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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

  • #58,701
  • Mar 19, 2010 4:22pm Mar 19, 2010 4:22pm
You should get your friend to read this http://www.hmrc.gov.uk/MANUALS/BIMMANUAL/BIM22017.htm he is not liable to pay tax assuming he is using spreadbetting.

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The fact that a taxpayer has a system by which they place their bets, or that they are sufficiently successful to earn a living by gambling does not make their activities a trade.

The case of Graham v Green [1925] 9TC309 concerned a man whose sole means of livelihood came from betting on horses at starting prices. Rowlatt J says at pages 313 and 314:...............
Quoting Max Profit
I'm not going to name a friend on a free bb, I know it's true and so does he, nothing to prove. Ok then pal, call the tax office, then get the tax back for my friend, he will buy you a new car, he's been taxed the last 3 years since he was classified as a professional trader. Professional deems you taxable at sourceIm not on about a 5 or 10pp gambler, I'm on about the real deal DA trader.
Oh ye, the website you mention is dead, they must have gone bankrupt for not paying their taxes....:O
  • #58,702
  • Mar 19, 2010 7:40pm Mar 19, 2010 7:40pm
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  • #58,703
  • Mar 19, 2010 7:46pm Mar 19, 2010 7:46pm
Potential trade was identified at SR level of 125ish and took the trade at break of pinbar. Initital entry closed and remaining still on the table.
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  • #58,704
  • Mar 19, 2010 7:59pm Mar 19, 2010 7:59pm
Quoting sakrani
Potential trade was identified at SR level of 125ish and took the trade at break of pinbar. Initital entry closed and remaining still on the table.
5680321
  • #58,705
  • Mar 20, 2010 1:52am Mar 20, 2010 1:52am
HAS ANYONE COMPARED THE PRICES OF THE YM CHARTS ON FxPro.???
YMHO, WHICH CLOSED MARCH 19, IS 60 POINTS HIGHER THAN YMMO.
TOO COMPLICATED FOR THIS POOR OLD BRAIN.....
GRAHAM
  • #58,706
  • Mar 20, 2010 3:18am Mar 20, 2010 3:18am
Quoting Janegra
HAS ANYONE COMPARED THE PRICES OF THE YM CHARTS ON FxPro.???
YMHO, WHICH CLOSED MARCH 19, IS 60 POINTS HIGHER THAN YMMO.
TOO COMPLICATED FOR THIS POOR OLD BRAIN.....
GRAHAM
The answer is that the futures traders expect the price in June for the YM contract to be lower than the price now.

But these are the expectations today, which can change tomorrow.
  • #58,707
  • Mar 20, 2010 3:38am Mar 20, 2010 3:38am
Quoting Max Profit
I'm not going to name a friend on a free bb, I know it's true and so does he, nothing to prove. Ok then pal, call the tax office, then get the tax back for my friend, he will buy you a new car, he's been taxed the last 3 years since he was classified as a professional trader. Professional deems you taxable at sourceIm not on about a 5 or 10pp gambler, I'm on about the real deal DA trader.
Oh ye, the website you mention is dead, they must have gone bankrupt for not paying their taxes....:O
Do you mean direct access when you say "....real deal DA trader." If that is the case then he wont be spreadbetting and will be liable to pay tax. Or maybe I've misunderstood you.
  • #58,708
  • Mar 20, 2010 3:39am Mar 20, 2010 3:39am
Quoting jspeakman
Fantastic post again, Benji - have been just looking at identifying setups for several months and now looking at the money management - risk/reward issues. You mention .1R and .3R - assume this refers to risk/reward ratio - most grateful if you could expand on that.
Yes 0.1R simply means 10% of your risk/position size. If you risk 100 pips, and take profit at 10 pips, you have made 10% of your risk.
For a method to be profitable you need the relation between your win rate and risk:reward ratio to generate a positive outcome in the long run. Yo can say you are trading like Ryan - going for a fixed RR of 2R (double your risk) and if you have only 50 % win rate you are happy. You can trade like James and go for a high win rate and not care about RR. Mike is also conservative, but when an A+++ setup forms he would give a bit more room for his trade and look for letting i run a bit more by trailing his stops.

Anyway, I think it really isn't that important. Just follow James principals, looking for the best setups on daily and weekly, manage them properly, be pick, patient, discipline and the rest will take care of itself. James16's principlas have it all "built in". For example the A++ setups tend to work almost every time and when they do, they run much more than the crappy bars at crappy locations. So if you are picky enough, patient enough especially on daily, and discipline enough to follow the plan, the rest will take care of itself in terms of WR and RR. It all boils down to patience and discipline like James says all the time.


