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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

  • #43,801
  • Sep 15, 2009 2:23pm Sep 15, 2009 2:23pm
Quoting TiaForex
Those bar lows at 1.6520 stick out like a sore thumb, you're right. If I was in this at the very least I'd probably be break even by the time we hit 1.65 I've been so influenced by mbqb11's emphasis on the big rounds so I try not to trade into them if at all possible.

I took the big BEOB and got out at break even on that one.

I passed on the CADJPY and am a little annoyed that out of the two gbp BEOBs that I chewed over, I took the GU and passed the GCAD. Still, tomorrow's another day.

Dailies have not really excited me for a while because...
I'm definitely on the same page with the consolidating dailies. I can't wait for it to get juicy. And Mike is right when he's talking about round numbers. It's ridiculous how often price will bounce at them. On trading higher timeframes, I've always found looking at rounds give me a reason to exit out of my winners prematurely however.

As for the gbp/usd, are you talking about the 4 hour chart? I'm not seeing anything like that on the daily.

And for the gbp/cad, that was based off the initial I4B on the daily 2 days ago, which was followed by that bearish pin. That's a classic setup. I was talking to Roger (Kissfan) just the other day about these. The IBs will break initially to one side in order to gain momentum to break through the other side. That's why I always looks for a close above the area of the IB bar. These IBs have been monumental to trading this past month or so. I'm still testing them on every pair I trade and I haven't seen one pair that doesn't do too hot.

I'm also damn surprised the E/U moved up again. I guess that's why I'm not in a trade on it. lol
I dream, therefore I become.
  • #43,802
  • Sep 15, 2009 3:01pm Sep 15, 2009 3:01pm
Quoting mike w
I'm definitely on the same page with the consolidating dailies....
I was indeed talking about the 4H lows on GU. I'm still a little antsy on that pair. Not quite sideways, not yet trending. I can't go into full range trading mode because I think something is about to happen, and I'm not sure which way price has decided to go so I am not in trend trading mode either. Looks like we are about to get some action too.

EU surprised me too. UCAD has also surprised me with its move down although we still have that trendline acting as support. The squeeze is definitely on with UCAD and I've been looking for a long move there for a while. Bias is such a double edged sword. It can definitely help to have market overview, but then if you get married to it you end up taking less than stellar PA and we all know where that leads.

Overall the markets have an "almost, almost, but no quite yet" feel about them and I have difficult reading them. My "just for fun" account which has a tiny balance for aggressive plays (and to satisfy my itchy trigger finger) is being decimated which shows how right my intincts are at the moment.

I am really curious about the I4B style and will head over to your journal to talk about it there.

All the best,

Aaron

Edited to add: I agree with you about the rounds so my philosophy is always this. Smaller rounds I use for trade management, entry levels, hiding stops, that kind of thing. Big rounds (1.65, 1.7 1.75 etc) are areas of big orderflow that I pay attention to for intraday trading. On the dailies almost every bar of quality goes through a big round so I only use it for sensible placement of entries and exits.
  • #43,803
  • Sep 15, 2009 3:17pm Sep 15, 2009 3:17pm
TTT -

I understand you 100%.

This is something you will have to figure out what works for you. First and foremost, you will need to focus hard core on the right trades. A+. These have a tendency to run fast and hard, and therefore give you a better chance to manage the trade into nice profits.

Your question indicates that you have noticed that PA always seems to go to where we'd expect on a first push, and perhaps you'd like to take advantage of that. DON'T EVEN THINK IT. Drink poison instead, it is faster and less painful.

I'll give you an example of a decent trade - it is not a primo A++ trade, but it is darn close.

The GBPCAD Today had a nice BEOB on the 4hr and broke out of a horizontal channel. (Marking a channel is another discussion with as many opinions as people.)

There are also some near term bar highs about 35 pips below the bottom of the BEOB, and I had the availability today to be at my PC when price hit that area to move to BE. This is crucial - If I take a trade that is less than perfection, I must be available to move my stops to BE. Period. (I learned this the hard way)

If that bar was smaller - or closed inside the channel or at the bound of it, I would have never
taken this. The size and close of the bar indicated strength to me and a certainty that I would see price in the trouble zone soon as well as having a good chance to move right on through it. Even the round number - which had a PPZ associated with it, was no match at all.

