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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

  • #42,621
  • Aug 31, 2009 3:56am Aug 31, 2009 3:56am
Quoting Jazflyer
Aloha,
I was hoping to get an opinion on the GU short I entered earlier.

I shorted upon the retest of the uptrend line with a bearish PB confirmation and fib confluence as well as a...
Hey Jazflyer,

Actually this is a nice flag pattern. I didn't play it mainly because it is against the main trend.
Secondly The pin is too small for me. However that divergence makes sense to me.

You have missed another trouble area, which I have marked with a blue horizontal line. Check out how if acted as a price flip zone.

IMO, if you took that trade as a breakout trade, you can just trail your stops after you are in a free trade. If using PPZs and PA bars to move your stops makes you a bit confused, try trailing with Mike's 2 bar stop method. It helps with all the emotion and desicion making stuff.

Hope it helps,

Ben
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  • #42,622
  • Aug 31, 2009 4:21am Aug 31, 2009 4:21am
Saw this as a good pin bar but I was stopped out when I placed my stop just above the PPZ (Whole Number)

Did I miss something?
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  • #42,623
  • Aug 31, 2009 4:45am Aug 31, 2009 4:45am
Quoting tradertt
Saw this as a good pin bar but I was stopped out when I placed my stop just above the PPZ (Whole Number)

Did I miss something?
Well, basically what went wrong IMO is that you have tried to trade against the trend based on a B pin bar

The size of the pin is nice, but again, when you are trading against the trend you need to ask yourself. "Is this pin really a sign for a trend reserval? what supports me?".

What I see is a pin deep in traffic. This is a B pin because it's nose doesn't stick high above all other bar highs. The location wasn't the best IMO.

Tell you the truth, I personally very rarely trade trend reversals if there is no divergence. But I still remember that it is a killer if I use it alone on trending markets.

For me, I need a VERY VERY strong sign in order to trade against a trend. Look at the pic below - see what you are trading against?

This pair is very choppy and that is why I have stopped looking at it lately, so this also can be a reason.

By the way, I consider only the major round numbers - every 500 pips. Means they need to end with 500 or 000 on these kind of pairs.

Hope it helps?

Ben
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  • #42,624
  • Aug 31, 2009 5:05am Aug 31, 2009 5:05am
Greetings all...
1 of the very few times that i still have an ongoing position, whether on demo or live. (normally, i get to post closed trades)
demo XTB MT4.

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  • #42,625
  • Aug 31, 2009 5:12am Aug 31, 2009 5:12am
Hmmm.. dont' quite understand 1 thing ... but aren't we suppose to look for Pin bars at swing highs which is what it was at that time?

I do agree that the nose was not poking out as much though. and without the MACD divergence, it may have been a killer.
  • #42,626
  • Aug 31, 2009 5:25am Aug 31, 2009 5:25am
P.S.

1 more thing: Tell you the truth, I personally very rarely trade trend reversals if there is no divergence. But I still remember that it is a killer if I use it alone on trending markets.

Would you mind elaborating a little bit more on this?
  • #42,627
  • Aug 31, 2009 5:25am Aug 31, 2009 5:25am
Quoting benji533
ok guys...I thought first that it can drive people crazy trying to do this...but I just have to post it.

Remember the post I have made on about entries on the retrace to the round number? Remember the GBPCHF chart?

So this is how it looks on the 30min chart on my demo testing account....till now this went 300 pips, meaning 10R. Make your own conclusion.

On the 4H I got a BEOB, and then placed a sell limit order on the round number. Trailing with the BAT indicator on the 4H.

Please don't think I'm crazy I know...
Hey i did the same with GJ while ago. I am on your tail buddy.
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  • #42,628
  • Aug 31, 2009 5:33am Aug 31, 2009 5:33am
Quoting tradertt
Hmmm.. dont' quite understand 1 thing ... but aren't we suppose to look for Pin bars at swing highs which is what it was at that time?...
if i may......
yes, PB's at swing highs. but not all PA setups work.
benji was correct in saying u traded against the trend, which is up. to be more specific, u shorted a strong currency (AUD) against a weak currency (CAD).

u will also often hear Sir jarroo say that a great setup is a high momentum setup. if u apply/compare this with your short trade, your trade did not fall with good/great momentum. price in fact reversed on the next bar (immediate PPZ around 0.9165-ish --try &plot a line in this area), even closing above the .9200 round number. then the next bar (the last bar on your chart) bounced from the round number. the last two bars could already have alerted u of 'something fishy' about your trade.
Hope this helps further
  • #42,629
  • Aug 31, 2009 5:33am Aug 31, 2009 5:33am
Quoting tradertt
Hmmm.. dont' quite understand 1 thing ... but aren't we suppose to look for Pin bars at swing highs which is what it was at that time?

