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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

  • #44,181
  • Sep 18, 2009 5:43pm Sep 18, 2009 5:43pm
Quoting james16
is forex factory screwed up right now or is it just me.

everything is solid white.

I got the same thing, it screwed up yesterday as well.
Keep taking CT trades, I need more money
  • #44,182
  • Sep 18, 2009 5:43pm Sep 18, 2009 5:43pm
Quoting james16
is forex factory screwed up right now or is it just me.

everything is solid white.
Don't go into the light Jim. It's not your time....



FF is fine here. Must be a problem on your end.
  • #44,183
  • Sep 18, 2009 5:43pm Sep 18, 2009 5:43pm
Quoting benji533
Hey....
I want to know why divergence on trends, alone, is "showing the potential for a reversal". That's all.
What divergence on a trending price actually tells you?
Ben
one word answers (synonyms, in fact):
DISCREPANCY. INCONSISTENCY. & DIVERGENCE itself.

Divergence/Inconsistency: price making higher high but MACD is not (momentum is not consistent with what price is doing, in this case going up)
Momentum Oscillators like MACD, Stochastics, CCI, RSI, etc, in trending markets (for example up trend), can stay at overbought/high levels for a long period of time, making minor dips from time to time.
we are in highly trending market territory right now, spotting reversals using MACD etc can be very tricky & costly.

probably the divergence itself can be explained by sellers (for bullish divergence) coming in at that time/bar/candle.

if interested, u can check out two Divergence articles i shared back in June.
  • #44,184
  • Edited 6:19pm Sep 18, 2009 5:57pm | Edited 6:19pm
In relation to my above post...

Quoting benji533
This ended as a lose for me. Price stalled at the first trouble area and turned.....
This is why I damn hate reversals. A round number + PPZ + huge divergence + space + great pin bar wasn't enough to make price turn down. Look what a sharp trend up.....
It's great u were aware of the trend & got out shortly.

u were essentially trying to stop a bullet train here.
practically, u were selling a STRONG currency (EUR) & buying the NEW funding currency (GBP) --- the new Yen.
it's difficult to predict when the eurgbp upmove will stall or stop, convincingly.

recently, EUR (among others) has been strong. GBP has been weak (i think this made eurgbp much stronger). $ has weakened further.
on the weekly chart, the $ index's Dec2008 low has been breached convincingly for the first time last week & we have conveniently stayed below it.

it pays to check/monitor the strength/weakness of other 'markets' --- be it the $ Index, Stocks & futures (Dow, E-mini etc), commodities, or other currency pairs.
  • #44,185
  • Sep 18, 2009 6:03pm Sep 18, 2009 6:03pm
  •  krue
  • | Joined Mar 2008 | Status: finger scares cat, power of illusio | 410 Posts
rule nr 1 : no traffic
rule nr 2 : space



Quoting benji533
Here it is. the thing that makes the difference is that there was no traffic, but a push of a break into space. That allows me to get into a free trade as dast as possible.

Ben
  • #44,186
  • Sep 18, 2009 6:17pm Sep 18, 2009 6:17pm
Quoting rustyjeff
Just do it.. Ben..
If you do nothing but repeat what you have been posting you will be well ahead.. thats how I started.. actually my first acct was $500..it went up, then down to almost zero then slowly & steadily up over a couple of years till there was 5k...
to make money thats all you have to do.. find something you trust & repeat it.. ask Mike, James, Ryan, Bemac. anyone who has traded well (not just traded) for more than 10 years.. I bet thats what they do...
Inspirational!
Thanks for sharing Sir
  • #44,187
  • Sep 18, 2009 6:27pm Sep 18, 2009 6:27pm
Quoting james16
is forex factory screwed up right now or is it just me.

everything is solid white.
FF is all screwed up for me too.

