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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

  • #62,361
  • Apr 29, 2010 3:23pm Apr 29, 2010 3:23pm
RPA 2010 soccer mundial. I wonder how much money will be converted to RPA rand currency . Breakout to the downside could be very interesting and look how volatile are those selloffs.

Cheers
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  • #62,362
  • Edited 5:21pm Apr 29, 2010 3:52pm | Edited 5:21pm
Quoting skinfx
enter demo this pair on break of BEOB. Not the highest bar on swing high location. But what i see is it is trading away from PPZ. and my FTA is at 1.64. so still got some room for it to move. any comments are welcome.... thanks alot...

rdgs,
skin
Quoting jarroo
Nice one skin. Good target.

Don't think that the other BEOB (4.23) isn't in play here . . it is.

Nice trade.
Man . . I'll tell you skin . . it seems right when I posted the post above . . Price shot straight up to the moon. The 1.64 was a reasonable expectation for this setup. Virtually no traffic except for that previous High (green line). No testing of the break and a little hesitation at the 1.65 (as we would expect) then to the moon Alice.

It is, what it is (never cared for that expression) but its true. There was a target. A previous bar High.

What does it tell me? That the up trend is very strong. If a high quality setup, which I categorize this one to be, can't even cut through a reasonble FTA or hits its FTA and breaks hard the other way . . . something going on. Meaning in this case, the uptrend is strong.
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Indicators show the past. Price Action "Indicates" the future.
  • #62,363
  • Apr 29, 2010 4:25pm Apr 29, 2010 4:25pm
Quoting jspeakman
Hi

Just wondered how rigid you might be on the free trade approach or do you allow some discretion to tuck your SL behind a BRN/PPZ if it might cost 5-10pips if price retraced. Sort of taking Joel's point about not necessarily advisable always to stick to rigid r:r ratios. Hope that make sense!

J
Quoting joelcf
I'm a big fan on basing your stops on PA. Makes sense to me that if you are going to enter on PA, you can use it to give you an idea of what price might do after you enter. If there is a big PPZ sitting on a BRN, my short entry is always
going to be under it, so I see no reason not to put my stop behind it too - usually around ten pips. Be interested to hear J's thoughts.

Then again, I'm also a big fan of Cherry Coke Zero and McDonalds animal cookies, so feel free to disregard
I would say I'm pretty rigid but I understand yours and Joel's point.

Referring back to the Aud/Usd Daily PB.

If that green line (Daily PPZ) was the .9000 instead of the 0.9252 I might move my -20 pip S/L to under the .9000 (about 10-15 pips under as Joel said) and except the loss if it happens.

But remember the confirmations that I'm looking for when the setup breaks. (blue lines)

Price breaks and never looks back, Price breaks the FTA and retests it, then to the moon and/or Price retest the break of the setup and then to the moon.

If Price does none of this after the break . . I'm out for a net zero loss. Will Price retrace deeper into the setup and then go to the moon? Sure, but I would rather watch it and see what happens with no skin in the game.
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Indicators show the past. Price Action "Indicates" the future.
  • #62,364
  • Apr 29, 2010 4:28pm Apr 29, 2010 4:28pm
Quoting lovejoy80
A bit off topic but just like to add with regards the tax treatment of using an SB...profits being tax free is simplified...they are free from capital gains tax but if you rely on the profits to live off i.e. as your main source of income and thus classed as a 'professinal gambler' then the profits can be liable to income tax...(this is not accounting advice, just what I know from other people who have come across this).
I've almost certain you have been mislead there. Even if you are a professional gambler, in the UK that still doesn't make your winnings liable to income tax. The only time it becomes a grey area is if, say you are a professional poker player and start being paid by sponsors. It's possible that not only your sponsorship money would be taxed, but your winnings as well. Some how, I doubt anyone will be sponsoring you to spread bet on on forex As always with HMRC, they have left the door open to tax gambling winnings, but they would find it very difficult to do so without also allowing gambling losses to be tax deductable, which would be very bad for overall tax revenues.

Here's a link for you: http://www.hmrc.gov.uk/manuals/bimmanual/bim22017.htm

BTW, I'm using GFT UK as my spread betting platform for forex. It's ok, but I far prefer using a demo account and MT4 for charting.

Sorry for the derail.
  • #62,365
  • Apr 29, 2010 4:34pm Apr 29, 2010 4:34pm
Quoting Danku
Anyone know something called CT...............

Counter Trend, as in counter trend trades.

