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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

  • #54,961
  • Feb 14, 2010 8:20am Feb 14, 2010 8:20am
Quoting jspeakman
Thanks Mike - great stuff as always from you and everyone on this thread. I really appreciate people's generosity and have really learnt a great deal. At the moment I doing ok identifying good moves after they have happened - now if I could just.....
Ask yourself this question - and take notes in a table so you can see a pattern emerging:

What were the conditions at the time the bar formed? At a PPZ? At an fib area (50 - 61%), At a round number, was the bar bigger, smaller of the same as the preceding community of bars? Is it part of a double/triple top? Was there divergence on the RSI? MACD? Is it trading into traffic, or is there space?

Then - examine what price did post bar. Did it run? Was there a pull back then a run? Where did the pullback occur?

I'm sure you could think of more things - but this simple exercise over just a few hours will yield significant knowledge. Forget for now how much money each bar could yield, learn Price Action. Money follows.

Cheers Again!

(BTW - saw Celtic Woman at the Durham Performing Arts Center last night. If you ever get the chance to see them - do so. Stunningly talented.)
I'm pretty much done with all this ...
  • #54,962
  • Feb 14, 2010 8:25am Feb 14, 2010 8:25am
Quoting Prof Hunter
Sorry, I can t find it. Am I missed it, or not posted, yet?
THX, PH
Still coming ... hang tight.
I'm pretty much done with all this ...
  • #54,963
  • Feb 14, 2010 9:23am Feb 14, 2010 9:23am
Hi guys,

I have been playing around on a spreadsheet looking at how long it might take to build an account using J16 method. I will be demoing most of this year and looking at going live start of next year.

One of the frequent pieces of advice is that having a large account makes it easier to wait for A++ trades, but what defines a large account?

I also would like to know what kind of returns you can expect using this method, one posts from the seniors talks about small accounts 500-3000% a year. Medium account 100-150% and large 60-80%.

I will work on the assumptions that conservative money management is used at 1-5% per trade, and TA is based on weekly, daily,(but entries may be on 4-1hr).

Thanks Chatzi
  • #54,964
  • Feb 14, 2010 9:24am Feb 14, 2010 9:24am
Quoting FormulaOneFa

BUOVB - Bullish outside vertical bar

BEOVB - Bearish outside vertical bar
BUOVB - Bullish OutsideOverbought Bar

BEOVB - Bearish OutsideOversold Bar

I think............
  • #54,965
  • Edited 9:55am Feb 14, 2010 9:29am | Edited 9:55am
Hi everybody, how would you rate those two pinbars at double bottoms ?
Attached Image (click to enlarge)
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  • #54,966
  • Feb 14, 2010 9:48am Feb 14, 2010 9:48am
Quoting ljr
Hi Boy

I think most people here will also say option 3. This shows a stong close above the previous candle. Some may also consider option 1 but then you probably want to place your order above the previous bar anyway to make sure that resistance is cleared.

Option 2 is a definate NO in my opinion. This would not signify a very strong move up at all.

Leon
Hi Leon,

Interesting you should say that option 2 would be a definite no in your view.

Again, with the double bar low, higher close (DBLHC) as an example, since the first bar/candle of this pattern is bearish, i.e., its open is higher than its close, I'd say that option 2, a close of the second bar/candle above the open of the first bar/candle, is more bullish than option 1, a close higher than the close of the first bar/candle, which, barring any gaps, should coincide with the open of the second (bullish) bar/candle.

With option 1, the second, bullish, bar/candle has a greater range than the first, bearish, bar/candle, but in (Nison's) candlespeak, its real body does not engulf the real body of the first bar/candle. With option 2, again using candlespeak, the pattern would be called a bullish engulfing pattern (for forex), where the real body of the second, bullish, candle engulfs the real body of the first, bearish, candle.

So in my view, the order of strength is option 3 > option 2 > option 1. The question is, when do we start calling something a DBLHC or DBHLC. This definition matter also applies to outside bars, come to think of it, which are closely related to DBHLCs/DBLHCs.

B.
It's not about how much you make, it's about how much you don't lose.
  • #54,967
  • Feb 14, 2010 9:50am Feb 14, 2010 9:50am
Quoting ts63
Hi everybody, how would you rate those two pinbars at double bottoms ?
Hi, personally for me none of them is a pin bar. To me they both look more like neutral bars. But I like location of the bar on GBPCAD chart. If I had to rate I'd rate it D (GBPSGD) and C- (GBPCAD).

