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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

  • #61,121
  • Apr 18, 2010 10:15am Apr 18, 2010 10:15am
Quoting Pinnocchio_S
Is this an example of your trend trading? Would you mind sharing how you trade manage these? i.e. how tight do you place your stops etc.etc.

What kind of %wins do you get trading this system, & do you trade like this on your active account. I assume that you don't necessarily wait for PA when adopting this system.

Thanks in advance,


Stef
Nasir, go ahead and post your account statement too! (jk). If you search his posts, you can basically find all of the answers, as they are all questions I've already asked him
  • #61,122
  • Apr 18, 2010 10:15am Apr 18, 2010 10:15am
Quoting trade price
Hello everyone.
i am not a...
Very nice clean chart Sho thanks for sharing. It is all about understanding these supply/demand levels timing your entries and then mgmt of your trades. Good stuff

Mike
  • #61,123
  • Apr 18, 2010 10:17am Apr 18, 2010 10:17am
Quoting g_j_hook@yah
heres a q. that keeps coming back to me...
why does price almost always retest the res/sup it just broke through???we see it all the time but i never really understood it???is it simply the other side trying to get control again but meeting with heavy buying/selling at the same price range as before?? and if so why? didnt all the significant orders get triggered the first time????
hope i can catch up on some interesting posts later this eve???

cheers

jon
G'day Jon.

You've forgotten about the people who held on to a losing position way into bad territory and just want to get out at break even when/if it returns.

There are also those who don't believe it will go very far, so you see the first round of profit taking from those traders pull the price back to the line again where the winning team is now sitting and waiting to collect more at a bargain price.

And then there's the options traders needing to cover their asses etc.

As well as the psychological...
"Woah! ....she finally broke through $50.00 after failing to do so for 4 months straight! She's going up!!" "Damn... If she get's back down to $50.00 I'm getting me some of that action too!!"

There's plenty of weight to why it happens.

There are excellent articles/books on this somewhere. Mike or someone could rattle off a book title for you , I'm sure. ...been way too long since I read them. lol

Maybe Joel has a post somewhere too. He's good with these ones.
Bundy's status today: "Waiting..."
  • #61,124
  • Apr 18, 2010 10:21am Apr 18, 2010 10:21am
Quoting mbqb11
Hey NewinTown

My recommendation is to stick to this thread for at least a few months, hang out here keep working your way through. There is a ton here to absorb and it is worth it. Keep that demo account going and learn learn learn

Oh yeah ask questions as you work your way through too!

Best
Mike
Thanks man!
Also i was wondering.. I'm looking for a broker at the moment that i can atually open a demo account and follow later on with a real one.. since there are so many brokers and types.. I was thinking of learning on an ECN.. which one would be recommened.. I know there is a thread regarding brokers in another section but who best to ask but the people on one of the best threads..
Thanks!
  • #61,125
  • Apr 18, 2010 10:24am Apr 18, 2010 10:24am
Thanks for that Jlr, didn't realise he answered these questions as they relate specifically to his trend trading method!

P.S Are you a professional football player (just checked out your profile)


Quoting Jlr
Nasir, go ahead and post your account statement too! (jk). If you search his posts, you can basically find all of the answers, as they are all questions I've already asked him
  • #61,126
  • Apr 18, 2010 10:34am Apr 18, 2010 10:34am
Quoting Pinnocchio_S
Thanks for that Jlr, didn't realise he answered these questions as they relate specifically to his trend trading method!

P.S Are you a professional football player (just checked out your profile)
Haha no, just a fan. Thats Aaron Rodgers by the way, future hall of famer/legend
  • #61,127
  • Apr 18, 2010 10:34am Apr 18, 2010 10:34am
Hello all!
I've been trying to figure out what platform/software allows you to perform the "free-hand" drawings that Mike is accomplishing on this video.
http://drop.io/mcch98g

Any help from, Mike or rest of the group would be appreciated.

Thanks in advance!

