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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

  • #42,561
  • Aug 30, 2009 6:38pm Aug 30, 2009 6:38pm
Quoting raczekfx
Understanding is one thing... and trading pin off of support live, without...
so true(although I haven't met anyone who has actually peed themselves ).

That's why when Jim says it is all whats going on b/w your ears, he ain't lying.

Takes time folks, but then it really does become second nature it feel. That is what consistency is and why you see certain traders do the SAME things over and over and over......
  • #42,562
  • Aug 30, 2009 6:40pm Aug 30, 2009 6:40pm
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...


I think James is right. This dude is a 65 year old retired trader living in NY having a little fun.
  • #42,563
  • Edited 7:00pm Aug 30, 2009 6:41pm | Edited 7:00pm
Quoting benji533
You like my analysis eh?


Ben
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
Very nice Ben. There is nothing wrong with entering off a Price Action setup, be it at the break of retracement, with a low amount of risk.

I have to expand a little on RustyJeff's important point. Rememeber our premise here: We are looking for setups that have high probability outcomes. I'm not taking away your examples Ben, just expanding on them.

Take the Weekly DBHLCs Gbp/Jpy and Gbp/Chf. This a great PA formation, but with all PA formations, this is only part of the story.

Weekly DBHLC Gbp/Jpy (blue):

DBHLC is at a swing high, some fib confluence with the 61.8, at 50% retracement level and a strong round numbers 160.00.

This gave a nice hard break and gave up over 200 pips before stopping my 2nd half out for break even. ( As Tia mentioned , a 50 pip stop loss was what I used on this break, although the draw down after the break was about 15 pips, if that.)

Prior to the Weekly DBHLC, was a 2 Day Pin Bar(white) with some good supporting confluences. Swing high, divergence, weekly fib and 50% retracement levels, etc. A stop loss above this setup would still have you in this trade.

Back to the Weekly DBHLC. Price stops me out at break even after some banked pips and your looking for a possible re-entry at a retracement level. The key point is that the formation was validated, meaning it broke.

We now look for bearish PA at a swing high with supporting confluences. The daily shows nothing. The 4 hour shows a bearish PB (green) meeting these criteria.
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Indicators show the past. Price Action "Indicates" the future.
  • #42,564
  • Aug 30, 2009 6:50pm Aug 30, 2009 6:50pm
  •  2mas
  • | Joined Apr 2007 | Status: Thanks to James 16 family | 89 Posts
Quoting raczekfx
Understanding is one thing... and trading pin off of support live, without...
That's how I was, read all the posts here and PF about methods,rules, ideas,...you name it, still at the end found out that I lose money... demo and live.

Only made money when I spent enough time in the only section I overlooked...Fiji's Trading psychology.
I still have a lot to learn and understand there, but one phrase made a lot of or the whole difference for me...
" Trading is a marathon, not a 100m sprint"...
that's when I decided to quit the get rich fast and killing trades BS forever.
Thanks Fiji
  • #42,565
  • Aug 30, 2009 6:53pm Aug 30, 2009 6:53pm
Watching the Aud/Usd Daily PB at the top of a consolidation. We have some good confluences here. A hard break, low risk setup is what I will take.
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Indicators show the past. Price Action "Indicates" the future.
  • #42,566
  • Aug 30, 2009 6:57pm Aug 30, 2009 6:57pm
Quoting 2mas
...

Only made money when I spent enough time in the only section I overlooked...Fiji's Trading psychology.

Thanks Fiji
This is the most important section in the pf imho, but unfortunately not many traders see it right away. I think ego plays a huge role.
That section alone is worth more than entire ForexFactory....

You're allowed to disagree...
  • #42,567
  • Edited 7:38pm Aug 30, 2009 7:10pm | Edited 7:38pm
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.
Not necessarily. On a daily bar, it could be a sharp move upwards in the first hour, then 23 hours of gradual descent. An inside bar could be a combination of a few big orders to form the first bar during a period of market quiet, and then thousands of orders battling for market position on the inside over a tight spread.

Without access to order book info from at least one large liquidity provider, if not several, you really dont know. It is far too easy to read too much into simple bars, something I am often guilty of.

(interesting you bring this up though, it is one thing I have been investigating lately. breaking down pin bars to look at how the market actually reacted, and distinguishing the quick reversal type from the slow movement type)

Quoting benji533
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.
That is the exact same thing that a pin bar tells you. Price went one direction, reversed, and made a small break on the other side. As Aaron pointed out, a DBHLC almost always forms a 2 day pin bar.

I think the problem here is the way you are looking at it. Price movements (and markets, in general) arent a series of discrete bars, even though it might look like it on a chart. It is a continuous stochastic process - and the lack of volume data and order info in forex means that you are always going to have issues coming to any kind of absolute conclusion on what may/may not have happened.

