james16 Chart Thread

1% a week, 4% avg a month is fantastic my friend. Just stay disciplined and patient and not much can stop you

Mike

anybody have the chance to catch these 4hr bars today? I was out today. I can say for a fact, that GBPJPY would have been at the very least a 1% risk on the real account

#1) GBPJPY, very beautiful BEOB, with a close lower than the low of the previous bar, bouncing off the 146.00 PPZ zone... First target hit fast.

#2) CHFJPY, decent pinbar off PPZ. First target hit fast.

You're exactly right it wasn't an A++ bar, I was playing it as a retest of the trendline, and because it wasn't a perfect setup I played it and took profit on part of my position at 147.00. I was stopped out on the remainder at break even. I really liked the confluence of the 61.8, PPZ, and trendline, so it fit my trading plan and I played it carefully. However, many traders wouldn't play this bar, and would wait for even better setups.

This is definitely the best thing to do until your comfortable with trading these setups. Knowing the areas price will could turn around is the most important thing, because then even a B+ trade like this will typically go where you think it will.

I will focus on posting A++ setups for now on, I know it is better for the thread. I just wanted to show you what I thought was a better setup (esp. the confluence) compared to the other ones posted for that day.

Thanks for your question! I think this needed clarification.

Cory

Hey Mike, I was looking at this, and I was curious if you ever play something like this.

Yes I know it's not at a swing high, and there's a TON of traffic right below it (actually, the bar closes right on a very strong PPZ), but lets pretend this bar formed straddling the .9500, with little to no traffic below, would you ever see that as the "straw that broke the camals back" and consider it a precursor to a potential hard break down?

I've highlighted all the traffic areas which the trade would run smack into with pink horizontal lines which would almost certainly stall the trade.


I HATE to say "well lets pretend this, then what?" because I know at that point it's all 100% theoretical, and essentially makes it moot... but I don't know, I'm just trying to learn forgive me.

Hi Mike:

Thank you for your response and kind words. I will stay disciplined as I know that is my only hope for making it. I am taking only with-the-trend pullbacks on A++ pullbacks using only Pin Bars, Outside Reversal Bars and, when they look great, inside bars. All set ups must close in the top or bottom 25% of the bar's range, be above all EMAs (20, 34 and 50) for longs (reverse for shorts) and above the days open for longs (reverse for shorts). I am just staying calm and working it slowly, letting risk-per-trade only increase if winnings are sufficient to fund increases. It will be a long haul but well worth it if I succeed.

I have one question Mike. In addition to the pin bar, outside bar and the inside bar set ups, the pdfs I printed and read mention a bar that merely closes in the top or bottom 10% of its range. Are bars that close in the top 10% of it's range at key support and resistance levels, and/or swing lows with other confluence, reliable enough for entry even if the bar does not qualify as a pin bar, outside bar or inside bar, or should I keep this set up out of my arsenal until I have a lot more experience? I have been trading technical chart patterns for nearly 15 years so I am not new to trading in general.

Many thanks for your response.

Hi Mike,

I get your point that in practice and from experience things are different when you have a large acount...(plus we are humans so we do have emotions...it's only 'human' to be annoyed when doing a bad trade or take profit too early or the opposite etc.), but what you said about drawdown etc...yeah sure if you had a million trading account suffering a 40% drawdwon would be pretty traumatic compared to 40% of a 10k account. But sure;ly it's aslo about what that money means to you as it's all relative.

For example, if I'm trading a 10k account I'm likely to be trading that much as that is what I can afford to lose...i.e. that is my capital I have that I am prepared toi 'risk' trading...i.e. it is not all my money and I have other capital to live off or have another job more likely etc so if I suffered a drawdown on this then yeah it would mean something but its' money I can afford to lose (but in anycase an account shouldnt go 40% into drawdown - 10% and I'd take a break and go back to demo) i.e if I lost a trade - took a full bar loss costing me 1% then losing a 1% trade on a 10k account should not differ from losing a 1% trade on a £1m account as if you have a £1m account the you obviously have some other £millions to live off etc so relatively speaking they both 'mean' the same to you (and if you have £millions you have probbaly made it/achieved it and so are even more comfortable having some losses as you know from experience you can make it again...whereas a £10k account is more liekly to be traded by a less experience person where some losses will hurt more psychologically as although that money is not a lot in absolute terms it probably is if treating trading as a business and wanting to 'make it' as they need that account to grow to a level which gives that person independence...

A few losses on a 10k account can mean more if someone is trying to grow their account to a level where they have financial freedom...a few losses on a £1m account, although more in absolute terms surely does not mean as much as that person has acheived financial freedom and therefore these losses do not mean much in the grand scheme of capital that person has.