It hit each marked location and "Bang-Zoom, to the Moon, Alice!"

I don't know how far this thing will run, but if you look at the charts, we are approaching the area will price is very likely going to retrace. I'll preserve the bulk of the trade profits with a stop tucked behind the freshly closed Small Crappy Pin Bar and a few bar highs...

Notice where I talked about R:R? That is right, I did not. One of the big problems with this, or any forum is that it is a 'forum'. You get a lot of opinions - most of which are entirely unqualified. Maybe even mine. I am an idiot with an Internet connection. Don't get lost in the noise.


...


Quoting tradertt
Guys I do have 1 question for you all today though that came into my mind

I know James, Mike, Jarroo etc do not talk about risk reward in a trade and often don't take a full bar loss but I was thinking

I often see people taking profits very early 0.3R, 0.5R, 0.2R

and sometimes, not often (of course the more experience you are the lesser you get hit by a full bar loss) you take a BIG full bar loss (1R) which totally eats up all your previous profits and even bring you into the losing zone.

What are your takes on this?...
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I'm pretty much done with all this ...
  • #43,804
  • Sep 15, 2009 3:33pm Sep 15, 2009 3:33pm
Quoting StoragePro
TTT -

I understand you 100%.

This is something you will have to figure out what works for you....

I think I understand. We have to first focus on the trades entry to get the CORRECT trades and after that it is trade management. Was in that GBPCAD trade too but will give it a little more room to run using Mike 2 bar stop though I am sure he would have moved his stop above that small crappy pin bar as you said as it is into the congestion zone that you were referring to.

Why I brought up that topic was because this month of trading, I am down around 6% trading 2% risk per trade. Had a bunch of small winners but 3 FULL BAR LOSSES killed me off and cause me to be in draw down. This was what got me thinking. Each full bar loss will just set me back more and more but I guess with choosing the good entries, I should not be experience too many full bar losses. Right? ( i hope )
  • #43,805
  • Sep 15, 2009 3:34pm Sep 15, 2009 3:34pm
Quoting StoragePro
Notice where I talked about R:R? That is right, I did not. One of the big problems with this, or any forum is that it is a 'forum'. You get a lot of opinions - most of which are entirely unqualified. Maybe even mine. I am an idiot with an Internet connection. Don't get lost in the noise.
...
StoragePro,

Though not replied to me, I did like your post a lot. Also, because it addresses my confusion too. I recently talked with a guy who suggested that the RR may be more appropriate to judge based on the method of trading and not purely based on SL/TP....
If the set up is A++ and the method is good then as soon as you are at BE the risk is 0.

Another proffessional trader suggest that SL is to put to a place where it prevents us from account collapse and recommends personal responsibility and involvement in pulling the exit trigger when the set up turns to be wrong.

Either way, I can tell that I got stopped out many times because my stop was too tight, no matter how right my direction had been. There may be also additional pressure when the price is close to the SL. I admit that was day trading, so I am looking into PA on higher TF.

Thx, educational!
Kind Regards zol
  • #43,806
  • Sep 15, 2009 3:36pm Sep 15, 2009 3:36pm
Quoting tradertt
I think I understand....
Of course this is demo money, so I am not that concerned. You might ratchet it down to 1% as well. When you go live, 2% will likely be too much.

hey - anyone answer - losses make me sweat and feel hot. I think I might be mental. How about you all?
I'm pretty much done with all this ...
  • #43,807
  • Sep 15, 2009 3:44pm Sep 15, 2009 3:44pm
Quoting zoli
StoragePro,

Though not replied to me, I did like your post a lot. Also, because it addresses my confusion too. I recently talked with a guy who suggested that the RR may be more appropriate to judge based on the method of trading and not purely based on SL/TP....
If the set up is A++ and the method is good then as soon as you are at BE the risk is 0.
Ain't that cool???? :nerd: But again, you gotta take the A trades to make this work and to not freak out from taking sub par ones.

Quote
Another proffessional trader suggest that SL is to put to a place where it prevents us from account collapse and recommends personal responsibility and involvement in pulling the exit trigger when the set up turns to be wrong.

