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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

  • #43,261
  • Sep 7, 2009 6:58pm Sep 7, 2009 6:58pm
Quoting Jigsaw
Do you know of somewhere where I can get data for the individual stocks of the FTSE 350 (I understand I will have to pay for this feed).
I trade LSE stocks sometimes - mostly the big financial and insurance houses. I get the feed through my broker (interactivebrokers), it costs me GBP5 for a non-professional investor. Those are standard data fees, so it shouldnt cost you any more than that through any other broker. Most of them will rebate it to you, as long as you trade a minimum volume.

You will find all the FTSE 100 and FTSE 250 stocks on the LSE (FTSE is a joint Financial Times / LSE index). The FTSE 350 is just a combination of the companies making up the 100 and 250 indicies.

If you want London futures or derivatives (ie, trade the ftse100/250 itself), you need to subscribe to Euronext (which gives you LIFFE/Paris/Amsterdam/Brussels/maybe Lisbon) for GBP5, which gets you L1 derivatives and L2 stocks. Not that there is anything else on EuroNext (outside of LIFFE) that I want to trade, except maybe to short Louis Vuitton and Renault into the ground

*edit* the interbirds tell me that it should cost you around 6 pounds for level 2 and 4 pounds for level 1
When you have to shoot, shoot. Dont talk.
  • #43,262
  • Sep 7, 2009 7:25pm Sep 7, 2009 7:25pm
Quoting TiaForex
I don't play stocks Jig so I can't help you I'm afraid. I even thought it was the FTSE 100 so it shows how much I know.

When I do play stocks I plan to get tradestation and just pay for the feed through them.
No problem Aaron thanks anyway bro,

Hmmm, all this talk of you getting tradestation is making me think that I need a Merry Christmas to me present of either an IB account or a tradestation account . . .

MMMmmm . . .



Quoting joelcf
I trade LSE stocks sometimes - mostly the big financial and insurance houses. I get the feed through my broker (interactivebrokers), it costs me GBP5 for a non-professional investor. Those are standard data fees, so it shouldnt cost you any more than that through any other broker. Most of them will rebate it to you, as long as you trade a minimum volume.

You will find all the FTSE 100 and FTSE 250 stocks on the LSE (FTSE is a joint Financial Times / LSE index). The FTSE 350 is just a combination of the companies making up the 100 and 250 indicies....
Cheers Joel,

Yeah I was thinking of getting an IB account for a while. . . And the data feed price is better than I have seen elsewhere so far, what is their charting like ?

Joel, quick question if I may -

What percentage of forex market activity is purely speculative ? I have my own opinion on this but I keep seeing contradicting views and it drives me crazy.
  • #43,263
  • Sep 7, 2009 7:37pm Sep 7, 2009 7:37pm
Hi,

can someone take a look at this and see if this is the right way to calculate drawdown? (mike?)

I am not the best with excel and want to input a function that will automatically calculate the max DD when given a column with the adjusted acct bal. over a one month period. Is anyone good with excel that can help me?

thank you and any help would be appreciated
Attached Image (click to enlarge)
Click to Enlarge Name: drawdown.png Size: 56 KB
  • #43,264
  • Sep 7, 2009 7:44pm Sep 7, 2009 7:44pm
As far as book recommendations go I think Tyler closed the discussion with Lord of the Rings. Man, I loved that book!

If you liked Black Swan, did you try Taleb's first bestseller, 'Fooled by Randomness'? I personally enjoyed it immensely although I wouldn't necessarily call it a 'Trading' book per se. It talks much more in depth of mathematics in a broader sense, coupled with Taleb's philosophical view and his Frasier-esque style wit and charm. Not as good as Black Swan but some worthy Trading/Life lessons lie in it's pages as well.

Also, since Taleb was mentioned, George Soros is another trader who is mentioned quite a bit in Taleb's books. His book 'The New Paradigm for Financial Markets' is a stellar read full of invaluable thoughts on the current state of the markets. Its fundemental based, so you'd be more in line with something like 'Pring on Price Patterns' if you want something to supplement your J16 learning, but its a great read if you've got some spare time and your interested.
  • #43,265
  • Sep 7, 2009 7:47pm Sep 7, 2009 7:47pm
Quoting Jigsaw
Cheers Joel,

Yeah I was thinking of getting an IB account for a while. . . And the data feed price is better than I have seen elsewhere so far, what is their charting like ?
I generally dont use their charting too much - I pass the data through to ninjatrader and use that for charting/trading, but it isnt too bad. You could definitely trade from it and be happy.

It's a step above the rubbish that most brokers give you, but it cant hold a candle to Tradestation.

Quoting Jigsaw
Joel, quick question if I may -

What percentage of forex market activity is purely speculative ? I have my own opinion on this but I keep seeing contradicting views and it drives me crazy.
lol. That's a long, complex question that far smarter people than me have tried to answer and not been able to.

Figures suggest somewhere around 75-90% of activity is non-deliverable (ie, the end user is trading the movement in the currency and never intends to get a pile of Swiss Francs dumped on their doorstep) but the problem you run into here is that while this could be considered speculative from a technical definition, it also includes hedging transactions (generally, when you hedge against a risk you dont actually take delivery of the currency).

