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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

  • #60,521
  • Apr 10, 2010 11:08am Apr 10, 2010 11:08am
Quoting ppfx
actually this is a PB (pinbar) the abbreviation IPB means inverted pinbar and is considered a little more advanced stuff (here are some examples of what IPB is link )

and yes its pretty good, look a few pages back you'll see the discussion
Thank you for the link.. I did read that last time but didn't get that time. I was assuming both PB and IPB are one and same. Thank you for putting me in the right direction.

The differrence between PB and IPB is the position of the head. IPB:Having a long wick along with a head protruding high/low (preferably) through restistance zone..
PB: Long wick but the head is within the previous bar head.


Also I saw the previous couple of posts on GBP/CHF, but I want to make sure my analysis is correct with all the factors that I put it up on the chart.
or am I mising any other factor that should be considered before identifying an opportunity.
Once an opportunity is identified, want to make sure the entry points are indeed valid.

Sorry, if it is little redundant..
  • #60,522
  • Edited 11:51am Apr 10, 2010 11:15am | Edited 11:51am
Quoting jspeakman
Hi

Chart attached - sorry its rather a while back now. Just wondered if that 4hr pb was playable at the break to just short of 125 (say half off at that point) and then continue with 2nd half of position moving stop to break even managing tightly in case of stall at 125 (which it didn't). The alternative I guess was to play the daily pin after break and pull back to 125

thanks

J
That 4 hour Eur/Jpy is absolutely tradable at the break. Easy to say that, after it flew to the moon. lol

The Location had a great confluence, 124.00 RN, Swing Low, 61.8 ret at a PPZ level on higher time frames. Key words here: Higher Time Frames .

When venturing down to the 4 hour time frame, knowing where these Higher Time Frame key levels are located is a must.

Besides that the 4 hour PB was rather small, it had everything going for it.

If you would have taken it and then Price turns into a Daily bullish PB . . . SWEET ! . . .what great confirmation that the uptrend would continue and adding to the position is a great possibility.

Attached Image(s) (click to enlarge)
Click to Enlarge Name: eurjpy09daily.gif Size: 24 KB
Click to Enlarge Name: eurjpy094hour.gif Size: 25 KB
Indicators show the past. Price Action "Indicates" the future.
  • #60,523
  • Apr 10, 2010 11:18am Apr 10, 2010 11:18am
Quoting ppfx
nice

now like SC said you cant made up any excuses that you havent seen some ppzs
true. i dont think ive ever done that
  • #60,524
  • Edited 10:04pm Apr 10, 2010 11:43am | Edited 10:04pm
Quoting ertorque
Hey Jaroo, SChoas,

For the sake of "correctness", would like to clarify something here about the need to have an IPB's short wick stick out a bit. According to Ghous in his post below, the preferable scenario would be having the wick NOT protruding out from the previous bar.

In his attempt to explain the BEARISH IPB (in an upswing), he says (see bold). This means the wick ie the high of the IPB is prefered not be higher than the previous bar (it could be higher but only if a little higher).
And vice versa for the BULLISH IPB,...

Yeah . . . I saw that.

I think a better definition, and I'm sure ghous would agree, is instead of
" or better still...it fails to make a high any higher than the previous bar's high" . IF the Close fails to make a higher high.

Just like with PBs we want the Open and Close within the previous bar, IPBs need to have this same definition. I'l have to check with ghous for his thoughts.

Here is a case in point.

Nasir.khan was asking ghous if he was "feeling it" with this potential IPB on the Daily Eur/Gbp.

Quoting nasir.khan
Does that feel right Ghous?
.
Locationally it was in good shape but notice that the Close was not within the previous bar. Another potential IPB formed again, but still it closes wrong. Since it was not structurally sound an easy pass would take place.

So my point is that I like the head wick sticking out a bit, but the Open and Close should be within the previous bar. Or that the Close fails to make a new High/Low.
Attached Image (click to enlarge)
Click to Enlarge Name: eurgbp ipb.gif Size: 21 KB
Indicators show the past. Price Action "Indicates" the future.
  • #60,525
  • Apr 10, 2010 11:59am Apr 10, 2010 11:59am
Quoting Chris_B
Thanks Jarroo!!
I know what you are saying...i'm demoing these setups from a while and quite evrytime there is a pullback to the entry point...I was thinking to do what you did...at the first trouble area reduce my stop but leaving the price some pips to breathe for the pullback...I will manage like this for a while...

