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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

  • #42,861
  • Sep 2, 2009 11:25am Sep 2, 2009 11:25am
Quoting bundyraider
Damn Josh, I'd love to answer you here , but that questions got so much going on I'm getting a headache reading it. lol

I totally understand why you are asking all that though.

The best answer I can give of myself is to suggest that you filter down to trades that you know are going to be easier to manage. It's pretty easy to watch a trade move against you when you are confident you have chosen the absolute best place to take a punt on. Where there is a good clear run ahead of them. Then you don't have to worry about those other trades that...
Thanks for your replies Benji and Bundy. This helps me understand somewhat. As for my management, after 3 months of forward testing, I changed to start using 1/2 of bar height (50FIB) as my initial stop loss. I get to b/e earlier than I used to also. And I no longer take partial profits. I've found that I'm in losing trades for less time now (closer stop = gets hit earlier), while it allows me to catch more Rs on winners. My testing found that [for the trades I generally take], if a trade goes against the PA 50%, it more often than not goes 100% against the PA...

Ideas for these changes came from several traders including, but not limited to James, Jim, Bundy, Ryan, and Mark.

Bundy, you make a good point about discretionary vs. mechanical... the more experience we get, the more 'mechanical' our method becomes despite not changing anything. We become more comfortable finding s/r, understanding pa, and taking profit/loss. Experience certainly helps make quick trading decisions second nature without emotion and to the trader him/herself, seem mechanical... Do you agree with this?

The same active, quick management decisions made instead by a new trader would seem very discretionary however, because the new trader doesn't have the memory/experience to 'back' his decision.

At least this is how I view it... Good stuff... now gimme some tradeable action on these charts...
  • #42,862
  • Sep 2, 2009 12:08pm Sep 2, 2009 12:08pm
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 it's crazy,...
I have closed this one with +7R profit, after one of the bars closed above the BAT on the 4H chart.

Mike, if you don't mind, I have another question

You can see on my second chart, that the 4H bar closed above the BAT, but then the next bar shot down again.
Now I am trying to learn from it...
If I had been placing my stop just above the high off the breaking bar....I would still be in this trade.

Do you exit your trades right away when a bar closes above the BAT? or you wait for a break of the high of the breaking bar? What do you think about this?

Appreciate your time

Ben
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  • #42,863
  • Sep 2, 2009 12:17pm Sep 2, 2009 12:17pm
Hey Josh

I will just put in my thoughts on this subject.

I do both and all of the above. I always place a stop loss below/above a bar. But many times I know going into a trade hey, there is no way I am taking that full bar loss. Now even know that, it doesn't mean it isn't possible that I will. OK so what does that mean?

Well say I am trading a big BUOB. Say this BUOB runs right through the round number at it's 50% retracement mark. THat is my battle line, that is really where I want to cut on on a trade AFTER watching a reaction around that area(if price gets there of course). Well so why place my stop below the bar. Well I just dont feel comfortable sticking it somewhere arbitrarily around that round number or lower and letting it run. My goal is most always to eliminate risk where possible. Taking a 1/4 , 1/2 % loss is a LOT easier to make up for me then a full bar loss.

Now like everything else in trading every situation will occur. Where I say ok it either hits here, or hits my stop. Or where I take that quarter percent loss and then it turns around. It is a balancing act for the individual trader. That is why we will have this conversation in the future with many many other traders b/c of how dynamic trading is without a do A, then B, then C. It is what drives people nuts for years b/c it isn't like opening a textbook.

Now is it wrong to have a set and forget? Of course not, anyone who says this I would laugh in their face b/c trading is an individual thing. But from trading discretionary for a long time now, I trust myself to do the right thing MORE times then not that will bring me into profit. As my account has grown, I have grown, I have become more picky, more conservative on all aspects of my trading(entries, exits, etc). Why? It is where I am most comfortable with less fluctuation in my equity and a smoother curve. I can make money a bunch of different styles, and many can here, but at the end of the day you either can trade it mentally or you can't.

Just my thoughts on this subject and as I said above though take 50 traders, you will get 50 different answers no doubt, and I respect each one of them as long as they are making money consistently

Best
Mike

Quoting Jduester
(Joel, this is not intended to pick on you or your post....
  • #42,864
  • Sep 2, 2009 12:18pm Sep 2, 2009 12:18pm
Strong confluenced area.
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Indicators show the past. Price Action "Indicates" the future.
  • #42,865
  • Sep 2, 2009 12:20pm Sep 2, 2009 12:20pm
Quoting benji533
Hey Mike...hope you will see this post.

I had been monitoring a breakout pattern on daily. When it broke, the only PA it produced was a pin on the 15min chart.

Basically it is not trade-able for me. Logically thinking...it is not so smart to enter a breakout of daily bars, based on a 15min pin bar. A 15min bar has no value of data next to the daily bars. Based on this, I have decided that the maximum I'll allow my self to go down in time frames in order to spot a PA confirmation bar will be 2 time frames difference.
For example - If I have my...
Hey Ben

Generally speaking(as their are always exceptions of course), with breakouts I will go down one timeframe for my entries.