I do agree that the nose was not poking out as much though. and without the MACD divergence, it may have been a killer.
Hiya,

I agree with Bens comments above.

We look for pin bars at swing highs and swing lows.....if you are trading with the trend you really wanted that pin bar at a swing low....with a nice long nose, plenty of space and if there is confluence with other supporting factors all the better.

Cheers

Dave
  • #42,630
  • Aug 31, 2009 5:38am Aug 31, 2009 5:38am
  •  krue
  • | Joined Mar 2008 | Status: finger scares cat, power of illusio | 410 Posts
don't trust any of these words, even the best setup may fail from time to time. no need to analyze it, simply move on to the next. a good MM will save your account in the end.

Quoting tradertt
Hmmm.. dont' quite understand 1 thing ... but aren't we suppose to look for Pin bars at swing highs which is what it was at that time?

I do agree that the nose was not poking out as much though. and without the MACD divergence, it may have been a killer.
  • #42,631
  • Aug 31, 2009 5:44am Aug 31, 2009 5:44am
Quoting tradertt
Hmmm.. dont' quite understand 1 thing ... but aren't we suppose to look for Pin bars at swing highs which is what it was at that time?

I do agree that the nose was not poking out as much though. and without the MACD divergence, it may have been a killer.
Yea, you want them on swing high - but you also want them to be A+ setups, or at least to have enough supporting factors to your desicion. That B pin alone doesn't mean a lot to me. You need to be very careful when you trade against the trend. I personally like to trail my stops, so I must trade in the direction of the trend, meaning entering on all sorts of pullbacks.

Quoting tradertt
P.S.

1 more thing: Tell you the truth, I personally very rarely trade trend reversals if there is no divergence. But I still remember that it is a killer if I use it alone on trending markets.

Would you mind elaborating a little bit more on this?
Basically divergence shows a gap between the oscillator and the price, which needs to be filled. How? by a reserval. So I use it as a clue for a reserval, and I have scrolled far enough back on my charts in order to see that it does work.

I say that it is a killer alone on trending markets, basically because it is just a clue. You can't just see some divergence and trade against the trend. The forex market is the most powerful when trending. Once a trend is in place, it's hard to reserve it. You need a very very good confluence of factors in order to trade against the trend. In your case, all I see is a B pin bar.

You can trade against the trend by trading pullbacks, but IMO it is harder. I believe that if you can't trade with the trend, it will be very difficult to trade against it. You need to manage you trades very tightly.

Hey, all above in only my opinion.

Ben
  • #42,632
  • Aug 31, 2009 5:46am Aug 31, 2009 5:46am
Quoting benji533
Hey Aaron,

Thanks again for this useful post.

Actually, yea my nature is to search search for logic and understanding behind every tiny thing I do. In this case I have got so deep in what I THINK is causing the outside bars, just to try to explain why I prefer them instead of DBHLCDBLHC bars.

But basically, whatever the reason will be...if the bottom line is that I can read price through this bar, and understand from it that bulls have more power, it enough for me.

When I trade, I do not think about all these things - I keep it simple.
Once...
Benji my man, you are going to be just fine. In fact, more than just fine...
  • #42,633
  • Aug 31, 2009 5:47am Aug 31, 2009 5:47am
Quoting nasir.khan
Hey i did the same with GJ while ago. I am on your tail buddy.
Cool
But I use only major round numbers.

Where was your stop?

Ben
  • #42,634
  • Aug 31, 2009 5:50am Aug 31, 2009 5:50am
Quoting benji533
Cool
But I use only major round numbers.

Where was your stop?

