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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

  • #46,061
  • Oct 14, 2009 5:00pm Oct 14, 2009 5:00pm
Quoting benem
As Mike told me few post above i think it's another pair where we don't have a swing low in an up trend.....seems more a swing high......
Yeah, like a bullish pin, we want BUOBs at swing lows. Now of course you can play them as continuations, I do, but I consider that more advanced, and always recommend getting a hang of it the way taught here by James before taking them at other spots.

Best
Mike
  • #46,062
  • Oct 14, 2009 5:14pm Oct 14, 2009 5:14pm
Quoting atclarkson
Thoughts on this BUOB?
Close is in top 1/5 of bar, engulfs prev bar well.
The two pink lines are PPZ and 150ema confluence.
Dotted Yellow line is first trouble area.

Buy ten above, stop loss ten below. ?? I've never taken a BUOB

I'm unsure because of where it is, can you take a bullish signal at a swing high?

I hope my two charts show enough. Sorry bout all the lines, I'm working on PPZs

Thanks!
Truthfully, I'd check out the chf/jpy before I checked out the eur/jpy. It seems a lot more convincing on the close above. I'll be waiting until we are at the 50% retrace of the bar to see if we get any solid hourly bullish setups, thus reducing my risk to the absolute smallest possible. If that doesn't happen, then oh well, I'll still be enjoying cigars and grand marnier for the night with a few friends.
I dream, therefore I become.
  • #46,063
  • Oct 14, 2009 5:20pm Oct 14, 2009 5:20pm
Thanks benem, mbq and mike!

Bullish signals at swing lows, Bearish signals at swing highs. Got it Will watch this one play out (and the C/J, though I don't usually watch it, the spread is decent, I will add it to my list )
  • #46,064
  • Edited 7:26pm Oct 14, 2009 5:45pm | Edited 7:26pm
Keep this in mind (I don't know if this is the J16 way) but imo we are not trading candlesticks, we are looking for high probability candlestick patterns at Pivotal Prices. The candlestick is not as important as the price level.

The concept of pivotal price is the number one most important thing to grasp as a trader.
  • #46,065
  • Oct 14, 2009 9:59pm Oct 14, 2009 9:59pm
Hello everyone,

I really need some feedback. Mike, please feel free. I entered this trade below on the GBPUSD Daily chart based on the BUOVB.

My thoughts were: BUOVB, Divergence, and some traffic at 1.6000 round number.

1. Entered close to the 1.5900 level on the slight retrace after the BUOVB was formed (of course)

2. closed half the lots about 15 pips before reaching the 1.6000 level and moved my Stop Loss from below 1.5800 to just below 1.5900 level

3. Price is now at 1.6055 and now my SL has been moved from below 1.5900 to just below 1.6000.

Please grade this setup. I know it is working out well but I am interested in ranking the setup, A, B, C D setup. Tell me as it is, no sugarcoating.

I am aware that one should consider traffic from point of intended entry onward and my entry point was around 1.5900 and IMO based on the daily chart the only traffic to note was the 1.6000 level, which by that time I thought I would have bagged approximately 85+ pips - enough for me to take some partial profits (and move my SL) so even if price retraced to hit my SL I would have still preserved my capital.

Please, I need some feedback. Thanks in advance.

- DW
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  • #46,066
  • Oct 14, 2009 10:14pm Oct 14, 2009 10:14pm
Quoting Flem26
I think these markets have changed dramatically from a liquidity perspective and in addition, I have gotten less aggressive, which is a good thing. The result: less trading, which bores me to tears, but saves the trading account. Alright who is with me?
Volume has decreased significantly from a year ago, but liquidity is fine. You arent trading a dry market. Look at the CME futures and options data, there is more than enough action in the currency markets during the US session.

Thing just arent as volatile, hence you arent seeing crazy swings (or as much of them, anyway).

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The setups are definitely there, they just arent there as often as they have been. And it isnt just me that is seeing them - strolling through the member journals on the PF, there are a bunch of people making a bunch of money off a bunch of setups.