Sorry none of my fellow J16ers could not help you with this Danku. I find it hard to believe no one was on the thread at this time.
Indicators show the past. Price Action "Indicates" the future.
  • #62,366
  • Apr 29, 2010 4:38pm Apr 29, 2010 4:38pm
Quoting ghous


g.
Thanks g. lol
Indicators show the past. Price Action "Indicates" the future.
  • #62,367
  • Apr 29, 2010 4:43pm Apr 29, 2010 4:43pm
Daneel has mentioned some of this already but this is some of what I put on another website. My background is from betting.

Spread Betting is only open to UK residents.

Betting is not taxed.

If you remember you used to pay betting tax on bets. You either paid before the event or after on the winnings. There was no tax on the race course.

Then Victor Chandler went off to Gibraltar and set up his bookies there. Punters did not have to pay the betting tax if they bet with him, no betting tax in Gibraltar. So he got more and more of the bigger bets. Other bookies decided it was a good idea to go to Gibraltar.
HM Government had a panic attack and negotiated with the bookies to come back to mainland UK and they would abolish betting tax which Gordon Brown did in 2001.

This meant that the Inland Revenue could tax the bookmakers' profits in the UK.
The punters always lose in the end so their money ends up with the bookmakers anyway!

So this is why betting is not taxed in the UK.

Now it might change if Betfair gets much bigger.
Betfair is a betting exchange where members back and lay bets - when you lay a bet you act like a bookmaker. This is hurting bookmaker profits as the odds you get with Betfair are usually better than traditional bookmakers. You don't pay taxes on backing or lay bets with Betfair (at the moment).

Now can betting be a trade and so be taxable?

No it can't be a trade even if you are a professional gambler.

Straight off HM Revenue website - so this is straight from the horse's mouth

Trade: exceptions & alternatives: betting and gambling: the professional gambler

Now there is another page about spread betting
http://www.hmrc.gov.uk/manuals/bimmanual/bim22020.htm
which says:

The principles of Down v Compston [1937] 21TC60 and Burdge v Pyne [1968] 45TC320 (see BIM22019) apply equally here. To be taxable, the spread betting wins must come not merely from an opportunity presented by a trade, they must arise from the carrying on of that trade. Whether or not a particular spread bet is taxable will depend on the terms of the contract and the economic substance of what is done.

Tax on Spread Betting Not applicable to private individuals.

Taxing derivative contracts: scope: contracts for differences

A financial spread bet, if entered into by a company, will also be a contract for differences. The essence of a spread bet is that the punter wagers on either upward or downward movement in a particular index or the price of a particular subject matter. It would be unusual for a company to place such a bet - most companies are likely to be prohibited by their Memorandum and Articles of Association from out-and-out gambling - but if it does so, the fact that the contract may represent a wager does not of itself mean that Schedule 26 does not apply.

So there we have it - don't form a company, spread bet if you win at forex and call yourself an habitual gambler and you won't pay a bean, penny or farthing to the tax man.
  • #62,368
  • Edited 5:47pm Apr 29, 2010 5:24pm | Edited 5:47pm
Quoting benji533
Just noticed you have been talking pretty much a lot about the trend recently, so thought to share my thoughts if it's ok
awesome stuff Ben.

Quoting triggerju
Well yeah, I thought I was about to be wowed with sum cr*ppy trading/life philosophy like everyone has at the foot of their posts.
lol, not from me. If it dont have numbers, I aint interested.

Personally, I think many people use 'psychology' as an excuse because their methodology is failing to make money. It's much easier to talk about (and write books about) 'the mental game' than it is to find a way to trade profitably, because it is all subjective and unquantifiable.

Quoting triggerju
No eureka moment, but common sense. Everyone teaches that charts are all the same regardless of timeframe/instrument ec... This has it's truth and it's lies, frankly.
Quoting Ted1983
IMO timeframes are indistinguishable*, just that trading costs grow to be a too large proportion of targets.
Transaction costs are one factor, definitely (although people do like to ignore them, for some reason), but a more pressing one is 'noise'. Or, more correctly, the information content of bars.

Price doesnt move from A to B in a straight line, which we all know - it moves through a stochastic process. Price moves because hundreds of thousands of transactions with different motivations and based on different 'news' move it. Is it moving in a path? Generally, yes - one determined by fundamental forces. But within this, each step along the path is going to be comprised of an expected value component (ie, the signal) and a variance component (the noise). Which is good for us, because the movement around this 'true' path is what gives rise to our PA.

Since the price bars we look at are aggregates of these orders, the longer the timeframe, the more of these orders are contained in a bar. So while the variance component remains a constant factor (well, more or less, when we model the noise as a normal distribution), the information component increases as a proportion.

