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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

  • #45,861
  • Oct 12, 2009 5:27pm Oct 12, 2009 5:27pm
Hmmm, interesting..
I;ll keep a close eye on this one tomorrow.
I have to admit, for some reason I have had a soft spot for trading the exotic Scandi currencies (NOK &SEK), and after realising this, I now like to think twice before jumping in.

Quoting benji533
Actually, I like it.

Sorry, just now opened that chart lol.

Only concern it's against the trend, but I am going to make an intraday trade of the daily chart with a tight stop...when it touches the round number again.

Ben
If you can wait and not be tired by waiting...
  • #45,862
  • Oct 12, 2009 5:57pm Oct 12, 2009 5:57pm
i havnt been using divergence but maybe i should add that to my trading?
i kind of wanted no indicators but i guess it could be useful?
  • #45,863
  • Oct 12, 2009 6:11pm Oct 12, 2009 6:11pm
Quoting TiaForex
Lol. Actually, this job requires me to play someone pushing 50. I'm 36. So the night before filming I have to stay up late to get the bags (tricks of the trade). Add to that the fact that I've always been a night owl and here I am.
How come someone who is pushing 50 is somehow identified by having bags under the eyes?
  • #45,864
  • Oct 12, 2009 7:36pm Oct 12, 2009 7:36pm
Quoting supermatt
i havnt been using divergence but maybe i should add that to my trading?
i kind of wanted no indicators but i guess it could be useful?
I use it in conjunction with double/triple tops and anytime I am looking at a reversal - not much more though. It lends a bit of weight to a situation where you expect a trend to reverse (pin at a swing high, for instance), but it is just a small factor.

People that try to make an entire system out of divergence and crosses are... well

Quoting Lou
How come someone who is pushing 50 is somehow identified by having bags under the eyes?
I imagine it is because they generally have to stay up late every night writing letters of complaint about things that annoyed them during the day - rap music, teenagers with piercings, suspicious-looking birds, etc.
When you have to shoot, shoot. Dont talk.
  • #45,865
  • Oct 12, 2009 7:50pm Oct 12, 2009 7:50pm
Quoting joelcf
I imagine it is because they generally have to stay up late every night writing letters of complaint about things that annoyed them during the day - rap music, teenagers with piercings, suspicious-looking birds, etc.
Heheh, I lol'd...

Good to be young...


Just wondering if you seen my last post Joel, specifically the bit concerning betting for and against a certain currency, literally using it as a 'middleman' to save on spreads... is there any validity it this or is it completely nonsensical?

As long as you get in on the two currencies, x/z and z/y, at the same time, it seems to have the same effect as entering on the x/y pair at that time, which would seem logical. This is just based on non-detailed observation. There definitely could be variable factors involved.

Any experiences with this kind of thing?

Thanks man.
  • #45,866
  • Oct 12, 2009 8:04pm Oct 12, 2009 8:04pm
Quoting jarroo
Boy I used to zoom in alot. Thank God I started listening to Mike and zoomed out to get the bigger picture. Probably when I realized what the true traffic of a setup presented.
Sir, are u really nearing your 50's?
if so, maybe zooming in naturally comes with age.
btw, u can check out my 'prescription' here.
  • #45,867
  • Oct 12, 2009 8:06pm Oct 12, 2009 8:06pm
Quoting dart
James, another reminder to post a chart of one of your YM trades you took last week. thanks
it would be best if u remind him via PM &/or when he is actually online.
  • #45,868
  • Oct 12, 2009 8:17pm Oct 12, 2009 8:17pm
Quoting Lou
How come someone who is pushing 50 is somehow identified by having bags under the eyes?
I knew I'd get in trouble with this one....lol

All that I meant was that as someone who looks and is 36 I needed help to look the age I was supposed to be playing. So, seeing as I couldn't age my face 14 years, I need a little help from a few late nights, some make up, and a few white flecks added to a beard I'd grown.