To add complexity, some hedging transactions can be partially speculative - an exporter might only hedge half of their currency risk, because they expect currency movements in their favour... but dont want to risk everything on it.

Then you have arbitrage trades, which are kind of speculative (you dont want delivery) but not really (since you are looking at relative movements in riskless transactions, and speculation implies risk).

Then you have problems with under reporting, transaction pooling, etc...

I've read a bunch of different papers that came to a bunch of different conclusions - but broadly, the amount of speculative (ie, betting on a rise or fall) volume by hedge funds is very high, probably higher than other activity. So you could say that this kind of speculation dominates the market volume. Obviously, the volume is also going to vary a whole bunch, depending on outside factors (compare the asian financial crisis or the whole Soros/BoE period with 2008, for instance).

Probably the best paper I read was called Speculation, Hedging and Intermediation in the Foreign Exchange Market by Malte Krueger (sp?). It is a bit old (1996), so while the quantitative conclusions are outdated (hedge funds are far more active now than they were then), he does a really good analysis of the issues and why it is so hard to actually determine the level of pure speculation. You should be able to find it on SSRN, or googleweb, if you are bored enough.

But, in short - hell if I know, but alot
When you have to shoot, shoot. Dont talk.
  • #43,266
  • Sep 7, 2009 7:48pm Sep 7, 2009 7:48pm
Hey Jig, my spread-betting account allows access to FTSE 350 charts.

They're shit feeds but if theres anything I can post up for you just say the word!

All the best
  • #43,267
  • Sep 7, 2009 8:09pm Sep 7, 2009 8:09pm
Quoting Rocket!
As far as book recommendations go I think Tyler closed the discussion with Lord of the Rings. Man, I loved that book!
Agreed. I reread the series every couple of years, and it gets better each time.

Quoting Rocket!
Also, since Taleb was mentioned, George Soros is another trader who is mentioned quite a bit in Taleb's books. His book 'The New Paradigm for Financial Markets' is a stellar read full of invaluable thoughts on the current state of the markets.
The reissue of this book, The Crash of 2008 and what it means: The new Paradigm is even better, since you get a new section with George talking about how he screwed up and why - the stuff on AIG (pairs trading CDS and vulnerable companies' bonds) is completely worth it.

Soros' Alchemy of Finance is an absolute classic, and pretty much required reading imo.
When you have to shoot, shoot. Dont talk.
  • #43,268
  • Sep 7, 2009 8:10pm Sep 7, 2009 8:10pm
Quoting tormo
Hi,

can someone take a look at this and see if this is the right way to calculate drawdown? (mike?)

I am not the best with excel and want to input a function that will automatically calculate the max DD when given a column with the adjusted acct bal. over a one month period. Is anyone good with excel that can help me?

thank you and any help would be appreciated
Yes that would be correct max drawdown from peak to valley. Obviously according to your chart this equity curve never spent any time under the money line, so the drawdowns are on profits not initial investment.

Best
Mike
  • #43,269
  • Sep 7, 2009 8:30pm Sep 7, 2009 8:30pm
Quoting tormo
I am not the best with excel and want to input a function that will automatically calculate the max DD when given a column with the adjusted acct bal. over a one month period. Is anyone good with excel that can help me?
I'm not quite sure what you mean, but from your graph it *looks* like you want to find the biggest 'dip' - ie, each time your account hits a peak, how far it falls below that peak before you move to another high?

Grabbing the max difference is easy, =max(high1-low1,high2-low2). But that assumes you know where your high and low points are.

The way I would tackle it would be to setup a column next to your adjusted account balance called 'maxbal', and set it as a kind of 'high watermark' that records the highest your account has been at that point in time and work off that.

So it would look something like *edit* screw it, i made a quick sheet because I suck at explaining things.

Attached File(s)
File Type: xls Book2.xls   18 KB | 607 downloads
When you have to shoot, shoot. Dont talk.
  • #43,270
  • Sep 7, 2009 8:58pm Sep 7, 2009 8:58pm
Quoting joelcf
I generally dont use their charting too much....
Probably the best paper I read was called Speculation, Hedging and Intermediation in the Foreign Exchange Market by Malte Krueger (sp?). It is a bit old (1996).....
Thanks for this one, joel.

SSRN = Social Science Research Network.
i believe one needs to register to benefit from the free papers/articles found there.

as an example, here are papers by Carol Osler.
she was recently mentioned/discussed in the Behind Price Orderflow thread.
  • #43,271
  • Sep 7, 2009 9:07pm Sep 7, 2009 9:07pm
Quoting Jigsaw
Aaron,

Do you know of somewhere where I can get data for the individual stocks of the FTSE 350 (I understand I will have to pay for this feed).

Regards,
Jig
Hi Everyone - been "lurking" for a few months. Love the thread - everyone is so generous, which can be a rareity! Thanks to Strat for the link to this thread and to all of you.

Jig, there are a couple of data feeds I know of : ADVFN (£20/month ish) and Sharescope (from £16 per month). I've used both and Sharescope has the better charting package IMHO.

