Inserted Video
sounds great!
james16 Chart Thread
- #62,223
- Edited 8:59pm Apr 28, 2010 8:28pm | Edited 8:59pm
People talk of 50% per year with J16... you can kill that number with stocks just following the general market bias!!
In fact, I would be suprised if you could name a single person who does that consistently with any kind of real account (ie, not 'I risked my $100 account on a penny stock and doubled it this one time').
To be completely honest, 'follow the market bias' sounds alot like some Covell 'follow the trend lol' cliche. Some other killer rules that are guaranteed to make you tons of money are 'cut your losses, let your winners run' and 'buy low, sell high'
Anyone claiming that equity trading is somehow easier that the PA techniques taught here is deluded, at best. A forex trade might take me five minutes to find, analyse, record and enter. An equity position takes more like five hours. Often (usually
)longer.*edit* sector rotation, in itself, is nothing new or 'secret'. And it most certainly wont get you 50%+ pa returns. Hell, even a long/short rotation wont come close to that.
I think it's important to remember that trading traditional daily J16 grows ALREADY-LARGE accounts - most people come on here with their $250 mini FX account and want to be rich. Unless you are rich enough to have $1000's to trade with and you are young enough to have at least 10 good trading years in you then this PA trading probably aint for you.
For reference, her $500 account is now around $4k so far in 3 months, with a RoR well under 1%.
People who say you cant grow an account using the stuff in this thread either havent tried, dont have the necessary tools, or just gave up when they didnt get an Aston Martin after a week of 'trading' the M5 charts .
Using daily PA is a very painful way to trade. If you see a half decent pin which has at least the same distance to go until its FTA as it has to the stoploss (in other words 1:1 risk reward) then that's probably all you will get from this method. Take it, hope and move to BE asap. Everyone around here seems to hate the idea of risk reward but the maths cannot be denied: you make $1 x 3 good Pins then lose $3 on one bad one.... well, do the math.
I dont think anyone is really denying risk:reward - it just isnt a great tool for anything but a coinflip system (or a bookselling system...)
The reason it is 'painful' is that you are blindly following rules (you always need 1:1 r:R!@#) without thinking about why. And so you miss a ton of profitable trades. If you had a setup that worked 75% of the time, you would be a chump to only take it if it offered you 1:1.
Money management is a hugely misunderstood area of trading. The amount of misinterpretation and platitude floating around is amazing. I could hazard a couple of guesses at why.. but given I havent got around to writing my 'how to do the tradings money!' book, I cant throw stones
I know Jim, Mike and all mean well and there is obviously some good in this PA daily chart trading for them, but a warning to newbies and anyone else you will not get an easy ride with PA trading and your account will grow painfully.
If you risk 3% on a low frame, you could make 20% per month most months using J16 PPZs and decent pins with a GOOD RISK REWARD RATIO. But it is a gamble, be quick on those fingers
The only difference is that you get a larger number of potential signals.
When you have to shoot, shoot. Dont talk.
- #62,224
- Apr 28, 2010 8:42pm Apr 28, 2010 8:42pm
- | Commercial User | Joined Aug 2006 | 12,004 Posts
The only way you are even possibly getting an ROI in that range is by using a ridiculous amount of leverage and dicey position sizing that veers right into the heart of RoR territory. In which case, ROI is meaningless - it is ROE which actually tracks the returns from your strategy, and they are going to be alot less impressive.
In fact, I would be suprised if you could name a single person who does that consistently with any kind of real account (ie, not I risked my $100 account on a penny stock and doubled it this one time).
To be completely...
- #62,225
- Apr 28, 2010 9:07pm Apr 28, 2010 9:07pm
I am so behind the times. Today is the first time I have ever seen Charlie Bit Me. 183m people beat me to it, somehow. Learn something new and useful every day here
Getting rich quickly isnt as hard as people think - you just need to sign up for my ski mask, shotgun and getaway car system! Only 4 payments of $99.95*!
*may carry residual cost of 25 to life.
Easy and quick money is the biggest illusion in this world in any industry.
*may carry residual cost of 25 to life.
When you have to shoot, shoot. Dont talk.
- #62,227
- Apr 28, 2010 9:48pm Apr 28, 2010 9:48pm
I'm looking for a possible retracement towards 1.3500 as both previous divergences hit more than 300 pips. Price is now at the bottom of a channel resting on some supports with brn, fib and monthly pivot.
