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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

  • #71,761
  • Aug 16, 2010 3:17am Aug 16, 2010 3:17am
Quoting ghous
Yup! An IPB has to have the look of a pin bar...because it is a pin bar, only inverted.

g.

Yep . . .that's how I was taught to view them as . . plus some other great stuff about them.
Indicators show the past. Price Action "Indicates" the future.
  • #71,762
  • Aug 16, 2010 3:24am Aug 16, 2010 3:24am
Quoting Adilius07
Can some one explain why divergence work? I have learned how to see it. But nowhere I can find the explanation WHY?

I can understand why PA, S&R work. But why divergence? Google explains as because bulls or bears have exhausted... well why?

Do yourself a favor and take the RSI/MACD off your charts completely.


You can come back to it later, but honestly it's not important.
Many choose unhappiness over uncertainty.
  • #71,763
  • Aug 16, 2010 3:26am Aug 16, 2010 3:26am
Quoting supremeChaos
does joel's post help?

another answer:
supply & demand (selling & buying)
wow Supreme thanks a lot! Super post! I think I begin to understand.
So it is Rate of change in price "now" compared to what it was "before".
I understand it this way.

I will read that post again thanks!
  • #71,764
  • Aug 16, 2010 3:28am Aug 16, 2010 3:28am
Quoting Dan Gilbert
the USDCHF daily I4B on straddle of the 1.05 vbrn has broken south.

I did not take this trade, for 3 reasons:

-I was skeptical of the bar in the first place
-I was already long CHFJPY
-on IBFX it opened with a small gap down, although it did retrace, I am very skeptical of taking the break on a sunday night.


So, I will miss this train, but I won't really "miss" it, if you know what I mean
Very understandable Dan . . but . . wow . . your I4Bs (or IBs) at BRNs freaking rule.
Indicators show the past. Price Action "Indicates" the future.
  • #71,765
  • Aug 16, 2010 3:28am Aug 16, 2010 3:28am
And this was fast, just PPZ & PA - easy money!!!
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  • #71,766
  • Aug 16, 2010 3:30am Aug 16, 2010 3:30am
Quoting ghous
This could be of some assistance to our inquisitive Ad.

MACD DIVERGENCE

g.

I don't think the code on that site works, I remember trying it once.

However, this is a pretty good MACD Div indicator but, I only use it as an added confluence. Meaning, I would not just take a trade on the first sight of a divergence.
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Attached File(s)
File Type: mq4 FX5_MACD_Divergence_V1.1.mq4   12 KB | 371 downloads
  • #71,767
  • Aug 16, 2010 3:33am Aug 16, 2010 3:33am
Quoting Adilius07
And this was fast, just PPZ & PA - easy money!!!

What EMAs are you using?

Doesn't look like the 365 & 150?
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  • #71,768
  • Aug 16, 2010 3:36am Aug 16, 2010 3:36am
Quoting Pinbar
I don't think the code on that site works, I remember trying it once.

However, this is a pretty good MACD Div indicator but, I only use it as an added confluence. Meaning, I would not just take a trade on the first sight of a divergence.
It was only to provide information to Adilius as to why divergences work.

but then my bad I missed that jewel from Joel referred to by Chaos,

Seriously Ad that post is all you ever will want to know about divergences.

g.
I believe . . .
  • #71,769
  • Aug 16, 2010 3:36am Aug 16, 2010 3:36am
Quoting Pinbar
I don't think the code on that site works, I remember trying it once.

However, this is a pretty good MACD Div indicator but, I only use it as an added confluence. Meaning, I would not just take a trade on the first sight of a divergence.
Thanks Pinbar, gonna check the link and indicator right now! thanks
  • #71,770
  • Aug 16, 2010 3:39am Aug 16, 2010 3:39am
Quoting Pinbar
What EMAs are you using?

Doesn't look like the 365 & 150?
I use 50EMA and 150 EMA. That maroon is 50EMA.
I used to have 365 to, but honestly do not see how can I use it (from the free videos I understand that one way Jim showed to use it is to see if price would chop around it "usually it does this" he said. I may have gotten it wrong. Anyway for now I just use 2 EMA's as my guide.
  • #71,771
  • Aug 16, 2010 3:44am Aug 16, 2010 3:44am
Quoting ghous
It was only to provide information to Adilius as to why divergences work.

but then my bad I missed that jewel from Joel referred to by Chaos,

Seriously Ad that post is all you ever will want to know about divergences.

g.
Thanks Ghous. At first I thought thouse Indicators below my chart would serve me no good ( as I would "talk myself in" to take a trade which based on PA I should not take at all. So I never used them.

Then, yesterday I found a journal of one of the followers of this method Jankone. He trades intraday M5 and uses divergence if he wants to trade against the main trend. I thought it was an interesting idea. Maybe I can apply the same technique too. But I mean on my higher time frames. I would not move down do those little frames. Scary
  • #71,772
  • Aug 16, 2010 3:47am Aug 16, 2010 3:47am
Quoting Adilius07
I use 50EMA and 150 EMA. That maroon is 50EMA.
I used to have 365 to, but honestly do not see how can I use it (from the free videos I understand that one way Jim showed to use it is to see if price would chop around it "usually it does this" he said. I may have gotten it wrong. Anyway for now I just use 2 EMA's as my guide.


Ok, I am with you now.

Great post by SC about Div.

By the way, you can turn the lines off on that MACD so that, once you find a setup you can switch it on just to check quickly what the div is.

