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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

  • #42,501
  • Aug 29, 2009 5:33am Aug 29, 2009 5:33am
Quoting Grousman
Thanks for the prompt reply. How much weight do you put on the divergence (I do not use this, maybe I should?). I think the divergence I refer to is the opposing slope on the MACD (am I confusing myself here!!!)
Not a lot because it can never convince me to enter/exit a trade, but it sure is another tool you can add to your "confluence" box, so that when it appears it merely adds to the odds going in your favor on a potential trade entry,

Here's a little time pass for you

trading Divergence

g.
I believe . . .
  • #42,502
  • Aug 29, 2009 5:43am Aug 29, 2009 5:43am
Short on this pair after daily IB t resistance. Interesting that the last 5-6 IB's on the daily have led to reversals. Not saying this one will but for now its on the right direction. If it breaks 1.43 potentail for 1.42

Any thoughts?

BTW thanks for the divergence link ghous.
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  • #42,503
  • Aug 29, 2009 7:10am Aug 29, 2009 7:10am
Quoting Rainmaker
Take care Ben
RM
Thank-you

Ben
  • #42,504
  • Aug 29, 2009 10:56am Aug 29, 2009 10:56am
We need to get a Kids table around here.... and I will be sure to be seated at it.



Quoting benji533
LOL

Here in Israel we have 2 months of vacation between grades, July and August (summer). At the middle of next week we go back to school...for the last year - and then to the army for three years

Till then my plan is to save money for a nice account

@ Jarroo - You really liked that post eh? thanks man

Ben


EDIT: Check out this question from one month ago: http://forums.babypips.com/free-fore...tml#post123310 lol
I'm pretty much done with all this ...
  • #42,505
  • Aug 29, 2009 12:54pm Aug 29, 2009 12:54pm
Quoting supermatt
I noticed someone said Aus/NZ was a choppy pair. Was just looking at some charts and a pin has formed on the weekly.
I have been reading and listening to you guys about locating trouble spots and ppz etc and not taking trades that have minimal space. What do you think about this pair and this pin setup?

I have marked a few areas of possible trouble so there probably isnt alot of space for this one to go?

This looks good matt. It is at a swing low, the size and shape could be better. It is trading into a PPZ level, 1.2300-1.2350, at the bottom of the previous consolidation area (peach). Daily shows the 365 ema adding strength to this PPZ level.


Price could break up through the PPZ level, use it as support and continue in the peach consolidation area as it did in the past.

Or break down because of the PPZ level and the weight or mass of the previous consolidation area.

My thinking is that Price will continue downward. Note the candle that broke hard through this PPZ level and consolidation (check mark). Price maybe currently retesting this level and continue down.

Bearish PA is what I would be looking for on the Daily and/or 4 hour time frame.

Just some thoughts,

jim
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Indicators show the past. Price Action "Indicates" the future.
  • #42,506
  • Aug 29, 2009 12:56pm Aug 29, 2009 12:56pm
Quoting ghous
more, more, MORE!

4000 tick ? whats nearest minute time frame to that please?
every Saint has a past. Every Sinner has a Future
  • #42,507
  • Aug 29, 2009 1:03pm Aug 29, 2009 1:03pm
Quoting jarroo
I really liked it Ben.

Just for the simply fact that how quickly you understood what Jim is teaching here and on his videos. It really is that simply and Jim presents it in a no nonsense way that makes it very easy to understand. He's a very good teacher.

So I'm really not surprised that you understand it, its just that some of us (me included) takes a little longer to see how simply it really is.

So keep posting little brother , I'm sure you are seeing the benefits of posting and giving analysis on different setups. It will...
You like my analysis eh?

Ok check this out. I will share something I am working on. IMO anyone can trade pin bars and outside bars on their break without a problem. Like I have said earlier, I also like this business cause it is fun and challenging, I enjoy it. This is a bit more advanced stuff that I am not suggesting to trade live after you make your back testing on it. Hope won't confuse anyone.

