james16 Chart Thread

I'm still going through chart after chart trying to determine the best PA bars to pick. I've just been through the following chart and picked the highlighted bars.

I would appreciate if someone else with PA experience could show me which bars you would or did pick?

Many thanks

Hi Vasco.

Personally I always favor high time frame trend and ppz, if the price has just bounced from the bearish trend line on monthly and especially if the TL was confluenced with other factors I wan't be looking for buy opportunities If I don't see something more important than the zone from witch the price has just bounced. Everything comes to recognizing important zones, in the USD/CHF case we discussed above, important zone IMO was the zone from witch the price is moving down, the power is with bears and to stop that power is much more quality PA needed than we had on daily and 4h. The direction of price isn't changing rapidly most of the time, that's the biggest problem of trading if you're impatient and the biggest power if you're patient.

Personally I play low quality PA vise versa, I had a sell limit above USD/CHF daily PB, it wasn't triggered unfortunately. Blue zone above the PB is where I was looking for shorting oportunity.

I hope that helps.

I've been watching this pair consolidate for a while and it's finally broken down pretty hard. Looks like the 1.1000 zone has a couple of prime locations for some PA.

We have fib confluence from 2 previous swing lows in 2 areas. First is 50/38 also in confluence with the 150 weekly ema around RN 1.1100. The second, and most interesting to me is the 62/50 that looks to be to the pip at 1.0900. I'll be watching this one closely next week hoping to catch a bounce.

Additional note is that zoomed out on weekly there is almost no need to draw the ppz's on this pair. They stick out like a sore thumb at the BRNs.

The key now is to wait...if it breaks the 1.1000, there's always 1.0500 and 1.0000 down the road.

I addition to the last post would the following be a 3 day pin bar and is it a valid J16 PA setup?

I'm not a pro, but here are the ones i would have taken

Fxdrive

Some of the candles you have picked out are not pin bars.

The preceding bar is the left eye.
The pin bar body must be contained entirely within the left eye.
As you will see not all the candles have their entire body within the left eye.

The body should be relatively small and towards one end. The opposite end to the nose.

The nose is the wick sticking out beyond the left eye. It should stick out as far as possible. The longer the better. Not some little stump.

The nose should stand proud of the left eye, like a long nose.

There may be many bars looking like this but they will not all be good pin bars.

The best pin bar I can see you have marked is number 4.
In this the body is small and the wick long. The body is at one end of the candle. The wick is sticking clear of the left eye. The body is within the left eye.

At one point the bulls had bought price to the very top of the candle. The the bears took over control and sold price right the way down. A long wick indicates are big shift in market sentiment.

What caused this shift - well price hit a resistance level in the market.
A lot of shorts sat around the resistance line you have drawn. They overwhelmed the bulls and sent price down.

Notice that the pin bar is at a swing high.
The had been a bullish trend - price then hit the resistance line and was sent back and back along way.

So Price Action tells you there is a change in sentiment and a reason is the resistance level. There may be confluence of other factors like fibonacci levels, BRN (big round numbers eg 1.000) moving averages for example. The more factors come together the better. Traders look out for different things, so the more there are together, the more traders will see something they react to.

So relative size and position are both important.

Also you need to consider the time frame. A weekly pin bar is more significant than a 15 minute pin bar. To create a weekly pin bar needs to involve many many more traders, a massively bigger order flow and a much more significant change in sentiment that a 15 minute pin bar.

Hope that helps.

The bars Yaniv picked out - the first one might confuse you. This is what I understand to be a two day pin bar. Basically if you combined the bullish and bearish candles you would have bearish pin bar with a bearish body. The wick would be sticking up ( so price will likely go down - which it did) and there would be a small bearish body to this bar. This might not have the same impact as a classic pin bar. For me it is important that the second bar is bearish as this is the direction you are predicting price will go. You need a big bullish bar and then an even bigger bearish bar - a big change in sentiment to the short side. Think about what is going on between buyers and sellers to create these bars.
The third pin bar Yaniv has chosen has a gap on the right eye side. This is likely a Sunday gap, where trading continued over the weekend when most brokers are closed. So when it reopened on Sunday evening (GMT evening) price had moved from the Friday close and so there is a gap. I am not sure how this might influence things but the pin bar will be a Friday pin bar when many people will closing their positions and so the candles formations are not as reliable.

I think pinbar mentioned this 1 it is already some time ago but the breakout was perfect i posted it some time ago

http://i40.tinypic.com/2q0qc1h.jpg

I thought earlier in the week we were watching this weekly. It might have been Pinbar who sighted it ...I forgot...well anyways...here's the results!
BUOB worked nicely.

Thx J16

Although the .8800 was smacking it in the face

I just wish I had the PATIENCE to hang with Weeklies....still working on it.

Were you saying the AUD/USD was an example of an outside bar?
There isn't complete overlap - but there are inside bars if that is what you mean.
The MASSIVE bearish bar could hold a few month's worth of bars!!
There is an inside bar even if you ignore the big bearish bar.

I think Mike was saying he didn't feel the really big bars were as reliable. This is logical as the inside bar setup is about price congestion. Price getting wound up and then exploding out. When there is some much room with the big bars this isn't necessarily happening.

In terms of shear bars themselves, forgetting location and just bars.

I think Yaniv has it, but I would add in that BUOB and that first 2 day bar.

Again that is speaking simply in the most basic here are some good bars that are going to generate an opportunity to make pips. This does not mean they are bars I would play with my style. Style is what separates each trader. A conservative trader could easily play all those for b/e or pips.

Best
Mike

You r correct not engulfing

[quote=six gun;3813656]Were you saying the AUD/USD was an example of an outside bar?
There isn't complete overlap - but there are inside bars if that is what you mean.quote]

Defn BUOB-- * Bar 2 engulfs bar 1
* Close of bar 2 is higher than open and close of bar 1, preferably two thirds of way up or more
* Direction is up

Hey ATC

For a BUOB it must have a higher HIGH then the previous bars HIGH. The aud/usd was close to it but not quite

Mike

Come on guys ...it's the weekend .....can't you spare me a few pips?

hahah right on man, I'm done too

Enjoy

Many thanks for the replies and insights into PA - really helps with my understanding.

Hey Supreme,

When I get rich tradin I'll come buy you a drink and you can introduce me to a few.
The problem could be....I'm quite picky. LOL

Sure, here your go. This is a reverse one it seems.




What Does Cup and Handle Mean?
A pattern on bar charts resembling a cup with a handle. The cup is in the shape of a "U" and the handle has a slight downward drift. The right-hand side of the pattern has low trading volume. It can be as short as seven weeks and as long as 65 weeks.

As the stock comes up to test the old highs, the stock will incur selling pressure by the people who bought at or near the old high. This selling pressure will make the stock price trade sideways with a tendency towards a downtrend for four days to four weeks... then it takes off. Below is an example of a cup and handle chart pattern:

I don't think that is the breakout of the Cup & Handle pattern, the breakout is always in the opposite direction that we pour the beer in. So this is a bearish Cup & Handle.