Ross
  • #44,188
  • Sep 18, 2009 6:36pm Sep 18, 2009 6:36pm
Have to say that reading through the last few pages this morning about 'why's'' and psychology has been fantastic! Thanks to Ryan, Benji, Storage, Rusty and the rest for the insights. Its brilliant to be able to hear the views of the ones that have seriously been trading for years and years.
All that matters is winning the week
  • #44,189
  • Sep 18, 2009 7:00pm Sep 18, 2009 7:00pm
I did the same when my 5k euro account was 10% in the min. That was in December 2008 and I went into demo mode.

Since August I started live trading again...slowly. I am planning to fund my account in the short term.

I still demo trade some methods until I'm consistant with them for 3 months (J16 rule). Only then I'll give 'em a whirl in the live account.

Quoting Jlr
It amazes me people just blow up their accounts. If your trading poorly, step aside and practice jeesh. I know months back I was struggling, and I was down maybe 7 percent or so on my account after a longish period of trading. Realized I was trading really dumb and I withdrew my cash to prevent myself from making the problem even worse and began to actually practice, best decision I ever made.
  • #44,190
  • Sep 19, 2009 12:46am Sep 19, 2009 12:46am
Quoting manperm
I'd say about as much as an airline pilot needs to know about the plane he's about to fly. Basically, you need to know as much as possible. "Less is more" can be taken as, "Less knowledge will cost you More," as well.
Remember to only touch the shinny switches and try to remember what that big red light means.
A lawn mower is not an effective tool to pick-up dog poop!
  • #44,191
  • Sep 19, 2009 12:58am Sep 19, 2009 12:58am
Quoting Ryanmcd
And to back up my point, here is my 1 trade today that made me 4% and I really don't care how it worked or what else was going on, I made money and that's my job
Ryan, where did you have your div. line drawn on this chart? Guess it would have to be prior to the swing high PB otherwise there wouldn't be any div. Is that correct?
A lawn mower is not an effective tool to pick-up dog poop!
  • #44,192
  • Sep 19, 2009 3:30am Sep 19, 2009 3:30am
Quoting Jduester
Good Morning everyone....
Beautiful post...very enlightening.....i'am going to write my trading plan,because i realized i havent'got one and try to respect it.
Patience is essential
  • #44,193
  • Sep 19, 2009 3:45am Sep 19, 2009 3:45am
Quoting Jduester
Good Morning everyone....
Hey josh,

I have just thought about your post again.
You have reached your 2 target and decided to move it farther. Ok. Why not moving your stop as well when you reach the 2 target.

Lets say we are right now at the point of 2TP - how much are you willing to give back in order to try and reach 3TP? if you are willing to give back 2R, so stop at BE, but if you are willing to give back only 1R not matter what - move your stop to TP1.

I very rarely use targets cause I trail my stops, but the real important thing is that I lock in what I am not willing to give back. You can do the same even if you like using targets.

Maybe it will help you buddy

Ben
  • #44,194
  • Sep 19, 2009 3:49am Sep 19, 2009 3:49am
Quoting rustyjeff
Just do it.. Ben..
If you do nothing but repeat what you have been posting you will be well ahead.. thats how I started.. actually my first acct was $500..it went up, then down to almost zero then slowly & steadily up over a couple of years till there was 5k...

then after proving to myself I could be responsible with real money I funded a larger acct....
Thanks for sharing Jeff
  • #44,195
  • Sep 19, 2009 4:11am Sep 19, 2009 4:11am
Quoting supremeChaos
one word answers (synonyms, in fact):
DISCREPANCY. INCONSISTENCY. & DIVERGENCE itself.

Divergence/Inconsistency: price making higher high but MACD is not (momentum is not consistent with what price is doing, in this case going up)
Here is my problem. I tend to disagree with this sentence. I will use my past chart to explain again.

I agree that when price is trending up, it makes higher highs.
But please look at the MACD alone. You see three matching highs (oscillator isn't making higher highs like price). So yes, there is INCONSISTENCY here. So what?

All I understand from this INCONSISTENCY is: price moves up while the momentum|ratio of the move's speed is the same at three cases. So what?

Can't price keep moving up while the speed and momentum are the same?
OR - if it happens, why is it a sign of a possibility bearish move?