Weekly - daily trigger
Daily - 4hr
4hr - 1hr
1hr- 15min

Of course Sometimes I will go down another for each if I see very very clear PA and am very very confident in what I am trading(those are the exceptions). Again just how I have found this stuff to work for me

Best
MIke
  • #42,866
  • Sep 2, 2009 12:23pm Sep 2, 2009 12:23pm
Quoting atton
When I have OB, IB, PB DBLHC etc I should enter them on 50% ret right ?
Hey Atton,

Entering on the 50% retrace is considered a more aggressive style, which I usually do not recommend for those very new to the material. I would not recommend doing at all for IB as that doesn't make much sense b/c an inside bar indicates consolidation so we want to see a breakout.

The good for entering on a retrace? You get a bigger position size(I see you are new to this so I want to make sure you understand what position size means, if not speak up here please).

The bad of entering on a retrace? The bar is not yet confirmed. If we are looking to play a BUOB(which is buying), and we buy at the 50% retrace, we do not yet know if that BUOB is going to be confirmed. The confirmation that it is a valid bar comes when price breaks the HIGH of the BUOB.

So which is right? There is no right there is only testing to find what works for us. I personally never trade retraces and only trade a break of the bar. Many others here do retraces, both, etc.

Hope that helps
Mike
  • #42,867
  • Sep 2, 2009 12:25pm Sep 2, 2009 12:25pm
Quoting benji533
I have closed this one with +7R profit, after one of the bars closed above the BAT on the 4H chart.

Mike, if you don't mind, I have another question

You can see on my second chart, that the 4H bar closed above the BAT, but then the next bar shot down again.
Now I am trying to learn from it...
If I had been placing my stop just above the high off the breaking bar....I would still be in this trade.

Do you exit your trades right away when a bar closes above the BAT? or you wait for a break of the high of the breaking bar? What do you...
Hey Ben

Almost always on the close above. Sometimes I might place my stop at a point say above that bar, or above a round number if it is close by and let it go a bit more. A case like this I would use the close. Price is now coming into support where it is right now, and you are locking in a ton of profit, worth to just take your profit sometimes and go back to waiting in the bushes.

Awesome trade!

Mike
  • #42,868
  • Sep 2, 2009 12:31pm Sep 2, 2009 12:31pm
Quoting mbqb11
Hey Ben

Almost always on the close above. Sometimes I might place my stop at a point say above that bar, or above a round number if it is close by and let it go a bit more. A case like this I would use the close. Price is now coming into support where it is right now, and you are locking in a ton of profit, worth to just take your profit sometimes and go back to waiting in the bushes.

Awesome trade!

Mike
Hey Mike,

Thanks a lot for both answers. It makes sense to me

Ben
  • #42,869
  • Sep 2, 2009 12:41pm Sep 2, 2009 12:41pm
What happened here. Did I miss something important ? We have ret to 50% fibo and the price touchs the both Emas


Edit : Thanks to all of you who answered my questions. Good luck
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  • #42,870
  • Sep 2, 2009 12:47pm Sep 2, 2009 12:47pm
Quoting atton
What happened here. Did I miss something important ? We have ret to 50% fibo and the price touchs the both Emas

http://img259.imageshack.us/img259/864/pinbar.jpg
Hey Atton

Here is what happened with this one and why trading the hourlies are so difficult. Please stick to the daily/weekly as recommend by James and the rest of us, it is to help you I promise I know the urge is to trade but it is best to absorb information at your stage and watching the daily weekly till you can do them.

Here is why this was a problem trade marked off by the blue box which is trading right into a very strong PPZ. We have to watch these areas and they are more important then anything with this material. Also price only broke the low by 6 pips on my feed. I tend to use a buffer of ten pips or higher to prevent this kind of "false" break.

Hope that helps!
Mike
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  • #42,871
  • Sep 2, 2009 12:59pm Sep 2, 2009 12:59pm
mbqb11 So u mean we shouldnt take trades near strong PPZ ( pivot point zones ? ) ?
  • #42,872
  • Sep 2, 2009 1:03pm Sep 2, 2009 1:03pm
Quoting atton
mbqb11 So u mean we shouldnt take trades near strong PPZ ( pivot point zones ? ) ?
Hey Atton,

Generally speaking we want to take trades off these PPZ, away from them. Now we have minor and major zones, but they are crucial to both entries and trade mgmt. Check out this post that contains James16 phenomenal posts

http://www.forexfactory.com/showpost...ostcount=14084

Hope that helps
Mike
  • #42,873
  • Sep 2, 2009 1:10pm Sep 2, 2009 1:10pm
Quoting mbqb11
Hey Nasir

I commend you for asking for our honesty here....
Hello Mike you were right.

But its not a PM cause i don't wan't anyone to feel like i am feeling right now.

It's all gone. All profits of 1 month in 2 Days.