Thad indicator also pops up a window when Div is found and informs us what the div actually is.
  • #71,773
  • Aug 16, 2010 4:00am Aug 16, 2010 4:00am
Quoting mihazupan1
,... IMO it's essential to know the background of what you're trading. Got to dig into it
Quoting Adilius07
...Super post! I think I begin to understand.
So it is Rate of change in price "now" compared to what it was "before".
....
i think another analogy is a car moving at a certain speed:
if u step into the gas pedal, the car moves fast(er) {in (bearish) divergence, this is the price first high/lower high; indicator lower high}
if u remove your feet from the pedal, the car still moves/moves fast, but not as fast as when your feet was on the pedal {in (bearish) divergence, this is the price 2nd high/higher high; indicator lower high}


Quoting Adilius07
... I would not move down do those little frames. Scary
Scary:
always, for most people (a matter of personality, risk profile)

Scary:
at first, for some people (a matter of experience)
  • #71,774
  • Aug 16, 2010 4:02am Aug 16, 2010 4:02am
Quoting Pinbar
I don't think the code on that site works, I remember trying it once.

However, this is a pretty good MACD Div indicator but, I only use it as an added confluence. Meaning, I would not just take a trade on the first sight of a divergence.
Hello
Try maybe this version indi.
Attached File(s)
File Type: mq4 FX5_Divergence_V2.1.mq4   11 KB | 410 downloads
Number of Days without an idiotic request: 0
  • #71,775
  • Aug 16, 2010 4:33am Aug 16, 2010 4:33am
Quoting xmzhang
I've a question about trade management, here another demotrade I took on the kiwi daily. Kiwi generated a beautifull PB right off the BRN 7400, at a swing high. On the weekly we see a major PPZ situated at the 7440. My quess was that this pair might bounce off this strong PPZ and reverse it's current uptrend.
I went short on the break of the close of the PB, but I chickened out when price generated a bullish PB at the BRN 7200, I closed my position for a small loss the next day. In hindsight this trade would have been a smash hit trade, as price...
Let's go over the setup itself. The 1.7400 is not a Big (or Bold) Round Number, just a RN. Not saying that RNs aren't important, they are especailly on this pair. BRNs are the .7500, .7000. .8000, .6500, etc.

The PB's size is a bit small, but showed a good rejection near not at the .7400. Meaning if the PB was bigger and showed a break up and through and then down the .7400 then now we're talking nice. But it was PB at swing High and worked out nicely to its targets. PA is a powerful thing.

The traffic on the setup, previous bar High(s), PPZs, etc., would concern me. These areas matter and shows the important of having Space. Notice how Price reacted to these levels on the 4 hour chart.

I take it that you saw this hit its main target the .7200 PPZ level that confluenced with your trendline. No surprise what happened here. I would say rule Number 1 on how to manage this trade (or any other trade for the matter), never . . ever . . ever . . . let a trade turn into loss especially when it hits its main target. At least move to B/E or take some off the table. The .7250 for close to 50 pips would have been great and then protect yourself.

Once you saw that Daily bullish PB you could have free traded it. Meaning take half off at the top of the bullish PB (about 40 pips) and move the other half that distance away from your entry Price. It would have resulted in a net zero trade but it would have allowed more room for it to run and it wouldn't have been a loss.

But your asking how you could have caught that run that the Kiwi did a week or so later . . . You could have left your Stop Loss above the PB and you would have caught it . .no problem. But you felt that this setup wasn't worth that draw down or that the strong up trend was going to continue . .all valid points.

I just remember what James16 says (not word for word) . . .get good a selecting great setups and then protect yourself, you're going to get stopped out a break even or get stopped out at break even and then they run . . . SO WHAT!! . .the runners will come people and this time they won't stop you out . . they're going to come . .they always do . .

Jim
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Indicators show the past. Price Action "Indicates" the future.
  • #71,776
  • Aug 16, 2010 5:38am Aug 16, 2010 5:38am
Quoting nowy
Hello
Try maybe this version indi.

Thanks Nowy


I compared the new version to the old version and an actual MACD regular indicator.

The new version of FX5 does not compare to the regular MACD at all, the old version is identical to the regular MACD at 12. 26. 9


I am really looking for an RSI div indicator, just to quickly confirm div. I get it wrong too often.
  • #71,777
  • Aug 16, 2010 6:12am Aug 16, 2010 6:12am
Quoting Pinbar
Thanks Nowy


I compared the new version to the old version and an actual MACD regular indicator.

The new version of FX5 does not compare to the regular MACD at all, the old version is identical to the regular MACD at 12. 26. 9


I am really looking for an RSI div indicator, just to quickly confirm div. I get it wrong too often.
hmm maybe this will help
Attached File(s)
File Type: mq4 ind_DivPeakTroughRSI_SW_v1.mq4   11 KB | 405 downloads
File Type: mq4 ind_RSIColored_v1.mq4   5 KB | 452 downloads
Number of Days without an idiotic request: 0
  • #71,778
  • Aug 16, 2010 6:14am Aug 16, 2010 6:14am
Quoting nowy
hmm maybe this will help

Yeah, I already have those.

Thanks for the thought though.
  • #71,779
  • Aug 16, 2010 6:16am Aug 16, 2010 6:16am
Quoting Pinbar
Thanks Nowy


I compared the new version to the old version and an actual MACD regular indicator.

The new version of FX5 does not compare to the regular MACD at all, the old version is identical to the regular MACD at 12. 26. 9


I am really looking for an RSI div indicator, just to quickly confirm div. I get it wrong too often.
what about this RSI Div indi. Looks good to me.
http://www.forexfactory.com/showpost.php?p=3326406
  • #71,780
  • Aug 16, 2010 6:55am Aug 16, 2010 6:55am

Hello all,

I was recommended to this thread by Geofract. There's certainly a lot to take in. I have recently got into PA after years wasted on the smaller TF's. It's good to find like minded traders looking for the same set ups. I look forward to sharing some ideas with you all in the coming weeks and months.

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