No offence intended to the 50 year olds on here, hope none was taken.
  • #45,869
  • Edited 11:11pm Oct 12, 2009 8:18pm | Edited 11:11pm
Quoting Rocket!
Just wondering if you seen my last post Joel, specifically the bit concerning betting for and against a certain currency, literally using it as a 'middleman' to save on spreads... is there any validity it this or is it completely nonsensical?
Sorry, I probably missed it - been snowed under with work, so I am about eight thousand pages behind everyone else. This thread moves too damn fast

*searches*

It's definitely feasible to construct your own artificial cross when the spreads get out of line. It's probably one of the only good reasons to do it (the other being a triangular arbitrage situation).

In theory, you should get the same median price in the end...but the problem you could run into (in the short term, anyways) is that your basket might not behave the same way as the one you are trying to replicate - especially on lightly traded pairs and during low liquidity periods. It should move back in line eventually (anywhere between seconds and minutes), but it can kinda suck if it happens to be at the time you want to exit.

Alot of the times, the slippage will screw you over too, depending on your broker and the speed of the market.

Quoting Rocket!
As long as you get in on the two currencies, x/z and z/y, at the same time, it seems to have the same effect as entering on the x/y pair at that time, which would seem logical. This is just based on non-detailed observation. There definitely could be variable factors involved.
Nope, that's exactly how you would do it. Just make sure you are looking at the right prices - mixing up bids and asks can quickly kill any edge you were going for

Quoting Rocket!
Pity about that awful 20 pip spread my brokers got... honestly, AUD/USD is 3 pips and NZD/USD is 6 pips...whats the deal!?!
So, in this case, you have AUDUSD and NZDUSD, and you want to end up with AUDNZD (long AUD, short NZD for our recently tuned in listeners)... so you want to be long AUDUSD (giving you a/u) and short NZDUSD (giving you u/n)

A/U x U/N = AU/UN = long A/N

obv, if you wanted to short the AUDNZD pair, you want to end up with NZDAUD (ie, long NZD), so you need to short audusd (giving you a u/a) and long nzdusd (giving you n/u)

U/A x N/U = UN/AU = N/A

Unfortunately, that is the easy part. The hard part is ensuring that you are *actually* cancelling the USD out of the trade. You always buy/sell in units of the base currency (pairs are base/quote, so, in audusd you are long one AUD and short .9100 USD).

So, say we want to end up long audnzd. We want end up in a position where we have bought 1 aud and sold x nzd.
We buy one unit of audusd, giving us a short position of y usd
To cancel that, we need to buy y units of usd, leaving us short x units of nzd in return. We are doing this with a short NZDUSD.

To work out what our position size in N/U is, remember that we work in units of the base. So, we need to use usd as the base to work out how many contracts to sell to get our y USD.

Our position size will be (1/nzdusd) x y USD
....

or, to make it more tangible, since stuff never makes sense to me unless I use real numbers.

Current audusd = 0.9071
Current nzdusd = 0.7365

Say we want to go long 1000 units of audnzd.

Buy 1000 a/u @ .9071, we get 1000 aud and -907.1 usd

So we need to buy 907.1 units USD, selling NZD in return.
We know that 1 NZD will buy us 0.7365 USD, so dividing by 1...

1/0.7365 = 1.3577 (ie, for every USD, we need to sell 1.3577 NZD)

So all that remains is to find out how many units we need to sell to get our 907.1 USD

907.1 usd required * 1.3577 nzd per usd = 1231.63 units

We sell 1231(ish) units n/u @ 0.7365, which gives us -1231 nzd and +907.1 usd.

end result: 1000 units aud, -1231 nzd and our USD positions cancel out...

For an ending audnzd rate of 1.231 (current rate is 1.2318, but i was lazy with decimals)

....

Hope that gave you a headache... now do it again using bid/ask prices

As you can see, you will need to tweak your position sizing a bit, but nothing a spreadsheet cant handle. The bigger problem is that you are going to need to use double the margin that you normally would, since the broker wont net them for you like they (effectively) do when you just buy the cross.

---------

That spread seems retarded, but it really depends when you grabbed it. AUDNZD is so thinly traded in the sunday session that 25 pips isnt unheard of.

I generally get around 5pips spread on IB for it, from memory, though it can broaden out a little during the weekend (as expected) or in news sessions.

