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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

  • #70,141
  • Jul 29, 2010 11:15am Jul 29, 2010 11:15am
Quoting mbqb11
just to add

we did in my book have the "first" breakout pullback if you drop to the 1hr(those that know I do that for the initial breakout+pullback).

funny how many ways you can look at one chart but be looking at the same things too, gotta love this stuff
Mike did you take that 1hr pin off the roll reversal?
  • #70,142
  • Jul 29, 2010 11:43am Jul 29, 2010 11:43am
Quoting True777
Mike did you take that 1hr pin off the roll reversal?
I believe it was the BIG BUOB on the Hourly he took at the breakout level.
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Indicators show the past. Price Action "Indicates" the future.
  • #70,143
  • Jul 29, 2010 11:48am Jul 29, 2010 11:48am
Quoting six gun
Not sure what the reason was behind the fall but it was good whatever.
Do we care?
Trading: the skill of avoiding trades
  • #70,144
  • Jul 29, 2010 11:51am Jul 29, 2010 11:51am
Quoting jarroo
I believe it was the BIG BUOB on the Hourly he took at the breakout level.
seems so big it wouldn't be worth the risk...
  • #70,145
  • Jul 29, 2010 11:58am Jul 29, 2010 11:58am
Quoting True777
seems so big it wouldn't be worth the risk...
The risk would be the same whether its 50 pips big or a 100 pips big. The position size would be the same.
Indicators show the past. Price Action "Indicates" the future.
  • #70,146
  • Jul 29, 2010 12:20pm Jul 29, 2010 12:20pm
Quoting jarroo
The risk would be the same whether its 50 pips big or a 100 pips big. The position size would be the same.
guess I'm thinking bigger stop means a bigger target for risk/reward justification...
  • #70,147
  • Jul 29, 2010 12:44pm Jul 29, 2010 12:44pm
If you want MOD status to the chat room please PM me with your Email address. We are giving it out to people that have "been around" and that we "know". So don't get offended if I say no, we want to have some sort of discretion to it. Otherwise everyone here would have it and it would be a free for all LOL

Thank you
Mike
  • #70,148
  • Jul 29, 2010 12:47pm Jul 29, 2010 12:47pm
test
  • #70,149
  • Jul 29, 2010 12:59pm Jul 29, 2010 12:59pm
I seem to be noticing more setups than usual lately so i'm probably not being picky enough but this looks worth a shot to me...USD CHF 4H. on 1.04 level which has acted as strong support twice before. FTA about 1.045. Any thoughts?
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  • #70,150
  • Jul 29, 2010 1:08pm Jul 29, 2010 1:08pm
Quoting Rustam
I seem to be noticing more setups than usual lately so i'm probably not being picky enough but this looks worth a shot to me...USD CHF 4H. on 1.04 level which has acted as strong support twice before. FTA about 1.045. Any thoughts?
Hey Rustam, my only concern would be:

  1. Against the dominant trend
  2. Weak pin bar against strong down swing


My feed didn't close as a pin, but it would be hard to reverse this move based on that small bar.

Just my thoughts.

-- Danny

  • #70,151
  • Jul 29, 2010 1:15pm Jul 29, 2010 1:15pm
Quoting eswap0
Do we care?
LOL!!

I care very deeply.
  • #70,152
  • Jul 29, 2010 1:19pm Jul 29, 2010 1:19pm
Quoting Rustam
I seem to be noticing more setups than usual lately so i'm probably not being picky enough but this looks worth a shot to me...USD CHF 4H. on 1.04 level which has acted as strong support twice before. FTA about 1.045. Any thoughts?
not new to forex but new to this type of trading, so not alot in what I say =) but... agree with blue and you would really want that pb closing higher than it opened, i.e. green pb instead of the red you have...
  • #70,153
  • Jul 29, 2010 1:42pm Jul 29, 2010 1:42pm
Quoting True777
guess I'm thinking bigger stop means a bigger target for risk/reward justification...
R:R is all relative to the win rate and overall trader stats. I never pay attention to R:R.

Here is a post from the PF

Q: Risk:Reward, Don't we have to have at least 2 times our Reward?