Quoting Flem26
... by the time I get up in the morning the main moves have been made. Once London is finished, the stupid currencies just seem to move with the manipulated US fraudexes
Get up earlier, if it is that important to you. Easy solution.

And as for 'stupid currencies moving with manipulated fraudexes', wow. Index manipulation, now?

Ignoring the tinfoil hat component of your rant, consider that maybe the currency markets are being driven by risk aversion at the moment - and so of course they are going to be correlated with index movements. They always have been. This is 'technicals' in its pure form, so I dont really know how you can claim that 'technicals' dont take over until the london session.

Plus, if you know that they are moving in tandem with something else, how are they not tradeable?

This is why most traders actually fail. Not because they have shitty money management (though that doesnt help) or because they lack discipline (though most do)... it is primarily because they cant shift gears and adapt to changing circumstances. They keep trying to use trend tools in flat markets, or range tools in trending markets.

There are a thousand ways to make money in this, and any, market climate. You need to sit back, have a couple of beers, relax a bit and look big picture.
When you have to shoot, shoot. Dont talk.
  • #46,067
  • Oct 14, 2009 10:16pm Oct 14, 2009 10:16pm
Quoting Hwd
Hello everyone,

I really need some feedback. Mike, please feel free. I entered this trade below on the GBPUSD Daily chart based on the BUOVB.

My thoughts were: BUOVB, Divergence, and some traffic at 1.6000 round number.

1. Entered close to the 1.5900 level on the slight retrace after the BUOVB...

Hey DW,

I am extremely impressed by your trade analysis. This is about word for word what I spoke about in my webinar yesterday. The BUOB was at the location we look for but we MUST be aware of trading into the traffic ppz level at 1.6000. You did exactly this, and now have protected yourself and managed accordingly.

Impressive and others should take note

Mike
  • #46,068
  • Oct 14, 2009 10:43pm Oct 14, 2009 10:43pm
Quote
You need to sit back, have a couple of beers, relax a bit and look big picture.

Okay Dad . . .

Seriously, I appreciate your perspective. But let me ask you this: is the US Fed`s actions over the past year not blatant market manipulation
"Don't trade to trade . . . trade to win." - James16
  • #46,069
  • Oct 14, 2009 10:49pm Oct 14, 2009 10:49pm
Quoting Flem26
Okay Dad . . .

Seriously, I appreciate your perspective. But let me ask you this: is the US Fed`s actions over the past year not blatant market manipulation
hey now, I'm not *that* old

It is manipulation of the money market, which is their job. Says it right there in the charter. They are supposed to manipulate market rates to smooth economic cycles. It isnt necessarily a bad thing, at all.

The entire idea was to make money cheaper, lowering the cost of capital and allowing more companies to engage in more projects and therefore be able to hire more people and buy more materials. Pretty decent response in the circumstances, I think. Most people agree.

They arent manipulating the DJI at all. No one is. Mainly because no one could afford to. Not even Scrooge McDuck. And he is the richest guy I know.

The strength you are seeing is coming from more companies making more money and more investors being more confident about putting more money into more equities.
When you have to shoot, shoot. Dont talk.
  • #46,070
  • Oct 14, 2009 11:27pm Oct 14, 2009 11:27pm
i want to know if this is considered a divergence?

i'm asking because i'm not looking at the 2 lows in between...does it still count? or the divergence has to be between 2 consecutive lows?
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  • #46,071
  • Oct 14, 2009 11:30pm Oct 14, 2009 11:30pm
Quoting arthurwtm
i want to know if this is considered a divergence?

i'm asking because i'm not looking at the 2 lows in between...does it still count? or the divergence has to be between 2 consecutive lows?
Hey Arthur

That is still divergence, but a sign that a stronger trend is under way so just be "cautious".

Best
Mike
  • #46,072
  • Oct 14, 2009 11:36pm Oct 14, 2009 11:36pm
Quoting arthurwtm
i want to know if this is considered a divergence?

i'm asking because i'm not looking at the 2 lows in between...does it still count? or the divergence has to be between 2 consecutive lows?
As with most things, the answer is 'sort of'.