Cheers,

Mikey
  • #54,968
  • Feb 14, 2010 9:52am Feb 14, 2010 9:52am
Quoting ts63
Hi everybody, how would you rate those two pinbars at double bottoms ?
Then seem like dojis, they might hint at indecision, but not powerful enough to trade a reversal, no momentum.
  • #54,969
  • Feb 14, 2010 9:54am Feb 14, 2010 9:54am
Quoting StoragePro
Still coming ... hang tight.
OK, THX!
  • #54,970
  • Feb 14, 2010 10:03am Feb 14, 2010 10:03am
Quoting Dhb
I'm a bit confused as to what exactly constitutes a DBLHC or DBHLC.

Let's take the double bar low, higher close as an example. It's a 2 bar/candle pattern, with matching lows (max. 2 pips difference between the lows on a daily chart). No questions there. However, I am a bit unsure about the "higher close" part. Higher than what exactly? In my view, it could be one (or more) of the following 3 things:

1) higher close than the close of the previous bar/candle
2) higher close than the open of the previous bar/candle
3) higher close...
Hey Boy

To qualify as a James16 DBLHC it must always be option 3

Best
Mike
  • #54,971
  • Feb 14, 2010 10:11am Feb 14, 2010 10:11am
Quoting chatzi
Hi guys,

I have been playing around on a spreadsheet looking at how long it might take to build an account using J16 method....
Hey Chatzi

You probably won't love what I have to say in regards to this, but it is a common question that has no real answer. So my summary of anything I say is to forget about what is possible, and simply learn to trade profitably and let those things take care of themselves(they will). The reason being the factors are to large. For example what account size one is making versus their risk(the difference b/w 1-5% per trade is so huge, you double your potential ROI and potential for DRAWDOWN from just 1-2%). So if you are making 40% a year and had a 18% drawdown at 1% risk per trade. And now move to 2% risk per trade you are now hypothetically looking at 36% drawdown and a 80% return.

So where does this leave you. Well it leaves you wherever you really want to take your trading. IMO 1% risk max while learning(on demo of course). Because these questions begin to answer themselves. You have to learn your method(which won't be the same as anyone else, since the pieces come together). Also what constitutes a large account is variable to a persons lifestyle/country/means etc.

Some additional posts that are important to me
http://www.forexfactory.com/showthre...69#post2645769
http://www.forexfactory.com/showpost...ostcount=25755

Trade well
Mike
  • #54,972
  • Feb 14, 2010 10:19am Feb 14, 2010 10:19am
Quoting ts63
Hi everybody, how would you rate those two pinbars at double bottoms ?
Hey TS

Careful here these are both Neutral bars. This is when the open and close are in the middle of the bar and we have "tails" coming from both ends. Often mistaken for a pinbar, but they really show indecision in the market place. Nice areas to be watching though(esp gbp/cad).

Best
Mike
  • #54,973
  • Feb 14, 2010 10:19am Feb 14, 2010 10:19am
Quoting chatzi
Then seem like dojis, they might hint at indecision, but not powerful enough to trade a reversal, no momentum.
beat me to it thanks

Mike
  • #54,974
  • Feb 14, 2010 10:23am Feb 14, 2010 10:23am
Hi Mike,

In your second link above... the post # 54972 states:

As my account size grows, my risk per trade is going to decrease decreasing my max drawdowns as well as my overall ROI for the year.

Lets see if I understand: As my account size grows, I still want to maintain the same risk per trade. So my risk as defined as a % of my account would be decreasing.

Lou
  • #54,975
  • Feb 14, 2010 10:28am Feb 14, 2010 10:28am
Quoting Lou
Hi Mike,

In your second link above... the post # 54972 states:

As my account size grows, my risk per trade is going to decrease decreasing my max drawdowns as well as my overall ROI for the year.

Lets see if I understand: As my account size grows, I still want to maintain the same risk per trade. So my risk as defined as a % of my account would be decreasing.

Lou
Hey Lou

What I am saying is that as my account size grows, I would be looking to Decrease my risk per trade thus decreasing my ROI and my Drawdown(this is the key here).

Hypothetical examples
100k account 2% risk per trade = ROI avg = 80% per year with Max Drawdowns of 30% over the year

Same trader now grows accuont to 1 million but they can't stomach a 30% drawdown which they have seen based on their methods. So they decrease risk per trade to 1% which now effectively gives them all things considered

ROI = 40% per year, with a Max drawdowwn of 15%.

