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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

  • #65,901
  • Jun 10, 2010 5:31am Jun 10, 2010 5:31am
Price making Lower Lows and Lower Highs.

A hard break would be interesting.
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  • #65,902
  • Jun 10, 2010 5:38am Jun 10, 2010 5:38am
Quoting nasir.khan
Hey Proletary,

The 4H PB you are talking about is not tradable cause of Space above and also the shape is not good ( @ IBFX ).
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Yes, I referred to it as PB because shape on my feed looks much better.

Quoting nasir.khan
Although i took a 2H PB and it did not failed. It did hit it's FTA @ 1.1500.

The current setup i am discussing is a valid J16 trade. BEOB's and BUOB's are discussed in this thread.
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Yes I see the BEOB clearly on your chart. Somehow I worked under the misconception that any of those J16 setups are valid only for one bar. Getting back to our example I thought that the BEOB setup lost it's power because of the very strong bounce form the S/R line on the following bar. As a result i dismissed the whole BEOB, and thought you were basing your trade solely on the broken S/R.

Thank you for clearing this up for me.
"Put your shoulder to the wheel!"
  • #65,903
  • Jun 10, 2010 5:42am Jun 10, 2010 5:42am
A very strong longterm PPZ,...365EMA, Divg, TL.
PB in 1H.

Lets see hoe it unfolds.
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  • #65,904
  • Jun 10, 2010 5:44am Jun 10, 2010 5:44am
Hi guys, quick newb question. Mike advocates waiting for the break of the pin and placing a SL behind/in front of the high/low of the pin.

When he plays a breakout (I hope I've got this correct) he waits for price to breakout, retrace/pull back to confluence for confirmation and then breakout again.

I've read that waiting for the retrace on the pin to enter is more risky and aggressive. I realise that the bars are formed differently for the pin and the breakout (breakout having consolidatating bars and the pin being at a swing high/swing/low.)

Intuitively, it seems that waiting for a retrace on the pin would seem more conservative (better price, smaller SL). Can someone please post a chart showing why the retrace entry is more aggressive? Why is waiting for the retrace on the break out more conservative and waiting for the retrace on the pin more aggressive? Is there a difference between a retrace (pin) and a pull back (breakout)? Hope this makes sense. I'm sure I'm missing something really simple here. BTW, this thread is wicked!
  • #65,905
  • Jun 10, 2010 5:56am Jun 10, 2010 5:56am
Quoting proletary
Yes, I referred to it as PB because shape on my feed looks much better.



Yes I see the BEOB clearly on your chart. Somehow I worked under the misconception that any of those J16 setups are valid only for one bar. Getting back to our example I thought that the BEOB setup lost it's power because of the very strong bounce form the S/R line on the following bar. As a result i dismissed the whole BEOB, and thought you were basing your trade solely on the broken S/R.

Thank you for clearing this up for me.

I think you are right...I was told by someone who I forgot, that a setup bar is only valid for the next bar.

But, Nasir also has an inside bar setp on the next candle so there appears to still be a setup in play.
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  • #65,906
  • Jun 10, 2010 5:57am Jun 10, 2010 5:57am
Quoting proletary
Yes, I referred to it as PB because shape on my feed looks much better.

Yes I see the BEOB clearly on your chart. Somehow I worked under the misconception that any of those J16 setups are valid only for one bar. Getting back to our example I thought that the BEOB setup lost it's power because of the very strong bounce form the S/R line on the following bar. As a result i dismissed the whole BEOB, and thought you were basing your trade solely on the broken S/R.

Thank you for clearing this up for me.
A setup is valid until price does't break the the other side. It's different for different people, Some people want their PA setups to break early cause are not comfortable with hanging there (like the current setup). Others don't see a problem in it they would wait for the price to hit either the TP or SL.

Quote
Getting back to our example I thought that the BEOB setup lost it's power because of the very strong bounce form the S/R line on the following bar. As a result i dismissed the whole BEOB, and thought you were basing your trade solely on the broken S/R.


You'r saying it lost it's power

and i think it's gathering some momentum / storing some power for a hard break down (looking at the space below).

See it's different for different people and there is no problem in it.

P.S that 150ema is making things tricky here. lol
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  • #65,907
  • Jun 10, 2010 6:00am Jun 10, 2010 6:00am
Quoting nasir.khan
A setup is valid until price does't break the the other side. It's different for different people, Some people want their PA setups to break early cause are not comfortable with hanging there (like the current setup). Others don't see a problem in it they would wait for the price to hit either the TP or SL.



You'r saying it lost it's power

and i think it's gathering some momentum / storing some power for a hard break down (looking at the space below).

See it's different for different people and there is no problem in it.

P.S...
Yeah, I think that IB is more confirmation of a setup. Maybe the 61.8 fibo is also part of the cause of it hanging around?
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  • #65,908
  • Jun 10, 2010 6:04am Jun 10, 2010 6:04am
Quoting nasir.khan

You'r saying it lost it's power

and i think it's gathering some momentum / storing some power for a hard break down (looking at the space below).