Technically, 'divegence' is there - price is indeed diverging from the indicator at those two points.

However, the reason we look at divergence is to give some kind of indication as to short term momentum. If price is making new lows, but momentum is decreasing, then you could expect that a reversal is more likely than without that sign.

So, applying that to your chart - what is it telling us? It is saying that price has just made a big new low, and that momentum, as measured from the last move, is increasing.

What we arent seeing is price movement slowing from the last dip, which is what we would want to see if we planned on taking a reversal.

The fact that it is showing a divergence from some other point in the past isnt really all that important to me. I want to know what price is doing now, not what it was doing a few weeks ago

*edit* as usual, beaten by Mike
When you have to shoot, shoot. Dont talk.
  • #46,073
  • Oct 15, 2009 12:14am Oct 15, 2009 12:14am
Quoting arthurwtm
i want to know if this is considered a divergence? ...
yes it is...
but i believe u have to put more weight in 'current/present/at-the-moment' divergence (if there is any) than in 'past' divergence (example, the divergence u plotted here).
comparing the current price from the recent swing low (1.0600?), there is no divergence. but since price have made a considerable move down, we may be near a pause/consolidation or reversal.


Quoting joelcf
...
*edit* as usual, beaten by Mike
in fairness, u had a lengthier post
  • #46,074
  • Oct 15, 2009 12:24am Oct 15, 2009 12:24am
Quoting supremeChaos
in fairness, u had a lengthier post
The most valuable of all talents is that of never using two words when one will do

to think I used to have that quote stuck to my monitor, lol. Clearly never sunk in.

I think we need to have some kind of sticky for divergence questions. I swear it comes up more often than anything else. Except for maybe 'do I really have to read 3000 pages?!', hehe.
When you have to shoot, shoot. Dont talk.
  • #46,075
  • Oct 15, 2009 12:31am Oct 15, 2009 12:31am
how bout just dont use div and focus on good bars at good locations?
  • #46,076
  • Oct 15, 2009 12:37am Oct 15, 2009 12:37am
Quoting supermatt
how bout just dont use div and focus on good bars at good locations?
sure you can take this all any way you really want. I think it is a real good tool and can give you a heads up on whats to come and more confidence. Again just a tool.

Mike
  • #46,077
  • Oct 15, 2009 12:40am Oct 15, 2009 12:40am
Quoting joelcf
The most valuable of all talents is that of never using two words when one will do ...
I think we need to have some kind of sticky for divergence questions. I swear it comes up more often than anything else. Except for maybe 'do I really have to read 3000 pages?!', hehe.
let's just say simplism has been running through Mike's veins & is manifest with his posts (apart from the fact that he types fast or that's bcoz he has a sexytary )... while u excel & prefer to speak your mind out loud.

regarding redundant questions, i'm slowly compiling & looking for pertinent yet 'recyclable' posts/responses.
  • #46,078
  • Oct 15, 2009 12:41am Oct 15, 2009 12:41am
Quoting supremeChaos
let's just say simplism has been running through Mike's veins & is manifest with his posts
I suspect he has fibre running through his veins and straight to the ff and j16 servers.

Quoting supermatt
how bout just dont use div and focus on good bars at good locations?
But why not use it with good bars and good locations? It has its place, it is just that most people dont really understand what it is and how to use it.

I agree with the sentiment though - it's icing, not the cake itself.

There is a technical term for people that trade solely based on divergence - broke
When you have to shoot, shoot. Dont talk.
  • #46,079
  • Oct 15, 2009 1:36am Oct 15, 2009 1:36am
yep all good point taken guys. always good to have a few extra tools handy
  • #46,080
  • Oct 15, 2009 1:41am Oct 15, 2009 1:41am
Quoting supermatt
how bout just dont use div and focus on good bars at good locations?
agreed, since divergence is a lagging indicator. it only tells what happened in the past
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