During the back testing time I have spent to build my intraday method based on round numbers and order flow, I have noticed something interesting. This is still in the very first stage of back testing. Not sure it will even be better. Just thoughts for now - Please remember this during the time you reading this post.

I am thinking about using round numbers as points to enter trades as a pullback point of a PA bar that already occurred - in other words, play PA more aggressively on the retrace of it, with much smaller pip stop. I have thought about it basically because I know that there is order flow at these areas, and I know that the market moves in waves.

I know why and how round numbers work. I can use this knowledge in order to improve my trading results. I want to be able to catch a nice move with minimum pip stop. I know the nature of the market is to move in waves. I know that every seller needs a buyer. How do I use all this?

I will use the first chart below as an example of a trade I took yesterday. See that big BUOB off the big round number 1.7000 ? That BUOB means to me everything. I know that there are tons of orders around that level. When I see a big BUOB, I know that it is big because it had triggered all the tons of orders that were in that area of interest. I see how it tested the lower area, and I see how it shooed up and closed in a maximal way. I see how it engulfs the previous 3-4 bars. I know that the push will be up.

Because I know that the market moves in waves, I know that before it continues to shoot up, it will most likely go back first. Where? of cause...the round number. So what I have done is placed a buy limit order at the 1.7000 level (the orange mark on the chart below). Look what price did. It went exactly where I thought, right to the round number. Look how it tested the round number and shooted up (not on the pip...but still good enough). Where will be my stop? I see the bunch of bar lows below the round number, so I have placed my stop right below them - that will be 15 pip stop!

I have a LARGE BUOB that means to me a lot, but instead of playing it on the break and have a large and unnecessary pip stop, I can enjoy a 15 pip stop with a bit knowledge of support, resistance, round numbers and price action. Isn't that cool?
And see what price did - It shooted up like I have expected.

That move doesn't look big eh (one bar)? If I had exited at that minor PPZ (purple line on the chart), I would be making 3R with such a small move!!
I have entered that trade, but I decided to move my stop to BE and let it run. So yes, this time it didn't work and I have been stopped at BE. I manage my trades very tight until the BE point. Then I am ready to let my trades space if I think they have potential. So this time I had been stopped at BE, but can you imagine what would be my Reward if price would run and make another high?

Just to clarify. This is a bad setup in my book. I won't take it as a trade. I took it as part of my back testing, when I test also the bad setups. In order for this setup to be good, it needs to be with the trend, and have divergence or other supporting confluence factor - I m not surprised that this ended as a BE trade.

So yes, I will be stopped out at BE many times cause I can't let a winner become a looser, but some times it will work, and when it works, it pays off.

Now this is a very aggressive way to play these setups. To play it safer, I can put my setup just below that BUOB low, like in a usual method. The desicion about this will more depend on the situation and how confidant I am in the certain setup.

The ideal setup will be a sharp trend up, break a round number with a large BUOB or large pin, and then enter at a retrace to the round number with a limit order.

All the above are just thoughts. Nothing that I can say is working. I am spending time demoing and back testing it. This is only about using my knowledge to improve my results.


Ben
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  • #42,508
  • Aug 29, 2009 1:06pm Aug 29, 2009 1:06pm
Quoting StoragePro
If he does, does he drive his teachers batty?
Tell yea the real truth...you will find me wandering around outside during most of the lessons I hate….history, literature, etc...I'm a bit (a bit…sure) hyperactive, so I do drive my teachers crazy lol. But I do have good marks for classes I am ok with

You know..in one of James PMs, he told me "do not make it your job". That is really important IMO. Personally I do not have tons of money I can trade and get rich from overnight. I do not even think about it that way. For what do I need ton of money now? Worst case I can ask my parents for money if I really need it. I trade because I enjoy it mostly. I can spend many time on it because I like doing it. If it isn't fun, it will be way harder.

I see many people set monthly targets of ROI like 10%-30% that they plan to achieve every month. It is obvious they trade only for the money. That is a very bad and dangerous habit IMO. That is being greedy.