I think the best way to look at it is to substitute $ for orders. How many dollars does it take to reverse a 1 minute bar, compared to a weekly bar? If I drunkenly order up a couple of full lots clearly against the trend, is it going to be 'seen' in the weekly? Unlikely. But in a low volume session on the M1 chart? Definitely. Then expand it out. A trader scalping, a couple of people trying to play an IB breakout, a hedge fund trapping breakout players, a bank ordering $10m aussie dollars for a client....

The lower the timeframe, the less information the bar contains. That's about the gist of it. A 1m bar could only represent a single order. A weekly bar will represent millions of orders, giving us a 'truer' picture. How does that fit into trading? It just means that the signals we use to enter are more reliable, because they are less likely to be made by my sister's cat jumping on my keyboard.

This doesnt mean that people cant trade it. They can and do. Personally, I cant really be bothered with it. I'd rather set some trades, close my laptop and go watch Lost. If trading is a 'second job' for you, then you probably do the opposite.

Quoting Ted1983
Most good methods look at more than 1 TF for charting I think. (Or zoom out considerably on a smaller chart).
That's actually a really subtle point, but a very good one that people overlook. When you zoom right out on a 4hr chart, are you only seeing a 4hr chart?
When you have to shoot, shoot. Dont talk.
  • #62,369
  • Apr 29, 2010 5:25pm Apr 29, 2010 5:25pm
Quoting jarroo
Counter Trend, as in counter trend trades.

Sorry none of my fellow J16ers could not help you with this Danku. I find it hard to believe no one was on the thread at this time.
lol, I didnt think it was a question, I thought he was making a point about the chart. Oops.
When you have to shoot, shoot. Dont talk.
  • #62,370
  • Apr 29, 2010 6:02pm Apr 29, 2010 6:02pm
Quoting joelcf
lol, I didnt think it was a question, I thought he was making a point about the chart. Oops.
yeah same here lol
  • #62,371
  • Apr 29, 2010 6:09pm Apr 29, 2010 6:09pm
Quoting joelcf
awesome stuff Ben.



lol, not from me. If it dont have numbers, I aint interested.

Personally, I think many people use 'psychology' as an excuse because their methodology is failing to make money. It's much easier to talk about (and write books about) 'the mental game' than it is to find a way to trade profitably, because it is all subjective and unquantifiable.





Transaction costs are one factor, definitely (although people do like to ignore them, for some reason), but a more pressing one is 'noise'. Or, more correctly, the information content...
good post mate. im glad someyone went into this aspect of the issue.
I just want to add the point of location. The best trade possibilities come at the best locations and it doesnt matter what TF your looking at the price will be the same in all of them!

jon
PATIENCE... DISCIPLINE
  • #62,372
  • Apr 29, 2010 7:27pm Apr 29, 2010 7:27pm
Quoting joelcf
lol, I didnt think it was a question, I thought he was making a point about the chart. Oops.

Quoting mbqb11
yeah same here lol
Quoting Danku
Just remember when you take a CT Trade Ryanmcd, myself and all other Big Boys/Dogs will be on the other side, Ryanmcd 80% and me, 60% of the time........coz of inexperience..........

Keep taking the CTs all...........
Sorry guys . . . I guess I read that wrong. My mistake.
Indicators show the past. Price Action "Indicates" the future.
  • #62,373
  • Apr 29, 2010 8:08pm Apr 29, 2010 8:08pm
Quoting joelcf
....a hedge fund trapping breakout players "on an IB"....
Now... with reliable L2 information, that'd be a good caper!
Bundy's status today: "Waiting..."
  • #62,374
  • Apr 29, 2010 8:25pm Apr 29, 2010 8:25pm
Quoting bundyraider
Now... with reliable L2 information, that'd be a good caper!
Wanna go halves in setting up a brokerage?
When you have to shoot, shoot. Dont talk.
  • #62,375
  • Apr 29, 2010 9:31pm Apr 29, 2010 9:31pm
Quoting triggerju
Agreed. 5 mins and the like is death. 1hr is minimum anyone can really keep good at.
..... most people CANT trade 100s of things........
the 1hr minimum is your view (& probably your experience).
& Mike didnt say trade 100s of charts, he said watch many charts. watching & trading are oceans apart.

all i can say is your posts/'revelations' today are nothing new (to me, at least).
Seniors here teach the way they teach for a purpose.
immediate understanding & realization will come if u read & imbibe Primi's words below