A: This is one of the biggest myths of trading. That is you always hear "Make sure you get 2r(that is 2 times) whatever your risk is. Or 4r or some random number. The short answer is this is NOT true. Do many traders do this? Yes they do and that is FINE, but it is not something you must do. One must know ALL the numbers to know the true story of the trader. You could gain .5r and win 85% of the time and be VERY VERY well profitable.

Many traders do NOT know their Risk:Reward going into a trade. This is completely fine as that one trade is meaningless. It is all your trades combined that make you up as a trader. Of course when you eventually run your numbers you will get an avg win %, and an avg Rmultiple(that is how much you avg win per trade). Those are the numbers that count. But, when I go into a trade I don't always have a set take profit for example so I might come out with 2 times my risk, or I might come out with .25r my risk.

This is a very common cause for concern for many, but it is very possible to be a winning trader with a 90% win rate and very small wins(way under 1R) and it is also possible to be a losing trader with a 90% winrate(if your losses are on avg bigger then your avg wins). It is also possible to be a 20% winrate trader and be profitable and vice versa.

The summary is that don't always believe what you read when you hear people say you MUST gain more then you risk. This isn't true. Also remember just b/c your initial risk might be 1% and you have a target of a certain amount, doesn't mean it has to be all or none. You can eliminate risk on a trade as you move along too. So losses don't have to be full amounts as well. Trading gives you the ability to be very flexible and find what works for YOU.

Mike
http://www.james16group.us/forums/im...c/progress.gif
  • #70,154
  • Jul 29, 2010 2:09pm Jul 29, 2010 2:09pm
And off to post 1 we go. Mike is right. RR is a bunch of BS. Dont let anyone tell you different.

Trying to play the RR game is just another account killer for new traders.

I CANT TELL YOU HOW MANY EMAILS I HAVE THAT GO LIKE THIS....

'Jim almost all my trades based on what ive learned from the group and thread make it to a profit point i expected but since its a poor R/R ratio i leave them on to reach a respectable R/R RATIO and end up losing. Ive always been taught that risk/reward ratios are critical."

WELL YOU WERE TAUGHT WRONG!!!!!

STOP IT!!!!!


Quoting mbqb11
R:R is all relative to the win rate and overall trader stats. I never pay attention to R:R.

Here is a post from the PF

Q: Risk:Reward, Don't we have to have at least 2 times our Reward?

[b]A: This is one of the biggest myths of trading. That is you always hear "Make sure you get 2r(that is 2 times) whatever your risk is. Or 4r or some random number. The short answer is this is NOT true. Do many traders do this? Yes they do and that is FINE, but it is not something you must do. One must know ALL the numbers to know the true story of...
  • #70,155
  • Jul 29, 2010 2:20pm Jul 29, 2010 2:20pm
what about a gbp/cad short from this 62 level? the last 4 weeks have all had highs with 10 pips or so of this level. maybe some PA setup and a short? thoughts?
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  • #70,156
  • Jul 29, 2010 2:32pm Jul 29, 2010 2:32pm
Pin bars, outside, inside bars and the like are not unique to J16.
I can think of one well respected Australian trader who is a very decent chap who uses these.

What I have not found elsewhere is the "where is price going?" phenomenon.

Using the material James teaches I have seen price almost always reaching the area you would expect it to go.

The 2:1, 3:1 risk to reward ratio trading rules will often work but it is more by luck then design.
If you rely on luck you will lose when it is just unnecessary.

When the seniors talk about traffic they are effectively using the rules of where is price going.

When a bar setup triggers it will usually get to where you expect price will go which will be the top or bottom of a nearby bar. When there are lots of these in the way of the forward progress of price, price is much less likely to get very far before it runs into trouble and has the potential to reverse on you.

So applying the risk to reward ratios in these circumstances is virtually certain to blow up on you and you will lose.
  • #70,157
  • Jul 29, 2010 2:45pm Jul 29, 2010 2:45pm
I was also thinking a lot about the R:R. I do not think with this method it is a problem at all. R:R should be GOOD.

I'll try to explain it as I see it. I think most traders here would make a partial exit at FTA (or even 20-30 pips partial exit before FTA). Then, when some profit is locked why can't one now decide on the appropriate R:R. Meaning he can run his remaining part as much as he thinks appropriate to have his R:R.(1-1,1-2) - Yes because it is a remaning part he would need to have his target farther (to make for his full position full bar stops that will happen). But this is a free trade now. Sometimes it will hit its target and if it is big enough it will make for any previous full-bar loss. I think this is not a problem.