Ben
At the top of the BEOB.
  • #42,635
  • Aug 31, 2009 5:51am Aug 31, 2009 5:51am
Quoting supremeChaos
if i may......
yes, PB's at swing highs. but not all PA setups work.
benji was correct in saying u traded against the trend, which is up. to be more specific, u shorted a strong currency (AUD) against a weak currency (CAD).

u will also often hear Sir jarroo say that a great setup is a high momentum setup. if u apply/compare this with your short trade, your trade did not fall with good/great momentum. [u]price in fact reversed on the next bar (immediate PPZ around 0.9165-ish --try &plot a line in this area), even closing above...
Thanks for the insights. I was wondering, cause I was trading on the H4 timeframe and that bar itself killed me off

When we don't see a hard break as Sir Jarroo says, what are our options, like in that case, it was already stopped out on the next bar .. it broke slightly below and bounced up to take me out. Take a smaller loss?
  • #42,636
  • Aug 31, 2009 5:57am Aug 31, 2009 5:57am
Quoting tradertt
Saw this as a good pin bar but I was stopped out when I placed my stop just above the PPZ (Whole Number)

Did I miss something?
Let me help a little here. It isnt about divergence, or round numbers, or swing highs. You picked a nice looking bar at a swing high - it might not have had the perfect shape as it didnt poke out enough, but hindsight is 20/20, as they say. On it's own, I see no problem at all with taking this bar.

But you forgot the aqua line.

It is all about the aqua line.

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Now, look at the 4H. Ignoring that Sunday bar, 6 out of the last 8 bars stopped there (including the pin itself, which I forgot to mark). You think it might have some power to stop a move? Especially countertrend? Hells yes it does.
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Anyways, I will address divergence in another post, because I think it needs to be talked about (badly, judging by the responses you got)... but that wasnt your problem here. You want to fade a big trend, you gotta dot the Is and cross the Ts. And you just missed a PPZ, that's all.

Happens to all of us. Mike and Jim have picked me up on it more than once... and every time, the trade woulda gone against me. now I am extra careful about looking at where price might go, and managing things appropriately.
When you have to shoot, shoot. Dont talk.
  • #42,637
  • Aug 31, 2009 6:05am Aug 31, 2009 6:05am
Quoting supremeChaos
Greetings all...
1 of the very few times that i still have an ongoing position, whether on demo or live. (normally, i get to post closed trades)
demo XTB MT4.

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Man you are trading according to my method as well! How did I miss this one?
This is a great trade, pullback to the major round number and shoots up! What can be better? it works again and again and again

Ben
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  • #42,638
  • Aug 31, 2009 6:14am Aug 31, 2009 6:14am
Quoting tradertt
......
When we don't see a hard break as Sir Jarroo says, what are our options, like in that case, it was already stopped out on the next bar .. it broke slightly below and bounced up to take me out. Take a smaller loss?
yes, imho, that's the prudent thing to do at that particular situation. kill the trade ASAP
(u could have avoided trading short, in the first place, if u correctly determined the trend &/or the PA setup's situation wherein it has an immediate 0.9165ish PPZ below it)

James16 THIS IS CRITICAL
"....THIS IS CRITICAL.
WE MUST LEARN TO:
1. notice a strong s/r area just beyond our pa if it exists.
2. know that if we trade into it we had better be prepared for a quick reversal that could give us a loss if we are not prepared........."


once more experienced, i think u can defer from exiting the trade if u think the odds are still stack in your favor (in this case, for an eventual drop).

there was a recent small discussion about next bar triggering in an earlier post initiated by ben.

thanks to joelcf for the charts above for illustrating the 0.9165-ish immediate PPZ i mentioned.
  • #42,639
  • Aug 31, 2009 6:18am Aug 31, 2009 6:18am
Quoting joelcf
Anyways, I will address divergence in another post, because I think it needs to be talked about (badly, judging by the responses you got).
I guess I am guilty again

I will be glad to get a post on this from you.

Ben

PS - Joel, a part of trading against the trend is also naturally trading into "traffic"PPZs. So usually I automatically see this, but thank you for stressing it.
  • #42,640
  • Aug 31, 2009 6:21am Aug 31, 2009 6:21am
Quoting benji533
Man you are....
if this trend continues, i expect price to tread the 1.65 - 1.69 area by second half of September to 1st half of October.
Let's see..
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