See it's different for different people and there is no problem in it.
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I guess that's why the market moves We would encounter problems with liquidity otherwise.


Quote
P.S that 150ema is making things tricky here. lol
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The proximity of the EMA makes the S/R stronger, is that what you mean?
"Put your shoulder to the wheel!"
  • #65,909
  • Jun 10, 2010 6:11am Jun 10, 2010 6:11am
Quoting Pinbar
I think you are right...I was told by someone who I forgot, that a setup bar is only valid for the next bar.

But, Nasir also has an inside bar setp on the next candle so there appears to still be a setup in play.
That I didn't see. Thanks for the hint. I went through a lot of charts recently, trained my eye to spot those PB (easy) and BEOB/BUOB making it almost automatic. The other day I noticed that the first thing I do when opening any chart, is to scan it for a PB, lol! I think it's time to broaden my focus.
"Put your shoulder to the wheel!"
  • #65,910
  • Jun 10, 2010 6:18am Jun 10, 2010 6:18am
Quoting proletary
That I didn't see. Thanks for the hint. I went through a lot of charts recently, trained my eye to spot those PB (easy) and BEOB/BUOB making it almost automatic. The other day I noticed that the first thing I do when opening any chart, is to scan it for a PB, lol! I think it's time to broaden my focus.

Yeah, now we have to spot the Prime arear for PA, PPZ & FTA and we are in business. Let's both keep at it!
  • #65,911
  • Jun 10, 2010 6:19am Jun 10, 2010 6:19am
Quoting forexben

Intuitively, it seems that waiting for a retrace on the pin would seem more conservative (better price, smaller SL). Can someone please post a chart showing why the retrace entry is more aggressive? Why is waiting for the retrace on the break out more conservative...
IMHO, it will help to keep you out of fake breakouts. If it breaks, pulls back and the pattern provides support/resistance, then it would suggest that it will resume. On the other hand, if you take the initial break you may find yourself in drawdown quite quickly if it is a fake break and moves back into the pattern.

Quote
...and waiting for the retrace on the pin more aggressive?
The advantage of placing your entry ahead of your PB is that the trade will only trigger if the market moves in your direction. If you enter somewhere within the range of the PB, you lose that advantage - not all pinbars go the way you expect! That is where the extra risk comes in to play.

Just my opinion
  • #65,912
  • Jun 10, 2010 6:26am Jun 10, 2010 6:26am
Hi All,

What an amazing thread I can't believe it's still going strong after all this time. I'm trying to catch up and am currently on about post 1000 but I'm going to read from the front at the same time as catching up from the back.

This is some of the best trading material I've read and I hope to follow along and contribute where I can. If Jim is still around on the public side, I'd like to say thank you for an outstanding contribution.

I've only just signed up so this post may lag a bit while I'm moderated. I'm still in a stage of refining what I need on my charts which at the moment is mainly candles, fibs and trend lines. I did find a James16 template for MT4 which i have been looking at.

I've attached a USDJPY H4 setup I'm looking at. The pin bar has all the eyes lined up and a long nose on a 50% Fib with price poking outside the bands. Is the open/close of the pin bar too low down in the bar making it more of a neutral bar? With USD news later today I think price may just stand still until it's released at which point it could go eitherway.

Thanks Dan.
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  • #65,913
  • Jun 10, 2010 6:33am Jun 10, 2010 6:33am
Quoting fxeturn
Bearish PB at gold's highest point yet and rejected at 1250. Looking at 1220, 1210 and 1200 as possible targets but the uptrend is really strong. Looking for more reasons to short.

Attachment


NZD/CHF has made a bullish PB at 0.76, which looks very strong as a resistance that has turned support, and now reinforced by the 150EMA directly beneath it. Looking at 0.78,0.79 and 0.8 as possible targets. Possible swing low in a range. Will take this over gold with 3 lots.

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Changed TP to 0.78 after realizing the bearish TL. Target reached.

Quoting fxeturn
1.45 support breached by the BEOB and yesterday's bar didn't make it although it try to. Confluences are slight divergence, fib, bearish TL. Low risk entry above 1.45, with a couple of targets based on the traffic, 1.43 is could be strong enough to hold it though. The only thing keeping me from entering is the giant BUOB in monthly...

Attachment

Anyone seeing this as well?
Actually entered this with 3 lots. First target 1.43 reached. Moved remaining 2 lots to BE, seeing 1.42 and 1.41 as next possible targets.
  • #65,914
  • Jun 10, 2010 6:43am Jun 10, 2010 6:43am
Quoting Pinbar
Yeah, now we have to spot the Prime arear for PA, PPZ & FTA and we are in business. Let's both keep at it!
Yup, the path is set. Now the hard part: The Journey!
But as they say: 'In good company the journey passes quicker.'