Quoting Primi
I really can't think of another place where this is promoted as much as it is here. I see you are very new around here (march 2010). Stick around and you'll see. Or start reading this thread from the beginning. There is a very informative first post with some references. I was "smart" when I arrived here and dismissed some of those suggestions/requirements as unnecessary. Well, after a year I think they are here in the best interest of new people. And they don't make the journey longer. They make it shorter. ....
  • #62,376
  • Apr 29, 2010 9:34pm Apr 29, 2010 9:34pm
Quoting joelcf
Wanna go halves in setting up a brokerage?
can i get designated as the head of the janitorial services of the firm?
at least i can watch the activities inside the firm.
sounds like a good plan.
  • #62,377
  • Apr 29, 2010 9:58pm Apr 29, 2010 9:58pm
It could happen. They haven't knocked the A/U down right away like the last three attempts to break up above that TL.
Quoting Dan Gilbert
Here is a Mike trade
  • #62,378
  • Apr 29, 2010 10:23pm Apr 29, 2010 10:23pm
Quoting joelcf


Personally, I think many people use 'psychology' as an excuse because their methodology is failing to make money. It's much easier to talk about (and write books about) 'the mental game' than it is to find a way to trade profitably, because it is all subjective and unquantifiable.
Tell me - You and I can both trade an identical method - one of us wins and one of us loses. (more like 95% lose and 5% win, I'm just using me and you as an example to make a point.)

What was the difference between us? Same charts, same system, same capitalization.

The answer is obvious, it is your head - also known as psychology. You and I have seen people take the same dang bar - and lose money, while others are up multiple R. Psychology. Some like to say that you need mental toughness - big a big swinging dick of Forex. Whatever - let's call it what it is - Psychology. I seen you call it 'stupid' - well, is that not something the emanates from the mind? Like er..... psychology?

Even you have made posts to the effect of - "You see the setup and you simply take it. What is the big deal?" That is psychology. And why do people take highly marginal crap at times? Wishful thinking - or - psychology, of you will.

There is a lot of marginal material about the subject, which is too bad, because it is far more important than anyone ever believes.

Or try this on - Why is it that nearly every trader on this thread has decided that grabbing the first fractional part of an overall move is 'great'? Is it because they cannot endure the eventual pull back or even draw down after being up 1 or 2 R to even dream of much higher returns? That, my friend is psychology - AKA 'fear'. Think about it - if we get PA off of a PPZ, then what not sit back a bit and enjoy the ride to the other side? Fear.

Why does James himself repeated say that it is very unlikely anyone will make it until they capitalize a large account? Because of that very fear. The very act of growing an account 1R or fractions thereof is extraordinarily difficult. So he advises to demo trade until you have the money. Not a bad way to go - if you have a decade or a few to burn - or want to.

But what would happen, if you cleared the cobwebs a bit - and simply allowed the market to move - and you moved with it? With the PA knowledge taught here, we have a pretty good idea where price is headed - and it usually does not disappoint - does it? Being willing to endure a little drawdown can yield huge rewards. Learning to exploit a trend - long or short in duration with adding in or reentry into it can rapidly build an account.

But it takes a very different mindset to do this. Or dare I say, psychology.

But what the heck do I know.
I'm pretty much done with all this ...
  • #62,379
  • Apr 29, 2010 10:37pm Apr 29, 2010 10:37pm
Quoting jarroo
What does it tell me? That the up trend is very strong. If a high quality setup, which I categorize this one to be, can't even cut through a reasonable FTA or hits its FTA and breaks hard the other way . . . something going on. Meaning in this case, the uptrend is strong.
Hi Jarroo, would you say that the loss on this trade is inevitable? Meaning that this was one of those good setups that doesn't work out?
  • #62,380
  • Apr 29, 2010 10:56pm Apr 29, 2010 10:56pm
Quoting supremeChaos
the 1hr minimum is your view (& probably your experience).
& Mike didnt say trade 100s of charts, he said watch many charts. watching & trading are oceans apart.

all i can say is your posts/'revelations' today are nothing new (to me, at least).
Seniors here teach the way they teach for a purpose.
immediate understanding & realization will come if u read & imbibe Primi's words below
Yeah. I really MUST say that I strongly disagree, but then again that is just me. Some people are comfortable with different timeframes and number of pairs... all contingent on method and psychology.

Ryanmcd loves the 5min. I've found my comfort zone in economic trends and the 15min. Been on this thread for about 1 year now (well, almost I think), and the ONE thing that strikes me is that we gotta make this material our own.

Indeed, as Mike said sometime back, PASR will add juice to any method.
The method... well it's up to the individual.
One Mind, Any Market
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