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Took a demo trade on break of Daily BEOB on 17 March (high just off 14000) - would that be in line with your/J16 approach?

Thanks

J
Is that the EURGBP we are talking about? If you can post a chart it would be great.

Ben
  • #58,709
  • Mar 20, 2010 5:25am Mar 20, 2010 5:25am
Quoting benji533
Great bars for me are:
Pin bars - close withing the left eye. Long nose is important after sharp moves.
Outside bars - BUOB close above prior bar. BEOB close below prior bar.

Location:
- Extreme wing points.
- Double tops and bottoms with divergence.
- Good bars off BIG ROUND NUMBERS.
- Pullbacks in a trending market.

Now take those guidelines and check the daily EURGBP daily chart again. That failed BUOB is nowhere of what I would consider trading. It's just a huge spike in the middle of nowhere.
Looking on the chart again, I have found...
Great post as usual benji, but I've a couple more questions (please bear with my mediocre image editing skills):
1) When do you consider something a pullback? If the pin you marked is considered a pullback, then why isn't the other pin considered a pullback as well?
2) The BUOB you marked has its close only 0.2 pips higher than the high of its preceding tiny bar. Is that considered a "good bar" too? Plus wouldn't this BUOB be considered in-traffic, with the price prior to it whipping around in a box region?
3) Why would the failed BUOB not be considered something you would trade? Based on your guidelines, it is at a swing low on a pullback in a nice uptrend (or so it seems at the time of formation), plus it is off the BRN 0.9000.
4) This is neither at a swing point nor pullback, so I'm assuming it's advance material for playing it as a continuation signal? (That, and the close is not much higher than the previous high as well.)
5) This BEOB is not considered in traffic? I suppose one can reject all the pins prior to it as they didn't close above the BRN, but with price ranging around in that little box (not to mention not having broken out of the previous swing high and low range), how do we know that this is the bar that will bring us out of here?

I hope I'm not sounding quarrelsome. I'm currently reading Peaks and Valleys by Spencer Johnson, and I identify with feeling in a valley currently. That's why I'm trying to go back to basics - when is a pin/buob/beob considered good? (Size obviously.) When is it a swing high/low, pullback, or "in-traffic"?

PPZs are good and can add much more confluence to the setups. But I find it too difficult to grasp to be considered "basic" for the time being (having gone from the "so this is a ppz" to "there's ppz everywhere!" and getting frightened out from pulling the trigger coz we're always trading into some ppz or the other).
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  • #58,710
  • Edited 10:08am Mar 20, 2010 6:37am | Edited 10:08am
Quoting arctos
Great post as usual benji, but I've a couple more questions (please bear with my mediocre image editing skills):
Quote
1) When do you consider something a pullback? If the pin you marked is considered a pullback, then why isn't the other pin considered a pullback as well?
Well here we have a breakout and pullback pattern + horizontal price pivot zone. Notice how the nose of the bar is long and the close is well below the open. Strong trend, pullback to resistance. Simple.

The second pin I do not like because it isn't really at a pullback and the close of the bar isn't below the big round number. If it was I would probably take it with a proper management.

Quote
2) The BUOB you marked has its close only 0.2 pips higher than the high of its preceding tiny bar. Is that considered a "good bar" too? Plus wouldn't this BUOB be considered in-traffic, with the price prior to it whipping around in a box region?
Well some won't take it cause lack of space. But this is just me. BUOB off BRN is good enough for me personally. Where is this bar heading? first minor flip between support and resistance. Take full profit, half, none - but not lose. Here is a good example of an opportunity to use a reduced stop. You have the BRN and all bar lows from the left. But that's just me again.

Quote
3) Why would the failed BUOB not be considered something you would
trade? Based on your guidelines, it is at a swing low on a pullback in a nice uptrend (or so it seems at the time of formation), plus it is off the BRN 0.9000.
This bar is nowhere. That isn't a swing low. It's a clear uptrend but nothing supporting it. I wouldn't really consider the 0.9000 level because it is too far and the bar is well above that level instead of bouncing off it like I would like to see (the BUOB we just discussed a moment ago is a good example). If that bar was half way lower, I would take it. Otherwise the BRN is really insignificant for your entry.

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4) This is neither at a swing point nor pullback, so I'm assuming it's advance material for playing it as a continuation signal? (That, and the close is not much higher than the previous high as well.)
Nothing is or will be advanced in what I am showing you. Just a simple BUOB off a big round number. Enter at the break of the three matching bar highs and not below.

Quote
5) This BEOB is not considered in traffic? I suppose one can reject all the pins prior to it as they didn't close above the BRN, but with price ranging around in that little box (not to mention not having broken out of the previous swing high and low range), how do we know that this is the bar that will bring us out of here?
Well I'm not so worried about space cause I am paying attention to first trouble area as always. Just another BEOB of a BRN that did what you would expect.

