanding orderflow and what traders are doing and why, will allow you to trade that little better.
not only was this pin with the trend,it traded back to a key level and then broke resistance sucking in buy orders.......then bam,you get the classic dump,caused by buyers covering longs-forces price down even harder due to newly initiating shorts and covered longs.
gotta love that.very cheeky
take care all.
Great chart and trade mate!

Love'm in their simplest of forms, the charts.

g.
I believe . . .
  • #42,327
  • Aug 27, 2009 8:32am Aug 27, 2009 8:32am
Hello Ghous,

Thank you for the chart and comment.

Just want to confirm your trade management on this EJ trade, you simply try to minimize the trade with SL at the left eye of the BUOB/PB, (you concern 135 is kind of strong that might not allow you to clear this. In fact entry break was kind of weak as we go down lower timeframe) However, the 4h bar close above 135 so you can stick your gun and wait it reach the first TP1. Do I rephrased it right?


I sometimes confused whether we should respect PPZ or Round number. As Rac style he does not care too much about the round number but only the ppz. That makes me confused and I thought you also do the same too.


PM






Quoting ghous
Hi PM,

135 was on my mind, in fact this probably was the single most important factor that kept it from breaking hard straight away to the upside "jarroo style"

the regions marked on my chart were those that I spotted at the first glimpse without looking to the extreme right at price levels,

However I was intent on letting the trade run until it could break the left eye of the BUOB/PB (the ppz which the buob was off of was another factor that mad me anticipate this) which it obviously didn't and more importantly the 4H was able to close [b]above...
  • #42,328
  • Aug 27, 2009 8:43am Aug 27, 2009 8:43am
Evening everyone,

As I'm bound by my pledge to trade only w1 and d1 timeframes for now I dont see much happening. There are a few pairs I'm watching but no definate set-ups just yet.

Monitoring the GBPCHF as well. THis was posted before but I am keeping an eye on the current bars being possible lows for now but there does not seem to be much room above before a PPZ would stand in the way of a long trade. Monitor only for now.
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  • #42,329
  • Aug 27, 2009 8:45am Aug 27, 2009 8:45am
Quoting PippingMama
Hello Ghous,

Thank you for the chart and comment.

Just want to confirm your trade management on this EJ trade, you simply try to minimize the trade with SL at the left eye of the BUOB/PB, (you concern 135 is kind of strong that might not allow you to clear this. In fact entry break was kind of weak as we go down lower timeframe) However, the 4h bar close above 135 so you can stick your gun and wait it reach the first TP1. Do I rephrased it right?


I sometimes confused whether we should respect PPZ or Round number. As Rac style he does not care...
Quote
Thank you for the chart and comment.

Just want to confirm your trade management on this EJ trade, you simply try to minimize the trade with SL at the left eye of the BUOB/PB, (you concern 135 is kind of strong that might not allow you to clear this. In fact entry break was kind of weak as we go down lower timeframe) However, the 4h bar close above 135 so you can stick your gun and wait it reach the first TP1. Do I rephrased it right?
That's correct.

Quote
I sometimes confused whether we should respect PPZ or Round number. As Rac style he does not care too much about the round number but only the ppz. That makes me confused and I thought you also do the same too.
Does he? as far as I know he's a RN fanatic.

Anways IMHO both, ppzs and round numbers can be extremely rewarding when respected and extremely punishing if disrespected. I don't think you should weigh them against each other on the scale of importance.

Yes I was wary abt the 135 round number, but the ppz right below made me believe price had a fair chance of holding up. You need not look at it as if I was in any way expecting the ppz to hold anymore than the round number. Since there wasn't a clearly defined ppz at 135 (it was rather around 134.5) If anything it was the round number psychology that could have stopped price,

The odds had lined up well, and price eventually did bust through it, 2 of the most important ones were 1) Strength of the setup. 2) lack of a defined ppz at 135.

generalizing a statement like "ppzs are more/less valid than round numbers" from an observation can be pretty damaging to say the least.

g.
I believe . . .
  • #42,330
  • Aug 27, 2009 8:49am Aug 27, 2009 8:49am
Another one I was watching was CADJPY.

Just before I snapped the chart it looked like a pin was forming but seems like it has deciced to head south for a bit just now.

We have a round number and a fib level conflence at the bottom of the current bar so I will keep looking for some price action at this level.

Cheers
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  • #42,331
  • Aug 27, 2009 8:51am Aug 27, 2009 8:51am
what about this pb on usdcad?
to much traffic on a break?
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meine augen sind die sterne
  • #42,332
  • Aug 27, 2009 8:52am Aug 27, 2009 8:52am
hi

this bar will be interesting if it closes as a nice looking pin.

64.00 round no. and ppz
50. fib
retrace and with short term trend.
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  • #42,333
  • Aug 27, 2009 8:55am Aug 27, 2009 8:55am
Oh, one more thing!

When it comes soccer it's got to be Everton, Aberdeen and Boca Juniors of course!

When it comes to NFL it has to be Miami Dolphins I'm afraid. Dan Marino and Mark Duper and all that!

And for the Aussie version of the code it's got to be Adelaide Crows. That's my buddies team so he got me into them when I lived there for a bit.

Cheers
  • #42,334
  • Edited 9:31am Aug 27, 2009 8:56am | Edited 9:31am
Quoting aserbfx
what about this pb on usdcad?
to much traffic on a break?
I'm watching that one. Off a nice PPZ, but you have that huge 1.100 level above. Break through 1.100 and I'll be all over that one like a fat girl on cake.