Also, like Rocket said, you can get shares info from a spread betting account (I use Finspreads), but the charts are not the best but are real time. Also, you could try iii, which is similar but a bit better than Finspreads ....and its free!! You can build your own portfolio of shares to watch but I think the feed is delayed 20 mins.

Cheers for now
  • #43,272
  • Sep 7, 2009 9:11pm Sep 7, 2009 9:11pm
@ joeslcf

thank you that helps a lot.

@Mike

do you consider the drawdowns on your profits separately from your initial investment or just combine the whole thing?
  • #43,273
  • Sep 7, 2009 9:17pm Sep 7, 2009 9:17pm
Quoting tormo
@ joeslcf

thank you that helps a lot.

@Mike

do you consider the drawdowns on your profits separately from your initial investment or just combine the whole thing?
Hey T

It is just book keeping. In the end the only stats that matter are the ones that matter to you unless of course you have investors then they might look at a variety of stats. I just take a check once and awhile for max drawdown stats. Or things like max consecutive losses etc. I have not spent any time under the money this year so that stat doesn't exist.

Best
Mike
  • #43,274
  • Sep 7, 2009 10:03pm Sep 7, 2009 10:03pm
Jarroo, thanks for your explanation.

I've got some questions about MACD.
Do we only use it to spot divergence?
Do we pay attention whether it's sloping upward/ downward, the location above/below 0 line or whether its above/below its signal line?
Thanks
  • #43,275
  • Sep 7, 2009 11:14pm Sep 7, 2009 11:14pm
Quoting esbatu
Jarroo, thanks for your explanation.

I've got some questions about MACD.
Do we only use it to spot divergence?
Do we pay attention whether it's sloping upward/ downward, the location above/below 0 line or whether its above/below its signal line?
Thanks
Hey Esbatu

Most of us use it the way J16 uses it which is only for divergence. I personally only use it for divergence also. I am sure others have integrated Price action with it in various ways but from using it as a divergence tool for so long it is the only way I personally recommend.

Take care
Mike
  • #43,276
  • Sep 8, 2009 1:31am Sep 8, 2009 1:31am
2 inside bars on the daily chart, each with subseqent lower close. 3 IB's on the 4H each with lower close.

Does anyone play an IB strategy?
  • #43,277
  • Sep 8, 2009 2:00am Sep 8, 2009 2:00am
Quote:
Originally Posted by joelcf http://cdn.forexfactory.com/images/buttons/viewpost.gif
I suggest that anyone trading 8%, 15% or 50% of their account has another look at these graphs from p 2763:


These arent made up numbers. These are based on a 75% win rate and a fairly optimistic return structuring - neither of whichanew trader has.

You increase your %R, you increase your risk exponentially.


Would You be so kind to post the math, or how did You get those numbers?(Complication is no problem.) Want to check it.
THX in advance, NL
  • #43,278
  • Sep 8, 2009 2:23am Sep 8, 2009 2:23am
Quoting my30marahaba
Hey Jarroo,
I see Pin bar on the weekly TF for AJ,NJ,CJ and GJ
would you plz advise which PB are the good location to be observation next week base on the J16

Thks,

The Aud/Jpy and Nzd/Jpy bullish PBs are at a swing high or at a very shallow swing low. Although they could be tradable if managed carefully, I would pass on these.

The Cad/Jpy and the Gbp/Jpy are at deeper swing Lows along with the confluencing PPZ and Fib retracement level. All good and better setups, but their size are a bit small for my liking.

I like the Cad/Jpy. Price broke the two PPZ levels of 85.00 & 86.00 and seems to be retest the 86.00 to continue upward. Nice 2 Day PB that broke nicely.
Attached Image(s) (click to enlarge)
Click to Enlarge Name: cadjpyweekly.gif Size: 22 KB
Click to Enlarge Name: cadjpydaily.gif Size: 27 KB
Indicators show the past. Price Action "Indicates" the future.
  • #43,279
  • Sep 8, 2009 2:24am Sep 8, 2009 2:24am
Quoting lacika
Would You be so kind to post the math, or how did You get those numbers?(Complication is no problem.) Want to check it.
THX in advance, NL
Hey there,

not at home, so I cant send through the spreadsheet, but you will be able to find all the working in the book I referenced in the original post.

joel.
When you have to shoot, shoot. Dont talk.
  • #43,280
  • Sep 8, 2009 2:39am Sep 8, 2009 2:39am
Quoting jarroo
The Aud/Jpy and Nzd/Jpy bullish PBs are at a swing high or at a very shallow swing low. Although they could be tradable if managed carefully, I would pass on these.

The Cad/Jpy and the Gbp/Jpy are at deeper swing Lows along with the confluencing PPZ and Fib retracement level. All good and better setups, but their size are a bit small for my liking.

I like the Cad/Jpy. Price broke the two PPZ levels of 85.00 & 86.00 and seems to be retest the 86.00 to continue upward. Nice 2 Day PB that broke nicely.
Hi Jarroo,

Thx very much for your explanation
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