Sincerely,

Illuminé
  • #61,128
  • Apr 18, 2010 10:45am Apr 18, 2010 10:45am
Quoting kk007
A number of factors are into consideration, pinbar length, the troubleness of the position, traffic, trendline, etc when evaluating position. I haven't found any problem with these factors. Here, I have singled out swing high/low to critise.

cheers,

kk
Hi kk,

Just so you know, the use of "Swing High" "Swing Low" terms are mainly used in here to stop a newcomer from taking a Bearish signal at a support/Low trade level or a Bullish signal at a resistance/High trade level. To stop them from taking them backwards, in other words.

I know it sounds silly, but you have to look at it from the point of view of someone who may have never even looked at a bar/candle chart before. Or who hasn't been at it very long anyway.

We deal with it all the time here and it gets the point accross very well when someone who is green identifies a signal backwards. They understand the point.

From there it's a matter of getting them to trade at good locations on the charts as well, and to get them away from trying pick bottoms and tops when any old signal comes up. Or stopping them from trying to be fortune tellers, as you say.
Bundy's status today: "Waiting..."
  • #61,129
  • Apr 18, 2010 10:47am Apr 18, 2010 10:47am
Quoting Illuminé
Hello all!
I've been trying to figure out what platform/software allows you to perform the "free-hand" drawings that Mike is accomplishing on this video.
http://drop.io/mcch98g

Any help from, Mike or rest of the group would be appreciated.

Thanks in advance!

Sincerely,

Illuminé

Hey Illumine

I use camtasia screen recorder and it is part of the video recorder software. They have a picture program called snag it that is free that has similar tools that you might want to use.

Best
Mike
  • #61,130
  • Apr 18, 2010 1:12pm Apr 18, 2010 1:12pm
Okay, if someone please could have a look at the charts of a trade I took on forex tester.

4 DEC 2002 G/U on Daily

+ Off a 1.57RN acting as a support and res in the past
+ The pin bounces off 61.8 FIB level of the recent swing low

- Not the greatest size pin, but I thought the confluence would make up for that
- Closed 5 pips above 1.57

I set my order 10 pips below the pin and my stop loss was 10 pips above the high of the pin.

http://img215.imageshack.us/img215/97/gufirst.jpg

Well, and I got stopped out.

http://img29.imageshack.us/img29/672/gu2hp.jpg
  • #61,131
  • Apr 18, 2010 2:24pm Apr 18, 2010 2:24pm
Quoting bundyraider
G'day Jon. ...
thanx Bundy, i just couldnt accept that it was jus as straight forward as that. i kept thinking through these types of ideas but allways thought there was something i was missing!!? One of the hardest things i had to overcome in my trading venture was to realise that even the big players are jus guys like me n you, even less trained and experienced! you seem to think of the market movers as some kind of invinsible force mega smart with a ton of tricks...lol they just a daft as me when it comes down to it! lol

good trading

jon
PATIENCE... DISCIPLINE
  • #61,132
  • Apr 18, 2010 2:56pm Apr 18, 2010 2:56pm
Quoting Mauzzz
Okay, if someone please could have a look at the charts of a trade I took on forex tester.

4 DEC 2002 G/U on Daily

+ Off a 1.57RN acting as a support and res in the past
+ The pin bounces off 61.8 FIB level of the recent swing low

- Not the greatest size pin, but I thought the confluence would make up for that
- Closed 5 pips above 1.57

I set my order 10 pips below the pin and my stop loss was 10 pips above the high of the pin.



Well, and I got stopped out.
Hey Andrew

Your two major keys are firstly and most important size. Size DOES matter. This one is just simply to small to consider IMO and then the fact the it could not close below 1.57 would be a major sign of weakness. My last thing to also say in general is 10 pips below the low is rather close IMO for the daily. Some people use 10 but I think you want to be more near 15-20. Especially with the fact that if its 10 pips below the low your now trading into the round number and it is very common for buyers to come in under the round numbers(or that is at least where the order flow can sit). Again bar size here can sum this whole trade up though.

Hope that helps
mike
  • #61,133
  • Apr 18, 2010 3:09pm Apr 18, 2010 3:09pm
Hi,

Is there anything about why the PA set ups work or what is physically happening?
Eg what is the physical significance of a DBLHC. Why is it important that the low of the two bars are at the same level? If the second bar is lower than the first it becomes a bullish outside bar which is just as important? What if the second bar's low is slightly higher than the first bar's low? Why is this not considered good? Does it not mean the sellers couldnt drive the price down and so the uptrend is likely to continue?