I hope I'm not sounding quarrelsome. I'm currently reading Peaks and Valleys by Spencer Johnson, and I identify with feeling in a valley currently. That's why I'm trying to go back to basics - when is a pin/buob/beob considered good? (Size obviously.) When is it a swing high/low, pullback, or "in-traffic"?

I am only showing you bars I would personally take but that means nothing. If you are going to hold it you definitely want to look for more space than I do.

Ben
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  • #58,711
  • Mar 20, 2010 6:48am Mar 20, 2010 6:48am
Hi,

Below is gbpusd wkly chart, some points to consider:
- wkly pin bar, not a perfect one, but had been piercing through two supports and seen testing 1.50000 support (a very good ppz area)

Trade plan:
- will wait for a retrace if confirmed by pa on the present price level, i think that it will retest the 1.5200-1.5180 level to confirm resistence and then will resume its long term trend which is short.
- if there is no retrace will wait for a confirmed breakout of 1.4850 level but will not trade the breakout(not according to my rules ), instead will wait for a retest of 1.4850 level.

All suggestions are welcome.

Kind regards
MKashif
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  • #58,712
  • Mar 20, 2010 9:35am Mar 20, 2010 9:35am
Quoting benji533
Yes 0.1R simply means 10% of your risk/position size. If you risk 100 pips, and take profit at 10 pips, you have made 10% of your risk.
For a method to be profitable you need the relation between your win rate and risk:reward ratio to generate a positive outcome in the long run. Yo can say you are trading like Ryan - going for a fixed RR of 2R (double your risk) and if you have only 50 % win rate you are happy. You can trade like James and go for a high win rate and not care about RR. Mike is also conservative, but when an A+++ setup forms he would...
here is a link to a page where you put the win/loss ratio and your win probabilty and it makes you a chart of how your account should grow/decrease
  • #58,713
  • Mar 20, 2010 10:10am Mar 20, 2010 10:10am
Quoting benji533
I am only showing you bars I would personally take but that means nothing. If you are going to hold it you definitely want to look for more space than I do.
But imo you should remember one important thing. A winner trade doesn't mean you are a successful trader - exactly like a loser trade doesn't make you a loser trader. Losing and winning is market's nature and has zero reflation of who you are as a trader in terms of success.
Fact is a complete newbie can be lucky and get his 10 first trades winners. But once his first loser will come, all his mental world will crash on him. The real success needs to come from inside you in a form of attitude and way of thinking. The outside factors like winners and losers mean nothing about you and will take care of themselves over time.

For example people who post on the forum every single winner trade they have, but absolutely none of their losers. Why? can we learn more form our winners than from our losers? no. They do it because in their subconscious they feel that the results of their single trades reflect themselves as humans. That is to say if they post winners and deny their losers they feel winners. But that's rarely the truth.
When people judge themselves based on their single trade results they will feel winners when they win and losers when they lose - give place for their emotions and dark side of mind control their next action.

For example a loser trade can lead a trader with the wrong mindset to let his emotions take control over him and push him to react in a dangerous way. If you don't truly take responsibility on your trades you will get hurt emotionally and blame the market instead of taking responsibility yourself. It can either come out in form of fear and hesitation before taking the next trade, or it can be anger and revenge feeling which will push you to be reckless, inpatient and indiscipline. And if you believe losing is a result of the market fighting against you instead of understanding it's trading nature - then you start looking for ways to fight the market back by learning about it as much as you can, change your system etc. But he only one you are fighting is yourself cause the market doesn't even know in which direction you expect it to move (the patterns you see, and your expectations from them are in your mind only, not in the market).

Ben
  • #58,714
  • Mar 20, 2010 10:24am Mar 20, 2010 10:24am
Quoting ppfx
here is a link to a page where you put the win/loss ratio and your win probabilty and it makes you a chart of how your account should grow/decrease
Cool
  • #58,715
  • Mar 20, 2010 10:56am Mar 20, 2010 10:56am
Quoting benji533
Yes 0.1R simply means 10% of your risk/position size. If you risk 100 pips, and take profit at 10 pips, you have made 10% of your risk.
For a method to be profitable you need the relation between your win rate and risk:reward ratio to generate a positive outcome in the long run. Yo can say you are trading like Ryan - going for a fixed RR of 2R (double your risk) and if you have only 50 % win rate you are happy. You can trade like James and go for a high win rate and not care about RR. Mike is also conservative, but when an A+++ setup forms he would...
Duh - sorry Benji - chart attached (Euro Cad) waited for break on BEOB - I know quite small but thought off 14000 VBRN(very big round number!) and strong downtrend was reasonable (took exit from oct 07 monthly close). Just didn't see anyone take it so presume there was a good reason for that but looked ok (not great but ok B-) to me. Previous fairly weak pin on the daily and BEOB on the 4 hr also influenced my decision,

Thanks for all your help and advice on R/R- I think you are becoming a newbie guru!

