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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

  • #42,541
  • Aug 30, 2009 12:08pm Aug 30, 2009 12:08pm
Quoting TiaForex
I know that mbqb11 cancels his order if the next bar doesn't trigger his entry 99% of the time.
Yes this is mostly the truth, except for as 2mas said those times where we might get clear PA that is still strong. But 99% of the time I am out. This has kept me out of 100s of bad trades I couldn't even count.

Again it comes down to your personal comfort as it always will but that is mine.

Best
Mike
  • #42,542
  • Aug 30, 2009 12:39pm Aug 30, 2009 12:39pm
Hello every one,

I have a question about your trading styles.

HOW DO YOU MONITOR YOUR CHARTS.

1- You see a PB, IB, OB, DBHLC and DBLHC. then you zoom out to see where is it formed I.E near a PPZ, FIB LEVEL, MA, SWING H/L or a TREND LINE.

OR

2- You draw you PPZ, TREND LINES, Check out for FIB LEVELS and MA'S and then you wait for a PB, IB, OB, DBHLC and DBLHC to appear.

THANK's.
  • #42,543
  • Aug 30, 2009 12:47pm Aug 30, 2009 12:47pm
Quoting nasir.khan
Hello every one,

I have a question about your trading styles.

HOW DO YOU MONITOR YOUR CHARTS.

1- You see a PB, IB, OB, DBHLC and DBLHC. then you zoom out to see where is it formed I.E near a PPZ, FIB LEVEL, MA, SWING H/L or a TREND LINE.

OR

2- You draw you PPZ, TREND LINES, Check out for FIB LEVELS and MA'S and then you wait for a PB, IB, OB, DBHLC and DBLHC to appear.

THANK's.
Hey Nasir

I personally do a little bit of both. I do have specific areas I am watching with confluence, but also sometimes you just have to be a bit more flexible when a huge nice bar shows up and see if it is playable. So my answer is both

Mike
  • #42,544
  • Aug 30, 2009 12:52pm Aug 30, 2009 12:52pm
Quoting mbqb11
Hey Nasir

I personally do a little bit of both. I do have specific areas I am watching with confluence, but also sometimes you just have to be a bit more flexible when a huge nice bar shows up and see if it is playable. So my answer is both

Mike
Thanks for the reply Mike.

I think this also depends upon how many pair are you watching and the time frame.
  • #42,545
  • Aug 30, 2009 12:53pm Aug 30, 2009 12:53pm
Quoting mbqb11
Hey Nasir

I personally do a little bit of both. I do have specific areas I am watching with confluence, but also sometimes you just have to be a bit more flexible when a huge nice bar shows up and see if it is playable. So my answer is both

Mike
Same here...
  • #42,546
  • Aug 30, 2009 2:39pm Aug 30, 2009 2:39pm
Quoting ghous
Hi guys,

Just wanted to put this up so you guys know...

My university starts from tomorrow and I'll be there for just as much time as I am at home trading and posting/reading at FF.

Besides I am commencing some of my trading research projects that I've lined up for quite some time. Whatever extra time I have I aim to utilize it looking beyond what I know into the unseen and unknown to discover the true world behind those price bars, so obviously I won't be just as available as up till now,

I'll obviously drop back for a while here and there,...
Good luck buddy....and take care...

Do not forget us

Ben
  • #42,547
  • Aug 30, 2009 2:45pm Aug 30, 2009 2:45pm
Quoting nasir.khan
Hello every one,

I have a question about your trading styles.

HOW DO YOU MONITOR YOUR CHARTS.

1- You see a PB, IB, OB, DBHLC and DBLHC. then you zoom out to see where is it formed I.E near a PPZ, FIB LEVEL, MA, SWING H/L or a TREND LINE.

OR

2- You draw you PPZ, TREND LINES, Check out for FIB LEVELS and MA'S and then you wait for a PB, IB, OB, DBHLC and DBLHC to appear.

THANK's.
Hi Nasir,

I think that this question is asked because you don't have a plan in place?

IMO, you need to spend a bit time making a plan or a general idea of what you are looking for. That way you won't need to think and break your head so much.

Search for certain patterns.

Personally, I use the round numbers, so it is very easy for me. I just scan my charts every few hours and it takes my something like 5 minutes to go through all the pairs. If price isn't heading into a round number, I pass.

That works for me.