Cool Chris. Check both ways and see what works for you.

Remember the higher the quality of the setup the better both ways will work. ( isn't that always the case. )
Indicators show the past. Price Action "Indicates" the future.
  • #60,526
  • Apr 10, 2010 12:04pm Apr 10, 2010 12:04pm
Quoting jarroo
Yeah . . . I saw that.

I think a better definition, and I'm sure ghous would agree, is instead of
" or better still...it fails to make a high any higher than the previous bar's high" . IF the Close fails to make a higher high.

Just like with PBs we want the Open and Close within the previous bar, IPBs need to have a this same definition. I'l have to check with ghous for his thoughts.

Here is a case in point.

Nasir.khan was asking ghous if he was "feeling it" with this potential IPB on the Daily Eur/Gbp....
Hey Jarroo, Jon (G J hook @yah)

It's good that you guys are chipping in for what I deem as a 'healthy' discussion on this IPB topic. I agree to all your points and think they are valid.
Thanks everyone.

CY
  • #60,527
  • Apr 10, 2010 12:12pm Apr 10, 2010 12:12pm
Quoting g_j_hook@yah
hi everyone, i thought i would give an unbiased explanation of the IPBs as they are in discussion.

the point i think Jarro was making was the an IPB which DOESNT stick out above the previous bar is by definition an IB, and as IBs can be any shape even an IPB is still also an IB by definition. What makes an IPB different is its shape, which both Jarro and Ghous have already explained. Now an IPB DOESNT have to be inside the previous bar, what is important is its shape as it is that what tells the tale. Wether an IPB what sticks out above the previous...

Absolutely Jon.

Ghous has found a way to manage this formation into a simple low risk, high profit potential Price Action setup. Very definable stop loss placement (which is small) and easy targeted profit point (which is big and could be bigger).

Great work ghous. Or should I say Mr. G.
Indicators show the past. Price Action "Indicates" the future.
  • #60,528
  • Apr 10, 2010 12:34pm Apr 10, 2010 12:34pm
Quoting g_j_hook@yah
just incase your interested the way i do it is to close 2/3 at the first area and leave my stop where i first put it untill price has made a new reaction high/low to hide my stop behind. this way i still get my free trade and maybe some profits and price gets plenty of room to move. i firmly believe that many setups need time and room to develope properly and so you need to give your trades a chance to proove themselves (imo)

jon
Very nice Jon.

What I like about the free trade approach is that it gives that extra development room (as you said) while the worst outcome of the trade is . . . ZERO.

Add some profit, like your approach, makes it even sweeter.

Nice.
Indicators show the past. Price Action "Indicates" the future.
  • #60,529
  • Apr 10, 2010 1:35pm Apr 10, 2010 1:35pm
Quoting skinfx
Hi Jim,

Yes, your explanation of the way u manage your trade really helps and clear alot of my doubt. A very good lesson for me. I have been taught by other school not worth to take a trade if the RRR is less than 1. I am so used to this kind of mindset and whenever i saw a trade with so little gain, i will just pass it. For this case will be ard 80pip SL (enter at 10pip break of PB and SL at top of PB) and 15pip gain. So can i say that you will not consider the RRR when you decide your trade?

Just added: Do you always stick to this "rule"...

No, I don't consider the RR before I make a trade. It is usually after the fact that I look at the RR of a given trade, if I do at all.

My main focus is looking at the Quality of the setup by its Location, Supporting Confluences and the Structure of the Price Action Formation in terms of size, shape, Opens/Close, etc.

I do tend to have tight stop loss placements on a given setup with the 1st target in mind. Many times, once the 1st target is hit the RR on the setup isn't fullfilled yet. So a trader will wait until it is hit.

I look at the setup and when Price hits the 1st target the trade is fullfilled. And protection mode takes place.

Lets take the Eur/Jpy Daily PB I took (and many others did too) on Friday.