Quoting benji533
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?
Quoting benji533
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...
Again, this isnt as absolute as you might think. Banks and big traders arent stupid. They dont just set a bunch of orders and then go to the pub (although, Fridays...). When a BUOB tests the low and shoots up, it could be a dozen different things. It could be, like you say, that TP/limit orders were hit. Or it could be that none of the orders were hit, and a big player swung the market back up. Or it could be that the selling pressure just naturally subsided, and so the process of order filling naturally pushed price back up, without any of the three.

Your third conclusion is also not made of stone. All you know is that buying pressure overwhelmed selling pressure. And without knowing how many units were on each side, you cant conclude that no sell stops were triggered. There could have been ten million units sold, but if there is demand at that price level for eleven million units...

I think you should have a look at some actual order flow data, watch it live for a bit. If you have access to it, watching a Level II order book can be quite fascinating.

First thing you will notice is that there arent big 'buy' and 'sell' orders just lying around, sitting in the sun and waiting to be triggered. Generally speaking, orders arent just dumped into the market. Price improvement algorithms run the show, and they dont work as simply and straightforwardly (is that even a word? ) as we would like.

*edit* as an aside, I think we sometimes put too much stock into what *we* would do, and then assume it will be true for the whole market. Or, more accurately, we overweight the effects that we expect from the orders of people like us. Yeah, traders might put buy stop orders at a certain level based on particular PA, but are they going to be the orders moving the market? In some situations - yes. Like a ranging market waiting for a breakout, because that is an extremely common way of trading.

But in most situations, it isnt our orders (or those of PA trading proponents generally) that are going to make the market react. Some people are trading economics. Some people are trading dumbass MA cross systems. Some people are using an EA and dont know wtf is going on. And some people are just buying currencies to pay for a bigass load of copper they need to build some cheap electronics.

To paraphrase (paraquote?) Roy Batty, our orders get lost like tears in the rain.


(this is also why blindly trading stocks using PA can be a killer if you dont know what you are doing)

Quoting benji533
Elliot Wave stuff.
Elliot Wave Theory is largely rubbish. Well, that isnt fair - Elliot's original observations were sound. However, his conclusions were erroneous at best. And the way they have been twisted into some kind of psuedoscientific crystal ball is ridiculous, and mainly just a way for people to sell book/software/newsletters on their 'market insight'. And even then, they are too vague and subjective to be useful (except when posting after the fact charts).

Prechter's stuff is well written, but ultimately he leaves enough subjectiveness in there to make sure he can curve fit his data to suit his needs.

My point is... dont put too much stock in EWT.
--------------

I enjoy reading your posts, Ben. Hopefully school doesnt cut back on your posting time too much!
When you have to shoot, shoot. Dont talk.
  • #42,568
  • Aug 30, 2009 7:14pm Aug 30, 2009 7:14pm
  •  2mas
  • | Joined Apr 2007 | Status: Thanks to James 16 family | 89 Posts
Who? me? Noway, I fully agree.
However to me it was not the ego, I was just still blind and misled by the hype of getting rich fast, forex...turn $1000 into 1mill in x weeks just put those MA and Stoc,..etc and take every signal.... I don't know now whether to laugh or cry at those days.
I am sooo d... lucky that I did stumble into this thread and then PF.
And yes it is the most important section, Jim said it himself. How could anyone disagree.
  • #42,569
  • Aug 30, 2009 7:31pm Aug 30, 2009 7:31pm
Quoting benji533
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
No you did not get me here i am just adding some pair's and was just curios how people manage them.
  • #42,570
  • Aug 30, 2009 7:33pm Aug 30, 2009 7:33pm
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...
Good luck BRO.
  • #42,571
  • Aug 30, 2009 7:40pm Aug 30, 2009 7:40pm
Quoting jarroo
Take the Weekly DBHLCs Gbp/Jpy and Gbp/Chf. This a great PA formation, but with all PA formations, this is only part of the story.
Weekly Gbp/CHF DBHLC,

Off a Swing High, 50% retracement level and strong round number, 1.8000.

Again a stop loss placement above this setup and your looking real good.

Not the hardest break but a drawdown of less then 10 pips after the break gave an easy opportunity to move to break even.

Price retreaces back up into the formation, as it tends to do especially on higher time frames, and now we look for bearish PA on the Daily and/or 4 hour time frames.

Nothing on the Daily that stays out nor on the 4 hour time frame. The purple area on the 4 hour would have been a perfect area for PA, but nothing that stays out (darn it!). There was some inside bars at the purple area on other feeds but i did not take them.