I just take what the market offers me. I know this from different psychology books. In order to be successful in this business, we need to control ourselves. We can't control the market, and that is what we are regular to do in our daily life style - to control others. The only way to succeed in this market is to control ourselves and fit ourselves to the market conditions. How can you archive 10% if the market doesn't allow it? That is crazy.

I will take what the market offers me. Setting targets is bad because psychologically you have the filling that you need to control the market and just trade because you have a certain target - that is to trade just to trade....and it is a killer.
The market is giving a shi*t about what target you want or not want.

Quoting StoragePro
Take a price bar that is a PA bar.

Pick the spot to where it will go. Primary, secondary etc. Rinse, repeat. Do this as the bar presents itself or F12 through the bars.

That is the demo.

I have done this to an extent, but not rigorously. I am going to because it is a big help.
That is EXACTLY what I have said I do as an exercise, I think last week I said that. Many times I mark the prediction of what price will do for the following days. That is a great thing because if you are right, that means you can read price.

Ben
  • #42,509
  • Aug 29, 2009 1:07pm Aug 29, 2009 1:07pm
Quoting jarroo
This looks good matt. It is at a swing low, the size and shape could be better. It is trading into a PPZ level, 1.2300-1.2350, at the bottom of the previous consolidation area (peach). Daily shows the 365 ema adding strength to this PPZ level.


Price could break up through the PPZ level, use it as support and continue in the peach consolidation area as it did in the past.

Or break down because of the PPZ level and the weight or mass of the previous consolidation area.

My thinking is that Price will continue downward. Note the candle that...

I agree with Jim..

If I traded this pair I would be looking for a 4hr bearish pin off the 1.2350 area as shown on jims chart..

You could of course trade long into that area but be ready for a quick reverse. when reading pa it pays to read the whole chart to get the real story.. try not to focus just on an individual bar but what the overall chart is saying...

It just takes practise & time, unless you are 16 or younger, then it seems to come quick & easy.......

No offense to the young snappers here....
  • #42,510
  • Aug 29, 2009 1:15pm Aug 29, 2009 1:15pm
Quoting benji533
You like my analysis eh?

Ok check this out. I will share something I am working on. IMO anyone can trade pin bars and outside bars on their break without a problem. Like I have said earlier, I also like this business cause it is fun and challenging, I enjoy it. This is a bit more advanced stuff that I am not suggesting to trade live after you make your back testing on it. Hope won't confuse anyone.

During the back testing time I have spent to build my intraday method based on round numbers and order flow, I have noticed something interesting....

Geeeeez, you are catching on quick...

I do this all the time.. try adding fib retaces of the main pa bar & look for your pa on 1 or 2 tf's lower for confirmation...
keep it up Ben.. your doing awesome
  • #42,511
  • Aug 29, 2009 1:21pm Aug 29, 2009 1:21pm
I'm probably going to post this on the Auslanco thread too. I report. You decide.
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"Don't trade to trade . . . trade to win." - James16
  • #42,512
  • Aug 29, 2009 2:07pm Aug 29, 2009 2:07pm
Quoting benji533

I am thinking about using round numbers as points to enter trades as a pullback point of a PA bar that already occurred - in other words, play PA more aggressively on the retrace of it, with much smaller pip stop. I have thought about it basically because I know that there is order flow at these areas, and I know that the market moves in waves.

Where will be my stop? I see the bunch of bar lows below the round number, so I have placed my stop right below them - that will be 15 pip stop!
I think that this was the most difficult thing to get through my skull - that PA not only can give you an entry, but it also provides targets. For exit and entry - if you wish.

I know more than a few of the traders here use a retrace for entry - it is very aggressive. Most (??) will set the stop to the par side of the bar, and hence lower the # pips making up their position size. It is more aggressive, but if you are schmart and choose only A+ setups, you'll prosper. Moving to on a bar break is, in my opinion, a must.

What I liked is that you saw that those bar lows and set a SL behind it. PA is more than an entry method - it will allow you to manage a trade in progress and possibly get a better entry. There are a number of ways to achieve this. Think about that one.