Thanks!
  • #61,134
  • Apr 18, 2010 3:21pm Apr 18, 2010 3:21pm
Quoting Scotty2Cues
Hi,

Is there anything about why the PA set ups work or what is physically happening?
Eg what is the physical significance of a DBLHC. Why is it important that the low of the two bars are at the same level? If the second bar is lower than the first it becomes a bullish outside bar which is just as important? What if the second bar's low is slightly higher than the first bar's low? Why is this not considered good? Does it not mean the sellers couldnt drive the price down and so the uptrend is likely to continue?

Thanks!
Hey Scotty

It can be any actual reason in terms of who is selling who is buying. But in terms of the bar formations by themselves(again the most important is where they are also the whole story combined). But if you think about a BEOB for example price runs up and at some point during the day goes ABOVE the previous days bar(testing the orderflow there), it also at some point goes below the low of the previous days bar testing what is there. Now from an orderflow and trading standpoint previous highs and lows are where orders(of all kinds exist),now after the bar does that and is able to close near the bottom portion it simply is showing where the short term strength is. Now we combine this with location, size of bar and all the other confluence components and we can start to build cases for and against bars and then we move into trade mgmt mode(which is sort of doing it in reverse where is price going etc). So the bars represent nothing more then price fluctuations during the day. DBHLC for example if price goes back to the same previous high and finds that exact point there is still supply(it could be one huge order that just keeps filling itself everytime price hits the same point), and the eventaully the bulls give up and price closes all the way below the prior low. Again it all is about showing where the pressure is. The bars themselves are not magic, once you are able to combine the bars as just a part of the overall story you are real close.

Hope that helps
Mike
  • #61,135
  • Apr 18, 2010 3:51pm Apr 18, 2010 3:51pm
Thanks mike! just trying to figure out the dynamics btween the buyers/sellers

Quoting mbqb11
DBHLC for example if price goes back to the same previous high and finds that exact point there is still supply(it could be one huge order that just keeps filling itself everytime price hits the same point), and the eventaully the bulls give up and price closes all the way below the prior low. Again it all is about showing where the pressure is. The bars themselves are not magic, once you are able to combine the bars as just a part of the overall story you are real close.

Hope that helps
Mike
Say we have a strong downtrend and a DBHLC forms on a 50% fib retracement. Other indications suggest the downtrend is likely to continue. If the second bar high is 1/3 of the way from the first bar high, you saying its less likely that the bulls will give up than if they had pushed the price to match the previous high?

So its incorrect to assume that there was never enough interest in buying to even match the previous high and so the downtrend will continue.
  • #61,136
  • Apr 18, 2010 3:56pm Apr 18, 2010 3:56pm
Quoting mbqb11
Hey Andrew

Your two major keys are firstly and most important size. Size DOES matter. This one is just simply to small to consider IMO and then the fact the it could not close below 1.57 would be a major sign of weakness. My last thing to also say in general is 10 pips below the low is rather close IMO for the daily. Some people use 10 but I think you want to be more near 15-20. Especially with the fact that if its 10 pips below the low your now trading into the round number and it is very common for buyers to come in under the round numbers(or...
Thanks for the explanation, Mike. The thing is, when I look at a random chart, there seems to be a ton of small pins just like the one I took which actually work out fairly decently due to the location they're at. I remember someone mentioning that location is what's most important and the bars themselves are only our "excuse" to get into a trade at a good location?

But if
Quoting mbqb11
Size DOES matter.
Then I should have consulted my girlfriend prior to taking the trade, LOL.


P.S. I'm not trying to be disrespectful of what you say (after all, you're the one with 8 years of experience here), I'm just asking those questions to be able to put the pieces of the puzzle together.


Quoting mbqb11
hope that helps
Your posts always do.
  • #61,137
  • Apr 18, 2010 4:13pm Apr 18, 2010 4:13pm
Quoting Mauzzz
Thanks for the explanation, Mike. The thing is, when I look at a random chart, there seems to be a ton of small pins just like the one I took which actually work out fairly decently due to the location they're at. I remember someone mentioning that location is what's most important and the bars themselves are only our "excuse" to get into a trade at a good location?

But if

Then I should have consulted my girlfriend prior to taking the trade, LOL.