J
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  • #58,716
  • Mar 20, 2010 11:08am Mar 20, 2010 11:08am
Quoting jspeakman
Duh - sorry Benji - chart attached (Euro Cad) waited for break on BEOB - I know quite small but thought off 14000 VBRN(very big round number!) and strong downtrend was reasonable (took exit from oct 07 monthly close). Just didn't see anyone take it so presume there was a good reason for that but looked ok (not great but ok B-) to me. Previous fairly weak pin on the daily and BEOB on the 4 hr also influenced my decision,

Thanks for all your help and advice on R/R- I think you are becoming a newbie guru!

J
Hey jspeakman,

Firstly the bar isn't really bouncing off the BRN, or even touching it. Secondly it isn't really at a pullback and thirdly it's quite a small bar. I think if it was much bigger, engulfing the prior range and bouncing off the BRN Mike would play it as a continuation bar. But I personally prefer getting in on clear dips (pullbacks). Everyone is different.
Best IMO is trading these bars where they suppose to be - swing points and with confluence like BRN or divergence. If you are patient enough to take only these you can do pretty well imo.
  • #58,717
  • Mar 20, 2010 11:16am Mar 20, 2010 11:16am
Quoting benji533
Hey jspeakman,

Firstly the bar isn't really bouncing off the BRN, or even touching it. Secondly it isn't really at a pullback and thirdly it's quite a small bar. I think if it was much bigger, engulfing the prior range and bouncing off the BRN Mike would play it as a continuation bar. But I personally prefer getting in on clear dips (pullbacks). Everyone is different.
Best IMO is trading these bars where they suppose to be - swing points and with confluence like BRN or divergence. If you are patient enough to take only these you can do pretty...
Really appreciate the advice - more chart study time I think!

J
  • #58,718
  • Mar 20, 2010 12:03pm Mar 20, 2010 12:03pm
Quoting benji533
Cool
very interesting actually. Thanks ppfx.
I am going to use it for a deeper research regarding money and trade management.
Interesting each system has a different risk/position size recommended. Nothing higher than 1% though. "ruin rate"?
Would be interesting to hear what Joel or Mike think about it...

http://www.hquotes.com/kelly.html


Ben
  • #58,719
  • Mar 20, 2010 12:44pm Mar 20, 2010 12:44pm
Quoting jspeakman
Duh - sorry Benji - chart attached (Euro Cad) waited for break on BEOB - I know quite small but thought off 14000 VBRN(very big round number!) and strong downtrend was reasonable (took exit from oct 07 monthly close). Just didn't see anyone take it so presume there was a good reason for that but looked ok (not great but ok B-) to me. Previous fairly weak pin on the daily and BEOB on the 4 hr also influenced my decision,

Thanks for all your help and advice on R/R- I think you are becoming a newbie guru!

J
The 4HR BEOB was better and tradable IMO
  • #58,720
  • Mar 20, 2010 12:49pm Mar 20, 2010 12:49pm
Quoting benji533
very interesting actually. Thanks ppfx.
I am going to use it for a deeper research regarding money and trade management.
Interesting each system has a different risk/position size recommended. Nothing higher than 1% though. "ruin rate"?
Would be interesting to hear what Joel or Mike think about it...

http://www.hquotes.com/kelly.html


Ben

Direct quote from the site

P.S. Our personal experience tells us that even you have a perfect trading system and calculations above show that you should invest up to 50% or more in a single trade, just DO NOT DO THAT! Don't tie more than 25-30% of your capital to any single trade despite any calculations! Don't be too greedy and then Mr. Market will reward you for your passion.


25-30% WHAT LOL

You are better off learning your system and what it produces and get a feel for the ups and downs. If anything run a monte carlo analysis on it so you can get a better idea of the types of potential equity curves that are possible(again this is all in numbers all things considered).

I am not saying every method doesn't have a more optimal risk. But that is a little bit tough to do with trading. Sure if you have a high winrate you can get away with some higher risk b/c you don't go through lots of losing streaks. but they DO happen. And when they do they can throw things for a tizzy. I think most people should start off with .5 -1% risk per trade learn their system and work for there. Most people should not be going near 2-3% risk like I normally see. I have no idea where this 2% risk per trade just became the standard I still wonder that hehe.

Mike
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