Ben
  • #42,548
  • Aug 30, 2009 3:11pm Aug 30, 2009 3:11pm
Hi, I hope everybody's weekends were good.

I have a question which I've been thinking about for a while.

Let's say that we find two nice bullish pin bars, both in good locations.

The first is EURUSD and the second is EURGBP (this is just an imaginary example)

They're both good, but only the EURGBP is a real A+ setup.

Now, here comes the twist: when we then flip through the many pairs, we find that the USD is weaker than the GBP and this weakness is suggested to continue by looking at PA on the GBPUSD pair.

Now we have this: GBP is stronger than USD - but the A+ EUR bullish setup is on the EURGBP.

What do we do here?
Trade the A+ setup and ignore the fact that the GBP shows less weakness than the USD, or trade the EURUSD pin bar instead?
  • #42,549
  • Aug 30, 2009 3:13pm Aug 30, 2009 3:13pm
Quoting o990l6mh
Hi, I hope everybody's weekends were good.

I have a question which I've been thinking about for a while.

Let's say that we find two nice bullish pin bars, both in good locations.

The first is EURUSD and the second is EURGBP (this is just an imaginary example)

They're both good, but only the EURGBP is a real A+ setup.

Now, here comes the twist: when we then flip through the many pairs, we find that the USD is weaker than the GBP and this weakness is suggested to continue by looking at PA on the GBPUSD pair.

Now we have this: GBP is stronger...
The simplest answer and what I believe is the best is ignore EVERYTHING else, and simply trade that one chart. If you have an A+ setup, then trade that and trade it based on that chart alone. It rarely lies if we put all the info together properly

Hope you had a good weekend as well
Mike
  • #42,550
  • Aug 30, 2009 3:14pm Aug 30, 2009 3:14pm
Quoting ghous
Hi guys,

Just wanted to put this up so you guys know...

My university starts from tomorrow and I'll be there for just as much time as I am at home trading and posting/reading at FF.

Besides I am commencing some of my trading research projects that I've lined up for quite some time. Whatever extra time I have I aim to utilize it looking beyond what I know into the unseen and unknown to discover the true world behind those price bars, so obviously I won't be just as available as up till now,

I'll obviously drop back for a while here and there,...
catch ya soon Ghous, take care

Mike
  • #42,551
  • Edited 4:11pm Aug 30, 2009 3:21pm | Edited 4:11pm
Quote
Let me answer some of your questions from my experience.

Cancelling the order if it doesn't trigger next bar

I know that mbqb11 cancels his order if the next bar doesn't trigger his entry 99% of the time. I am slightly different. Of course we all love to see price shoot down and never look back. But I look at it this way. If the next bar neither invalidates the pin bar (for example) nor triggers it, then it's an inside bar. Which in itself is a PA signal. And the pin bar plus inside bar combination can be deadly (also outside...
This is really interesting, but also confusing. A pin bar is a sign of fast and sharp rejection, and an inside bar is a sign of indecision. So basically that indecision is canceling the "push" of momentum the pin is showing". I will need to check the inside bars deeper before I can say something about them. But basically I also think that we need to use common sense and not be robots. Meaning that if I see a pin bar followed with another pin bar that didn't break to the opposite side, this is still a sign of rejection.
I think I can make these kind of decisions depending on each case and setup separately.

Quote
DBHLC

I rarely play them, mainly because they rarely show up, but if I did I would look for them at the obvious swing points. The thing I always try and remember about these bars so as not to spook myself about them being a rare and exotic PA setup, is that a DBHLC is really only a pip away from being a good outside bar with a strong close, and is usually a 2 bar pin anyway. It's just another way of looking at rejections on price.

Which brings me onto my next point...
ok I spoke about it today in another post, but I will give my opinion on this setup again.
What does a DBLHC or a DBHLC really tells us? as I see it, price failed to break one side, which is a sign of weakness, and a break to the other side is a sign for strength. I am not a big fan of this concept.

When I see a outside bar that barely engulfs the previous bar, I skip on it. I want to see it going further testing the weak side, and get rejected very fast and hard that it ends as a large bar with it's close on the other side.