Hope that clears it up

Mike
  • #54,976
  • Feb 14, 2010 10:35am Feb 14, 2010 10:35am
Quoting Dhb
Hi Leon,

Interesting you should say that option 2 would be a definite no in your view.

Again, with the double bar low, higher close (DBLHC) as an example, since the first bar/candle of this pattern is bearish, i.e., its open is higher than its close, I'd say that option 2, a close of the second bar/candle above the open of the first bar/candle, is more bullish than option 1, a close higher than the close of the first bar/candle, which, barring any gaps, should coincide with the open of the second (bullish) bar/candle.

With option 1, the second,...
Sorry I got 1 & 2 mixed up. For me I want to see the close of the second bar higher than the high of the previous bar. If the close is higher than either the open or close of the previous bar then you will still be trading into the high of the previous bar which could act as resistance. I think a lot does depend on how the first bar formed but I still would probably only trade option 3.

Edit: I see Mike has replied. He knows.....
  • #54,977
  • Feb 14, 2010 10:35am Feb 14, 2010 10:35am
Quoting mbqb11
Hey Chatzi

You probably won't love what I have to say in regards to this, but it is a common question that has no real answer. So my summary of anything I say is to forget about what is possible, and simply learn to trade profitably and let those things take care of themselves(they will)....

Thanks Mike,

I guess focus on making profitable trades and once you have a history of trades only then will I get a picture of % and possible risk amount. 1% sound sensible for starting out I agree. I prefer to hear the hard truth reiterated at this stage, I have been down the million in a year mindset and its only leads to pain.

Thanks again

Chatzi
  • #54,978
  • Feb 14, 2010 10:37am Feb 14, 2010 10:37am
Thanks Michal7 chatzi and mbqb11 for commenting my charts.
  • #54,979
  • Feb 14, 2010 10:46am Feb 14, 2010 10:46am
Quoting chatzi
Thanks Mike,

I guess focus on making profitable trades and once you have a history of trades only then will I get a picture of % and possible risk amount. 1% sound sensible for starting out I agree. I prefer to hear the hard truth reiterated at this stage, I have been down the million in a year mindset and its only leads to pain.

Thanks again

Chatzi
I've been doing .5 percent for awhile now. Told myself, after 6 months profitable months in a row, I'll bump it up to 1 percent. After 6 more, another .5, until I get to 3 percent or so. I think its important to protect yourself early on. Its not the time to aggressively make profits, but to protect the capital you have, while you learn as much as you possible can. Digging yourself a hole early on is probably the worst possible thing one can do, so I'd suggest you really are conservative. My first year prior to this thread was a nice 20 percent loss. Tried to chase it for awhile, even after finding this thread, and that is really the worst thing you can do. I think it would be safe to say, I was pretty lucky to still be in this game, and certainly not taking it for granted now.
  • #54,980
  • Edited 11:29am Feb 14, 2010 11:05am | Edited 11:29am
Quoting StoragePro
Aim higher. Half a point on 500K won't pay the bills in our neck of the woods. Not even close. Pretty good money for dinner out a few times and a few shows with enough left over for groceries. 3% is better, but to be honest, that ain't big bucks either. There are folks here in this forum that do that on a regular job. And they are not looking for parity from trading.

But your point is well taken, carefully grow your account and you can get to the place where a few well placed trades a month will make you more money that you can dare...
lol. I have no clue about the price of living in America I guess. But 3% of that account, meaning roughly 60,000 Israeli shekels per month...man, you can live here like a KING with that amount of money. I guess salaries and spends are relative.
My dad is a doctor (heading to be a professor some time soon). I think neto he brings 12,000-15,000 shekels per month. BTW we are 6 persons in the family, big house, big garden, 2 cars. I remember a few years ago they wanted him in Cambridge England...it was like X4-5 more per month...but no way we are leaving our country

I guess you can work one month in America, then go and live like a king in a third world country for the entire year LOL.
Quoting StoragePro
Still coming ... hang tight.
Looking forward for that

Quoting mbqb11
Hey Chatzi

You probably won't love what I have to say in regards to this, but it is a common question that has no real answer. So my summary of anything I say is to forget about what is possible, and simply learn to trade profitably and let those things take care of themselves(they will)....
Mike, this is a heck of a post. Keeps your rants coming !

Ben
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