Re-entry at the break of the DBHLC, tight stop loss above the 1.7700.
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Indicators show the past. Price Action "Indicates" the future.
  • #42,572
  • Aug 30, 2009 7:40pm Aug 30, 2009 7:40pm
Quoting jarroo
Watching the Aud/Usd Daily PB at the top of a consolidation. We have some good confluences here. A hard break, low risk setup is what I will take.
Whats your take on 4h.
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  • #42,573
  • Aug 30, 2009 7:45pm Aug 30, 2009 7:45pm
Quoting jarroo
Watching the Aud/Usd Daily PB at the top of a consolidation. We have some good confluences here. A hard break, low risk setup is what I will take.
That makes two of us
When you have to shoot, shoot. Dont talk.
  • #42,574
  • Aug 30, 2009 8:02pm Aug 30, 2009 8:02pm
After a couple of months R&R I'm trying to gently ease myself back into the swing of things.


A few things on the radar this week:

GBPUSD Pin: Not in the best position and the pair is still in an uptrend albeit a very weak one so countertrend is not your friend and I'll steer clear at this stage....this pair is teetering on the egde though and I wouldn't be at all surprised to see this head South.

EURUSD IB:I'll be keeping an eye on this to see what eventuates....there is some confluence around the 1.4200 area with a previous trendline and the 50% fib so this could be a place to look for some PA and a continuation of the uptrend.

AUDUSD Pin:Not the best shape....pair is consolidating and in an uptrend so I'll skip this.

A few IB's around but there is nothing that makes me want to put on a trade.
  • #42,575
  • Aug 30, 2009 8:04pm Aug 30, 2009 8:04pm
  •  2mas
  • | Joined Apr 2007 | Status: Thanks to James 16 family | 89 Posts
Quoting jarroo
Weekly Gbp/CHF DBHLC,

Off a Swing High, 50% retracement level and strong round number, 1.8000.

....
Fantastic
  • #42,576
  • Aug 30, 2009 8:08pm Aug 30, 2009 8:08pm
Quoting nasir.khan
Whats your take on 4h.

Not a bad plan nasir. Not feeling your trendline as you have drawn it. I like very definable trendlines on higher time frames and they must line up with other confluences like a PPZ or fib level, etc.

Also, this PB is on the Daily so it has a more strength.

Is it an A+ PB setup? No way. Aud/Usd has been trending for some time it may be due for some ranging time.
Indicators show the past. Price Action "Indicates" the future.
  • #42,577
  • Aug 30, 2009 8:12pm Aug 30, 2009 8:12pm
Quoting tehuringa
After a couple of months R&R I'm trying to gently ease myself back into the swing of things.


A few things on the radar this week:

GBPUSD Pin: Not in the best position and the pair is still in an uptrend albeit a very weak one so countertrend is not your friend and I'll steer clear at this stage....this pair is teetering on the egde though and I wouldn't be at all surprised to see this head South.

EURUSD IB:I'll be keeping an eye on this to see what eventuates....there is some confluence around the 1.4200 area with a previous...
Hey welcome back tehuringa.

Now here is a guy who knows an A+ setup when he see one. He's got the pip count to prove it.

I agree, nothing standing out that screams "Trade Me!"

Indicators show the past. Price Action "Indicates" the future.
  • #42,578
  • Aug 30, 2009 8:16pm Aug 30, 2009 8:16pm
Quoting jarroo
Hey welcome back tehuringa.

Now here is a guy who knows an A+ setup when he see one. He's got the pip count to prove it.

I agree, nothing standing out that screams "Trade Me!"

Hi Jim,

Good to see you mate

Nice weekly DBHLC trade you posted above...very nice

Cheers

Dave
  • #42,579
  • Aug 30, 2009 8:18pm Aug 30, 2009 8:18pm
Quoting jarroo
Not a bad plan nasir. Not feeling your trendline as you have drawn it. I like very definable trendlines on higher time frames and they must line up with other confluences like a PPZ or fib level, etc.

Also, this PB is on the Daily so it has a more strength.

Is it an A+ PB setup? No way. Aud/Usd has been trending for some time it may be due for some ranging time.
Thanks,

I won't go long on this one either. But i did got some pips playing the BEOB earlier and i was in it trade while a go but it took me out on BE.
  • #42,580
  • Aug 30, 2009 8:20pm Aug 30, 2009 8:20pm
Quoting tehuringa
Hi Jim,

Good to see you mate

Nice weekly DBHLC trade you posted above...very nice

Cheers

Dave
Thanks Dave.

I still tend to manage my trades pretty tight.

Just curious Dave, would they have met your strict criteria?
Indicators show the past. Price Action "Indicates" the future.
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