He is a book writer or trades for an institution. Obviously, this guy is not risking his own skin. He makes ZERO sense. Think about it - the trade moves against you. Do you really have the sense under fire to take appropriate action and close the thing? RULES. Self control is not in the domain of the stressed individual.

Quote
Either way, I can tell that I got stopped out many times because my stop was too tight, no matter how right my direction had been. There may be also additional pressure when the price is close to the SL. I admit that was day trading, so I am looking into PA on higher TF.

Good move. Day Trading is much more difficult (It moves very fast) and requires a much stricter adherence to the rules that have been proven to work as well as a maniacal focus on A+++ trades only.
I'm pretty much done with all this ...
  • #43,808
  • Sep 15, 2009 3:47pm Sep 15, 2009 3:47pm
Quoting StoragePro
Of course this is demo money, so I am not that concerned. You might ratchet it down to 1% as well. When you go live, 2% will likely be too much.

hey - anyone answer - losses make me sweat and feel hot. I think I might be mental. How about you all?
I know all that "game of probabilities", "losses are part of trading" yada yada. And I accept it. Never going to have a 100% win rate.

But...

I hate losses. Hate them, hate them, hate them. I hate drawdown and I hate losing. It's actually a psych weakness, puts me in mind to do crazy things.

My last loss gave me a bad stomach ache. And I only risk 1%. Imagine what 2% would do to me.

I guess that's why I am here. Jim's method when operated properly, gives the possibility of a very high win rate.
  • #43,809
  • Sep 15, 2009 3:58pm Sep 15, 2009 3:58pm
GBPJPY 4H pin bar

+At swing low
+Previous S/R
+Off 150.00
+Nicely formed pin bar

-First trouble area 30pips above

Opinions of this trade? I'm going to set the stop BE on the yellow line at 150.60.
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  • #43,810
  • Sep 15, 2009 3:59pm Sep 15, 2009 3:59pm
Quoting StoragePro
Of course this is demo money, so I am not that concerned. You might ratchet it down to 1% as well. When you go live, 2% will likely be too much.

hey - anyone answer - losses make me sweat and feel hot. I think I might be mental. How about you all?
No idea.

I don't care about winners or losers anymore, trading has just become ultra boring, it's like a XBOX360 game I have played too much of.

But I have tried really hard on taking my emotions away from my trading, I never allow myself to be happy with winners either. Because if I am happy with my winners I know I will revert back to being upset about losers.
I kept repeating to myself for weeks "My success as a trader is defined by my ability to follow my plan, not my wins or losses"

Then again I am a very low risk guy and will always be, I am talking 1% risk on the Daily's and .2% risk (looking for high RR though) on intraday.

The only time I allow myself to be angry/upset now is when I make a mistake plan wise, whenever I lose I just tell myself "I followed my plan" and whenever I win I simply tell myself "I followed my plan".

Trading when I started used to be exciting but in reality it's just boring and repetitive. It's literally the same thing day in day out.

Well that's how it is for me lol.

Then again you could well be trading a far larger account to mine so that is a consideration.

EDIT -

Specifically my intraday trading - I always lose way more than I win, I definately have 60%+ losses on any given day on the 5min. So maybe it's just I am so used to being stopped out and losing lol ?

Regards,
Jig
  • #43,811
  • Sep 15, 2009 4:00pm Sep 15, 2009 4:00pm
Quoting StoragePro
Of course this is demo money, so I am not that concerned. You might ratchet it down to 1% as well. When you go live, 2% will likely be too much.

hey - anyone answer - losses make me sweat and feel hot. I think I might be mental. How about you all?
Before learning PA, I often got ill feelings, doubts about whether I would be a successful trader, and get angry.

Now that I'm trading this method, I have much more confidence in my trading. My live trading results have not fully correlated to my demo results, but I don't conclude this is because of my trade management. Rather, I feel the market conditions in June-August were significantly different than Jan-May. Similar pinbars on the daily that ran for multiple R returns in the spring just didn't run far in the summer... We all know how congested we've been the last few months or so. It will take time for me to realize the difference and modify my management accordingly.

But I've become MUCH less stressed when trading this method live versus trading my previous methods live. I think proving it to myself through lots of demo/backtesting as well as testing of various trade management styles really helped. It can't hurt that I was executing trades for a hedge fund for 3 years prior to starting trading full time. So the execution side of trading is second nature to me. I have several steps to confirm orders I place to ensure I make no buy/sell, size, stop/tp, etc. type errors when placing my trades. Isn't a big deal now, since I'm only trading with 10% of my full account, but it is a good practice to get into for the coming months as I ramp up my account size.