Very nice setup. Location is good at a swing low, off of a PPZ level and 61.8 ret and 50%ret. , size not the biggest but good, a bit of traffic mainly the 125.00, which could make or break the setup. Price is behaving as it should, meaning respecting the break and 125.00, etc.


The size of the PB is about 140 pips, the 1st obvious target is the 1st blue line (a Daily PPZ level) which is about 40-45 pips away. Price hits that target easily and then some. So should I wait until the 2nd blue line or more is hit so that my RR is fullfilled to take profit or move my stop loss? I say, no way.

I had 2% in a 50 pip stop loss, which was just below the left eye (purple line). Would I have taken a full loss of 2% . . . No. I would have cut it much soon if Price stop respecting the break and/or started rejecting the 125.00. Probably 20-25 pips or less.

Once Price hit the 1st target I took half off (47 pips) and place the other half just below the break (15 pips below the break not the 125.00).

Free trading over the weekend feels good. Not sure how the RR guy would be feeling since his RR wasn't hit yet.

Jim
Attached Image(s) (click to enlarge)
Click to Enlarge Name: eurjpy09daily.gif Size: 24 KB
Click to Enlarge Name: eurjpy094hour.gif Size: 29 KB
Indicators show the past. Price Action "Indicates" the future.
  • #60,530
  • Apr 10, 2010 1:40pm Apr 10, 2010 1:40pm
Quoting jarroo
No, I don't consider the RR before I make a trade. It is usually after the fact that I look at the RR of a given trade, if I do at all.

My main focus is looking at the Quality of the setup by its Location, Supporting Confluences and the Structure of the Price Action Formation in terms of size, shape, Opens/Close,...
I think it is more cause for concern b/c it is some of the first things we read about trading, and it is true to a certain degree. You must win on avg more then you loss(r wise to be profitable). Same goes when people starting talking about pips, and pips are meaningless without the context they are in.

I wrote this friday and since the topic has come up(again )

QUOTE=mbqb11;57305] A: This is one of the biggest myths of trading. That is you always hear "Make sure you get 2r(that is 2 times) whatever your risk is. Or 4r or some random number. The short answer is this is NOT true. Do many traders do this? Yes they do and that is FINE, but it is not something you must do. One must know ALL the numbers to know the true story of the trader. You could gain .5r and win 85% of the time and be VERY VERY well profitable.

Many traders do NOT know their Risk:Reward going into a trade. This is completely fine as that one trade is meaningless. It is all your trades combined that make you up as a trader. Of course when you eventually run your numbers you will get an avg win %, and an avg Rmultiple(that is how much you avg win per trade). Those are the numbers that count. But, when I go into a trade I don't always have a set take profit for example so I might come out with 2 times my risk, or I might come out with .25r my risk.

This is a very common cause for concern for many, but it is very possible to be a winning trader with a 90% win rate and very small wins(way under 1R) and it is also possible to be a losing trader with a 90% winrate(if your losses are on avg bigger then your avg wins). It is also possible to be a 20% winrate trader and be profitable and vice versa.

The summary is that don't always believe what you read when you hear people say you MUST gain more then you risk. This isn't true. Also remember just b/c your initial risk might be 1% and you have a target of a certain amount, doesn't mean it has to be all or none. You can eliminate risk on a trade as you move along too. So losses don't have to be full amounts as well. Trading gives you the ability to be very flexible and find what works for YOU.

Mike[/quote]


off to enjoy the rest of the weekend hope you all do as well

Mike
  • #60,531
  • Apr 10, 2010 1:55pm Apr 10, 2010 1:55pm
Quoting mbqb11
I think it is more cause for concern b/c it is some of the first things we read about trading, and it is true to a certain degree. You must win on avg more then you loss(r wise to be profitable). Same goes when people starting talking about pips, and pips are meaningless without the context they are in.

I wrote this friday and since the topic has come up(again )

QUOTE=mbqb11;57305][b] A: This is one of the biggest myths of trading. That is you always hear "Make sure you get 2r(that is 2 times) whatever your risk is. Or 4r or some random...



Thanks Mike.

I know you have talked about this many times through out the thread and everyone should read your posts on this topic (If you haven't read all of Mike's post already).