You are actually saying here that if price moves up )price makes higher highs), the momentum|ratio of the move's speed that price is making needs to get faster and faster in order to prevent a bearish sign?

I can't see why a sign for a reversal in price pops up when price keeps moving higher at the same speed and same momentum, AKA INCONSISTENCY AKA DIVERGENCE. If the speed and momentum are the same, doesn't it make more sense that price will keep moving at the same way like in the past?
(where are you Joel?).

I do not argue about the fact that it works or not, either not about if it's a good confluence factor or not. This doesn't belong.

Ben
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  • #44,196
  • Sep 19, 2009 6:45am Sep 19, 2009 6:45am
Quoting benji533
Here is my problem. I tend to disagree with this sentence. I will use my past chart to explain again.

I agree that when price is trending up, it makes higher highs.
But please look at the MACD alone. You see three matching highs (oscillator isn't making higher highs like price). So yes, there is INCONSISTENCY here. So what?

All I understand from this INCONSISTENCY is: price moves up while the momentum|ratio of the move's speed is the same at three cases. So what?

Can't price keep moving up while the speed and...

Thanks for the support and idea Ben. I haven't found much success on my testing on daily/weekly with trades reaching 3(+)R without first retracing significantly. I interpret your idea as a 1R or a 2R trailing stop, which I do like and have been testing all along. It just hasn't had the results of a hard TP at 2R...This might change over time and I'll continue to have a column for that exit strategy.

As for the divergence stuff... I like to only use Divergence as confluence when divergence is opposite of price in direction. Meaning NOT flat. I need more confidence that we won't see what you show on your last chart. I want to know that:
Yes, price is still rising. But it's now rising MORE SLOWLY than it was previously.
If DIV is flat, I try not to take it into consideration, and in fact, try to view it as NOT DIV.

Thanks Ryan for the DIV insight. That is something I am eager to look into next week (only considering recent divergence)...Your help in recent months is truly appreciated.

Josh
  • #44,197
  • Sep 19, 2009 8:22am Sep 19, 2009 8:22am
Quoting benji533
Here is my problem. I tend to disagree with this sentence. I will use my past chart to explain again.

I agree that when price is trending up, it makes higher highs.
But please look at the MACD alone. You see three matching highs (oscillator isn't making higher highs like price). So yes, there is INCONSISTENCY here. [u][b]So what?
I always consider confluence as a way of forming alliances with other groups of traders. It is common knowledge that divergence of indicators suggests a weakening of the price movement, and therefore gives us opportunities to take trades in the opposite direction. Due to the fact that a group of traders has faith in this "method", they will open positions and might drive the price in the expected direction (this is the self-fulfilling prophecy part of indicators).

However, even though a certain group of traders acts on divergence, it doesn't necessarily mean that the price will actually behave the way they expect. The reason for this is that there are other groups of traders that are looking at different indicators, apply different methods etc that might give opposite signals.

In the simple sense, the more allies you have, the greater the chance of defeating the enemy. Thats why most people here look for confluence.

It is always dangerous to go counter trend, and of course it is better to find divergence supporting a move along with the trend.

My conclusion is that looking at divergence solely doesn't give a very high probability trade (though it still can be very profitable if you do it right). However, divergence is very important because the confluence can significantly increase the probability of your trade. And that the reason for this is that many traders "believe" in divergence and thus it has the chance of creating a self-fulfilling prophecy.
The nail that sticks out gets hammered back in
  • #44,198
  • Sep 19, 2009 9:50am Sep 19, 2009 9:50am
Anyone using the new windows yet? Is it working well with MT4?
I'm pretty much done with all this ...
  • #44,199
  • Sep 19, 2009 10:06am Sep 19, 2009 10:06am
Quoting StoragePro
Anyone using the new windows yet? Is it working well with MT4?
One of my computers has Vista and the other has XP. I don't notice any difference running MT4 on either OS.

Ross
  • #44,200
  • Sep 19, 2009 10:11am Sep 19, 2009 10:11am
Hey guys,

Does Oanda support MT4?
What are the fees of bank deposits and withdraws?

Ben
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