I hit the $365 mark on a $90 account but i did not took profit and it came down to $280.

After that i stopped taking profits every time i had a profitable or rather i should say all the time i had profitable trades but i turned them into losers i wanted my $320 back in one trade.

would you believe that i only had two or three trades which were losers from the start else i turned

$50 + 2*$40 + 3*$20 into BE's and losers.

Today i was standing on $95 and i did not had a trade that stayed green even a minute.

Adding to that i started changing my strategy in last two days. I was so fascinated by some PB trades i made i thought of getting rid of indicators ( you can see some previous charts that 8-21EMA's are gone). I guess there's nothing wrong with it but i must've done that on demo before not on Live.

ITS ALL ABOUT P.A.T.I.E.N.C.E.

And i don't have it.
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  • #42,874
  • Sep 2, 2009 1:13pm Sep 2, 2009 1:13pm
Hey Nasir

You do have patience, but it is something we all continuously practice and work on getting better at. All traders no matter what level have to work on it. But guess what you learned a cheap lesson that you can learn HUGE amounts from. I have seen many before in your shoes, and they have come out far better then they were before. B/C it is a lesson we all must learn. Don't take away from your progress, simply use this to build on in the proper way forward now. Slow and steady.

Head high sir!

Mike

Quoting nasir.khan
Hello Mike you were right.

But its not a PM cause i don't wan't anyone to feel like i am feeling right now.

It's all gone. All profits of 1 month in 2 Days....
  • #42,875
  • Sep 2, 2009 1:19pm Sep 2, 2009 1:19pm
Hey Mike

Thanks for the responce. From what I ve read I made a conclusion that the PB would be successful (well no one knows but..) if it was on that PPZ, not near above it?
  • #42,876
  • Sep 2, 2009 1:22pm Sep 2, 2009 1:22pm
Quoting atton
Hey Mike

Thanks for the responce. From what I ve read I made a conclusion that the PB would be successful (well no one knows but..) if it was on that PPZ, not near above it?
Hey Atton

Here is your same GBP/USD chart. Notice the BUOB I marked with an arrow is at a swing low, and OFF the PPZ trading away from it. The blue above it is the first trouble area to watch. Notice how in this case we have room to trade away from it.

Let me know if that makes sense
Mike
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  • #42,877
  • Sep 2, 2009 1:31pm Sep 2, 2009 1:31pm
Just though about sharing this
Maybe I'm naive to think this way after the fact. But I have also traded bunch of them and almost all of them were winners.

Ben
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  • #42,878
  • Sep 2, 2009 1:33pm Sep 2, 2009 1:33pm
Hi Mike,

Yes, I understand what you mean now.Thanks ! . About the BUOB we would have taken that trade because it was on PPZ and the bar was swing low ?
  • #42,879
  • Sep 2, 2009 1:39pm Sep 2, 2009 1:39pm
Quoting atton
Hi Mike,

Yes, I understand what you mean now.Thanks ! . About the BUOB we would have taken that trade because it was on PPZ and the bar was swing low ?
yep
  • #42,880
  • Sep 2, 2009 1:48pm Sep 2, 2009 1:48pm
(Mike pretty much said everything I was going to, but anyways...)

Quoting Jduester
My questions to those that manage trades this way:
1. Do you only intend to move your stop up (ie, not take a full bar loss) if the trade moves slightly in your favor and then against you quickly? This was the case described above, to which Joel was replying. Or do you plan to move your stops closer Anytime the trade is going against you (even if it's a slow movement against you).
I really only move my stop if something completely out of the ordinary is happening. A retrace is normal, we all see them and I am comfortable with that. But when it retraces through a big number without blinking, or hits what i thought was a weak ppz (such as the base of the pin i want to trade) and moves sharply against me, I get concerned.


Quoting Jduester
2. Is there a reason you don't look for round numbers, ppz, etc prior to entering, and putting your initial stop there (even if you position size based on full bar stop?) That would allow you to walk away from the trade and wouldn't have to 'manage' it until you are ready to move stop to b/e (or take profit)...
I do look for all these first, and put a list of 'potential stops' into my trade plan before I enter. To be honest, the reason I dont put my initial stop behind one of them is that I really havent tested alternative stops enough - so i just stick with what I know

I do agree though, it seems bizarre that you would put a full bar stop there when you never intend for it to be used.Or at least like a case of poor planning To me, what you are saying makes complete sense - if I picked my setup, I should just be able to commit, shove my money into the middle and stand up. But it just doesnt sit with my psyche... yet.

Definitely an area that I can improve on, I tend to micro manage things sometimes if they dont go just right. Most of the time I have done it has been because there has been a genuine change in the market that is going against me... but at least a few times, it was probably just me overreacting. Possibly stems from some ridiculous need to be right - and if the market is proving me wrong about the trade, moving my stop and getting out with a smaller loss can make me right again. Or something. Back to FT's section

(forgive me if these thoughts are a bit all over the place, it's half past four in the morning... stupid work.)
When you have to shoot, shoot. Dont talk.
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