I will explain why this is very important. Lets say I want to go long. I see a BUOB - why it is important to see it went much lower than the previous bar and shot up?
This is simple. If I have a BUOB that engulfs the previous 3-4 bars, I know that below theses previous bars, there can be many TP orders of buyers, or stop orders of fresh sellers, or limit orders of fresh buyers.
When the BUOB tests the low and shots up, it tells me:
1) sellers TP orders were hit, and now the buyers have more strength.
2) maybe some buy limit orders of buyers were hit, and the bulls get stronger.
3) The fact that the price shot up and closed as a BUOB with the close on the upper side of the bars, verifies for me that no sell stop orders were triggered, meaning no fresh sellers strength.

When I see a large BUOB, I do not know which situations from 1-3, or what mix of them have occurred, but I do know that whatever did happen, it is obvious that the bulls are in control.

This is why it's so important fore me to see a large outside bar that test further the low of the previous bar.

If I skip on outside bars which are barely outside bars....what sense will be in taking a DBLHC or a DBHLC? Maybe I am missing some thing. In fact, I hope James will see this post and give his opinion on the logic behind these setups. Personally, I do not like to do things like a robot - I want to understand the logic. Till I can't get to like the concept, I don't care how good it works on the screen (sorry if I am being rude, no offense to anyone).

Quote
Retrace Entries

DBHLC and Outside Bars often retrace at least 50% in my experience. If I see a good outside bar on the daily I will set my order for the breach as normal, but will also be watching 4H like a hawk at the 50% level for god price action. Then, rather than it being a retrace entry per se, it become a good 4H trade with strong daily bar confluence. In fact Rac likes looking for PA between the 50 and 61.8 ret of any swing.

I personally have never seen good results from setting blind entries at 50% retraces because often...
This is a great advice.

I just want to quote this again:

Quote
I personally have never seen good results from setting blind entries at 50% retraces because often just ploughs through. Better to wait for good PA.
I never ever set blind entries without logic
If you have noticed, I play my intraday trades ONLY off round numbers.

Here is a post I made about how I use roud numbers in order to enter a PA bar on the retrace: http://www.forexfactory.com/showpost...ostcount=42512

Outside bars are naturally huge, and naturally retrace before taking off - you too said that. As I have said to josh, price moves in waves as a fact. According to Eliot wave theory, trends are created by big waves that are followed with smaller retrace waves. Every big wave is followed with a smaller retrace wave - the move of an outside bar is a really large and fast rejection move, which is a "big" wave (of course a minor big wave. Every wave is created by minor waves that were also created by even more minor waves, etc). I believe that after every sharp and fast move, you will see a retrace. So that retrace that always follows the outside bars, is the small wave - this really makes perfect sense to me.

ok ok...how do I use it and how does it connect to your sentence I have quoted. I think that placing a limit order on the 50% of the outside doesn't really make sense. Why the 50%? I think that the best place to place a limit order will be on the round number. Why? because I am sure that is the ideal place for more orders to be triggered in my direction. If I play an 4H outside bar, I am sure that those that play the 5min are tuned with there limit orders on that round number - they want to get a chance to get again into the market on the pullback.

So I can say that till now, my testing produced great results of entering on the retrace with a limit order ON THE ROUND NUMBER. That will usually be the area where price will shoot in my favor again. That is an entry of a fresh new big wave.

Quote
Another way to look at things

Now that you're armed with the information about retraces within bars, another way to use it is to not look for early entries but to look for reduced stops. For example, you still enter your trade on bar breach, but you set your stop at 50% of the bar, or at a key SR level, or at the second eye of a pin bar. Jarroo does this a lot. I've even been testing having a standard 50 pip stop and shooting for a 50 pip target from an A+ bar breach (only testing this on daily). A simple in and out for 1R. I'm also...
Well...if you and jarroo do good with it, I am sure it makes sense. But in this case, it is a kinda conflict with the paragraph above
If I have discovered that many times price retraces on big outside bars, what logic will be to reduce stop to the half of the bar? There are high odds that price will retrace, hit my stop, and then go in my favor....
I guess it needs a separate testing.

Quote
Caveat

This post is specifically directed at Benji because he's reached a stage where he knows what he's doing and can cope with this stuff. But if you haven't mastered playing price action the classic way, and you think this is a way to squeeze more profits, then this information will kill you. It will destroy your account and your confidence and give you next to no chance in this business. Get the basics right and the rest will follow.