IMO, yes, we all hate losses. But the sweat and anger will dissipate as we gain experience and confidence in what we are doing. I guess it probably depends on people's risk tolerance (and whether it's matched to the size/% they are trading with) as well as their personality.

Time to investigate my daily's again...

Josh
  • #43,812
  • Sep 15, 2009 4:01pm Sep 15, 2009 4:01pm
Quoting StoragePro
Of course this is demo money, so I am not that concerned. You might ratchet it down to 1% as well. When you go live, 2% will likely be too much.

hey - anyone answer - losses make me sweat and feel hot. I think I might be mental. How about you all?
Yeah I have to be honest, one of my few pet peeves, is that new traders automatically pick 2% per trade? Where did this rumor get started. 2% and a few losses and all of a sudden you want to throw your monitor out the window. I think traders should be no more then 1% UNTIL they understand there methods, drawdowns etc. Then feel free to fiddle with it.

End rant

Mike
  • #43,813
  • Sep 15, 2009 4:02pm Sep 15, 2009 4:02pm
Quoting TiaForex
I know all that "game of probabilities", "losses are part of trading" yada yada. And I accept it. Never going to have a 100% win rate.

But...

I hate losses. Hate them, hate them, hate them. I hate drawdown and I hate losing. It's actually a psych weakness, puts me in mind to do crazy things.

My last loss gave me a bad stomach ache. And I only risk 1%. Imagine what 2% would do to me.

I guess that's why I am here. Jim's method when operated properly, gives the possibility of a very high win rate.
Confession time.

I took a fairly dumb trade today. (I am being kind) and of course I got zapped. I swear to you, I starting sweating and couldn't think straight. I had to walk it off. People were asking me questions and I was fairly incoherent...

I don't think the loss bugs me - it is the process I undertook to get the loss. I did not look close at the surrounding bars and traded like Zippy The Pin Head. (Pun intended) Too bad too, because I had some sharp wins today... I printed it out and marked it up, and I cannot stop looking at it in disbelief. It is like an awesome traffic accident. I'm rubber-necking my own trade!

About a month and a half ago I took a perfect Base trade. At a PPZ, Nice shape, right of the 365 and it reversed HARD and bombed. I just kind of laughed at it. It was the right kind of trade - 100%.

No, I will NOT post the chart of todays wreck. A man can take only so much persecution.

And now I hear Jim's voice in my head....
I'm pretty much done with all this ...
  • #43,814
  • Sep 15, 2009 4:08pm Sep 15, 2009 4:08pm
Quoting mbqb11
Yeah I have to be honest, one of my few pet peeves, is that new traders automatically pick 2% per trade? Where did this rumor get started.

Mike
Weird, now that you say it, that is what I thought I should have started out doing lo' those many years ago...

I think it is the Borg or the Matrix....
I'm pretty much done with all this ...
  • #43,815
  • Sep 15, 2009 4:17pm Sep 15, 2009 4:17pm
Quoting tradertt
I think I understand....
It's a god question and one that comes up a lot.

Basically you can have either a high win rate or a high RR. We'd all love to be trading a 90% win rate with 2R winners but it just doesn't happen like that. So you find the style that suits you. Trader discretion. And certain things go with certain styles. If you have a high win rate and low RR for your average trade then yes you need to guard against full bar losses. You need to find a way to cut your losses whether it be by killing the trade if it goes against you, or bring your stop up every day based on the next bar low, or getting to break even super quick. Whatever your method, you need to guard against taking too many full bar losses.

Personally I don't like the 7 winners wiped out by one loss vibe so I don't try and finesse my trades for 0.1R. It's also why i don't take partial profits.

If you are a low win rate/high RR style trader you need to find a way to keep yourself in the runners so that your winnes pay for your losers. This means not going to break even too soon, and not strangling a trade by bringing your stops up too tight when it runs. And you need to be prepared to give a portion back when it finally does move against you.