However, a closer look down to the H4 shows us a weak I4B/PB prior to the next I4B. Price has broke the long term bearish TL on Apr 12 but it fell immediately after.
If today's bar doesn't break yesterday's high and doesn't make a new low, IB will be formed, showing some stacked possibilities of the price going north, but then I still think it's a CT trade because EU is currently long term bearish.
Any thoughts?
However, a closer look down to the H4 shows us a weak I4B/PB prior to the next I4B. Price has broke the long term bearish TL on Apr 12 but it fell immediately after.
If today's bar doesn't break yesterday's high and doesn't make a new low, IB will be formed, showing some stacked possibilities of the price going north, but then I still think it's a CT trade because EU is currently long term bearish.
Any thoughts?
- #62,228
- Apr 28, 2010 9:56pm Apr 28, 2010 9:56pm
- Joined Sep 2005 | Status: J16 Senior Member | 13,635 Posts
So much for tightening stops too early ... out at BE and then this
I hear ya pmr. I know the feeling all to well. lol
I want to show a couple examples of how the free trade approach, when applied to the J16 PA, can alleviate some of those anxiety looking smiley faces.
Now I understand it cuts down the profit by half and all of that. But I will tell you, it cuts the stress level by 100%, especailly in the beginning of learning the J16 way. Over time, this approach can be dropped as you gain confidence on your selections of A+ trades. Or not drop it, like I do.
The free trade, at its basic level, is reducing your risk while still allowing your trade room to run.
Let's take your Euro 4 hour PB trade pmr. (Sorry pipmyride, I'm not picking on you brother, just thought I would use your post as an example.)
Your intial stop loss placement could be above the PB and/or above the 1.3400. But once that FTA is hit you take half off and move the other that pip distance away from you entry. Done.
Indicators show the past. Price Action "Indicates" the future.
- #62,229
- Edited 11:26pm Apr 28, 2010 10:12pm | Edited 11:26pm
- Joined Sep 2005 | Status: J16 Senior Member | 13,635 Posts
I hear ya pmr. I know the feeling all to well. lol
I want to show a couple examples of how the free trade approach, when applied to the J16 PA, can alleviate some of those anxiety looking smiley faces.
Now I understand it cuts down the profit by half and all of that. But I will tell you, it cuts the stress level by 100%, especailly in the beginning of learning the J16 way. Over time, this approach can be dropped as you gain confidence on your selections of A+ trades. Or not drop it, like I do.
The free trade, at its basic level, is...
Other example, Daily Aud/Usd PB.
Nice size PB with the trend, but not at the best location . . . Bullish PB at a swing low is what we look for and this one is at a swing high.
But let's apply the free trade and see what happens . . the up trend could continue.
Same as before, the 93.00 is a good obvious FTA about 20 pips away. Price hits it and the free trade is applied. Charts
We are then stoppped out for a net zero loss. It sure is easier (dare I say fun) to watch your trade once the free trade is applied, knowing that the worst your going to do is NOT LOSE.
Indicators show the past. Price Action "Indicates" the future.
- #62,230
- Edited 10:28pm Apr 28, 2010 10:15pm | Edited 10:28pm
I noticed that some of you guys seem to only try to catch 1 bar whenever going into a trade, or was I wrong? So nobody really rides the profit or there's just too little to risk to reap the rewards (chicken out)?
Everyone uses a different approach, but it generally falls under either
a) take profit at first trouble area. Low return, high probability, low variance.
b) move stop to b/e at first trouble area. Lower probability of a non-zero return, but higher potential rewards and higher variance
... or a combination thereof. Stuff like partial TP, dual stop trails, net zero risk positioning, etc.
The reason you see these approaches dominate something like 'take setup, leave stop where it is until we get exit signal or stopped out' is because there are areas where there is a high probability of a reversal, or at least a stalling in momentum... and once we recognise those, it is prudent to take some kind of action to reduce our risk. Leaving your stop at full risk and doing nothing about it in the 'hope' that the 'breathing room' will give you a runner when there are signs saying otherwise is a pretty poor decision, imho. It's just a variation on the old amatuer trap of 'i dont want to close my position for a loss, it has to come back!'.
That's probably the most important thing I have learned from this thread (aside from 'Dont Mess With Texas') - dont just sit there and take a full bar loss like a chump when you know that there is a good chance that if price hits a certain area, the momentum can easily to reverse and stop you out.