Looking on the Oanda webpage, they claim that their spread is about 7 pips at the moment, which seems pretty decent. But their last 7 days history shows some really huge spikes.

Attached Image (click to enlarge)
Click to Enlarge Name: spread2_AUD_NZD.png Size: 21 KB


(i dont really trade audnzd because it is choppy as hell)
When you have to shoot, shoot. Dont talk.
  • #45,870
  • Oct 12, 2009 8:38pm Oct 12, 2009 8:38pm
Quoting TiaForex
It helps, even in the demo, to be super super picky. Only taking touches at round number levels, with PPZs that even my grandma could see, or at clear double top/bottoms with divergence round number and PPZ confluence (those are sweet)

The main problem with touch trading too early in the learning curve is that you are doing it for all the wrong reasons. The one thing that will kill you in touch or low time timeframe trading IMO is doing it because you want more opportunities to trade.

Newer traders see more opportunities to trade as more opportunities...
Amen.
"Don't trade to trade . . . trade to win." - James16
  • #45,871
  • Oct 12, 2009 8:43pm Oct 12, 2009 8:43pm
Quoting TiaForex
I knew I'd get in trouble with this one....lol

All that I meant was that as someone who looks and is 36 I needed help to look the age I was supposed to be playing. So, seeing as I couldn't age my face 14 years, I need a little help from a few late nights, some make up, and a few white flecks added to a beard I'd grown.

No offence intended to the 50 year olds on here, hope none was taken.
Only a before and after shot will get you out of this, you know.
  • #45,872
  • Oct 12, 2009 8:55pm Oct 12, 2009 8:55pm
Quoting Lou
Only a before and after shot will get you out of this, you know.
Lol. I draw the line there.
  • #45,873
  • Oct 12, 2009 9:15pm Oct 12, 2009 9:15pm
Quoting TiaForex
Lol. I draw the line there.
Bags under my eyes just makes me look my age for once.

Quoting joelcf
I imagine it is because they generally have to stay up late every night writing letters of complaint about things that annoyed them during the day - rap music, teenagers with piercings, suspicious-looking birds, etc.
LOL . I think you got it in one.
Bundy's status today: "Waiting..."
  • #45,874
  • Oct 12, 2009 10:00pm Oct 12, 2009 10:00pm
Quoting NosferatuMan
Found it

Thank you and thank Cyrus for his great work.
Hey Nos, glad you find it useful =)
One Mind, Any Market
  • #45,875
  • Oct 12, 2009 10:06pm Oct 12, 2009 10:06pm
Quoting Rocket!

As long as you get in on the two currencies, x/z and z/y, at the same time, it seems to have the same effect as entering on the x/y pair at that time, which would seem logical. This is just based on non-detailed observation. There definitely could be variable factors involved.

Any experiences with this kind of thing?
I've got a friend working in a prop trading house.

This is actually one of the things they're experimenting with.

They're trying to program an algo to find oppty for when the underlying and the synthetic pairs go out of sync and then line up orders in the actual interbank market so that they can get in at a better than bid-ask price. So there can be differences btw the actual and synthetic pairs and yield that extra 1 or 2 pips of "alpha". (whatever that is)
Theoretically it's an arbitrage situation.

My 2 cents: That's a shit load of work for 1 pip!!!

(disclaimer: that's what he told me. I know jack all about getting better than bid-ask. I always thought those were limit orders but apparently in the actual inter-bank queue, there's what they call "the ladder" of 10 bids and asks and sometimes, u get better than bid-ask by some dude who really wants out if you Q in the bid/ask. makes sense...but I've yet to verify it)
One Mind, Any Market
  • #45,876
  • Edited 10:22pm Oct 12, 2009 10:06pm | Edited 10:22pm
Quoting teodosy87
This is an example of what does every chart should look like.
1.Important PPZ
2.The PIN
3.The money
This might look good in hindsight, but I wouldnt have passed on this one (as a pinbar, anyways).

The pin is tiny compared to the preceeding bars, and barely protrudes from the previous bar (which is also a failed pin-esque bar). These will very often fail.