Nice work - you are keeping your eyes open.
I'm pretty much done with all this ...
  • #42,513
  • Aug 29, 2009 2:30pm Aug 29, 2009 2:30pm
Quoting benji533
Tell yea the real truth...you will find me wandering around outside during most of the lessons I hate….history, literature, etc...I'm a bit (a bit…sure) hyperactive, so I do drive my teachers crazy lol. But I do have good marks for classes I am ok with
Mom and Dad would kick your tail across the room if you did not!


Quote
You know..in one of James PMs, he told me "do not make it your job". That is really important IMO. Personally I do not have tons of money I can trade and get rich from overnight. I do not even think about it that way. For what do I need ton of money now? Worst case I can ask my parents for money if I really need it. I trade because I enjoy it mostly. I can spend many time on it because I like doing it. If it isn't fun, it will be way harder.

My father always told me to pursue what I love to do, that money tends to come to those who are good at something - no matter what it is. I have found that to be truth.


Quote
I see many people set monthly targets of ROI like 10%-30% that they plan to achieve every month. It is obvious they trade only for the money. That is a very bad and dangerous habit IMO. That is being greedy.

I just take what the market offers me. I know this from different psychology books. In order to be successful in this business, we need to control ourselves. We can't control the market, and that is what we are regular to do in our daily life style - to control others. The only way to succeed in this market is to control ourselves and fit...

Yes. The business world teaches us to set goals. Revenue targets, delivery targets, performance targets. It is a great skill for most jobs to set a concrete revenue goals and hit it. Not so in trading, because as you point out, we are not in control of the market movement.

It is not unusual thought to think through what our method can obtain for us on a continuum. I have not had a zero dollar month, the one of the slowest months for me ever was July - and I was gone for about two weeks. There is always something - just have to be available to take it - and that is pretty hard sometimes.

What is reasonable? It depends on your method, your skill with that method, and your availability to the market to apply the method in a skillful way. 2 - 3% is very nice for most traders on a monthly basis. And you'll be beating nearly any fund out there. Most here have a job to attend to. But I know a number of traders who pull in a significant weekly percentage. And I am glad they do not publish it - as it would be damaging to most.

But let me tell you why I am doing this. Money. Period. And the things that the money will allow me to do, and that is the real bottom line.

I've been poor, and I've been rich. Rich is better. That, in and of itself is not greed. Greed will make you do completely stupid things. So will being poor.

Just get good at this. The money will come. Dad told me this a long time ago. And he was telling the truth.
I'm pretty much done with all this ...
  • #42,514
  • Aug 29, 2009 3:46pm Aug 29, 2009 3:46pm
Quoting rustyjeff
Geeeeez, you are catching on quick...

I do this all the time.. try adding fib retaces of the main pa bar & look for your pa on 1 or 2 tf's lower for confirmation...
keep it up Ben.. your doing awesome
Hey jeff, thanks for your comment man. Personally I am not a big fib fan, but I will look for more major points and see if I can get the 50% lines up with my needs. Thanks buddy.

Ohh and by the way, offense can't be taken here in this thread



Quote
What is reasonable? It depends on your method, your skill with that method, and your availability to the market to apply the method in a skillful way. 2 - 3% is very nice for most traders on a monthly basis. And you'll be beating nearly any fund out there. Most here have a job to attend to. But I know a number of traders who pull in a significant weekly percentage. And I am glad they do not publish it - as it would be damaging to most.
Well...currently I am just focusing on how to trade right. IMO the monthly ROI is just a question of MM and account size. If you have a big enough account, you don't need to worry about the ROI...and if you don't have a big enough account, but do know to really trade well...it's all about the MM settings. You can make 200% ROI and 2% with the same trading results...depending on how are you willing to risk and how confident you are in your trading, win rate, draw down, etc. So that isn't a big deal IMO.