I had someone trade my money once using price action principles. He fancied himself a bit of...
This is really important to me. I agree with you that at least 50% of trading is psychology, and that is why I always try to push these copyrighted books into my posts and PMs. Understanding simple rules and facts is very easy, but applying it and using common sense is the real thing. IMO, it is all about psychology and common sense (and money management - can't ignore it).
I agree that confidence is really important factor in trading. I hear many traders say that they have a low win rate, but a huge R:R, so it doesn't bother them loosing. I am different. Maybe I will be more profitable in the long run if I'll let my trades more space, but I know that mentally, it will be much better for me to not let a winner become a loser (I think James is the same). If I see my trade going to the first trouble area, and I end with a lose, that is just enjoying for me.
I think psychology and MM are the basics, before having a method.

Quote
It really is amazing how quickly you are assimilating the advanced material benji. You're going to be a James16 senior member and teacher before long...
LOL

with the length of my posts, I think it will me more effective for me to upload videos lol.
Just kidding....my English accent is really bad....I do not talk here English much...only writing

Anyway, thank you of the post Aaron....I appreciate it.

Ben
  • #42,552
  • Aug 30, 2009 3:49pm Aug 30, 2009 3:49pm
Quoting joelcf
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...
Thanks Joe . Yes I could haved researched it but I value the experienced traders view. Thanks
every Saint has a past. Every Sinner has a Future
  • #42,553
  • Aug 30, 2009 3:53pm Aug 30, 2009 3:53pm
Quoting ghous
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.
You were very helpful. Thankyou Ghous.
every Saint has a past. Every Sinner has a Future
  • #42,554
  • Aug 30, 2009 4:13pm Aug 30, 2009 4:13pm
Quote
1) sellers SL orders were hit, and now the buyers have more strength.

I meant to say TP orders, not SL.

Just edited my post.

Ben
  • #42,555
  • Aug 30, 2009 4:17pm Aug 30, 2009 4:17pm
Quoting mbqb11
The simplest answer and what I believe is the best is ignore EVERYTHING else, and simply trade that one chart. If you have an A+ setup, then trade that and trade it based on that chart alone. It rarely lies if we put all the info together properly

Hope you had a good weekend as well
Mike
Yeah, I had a feeling that was the answer

Trade the chart and nothing else... It's hard to unlearn habits and behavior! (that's probably part of why Benji's so good at this - he hasn't had the time to amass those bad habits yet, the other part is a natural aptitude)

The weekend was good and last month was profitable. Now looking forward to hopefully another month of sound trading for me.

I know many have said this before here, but this is really a superb thread. I've not seen anything like this anywhere else. Friendliness, very skilled posters, high quality discussion and prompt always kind answers. I'm happy and proud to be here!
  • #42,556
  • Aug 30, 2009 6:03pm Aug 30, 2009 6:03pm
Quoting benji533
This is really interesting, but also confusing. A pin bar is a sign of fast and sharp rejection, and an inside bar is a sign of indecision. So basically that indecision is canceling the "push" of momentum the pin is showing". I will need to check the inside bars deeper before I can say something about them. But basically I also think that we need to use common sense and not be robots. Meaning that if I see a pin bar followed with another pin bar that didn't break to the opposite side, this is still a sign of rejection.
I think I can make these...
Hi Ben,

You speak English immaculately. I would never have guessed it wasn't your first language.

You're going down very similar avenues that I went down a few months ago and I wanted to offer just a gentle warning based on my experience.

Keep it simple.

All your thoughts are good thoughts, and wanting to understand the reason why PA appears is a very valid line of thought. But when you start looking into it you'll realise that there are many many reasons why a particular PA setup can appear. Joelcf has a great post on this. And then you start asking whether this pinbar formed in the "right" way. And you can really tie yourself in knots.

Mbqb11 will play a mammoth outside bar intraday in the right location, even if it was formed by an NFP news spike. There are so many reasons why PA appears, and in my experience, the more I researched it, the more I ended up second guessing the charts.

You're a bright guy and so I can see you going down these avenues to get a better understanding of the markets. I can also see sometime in the future you reducing your trading to simple core concepts and rinsing and repeating.

When I started looking at the reasons behind PA I would constantly second guess the bars as they appeared on the chart. Did price shoot up the right way? Did it spike up? Was the pinbar created essentially in a 5 minute period? Did it create the "right" way? And so on and so on. There was way way too much discretion involved. And as I did research into round numbers I started discovering all kinds of logic behind it. Option protection etc. I even started looking at round numbers in other currencies and how they translated into SR levels on my chart. What 1.300 on the eurusd would look like on another eur chart for example. Joel talked about this recently.