The problem I have is actually to decide How I would exit my remaining part. At some second, third PPZ, or maybe when I see "opposing signal to my trade". Or maybe just to stay until next BRN or after 2 BRN's (which I have usually in 500 pip intervals)???

I think the remaining part of a position must be big (in terms of pips). Why not it is a free trade? But how big?

Or am I not getting it agian... This way seems logical to me to overcome this psychological R:R thing...
  • #70,158
  • Jul 29, 2010 2:47pm Jul 29, 2010 2:47pm
Quoting james16
And off to post 1 we go. Mike is right. RR is a bunch of BS. Dont let anyone tell you different.

Trying to play the RR game is just another account killer for new traders.

I CANT TELL YOU HOW MANY EMAILS I HAVE THAT GO LIKE THIS....

'Jim almost all my trades based on what ive learned from the group and thread make it to a profit point i expected but since its a poor R/R ratio i leave them on to reach a respectable R/R RATIO and end up losing. Ive always been taught that risk/reward ratios are critical."

WELL YOU WERE TAUGHT WRONG!!!!!...

I can say that I use R/R in a way that prevents me from taking a bad trade.

If I see a trouble area 20 pips away from a 100 pip S/L, i will not take the trade, because it doesn't have enough room to begin with (at least not for my methodology)

I now use the R multiple to record all my trades, but that is essentially just a percentage amount because for me, 1R=1%

I do not ignore trouble areas in pursuit of a great R/R though, that is stupid.
Many choose unhappiness over uncertainty.
  • #70,159
  • Jul 29, 2010 2:48pm Jul 29, 2010 2:48pm
Ok, on June 8th I starting strictly trading james16 on a micro acct. I started with $252 and I am currently sitting @ $553.75. The recent discussion about R:R is something I have been debating since I started this process.

I've been taking daily & 4hr charts and setting my SL at the appropriate J16 level. I have been setting my full tp on most orders at the FTA. This gives me a pretty horrible R:R on most trades.

Guess what I've been trying to figure out is if I should just stick with my current method (If I can continue the outcome for a few more months). With the R:R I was/am concerned. However, with the current discussion maybe I shouldn't be..

Opinions....

Thank you James, Jarroo, mbqb11 and all the seniors. This thread along with the PF is a world of help.
  • #70,160
  • Jul 29, 2010 3:04pm Jul 29, 2010 3:04pm
Quoting Adilius07
I was also thinking a lot about the R:R. I do not think with this method it is a problem at all. R:R should be GOOD.

I'll try to explain it as I see it. I think most traders here would make a partial exit at FTA (or even 20-30 pips partial exit before FTA). Then, when some profit is locked why can't one now decide on the appropriate R:R. Meaning he can run his remaining part as much as he thinks appropriate to have his R:R.(1-1,1-2) - Yes because it is a remaning part he would need to have his target farther (to make for his full position full...
I follow exactly what you are saying.
What is "taught" in many places is a mechanical RR system.
Stop loss = 40 pips, target = 120 pips.
Proper analysis of the setup, using "where is price expected to go" might tell you it will make this target. BUT you have properly analysed the setup.

Jim most certainly talks about moving the stop loss to break even quickly.
A trade with no loss goes into the winners column.
He most certainly talks about locking in profits.

A straight RR method is mechanical.
In essence RR works on an odds principle.
In a 3:1 RR method, you look to make 3X the money you put at risk.
The HOPE is you will win more than you will lose.
You BET that using the 3:1 RR you will win more than you lose but the straight RR method is unthinking.
Many traders will end up HOPING to win this fixed ratio when the setup hasn't a hope in Hell of achieving this.

What you describe is getting your stop loss to BE, getting some off the table and then risk the rest on the chance that the setup will be a runner which will get you some big pips.
This is far more sophisticated than the unthinking fixed mechanical RR.

What you should try to incorporate into your setup analysis is to think where price is likely to get to.
When price gets to that level, which you have already established, you can get some profit off the table and then see if the setup is a runner.
If it reverses on you and hits the stop you have already won on the trade.
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