There are also a bunch of MAs - one as possible resistance, one as possible support - but without knowing what they are, you cant really assign significance. It seems to be bouncing off a midterm one (200?), which is a good thing. But price was heading straight into the blue one (which I assume is shorter term - 150? - due to its responsiveness) and a big round number.

Very nice PPZ, decentish location, bad bar. Pass from me.

As a doubletop off a PPZ and (possibly) a round number, it looks nice and offers some pretty sweet r:R played down to that first support level. Some divergence would also make me a bit more likely to fire off a few rounds... but you have stochastics there, which I have never really found all that useful.

Looks like something mark would have been all over.

Results oriented thinking is a killer. Just because it looks good in hindsight doesnt mean it would have beed a good trade.
When you have to shoot, shoot. Dont talk.
  • #45,877
  • Edited 10:51pm Oct 12, 2009 10:13pm | Edited 10:51pm
Quoting Cyrus
I've got a friend working in a prop trading house.

This is actually one of the things they're experimenting with.

They're trying to program an algo to find oppty for when the underlying and the synthetic pairs go out of sync and then line up orders in the actual interbank market so that they can get in at a better than bid-ask price.
Theoretically it's an arbitrage situation.
This is probably the best known arbitrage situation out there, and is actively exploited by pretty much every big arb player in the business - that's why prices dont really get out of line for more than a few seconds... I think 14 seconds is about the average, up to a couple of minutes for lightly traded pairs during news time in low liquidty sessions.

they are the ones who keep our markets nice and efficient

Quoting Cyrus
(disclaimer: that's what he told me. I know jack all about getting better than bid-ask. I always thought those were limit orders but apparently in the actual inter-bank queue, there's what they call "the ladder" of 10 bids and asks and sometimes, u get better than bid-ask by some dude who really wants out if you Q in the bid/ask. makes sense...but I've yet to verify it)
If you are trading through an ECN, you will generally get a form of levelII for dealing (though it will probably just be your broker, so not really a true LII screen... although whether that is any better, with all the dark pools, baiting/ghosting and so forth, is an entirely separate question), and will get a full five levels each way. You can definitely put orders inside the bid/ask and hope they get picked up...but so can everyone else.

Attached Image


(this poorly conceived screengrab doesnt actually show a gap betweent he b/a, but anyways.. you get the idea. imagine that there was, and you put an order in there, lol )

Good luck to them, they must be some pretty damn smart people. HFT is pretty hardcore, the guys I know in the field absolutely amaze me.


Quoting Cyrus
So there can be differences btw the actual and synthetic pairs and yield that extra 1 or 2 pips of "alpha". (whatever that is)
Excess return over the portfolio risk adjusted return
When you have to shoot, shoot. Dont talk.
  • #45,878
  • Oct 12, 2009 10:44pm Oct 12, 2009 10:44pm
Quoting supremeChaos
Sir, are u really nearing your 50's?
if so, maybe zooming in naturally comes with age.
btw, u can check out my 'prescription' here.
Does the prescription work if your over 70?
  • #45,879
  • Oct 12, 2009 10:57pm Oct 12, 2009 10:57pm
Quoting TiaForex
Jim has put a lot of thought into teaching a method that allows you to still be in the game a year after you start. Staying above water in the early days is the key IMO. Because then everything settles in naturally. But if you're overleveraging and rushing, the tragedy is that you may not be around to see that stage of the learning curve.

Don't worry about small returns. Compounding and adding in is a small miracle.

The rewards of this business are huge. Huge. Be kind to yourself and give yourself the chance to achieve them.
People need to read this post again.

Aaron is like an eloquent, condensed version of everything you need to get from this thread, and most of the pf too.

In person form.

Presumably.
When you have to shoot, shoot. Dont talk.
  • #45,880
  • Oct 12, 2009 11:05pm Oct 12, 2009 11:05pm
Quoting supremeChaos
Sir, are u really nearing your 50's?
if so, maybe zooming in naturally comes with age.
btw, u can check out my 'prescription' here.
I'm going to get you, sChaos, for this one.
Indicators show the past. Price Action "Indicates" the future.
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