"Put your shoulder to the wheel!"
  • #65,915
  • Jun 10, 2010 6:58am Jun 10, 2010 6:58am
Quoting proletary
That I didn't see. Thanks for the hint. I went through a lot of charts recently, trained my eye to spot those PB (easy) and BEOB/BUOB making it almost automatic. The other day I noticed that the first thing I do when opening any chart, is to scan it for a PB, lol! I think it's time to broaden my focus.
I would recommend to practice PB's and BUOBs,BEOBs first, get good at them and then move to other ones like IB's.

Just keeping it simple you know.
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  • #65,916
  • Jun 10, 2010 7:03am Jun 10, 2010 7:03am
Quoting proletary
The proximity of the EMA makes the S/R stronger, is that what you mean?
Yes and

scroll back your charts a little to see how price reacts near 150ema and 365ema.
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  • #65,917
  • Jun 10, 2010 7:28am Jun 10, 2010 7:28am
Quoting nasir.khan
Yes and

scroll back your charts a little to see how price reacts near 150ema and 365ema.
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Nasir

Hope this really makes a hard break for you.

Looking at the weekly, we can see the PB off the PPZ area at 1.1425.
Is this also what is holding it up.
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  • #65,918
  • Jun 10, 2010 7:34am Jun 10, 2010 7:34am
Quoting One day!
IMHO, it will help to keep you out of fake breakouts. If it breaks, pulls back and the pattern provides support/resistance, then it would suggest that it will resume. On the other hand, if you take the initial break you may find yourself in drawdown quite quickly if it is a fake break and moves back into the pattern.


The advantage of placing your entry ahead of your PB is that the trade will only trigger if the market moves in your direction. If you enter somewhere within the range of the PB, you lose that advantage - not all pinbars go the...
Thanks for the reply One Day! Maybe I'm getting this wrong. Say we are going short on a PB located at a swing high and the length of the PB is 30 pips. The low of the PB is 1.20. If we enter when it breaks we would enter at 1.1999 for example. On the other hand, say the price goes down to 1.1995 then retraces back up to 1.2010 and we enter here instead. We are getting a better price and our SL is smaller than if we had entered at 1.1999.

What I want to know is why the retracement price of 1.2010 is a more risky or aggressive entry? Is it because price looks like it now turning around and not going in the right direction?

I understand Mike's logic for waiting for the retracement on a breakout, but are still not understanding why the same logic can't be applied to a PB.
  • #65,919
  • Jun 10, 2010 7:45am Jun 10, 2010 7:45am
Quoting Pinbar
Nasir

Hope this really makes a hard break for you.

Looking at the weekly, we can see the PB off the PPZ area at 1.1425.
Is this also what is holding it up.
I was looking at this trade as well. I like where price is at for a short but just not clear on an entry. I did take one successful short at 1.1650 closer to the TL and a trailing stop got me out for 125pips.
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  • #65,920
  • Jun 10, 2010 7:45am Jun 10, 2010 7:45am
Quoting forexben
Hi guys, quick newb question. Mike advocates waiting for the break of the pin and placing a SL behind/in front of the high/low of the pin.

When he plays a breakout (I hope I've got this correct) he waits for price to breakout, retrace/pull back to confluence for confirmation and then breakout again.

I've read that waiting for the retrace on the pin to enter is more risky and aggressive. I realise that the bars are formed differently for the pin and the breakout (breakout having consolidatating bars and the pin being at a swing high/swing/low.)...
Hey Ben,

Good logical question,

while Mike is taking a quick power nap I'll try to jump in,

In my opinion both the cases are worlds apart, and what makes them so different is the information they contain. A pin bar even on the weekly carries less information (or price action) than a tightening range on the same tf or even on a lower tf.

When price breaks out of a range it can be expected to return to test the break out point, simply because it needs to ensure what it is looking to do is backed with enough orders in the market which would be essential for the move, not only does this act as a further confirmation for us it also provides us with nice and easy target for stop placement (just below the pull back or the PA that we see at the pull back).

Making a blind shoot at a bar that seems to be poking out of a range is more risky because you risk false breaks and may or may not have any PA to play around with (even if there is PA it would be more like a BUOB at a swing high which can always be tricky to play) where as waiting for the break and a pull back and PA is a more safer and conservative way of dealing with a break out pattern.

Pin bars on the other hand are a totally different market phenomena, again because they contain less information any quick break out of a pin bar is a good indication that the proposed change in sentiment shown by the pin bar is a valid one which can straight away be taken, if instead price decides to retrace into the pin bar it's the first sign that the "little information" we have of the changing sentiment has issues with it.

There is one more element to the whole query. When price pulls back to test a range breakout it is more probable to receive res/supp at the multiple bar highs and lows, when price pulls back into a pin bar it hardly has any. Go down a time frame to see what sort of market activity makes up a pin bar. You'll see a "V" formation mostly and that's all you are banking on to provide res/supp to an already hesitant price.

g.
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I believe . . .
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