It drove me a little crazy.

The purpose of technical analysis, especially the way we do it here, is following footprints. That's why we ignore the news. Half an hour before news announcements there is usually a price action setup that appears that gives the tip off as to where price is going. Footprints. There's a lot of complex information priced into those charts, complex information that we have no hope of accessing, but nonetheless information which leaves footprints that we can follow.

To simplify, my gold standard became backtesting and demoing. If I had a concept that I felt was valid, I'd take it to forextester and then onto demo charts just to see if it worked over time. If it did I'd test it live, and if that worked, it rolled out as a viable strategy.

The danger with too much theorising is that we grasp only a small amount of the knowledge available. To use your example, yes a pinbar is a sign of a hard and fast rejection, but a cursory glance of the charts will show that many times after triggering the price lingers around before the big move. It doesn't plummet at that same rate that it came off the nose. And an inside bar isn't necessarily a sign of indecision (that's a neutral bar), it's more a sign of the market winding tighter and tighter before an imminent breakout.

There are many many ways to look at the whys and wherefores of why these bars appear. I'm just offering up a friendly warning based on experience to not delve too deeply into things, or at least if you do, to keep things simple when deploying your knowledge.

Of course, all this comes with the caveat that trading is based around your personality, and you may be someone who likes to have an overview and to understand everything no matter how complex. I know SeekingLight has a similar personality and his stuff is well worth reading. I think you'd like it. He does well with complex analysis because it's who he is, and a simpler reading of the charts wouldn't suit him. Trading really is personality based.

Anyway, I've waffled on a bit. Sunday nights are always the time when I ease myself back into this and so am always a little rusty from the weekend. Hope it made sense.

Good luck this week and I look forward to reading your posts.
  • #42,557
  • Aug 30, 2009 6:11pm Aug 30, 2009 6:11pm
ben i have been reading your posts and i am so impressed with your understanding of price action..u have a huge future ahead of u...keep learning buddy..
  • #42,558
  • Edited 6:37pm Aug 30, 2009 6:23pm | Edited 6:37pm
  •  2mas
  • | Joined Apr 2007 | Status: Thanks to James 16 family | 89 Posts
I do value the passion about knowing and analyzing what's behind those bars/candles but everything is good within the good limits.
I do like to analyze why did this go like that or why was the delay/bounce back after the break of a PA bar, but i do it when I am not trading. Then i can benefit from it after it sinks inside my brains and turns to be an automatic habit/reaction.
I learned from James always to have time every week that's just dedicated to watching charts live (without trading even on demo).

Here is an important post by a great senior here.... Seekinglight.
I hope it helps

http://www.forexfactory.com/showpost.php?p=2025650&postcount=1
  • #42,559
  • Edited 6:30pm Aug 30, 2009 6:24pm | Edited 6:30pm
Quoting ghous
Hi guys,
...
My university starts from tomorrow and I'll be there for just as much time as I am at home trading and posting/reading at FF.
Good luck with the studies - I know it can be a grind at times, but the 'click' you get when a concept just falls into place and the absolute clarity that accompanies it makes the climb all the more worthwhile.

Look forward to hearing from you again. Dont keep us waiting too long

Quoting TiaForex
I know SeekingLight has a similar personality and his stuff is well worth reading. I think you'd like it. He does well with complex analysis because it's who he is, and a simpler reading of the charts wouldn't suit him. Trading really is personality based.
I wholeheartedly agree. I read alot of market analysis, and Patrick's take is one of the very few I look forward to each week.
When you have to shoot, shoot. Dont talk.
  • #42,560
  • Aug 30, 2009 6:32pm Aug 30, 2009 6:32pm
Quoting nAVIN2007
ben i have been reading your posts and i am so impressed with your understanding of price action..u have a huge future ahead of u...keep learning buddy..
Understanding is one thing... and trading pin off of support live, without peeing in the pants is another. They're two different things. Trust me....

I know at least two guys from this forum (don't worry, i won't tell who you are), who PM me every other day. They can run circles around me with their understanding of PA, yet they keep losing dollar after dollar...
It takes time/years (and many won't ever get there) to master your psyche and emotions.

Quite a few authors made millions on great trading books, yet they never traded their own accounts.
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