By the way, speaking about win rate...to me win rate and correct position sizing is much more important mainly because the mentally aspect. I am very confidante in my trading when I spot a good enough setup, because I focus more on win rate than R:R. That is why I prefer getting a BE and miss a huge R:R opportunity. That is really important IMO.

Quote
But let me tell you why I am doing this. Money. Period. And the things that the money will allow me to do, and that is the real bottom line.

I've been poor, and I've been rich. Rich is better. That, in and of itself is not greed. Greed will make you do completely stupid things. So will being poor.
Yea...you are probably right. I felt something iffy about that sentence when I wrote it. Of course we are doing it for the money itself, and of course it provides better and easier life. I meant to say that personally, I feel like if you are doing it just for the money, it has no chance. and that I look at it more as numbers than money. Personally, I am happy with what I have in this stage of life, but building the future.

Ben
  • #42,515
  • Aug 29, 2009 4:39pm Aug 29, 2009 4:39pm
thanks jarroo and jeff for your thoughts on aus nz
i didnt even see what you saw about a break and retest.
  • #42,516
  • Aug 29, 2009 6:08pm Aug 29, 2009 6:08pm
Well, finished my exam this week. Aced it too!

Cant wait to catch up on the thread - was trying to read it as much as possible inbetween study. Got about 20 pages left to keep me occupied for an hour or two.

Just took two trades over the last two weeks. +220 and +43 respectively.
The second trade had gone up over 300 pips and, not being able to properly monitor it, I stupidly let it turn into a +43. What can you do though, a wins a win. On to the next trade.

One aspect Im finding important regarding trading mentality is to try and cut all emotional attachment to a trade once you're out of it. If you're out you're out. The last thing you want to do is keep yourself glued to that pair, cringing as it goes your way and thinking about all the pips you would have made if you were still in the trade. This only leads to revenge trading. By all means keep a close eye on the pair, but only re-enter if a setup occurs that meets your original requirments to enter a trade in the first place. No PA = no trade!

I'll try to get a chart up of my trades later, along with any potential weekly/daily ones for Monday.

Happy weekend to all!
  • #42,517
  • Aug 30, 2009 12:21am Aug 30, 2009 12:21am
Quoting turnip15
4000 tick ? whats nearest minute time frame to that please?
Not sure Bro, don't deal in tick charts, but upon a bit web search:

"Tick charts provide the rough equivalent of fractional minute charts."

from...

http://www.dacharts.com/faq/tick-charts.php

Somebody else would serve you better,

g.
I believe . . .
  • #42,518
  • Aug 30, 2009 12:22am Aug 30, 2009 12:22am
Quoting Rocket!
Just took two trades over the last two weeks. +220 and +43 respectively.
The second trade had gone up over 300 pips and, not being able to properly monitor it, I stupidly let it turn into a +43. What can you do though, a wins a win. On to the next trade.

Happy weekend to all!
Good stuff Bro,

Care sharing the setups you took?

Ghous.
I believe . . .
  • #42,519
  • Edited 1:10am Aug 30, 2009 12:39am | Edited 1:10am
Quoting turnip15
4000 tick ? whats nearest minute time frame to that please?
That's going to entirely depend on traded volume of the instrument involved.

If it trades 4000 contracts a minute, its a minute chart. If it trades 4000 contracts a day, its a daily chart.

(from this, you can probably figure out why forex tick charts arent really that useful)

For ES, volume is highest in the first and last half hours (about 250k), with a low of about 100k for the half hours around noon. So a 4000 tick chart is anywhere between 30 seconds and a minute or so.

Now, YM is about 130k daily...

Should be easy enough to go from there to work out what period a YM tick chart represents.


(you could have found all this for yourself within a few minutes)
When you have to shoot, shoot. Dont talk.
  • #42,520
  • Aug 30, 2009 1:18am Aug 30, 2009 1:18am
Hey joel ...

Just wanted to say I like reading your posts..
You obviously have knowledge in how things work practically...
I have read about what you say but to see it appear hear is just more confirmation..
Thank you.
Jeff
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