The key point is that trades can be flexible or can be managed in a way that best fits an individual trader's risk tolerance or style.

Jim
Indicators show the past. Price Action "Indicates" the future.
  • #60,532
  • Apr 10, 2010 2:19pm Apr 10, 2010 2:19pm
Quite a few pairs friday behaved in line with the pin bar strategy HOWEVER USDJPY retraced back to the H4 trendline


PB Pros: Swing low ?
Off BRN 93.00
No confluence or traffic on left

Does this makes sense to take a long trade from this point ?
Attached Image(s) (click to enlarge)
Click to Enlarge Name: Daily -USDJPY-04-10-2010.gif Size: 35 KB
Click to Enlarge Name: h4 -USDJPY-04-10-2010.gif Size: 37 KB
  • #60,533
  • Apr 10, 2010 3:43pm Apr 10, 2010 3:43pm
Quoting jarroo
That 4 hour Eur/Jpy is absolutely tradable at the break. Easy to say that, after it flew to the moon. lol

The Location had a great confluence, 124.00 RN, Swing Low, 61.8 ret at a PPZ level on higher time frames. Key words here: Higher Time Frames .

When venturing down to the 4 hour time frame, knowing where these Higher Time Frame key levels are located is a must.

Besides that the 4 hour PB was rather small, it had everything going for it.

If you would have taken it and then Price turns into a Daily bullish PB . . . SWEET...
Thanks again Jaroo - great advice and nice to know that I starting to get on the right track!

Best wishes

J
  • #60,534
  • Apr 10, 2010 4:09pm Apr 10, 2010 4:09pm
I just love this guy with his deep stuff, not for trading particularly, but very helpful for me at least. Just wanted to share

http://www.themanifest-station.com/i...FQiRZgod1xM-aQ
  • #60,535
  • Apr 10, 2010 4:31pm Apr 10, 2010 4:31pm
Jarroo, is this a good hang man?
Attached Image
Many choose unhappiness over uncertainty.
  • #60,536
  • Apr 10, 2010 6:04pm Apr 10, 2010 6:04pm
I would appreciate if seniors comment on the pinbar formed at Weekly EURCAD at BRN 1.3500 in line with lows of October 2007. This 1.3500 was also held at 4 hour chart.
Attached Image(s) (click to enlarge)
Click to Enlarge Name: eurcad-weekly.gif Size: 18 KB
Click to Enlarge Name: eurcad-4hour.gif Size: 14 KB
  • #60,537
  • Apr 10, 2010 10:22pm Apr 10, 2010 10:22pm
Quoting Dan Gilbert
Jarroo, is this a good hang man?
Yes that does look good as a bearish IPB.

The Close could be closer to the top but still it fits.

With all of Price Action formations, location and confluence is the most important factor. The 145.00 is a Big Round Number and a key level. I would like to see Price touch or piercing that 145.00. Let me put it this way, if the IPB's head was sitting on top of that 145.00 it would look a whole lot better. Price may not be done with that 145.00 just yet.
Attached Image (click to enlarge)
Click to Enlarge Name: gjweeklyipb.gif Size: 25 KB
Indicators show the past. Price Action "Indicates" the future.
  • #60,538
  • Apr 10, 2010 10:57pm Apr 10, 2010 10:57pm
IPB? what does it stand for?

Inverted Pin Bar ?


''''I''',,,,
  • #60,539
  • Apr 10, 2010 10:58pm Apr 10, 2010 10:58pm
Quoting 4X=0
IPB? what does it stand for?

Inverted Pin Bar ?


''''I''',,,,

Yes, that's correct.
Indicators show the past. Price Action "Indicates" the future.
  • #60,540
  • Apr 10, 2010 11:00pm Apr 10, 2010 11:00pm
Quoting jarroo
The same with the Nzd/ Chf. They may look like an IPB, but they are Inside Bars by any definition. Many IBs look like a PB, IPB or a doji or whatever.

A structurely sound IPB needs to have a long nose like a PB but the head needs to have its wick stick out a bit above/below the previous bar. Preferably sticking into a strong confluenced area or strong PPZ level, of course....
Thanks Jim.
I believe . . .
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