P.S. I'm not trying to be disrespectful of what you say (after all, you're the one with 8...
Hey Andrew

You are correct we can trade a variety of types of bars and still get away with it. But the smaller the bar and poorer the location then we MUST always understand where price is likely to go and work from there. With a bar of this size FTA is close and especially trading into that round number. SO what many do with these bars if they believe their location is good is watch how price acts at the first trouble area. You don't have to take a full loss often when you understand these trouble areas, you can move your stop down, take some off the table, close for b/e etc. This is where managing becomes everything. So when price hits that high and stalls out when can very well suspect the strength isn't there and cut out for worst a very small loss. So location is important from BOTH sides entry and exit. And IMO if you can't play the big bars the small bars will eat most people up especially in the beginning. It is a learning process and takes time.

Hope this helps
Mike
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  • #61,138
  • Apr 18, 2010 4:17pm Apr 18, 2010 4:17pm
Quoting Scotty2Cues
Thanks mike! just trying to figure out the dynamics btween the buyers/sellers



Say we have a strong downtrend and a DBHLC forms on a 50% fib retracement. Other indications suggest the downtrend is likely to continue. If the second bar high is 1/3 of the way from the first bar high, you saying its less likely that the bulls will give up than if they had pushed the price to match the previous high?

So its incorrect to assume that there was never enough interest in buying to even match the previous high and so the downtrend will continue.
Hey Scotty

I couldn't really give you a 100% answer, since it isn't cut in dry. What waiting for the bar shapes to be what they are after you start to visually see these things over and over you can begin to decipher stronger selling/buying from weaker buying/selling. When these "areas" that formally acted as strong support and resistance are tested again we can see how price reacts and thus formulate a better plan around this. THe best way to explain it is that price does have a memory to a certain extent and this is how us techies can get away with it.

Let me know if that makes sense. Again if you notice that you are comfortable trading bars outside what James teaches by all means explore that, that is part of the process. Again its all about pieces, the bars are 1 piece to the larger puzzle. Abstractly we can speak about it as I did in my previous post but ultimately that is a very small portion to my overall thinking when deciding to enter or exit a trade.

Best
Mike
  • #61,139
  • Apr 18, 2010 4:31pm Apr 18, 2010 4:31pm
Quoting mbqb11
Hey Scotty

I couldn't really give you a 100% answer, since it isn't cut in dry. What waiting for the bar shapes to be what they are after you start to visually see these things over and over you can begin to decipher stronger selling/buying from weaker buying/selling. When these "areas" that formally acted as strong support and resistance are tested again we can see how price reacts and thus formulate a better plan around this. THe best way to explain it is that price does have a memory to a certain extent and this is how us techies can get...
Makes alot of sense and cleared some things up for me.
Dont think I will be trading bars outside of what James teaches for a long time (only just made my second demo trade). When reading through the beginnings of the thread I wanted to know why he looked for the setups he did, why he wanted zero pip difference with mathching lows etc but you cleared it up.

Any chance you could take a look at page 4070, posts 61037 and post 61039 (the second post makes a comment about you never taking partial profit)

Will try not to bug you for a while

Thanks again
  • #61,140
  • Apr 18, 2010 4:40pm Apr 18, 2010 4:40pm
Quoting Scotty2Cues
Makes alot of sense and cleared some things up for me.
Dont think I will be trading bars outside of what James teaches for a long time (only just made my second demo trade). When reading through the beginnings of the thread I wanted to know why he looked for the setups he did, why he wanted zero pip difference with mathching lows etc but you cleared it up.

Any chance you could take a look at page 4070, posts 61037 and post 61039 (the second post makes a comment about you never taking partial profit)

Will try not to bug you for a while

Thanks...
Hey Scotty

It is no bother brother!

I do not take partial profits as I don't believe in it really. Reason being I used to and was profitable, then I decided to go back all my old trades and if I simply took Full profit at the first area I was taking half off i would have done better with that alone. This really was eye opening for me that I may have been over complicating(which I felt I was) and from that day forward it was all or none. Too me it simplified things even more so and it is what makes sense. You certainly can do it both or many ways here so I am not hard pressed on it and thus don't bring it up too often.

Best
Mike
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