There is a place for setting reduced stops but it's not for someone just starting out IMO. Why not keep a spreadsheet with a column for what the result would have been if your stop was at 50% of the bar? Then after 6 months you'll know if you would have been more profitable or not.

A final word on RR:

RR in the traditional sense is more applicable to those who trade mechanically. People say that without a good RR you will lose in the long run. I think that's flawed (ask James or Mike). Usually people who think like this envision a scenario where you place your order and then let the stop or the TP get hit first. That makes it easy to calculate. But the minute you start moving stops up, going to break even, trailing a trade out etc etc, then RR becomes too difficult to calculate. Because you may only have had your full risk out there for a few hours, and the trade may have gone on for days. So in my opinion the RR calculation is not useful for discretionary traders like us.

Like everything else, just use common sense. Don't risk 400 pips to get 10.

Mike has posted something about all this fairly recently. (Actually I could say that after every single one of my posts.... )

Hope that helps. it's absolutely the right question to ask.
  • #43,816
  • Sep 15, 2009 4:23pm Sep 15, 2009 4:23pm
Quoting StoragePro
hey - anyone answer - losses make me sweat and feel hot. I think I might be mental. How about you all?
I yell and throw stuff. Went out and bought some 'nerf' stuff so not to break to many things...
Don't wish it were easier, wish you were better. ~ Jim Rohn
  • #43,817
  • Sep 15, 2009 4:24pm Sep 15, 2009 4:24pm
Quoting StoragePro
Confession time.

I took a fairly dumb trade today. (I am being kind) and of course I got zapped....
I hear you brother. I had a couple last week and they just messed with my head. I still take train wreck trades that just make me utterly ashamed. And the worst part is when I get married to them. Just draw a line in the side and move on Aaron. Don't look to average down, don't try and finesse it to "make it all back".

I imagine a lot of people go through this, and very few admit to it. And yeah, there is a difference in the feelings I have with drawdowns and losses when I have taken a trade perfectly according to rules and plan, versus drawdowns and losses when I've acted on a hunch, been silly, or followed someone else.

The second one makes me want to gnaw my own hand off.
  • #43,818
  • Sep 15, 2009 4:30pm Sep 15, 2009 4:30pm
Quoting TiaForex
...I imagine a lot of people go through this, and very few admit to it. And yeah, there is a difference in the feelings I have with drawdowns and losses when I have taken a trade perfectly according to rules and plan, versus drawdowns and losses when I've acted on a hunch, been silly, or followed someone else.

The second one makes me want to gnaw my own hand off.
I fully agree and should have clarified that in my first post. I don't get angry/sweat/upset when a good setup loses... but I do get frustrated when I don't follow my plan. There is a fine line there, but a huge difference in my reaction.

Well said Aaron.
  • #43,819
  • Sep 15, 2009 4:44pm Sep 15, 2009 4:44pm
Quoting Jduester
I fully agree and should have clarified that in my first post. I don't get angry/sweat/upset when a good setup loses... but I do get frustrated when I don't follow my plan. There is a fine line there, but a huge difference in my reaction.
Man, that is when I get the most pissed off.
Don't wish it were easier, wish you were better. ~ Jim Rohn
  • #43,820
  • Sep 15, 2009 4:55pm Sep 15, 2009 4:55pm
Quoting TiaForex
I hear you brother. I had a couple last week and they just messed with my head. I still take train wreck trades that just make me utterly ashamed. And the worst part is when I get married to them. Just draw a line in the side and move on Aaron. Don't look to average down, don't try and finesse it to "make it all back".

I imagine a lot of people go through this, and very few admit to it. And yeah, there is a difference in the feelings I have with drawdowns and losses when I have taken a trade perfectly according to rules and plan, versus drawdowns...
So true. It took a MASSIVE beating for me to not follow others' analysis over my own about 2 years ago. I remember trading the gbp/jpy and I followed a highly regarded trader (in my eyes, and still is) into a trade, wondering "Man, this doesn't look right to me, but I'll be damned if this guy doesn't make more money than me." I lost quite a few thousand (overleveraged because, in my mind, this guy couldn't lose) and drank myself to sleep. It's a tough thing to deal with when struggling, especially when you see guys like Jim and Mike (other Mike) being right again and again and again.

To each their own. Follow yours or end up like I did that day.
I dream, therefore I become.
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