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Shorted AUDUSD too. Feel like a traitor

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When you have to shoot, shoot. Dont talk.
  • #42,335
  • Aug 27, 2009 8:57am Aug 27, 2009 8:57am
Quoting Eclipse
Yes, most of the time, but not always.
Take the USDCAD as example. Look at 1.03 level. It's not a big round number, but look at how many times it acted as resistance. Then it became support and made the huge uptrend start.
In the USDJPY you can see this with more evidence. Look at the very nice pin bar which appeared in late april, it came off the 96 level, which acted as a very good PPZ in the past.
Considering this 96 PPZ, I wouldn't have taken any kind of fantastic pin bar off the 95 level, even if it is a major round number.

Just my 0.2c

I was back testing and checking all this "round numbers" topic lately, and here is my take on the connection between round numbers and PPZs:

I have noticed that many treat charts like robots, meaning that they see a PPZ and automatically think that price will stall there. Nothing bad with it, and it is very true.
But I don't want to look at it like this. We must remember that there isn't really a think "we trade against or with the market". What is the "market"? That is humans like me and you that move it. Many tend to forget it.

How trends and PPzs are created? the answer is order flow of humans.
Now...why PPZs line up with round numbers, simply because it is nature of humans to use round numbers, so you will often notice the order flow around round numbers.

When price moves and then stalls at a PPZ...why is that happening? Magic? no way. It happens because of the order flow in that area.

Now it is true that many times there are certain areas that get tested and rejected many times , and by that, gain interest and order flow around them even tough they aren't round numbers, and please don't get me wrong - there is nothing right or wrong here.
A smart guy told me today by PM that there are ton of different way to trade, none of them are right or wrong. It all depends on what works for you personally.
If someone ignores round numbers and it works for him , that's ok.

My take of PPZs is using them in order to manage my trades, or avoid taking trades in the first place. I rarely use them as a pure location for my entries.
That is working for me.

Now...I will tell you another thing that I have noticed. These PPZs which aren't on round levels are most of the time very weak or temporary levels. Why? because after they break several of times, the interest of HUMAN traders is lower.

Why round numbers will remained working and acting as PPZs? Simply because that is what humans use. Do you say 13:31 o'clock, or 13:30 o'clock? it is the same, and Joel made another great post about how these numbers work.
As lon as the nature of humans won't change, these round numbers will remain working without a doubt.
That is how I can take an advantage of understanding the logic, and the fact that there isn't any "market" but humans that move it. If you can understand the mind of humans, or the mind of who you trade with, you can "win" him, or at least use it for your own advantage.

Buddy, sorry for the ran...and thank you for your post!
Really, I think I just used your post to post my thought lol, sorry mate.

Take care,

Ben
  • #42,336
  • Aug 27, 2009 9:13am Aug 27, 2009 9:13am
Quoting joelcf
Break through 1.100 and I'll be all over that one like a fat girl on cake.
Great way with words Joel. Like it!
  • #42,337
  • Aug 27, 2009 9:19am Aug 27, 2009 9:19am
EURAUD is another one I'm looking at.

W1 has shown a BUOB at a swing low. Not the best outside bar for sure, but an outside bar none the less.

D1 shows massive bullish divergence and we are hovering just above the 1.7000 round number. That's a triple zero round number that one. Huge significance I reckon.

No definitive entry yet but I'm watching to see how it pans out.

Cheers
Boca
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  • #42,338
  • Aug 27, 2009 9:28am Aug 27, 2009 9:28am
Careful guys... u/cad pinbar is a bullish pinbar at a swing high... not how we look for them... I like the idea of 1.10 break, retrace, with PA and entry though...

And yes, Rac has said several times that he doesn't pay much (if any) attention to round numbers...

Trade your own style, not someone else's, imo...



Josh
  • #42,339
  • Aug 27, 2009 9:34am Aug 27, 2009 9:34am
Quoting Jduester
Careful guys... u/cad pinbar is a bullish pinbar at a swing high... not how we look for them... I like the idea of 1.10 break, retrace, with PA and entry though...
Sorry, was doing twenty things at once and shoulda been clearer - i like it as a breakout trade of the 1.100 line, not as a pin.. just noted the hard rejection from the ppz and move back north as a positive sign
When you have to shoot, shoot. Dont talk.
  • #42,340
  • Aug 27, 2009 9:36am Aug 27, 2009 9:36am
Quoting benji533
How trends and PPzs are created? the answer is order flow of humans.
Now...why PPZs line up with round numbers, simply because it is nature of humans to use round numbers, so you will often notice the order flow around round numbers.

When price moves and then stalls at a PPZ...why is that happening? Magic? no way. It happens because of the order flow in that area.

Now it is true that many times there are certain areas that get tested and rejected many times , and by that, gain interest and order flow around them even tough they aren't round numbers,...
Yours are good thoughts and I seriously agree with them, BUT there's another point.
You miss the base principle of levels tested in the past (supports and resistances or ppz if you prefer) which not always match with big round numbers (don't forget that 1.03, 96 etc. are still round numbers, and they are very strong, see charts above).
If they do it's ok, easier life, but if they don't you have to pay attention, because you could incurr in a loss (see USDJPY example in my post above).

Again, my 0.2c
Have a nice day.
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