Jim's videos on 'where is price going? where did it do?' really were an eye opener. Such a simple, obvious idea... that I didnt even think about, along with most other people
It's also why something like r:R is largely useless - it might have *some* relevance when you are just taking an entry and covering your eyes and ears (ie, a binary approach - you hit your TP, or you get stopped out), but its an unsophisticated metric when you are dealing with a range of possible outcomes.
wrt ATR stops and trails, again - a variety of approaches, but I know these are both heavily used when we let a trade run. I tailor my stop approach to each particular trade (based on the instrument/pair and the outcome I am targeting), but ATR (well, something that works on a similar principal) is definitely part of the arsenal.
I guess, like everything, you can make trade management as complicated or as simple as you want. Some people are happy with a '1st trouble area, stop to b/e' approach. Some people want a dozen approaches. Neither is right or wrong - the only real mistake is having no plan at all. Or listening to Lady Gaga.
When you have to shoot, shoot. Dont talk.
- #62,231
- Apr 28, 2010 10:17pm Apr 28, 2010 10:17pm
I'm looking for a possible retracement towards 1.3500 as both previous divergences hit more than 300 pips. Price is now at the bottom of a channel resting on some supports with brn, fib and monthly pivot.
Attachment
However, a closer look down to the H4 shows us a weak I4B/PB prior to the next I4B. Price has broke the long term bearish TL on Apr 12 but it fell immediately after.
Attachment
If today's bar doesn't break yesterday's high and doesn't make a new low, IB will be formed, showing some stacked possibilities...
Let's see how things go............
CY
- #62,232
- Apr 28, 2010 10:18pm Apr 28, 2010 10:18pm
- | Joined Jan 2009 | Status: Trader | 1,067 Posts
You are right Jaroo - management of these things is paramount to success, and this is something i am still fine-tuning - thx for the refresher
- #62,233
- Apr 28, 2010 10:21pm Apr 28, 2010 10:21pm
- Joined Sep 2005 | Status: J16 Senior Member | 13,635 Posts
excellent post as always Joel
Indicators show the past. Price Action "Indicates" the future.
- #62,234
- Edited 10:40pm Apr 28, 2010 10:28pm | Edited 10:40pm
- Joined Sep 2005 | Status: J16 Senior Member | 13,635 Posts
You are right Jaroo - management of these things is paramount to success, and this is something i am still fine-tuning - thx for the refresher
If you do apply a free trade, just be prepared that when your stopped out at net zero loss . . . it then takes off in your direction.
This will happen too. But it does resovle the occurrence that many "A" quality setups tend to retrace to the break or retest the break. This I found this is eliminated with the free trade.
Indicators show the past. Price Action "Indicates" the future.
- #62,236
- Edited 10:47pm Apr 28, 2010 10:30pm | Edited 10:47pm
could I be your friend? I would love to have that kind of success. Been demoing this method for 2 months now and at just below break even.
*either in writing, or in Mike/Jim/Jim/etcs heads. Fortunately, they share that
When you have to shoot, shoot. Dont talk.
- #62,237
- Apr 28, 2010 10:35pm Apr 28, 2010 10:35pm
- Joined Sep 2005 | Status: J16 Senior Member | 13,635 Posts
Not really.
Everyone uses a different approach, but it generally falls under either
a) take profit at first trouble area. Low return, high probability, low variance.
b) move stop to b/e at first trouble area. Lower probability of a non-zero return, but higher potential rewards and higher variance
... or a combination thereof. Stuff like partial TP, dual stop trails, net zero risk positioning, etc.
The reason you see these approaches dominate something like 'take setup, leave stop where it is until we get exit signal or stopped out' is...
Indicators show the past. Price Action "Indicates" the future.
- #62,238
- Apr 28, 2010 10:46pm Apr 28, 2010 10:46pm
Good timing with my free trade posts because this post fits it perfectly.
*edit* 500 posts!
When you have to shoot, shoot. Dont talk.
- #62,240
- Apr 28, 2010 11:00pm Apr 28, 2010 11:00pm
- Joined Sep 2005 | Status: J16 Senior Member | 13,635 Posts
lol, if I ever do write a book, I'm gonna owe you royalties on the section entitled 'Why the free trade (and Jaroo) is smarter than you'.
*edit* 500 posts!
If the next 500 posts are anything like the last 500 . . . man . . it'll be great.
Indicators show the past. Price Action "Indicates" the future.