I agree that suffering 40% drawdowns and wanting a smooth equity curve is a must with any amount of trading capital...(well unless you have minimal emotions...I know big drawdowns would draw out a lot of emotions in me and would lead to me losing more money as you get into the cycle of not letting winners run, thus your loses outweight your winners, letting losers go too far, risking to much and eventually just trading all over the place without a plan until the account has gone) again it's about what that money means to you...if I suffered more than 10% of drawdown on my account (and I class my account as small) then I'd be bl*ody tearing my hair out as that money is money I'm prepared to risk but it is money that I care about as I want that account to grow...whereas if I had millions and was therefore trading a large account...I have a high absolute amount of money left over i.e. if you trading account represents x% of your entire assets then again you are in a much better positions in absolute terms having a large account, if you have losses you have plenty of other assets.

Personally I feel for me fluctuations on a small account have a larger affect as I want that account to grow as fast as possible and get to a stage where I can trade full time, whereas fluctuations on a large account where I am trading full time doesnt mean as much relatively speaking as I have obtained that financial independence eg. $1m account lose 10% I still have900k left which is a lot of money in life whereas 10% on a 10k account leaves 9k which hurts as I havent acheived financial indepedence and thus i am more eager for that account to grow whereas a larger account all I want is a few decent winners, ie a few% per month etc and thus can be very pickyand can afford to take profit quicky as that is all I need in order to make enough to live off these profits hence if I had an account that large I'd be trading daily charts obvious A+ setups only and tkaing prifts quickly just like jim does...but for a small account I want to trade high frequency setups still A+ with a potential for high %R in order for my acocunt to grow (without significant drawdowns) and IMO the best way to achieve this is through the lower timeframes.

Anyway it's late and Im droning on randomly about nothing now. Cheers for the input, always appreciate your thoughts and your insights.

I am attempting to add additional substance to the conversation on draw down and account size. I think all the points made above are good and true. However, at the end of the day, regardless of our current circumstances we are all trying to get to the same place - a large account that produces large enough profits to fund our lifestyle and, if we have excess above expenses, to build wealth. For me the math stays the same regardless of my account size, emotions, etc. That is, I use a 150 to 200 unit bank roll, I risk 1 unit per trade and I strive to make 1 to 1.5% per week. Whatever it takes to get there I will do. Trade more frequently in lower time frames, watch more markets, or a combination of both. The foregoing weekly returns amount to 4.12% to 6.2% per month, or 49% to 74.4% per year. Compound those monthly and the returns increase by another 30% or so (i.e. 4.12% compounded monthly = 62.33% per year; 6.2% compounded monthly = 105.8% per year).

My point is, like great real estate investors, money managers of buy-and-hold strategies, etc., we strive to create a cash-flow-machine from our trading/investing that produces consistent returns we can compound monthly over a long time horizon. I also strive to do this with draw downs no greater than 5 units out of 150 to 200 units or -3.33% to -2.5%. Regardless of account size, wealth or emotions, these are the types of goals that I pursue and I believe they are the type of goals that could bring many traders great success. Any institution in the world would kill for these types of numbers as they represent an annual reward to risk ratio of 14.7 to 1 (49% divided by 3.33% draw down) at a minimum.

I can only hope that I have the good fortune to do this with any account, large or small. Can I do this? I don't know because I just started with this method this week. I did make +1.28% this week with a -.68 unit draw down. Time will tell if this is just a pipe-dream or reality for me.

I am not saying this is for everyone, but I think it's a great first set of outside targets to shoot for and provides a solid business plan for any trader.

Yes sir, the gbp/jpy setup was gorgeous considering the daily and weekly outlook. The range trades before that were peachy too.

Hi Cory:

I was not criticizing in any manner, just trying to make sure I am understanding the definition of A++ set ups. Thank you for your clarification and I will consider your points as I try to get better at this method.

i love when the bar closes below the low like that... good momentum setup

You said it all with that one word my man.

that's my problem with GBPCHF right now.... lacking the "m"

Hey Dan

Yes those are some of my bread and butter intraday round number plays. These are the most common types of scenarios I play for continuation bars. You get a ranging on a round number, then a outside bar engulfs the range and tips you off where it is going, and manage accordingly. Although aud/cad is just the worst pair on earth so I wouldn't take it cause of that lol

Best
Mike

Hey Marx

That pdf was created by someone who browsed this thread, so it is 'unofficial' so to speak. It sounds as if you are referring to a BUB, or BEB, which is just a bullish bar or bearish bar. I don't know many people that trade based on those alone but use them as additional info for trades. I trade mostly outside and pinbars personally.

Have a great weekend guys
Mike

4%/month = 48%/year.... I don't think people realize how HUGE this is....

Nice stop placement.

Huge? That's not even big man...I mean come on, if you're not making at least 500%, you can't consider yourself a trader... eh, I'm going crazy in this little box I call my house tonight. Gotta make fun somehow. lol"

In all reality though, you are more than right if that's even possible.

Interesting...
'We' moved Swissy 130ps today. Lets see what we can do to it next Tuesday...

have to wait.... all I know is that I won't catch a full loss on it at this juncture

Good point bro.....