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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

  • #72,161
  • Aug 19, 2010 3:16am Aug 19, 2010 3:16am
Quoting ertorque
Hey Jaroo, looking at the weekly chart 5 bars prior to the current bar which is a BUOB ( a good one IMO), would you not agree that a person playing the enter-at-break would have been in heavy drawdown by now?
(heavy drawdown is the best case assuming his SL is at the other end of bar, otherwise would have been stopped out most likely)

Could we say that will be a decent setup that did not go well? I am keeping a lookout for decent setups that 'fail' just to satisfy myself that not all decent setups work (unless this BUOB is not a good setup)
Your...
Hi

If I might chip in - Jaroo can correct me. The BUOB you mention is very strong but not at a swing high. At best a continuation bar but counter trend so overall higher risk. Whereas the DBHLC is at swing high (pull back from trend) and from a retest of the 13650 area which had been strongly resisted. Still could all go pear shaped but that was my thinking

Cheers

J
  • #72,162
  • Aug 19, 2010 3:19am Aug 19, 2010 3:19am
Quoting jarroo
With a High of 1.3675 and a buffer of 15 pips would have got you in it to the pip, because it did break by 15 pips. . . ouch. You can see why I like retracement levels.

On the setup itself . .You got to like its Size but its not at a swing Low. It that baby was at a swing low . .say off the 1.2500 . . that would be A++. Since it not at a swing low, its a continuation play which can be tricky especailly fighting such a strong move down. This takes it out of the "A" category.

Since your keeping track, (I am too) it hasn't failed yet . ....
OOps - you got in first and of course I should have said swing low not swing high but think we are saying more or less same thing?

Thanks

J
  • #72,163
  • Aug 19, 2010 3:20am Aug 19, 2010 3:20am
Quoting jspeakman
OOps - you got in first and of course I should have said swing low not swing high but think we are saying more or less same thing?

Thanks

J

Yes we are J. . .
Indicators show the past. Price Action "Indicates" the future.
  • #72,164
  • Edited 3:28am Aug 19, 2010 3:26am | Edited 3:28am
Quoting jarroo
With a High of 1.3675 and a buffer of 15 pips would have got you in it to the pip, because it did break by 15 pips. . . ouch. You can see why I like retracement levels.

On the setup itself . .You got to like its Size but its not at a swing Low. It that baby was at a swing low . .say off the 1.2500 . . it would be A++. Since it not at a swing low, its a continuation play which can be tricky especailly fighting such a strong move down. This takes it out of the "A" category.

Since your keeping track, (I am too) it hasn't failed yet . . should...
Location again undermining an otherwise A+ trade!
Thanks for pointing that out buddy!

**EDIT** And thanks to your reply too, Jspeakman. Did not see your reply earlier**
  • #72,165
  • Aug 19, 2010 4:03am Aug 19, 2010 4:03am
Looks like we had a real stab at the 1.6 BRN this time
I like this bar very much
order placed at 1.6105 (above the BUOB and round number)
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  • #72,166
  • Aug 19, 2010 4:22am Aug 19, 2010 4:22am
Different strokes for different folks (FTA and R:R:R).......hardly will your R:R:R equate to your FTA. Personally, i think one needs to be chosen and not both. I have tried both and failed trying R:R:R but FTA works perfectly for me...........cheers

Quoting Pinbar
Done my back in here with sleeping in the air conditioning in these 40C temps we have had recently. So, I am popping in and out and don't really have the concentration to trade. Just watching the videos and reading the J16 stuff again.

I just read the posts in the links Jarroo posted and while it seems the R&R has been shot down, I wonder how this relates to the FTA.

I mean, if the FTA is 5 pips away and we have a 50 pip SL we would obviously not consider taking the trade, right.

In this sense, this is also a RR ratio, is it not?

Sorry to confuse...
  • #72,167
  • Aug 19, 2010 4:29am Aug 19, 2010 4:29am
Quoting Danku
Different strokes for different folks (FTA and R:R:R).......hardly will your R:R:R equate to your FTA. Personally, i think one needs to be chosen and not both. I have tried both and failed trying R:R:R but FTA works perfectly for me...........cheers

Sure I agree about the FTA.

What I was trying to say is, if we really think about it, the FTA is also a RR ratio, in as much as we consider this the first area that price may turn around on us and consider if it is worth taking the trade.

If you see what I mean.
  • #72,168
  • Aug 19, 2010 4:33am Aug 19, 2010 4:33am
Quoting Jonnyislost
Looks like we had a real stab at the 1.6 BRN this time
I like this bar very much
order placed at 1.6105 (above the BUOB and round number)
See this is the kind of bar i have a problem with - where is your stop - the risk vs reward to your FTA is wildly inverted .. that thing whips around and you are in for a loss bigger than what your reward was going to be ...

just the way i see this kind of setup ofcourse
  • #72,169
  • Aug 19, 2010 4:41am Aug 19, 2010 4:41am
Quoting pipmyride
See this is the kind of bar i have a problem with - where is your stop - the risk vs reward to your FTA is wildly inverted .. that thing whips around and you are in for a loss bigger than what your reward was going to be ...

just the way i see this kind of setup ofcourse

I think the reality is the FTA is almost always pretty close to the entry in relation to the stop size. But with big bars and good locations, my experience with the J16 material so far tells me we can expect a high number of these trades to make mince meat of the FTA without too many problems.
Not to mention a high winrate with these type of setups (not specifically this trade, but in general)

I think both RR and winrate % are meaningless, unless they are quoted together
  • #72,170
  • Aug 19, 2010 4:46am Aug 19, 2010 4:46am
Quoting Jonnyislost

I think both RR and winrate % are meaningless, unless they are quoted together
well i'll leave that debate alone but its not about opinion its pure mathematics ..

  • #72,171
  • Aug 19, 2010 4:48am Aug 19, 2010 4:48am
Quoting Jonnyislost
Looks like we had a real stab at the 1.6 BRN this time
I like this bar very much
order placed at 1.6105 (above the BUOB and round number)
Nice spot J. I'm with you on this one. Good divergence too, should be a clear shot to the FTA, then possibly 1.6200.

Quoting pipmyride
See this is the kind of bar i have a problem with - where is your stop - the risk vs reward to your FTA is wildly inverted .. that thing whips around and you are in for a loss bigger than what your reward was going to be ...

just the way i see this kind of setup ofcourse
I know where you're coming from Pip. I guess it all depends on what type of trader you are and how you like to play things. Personally, I only take high probability setups with lots of confluence, so that I know 9 times out of 10 they are going to get to that first trouble area. Then it comes down to trade management - either taking profit at that level, reducing your stop, or moving it to BE.

With a strategy with a lower win rate, I agree the R:R needs to be high to account for it. Different strokes for different folks

Best,
Chris
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  • #72,172
  • Aug 19, 2010 4:56am Aug 19, 2010 4:56am
Quoting Chris P
Personally, I only take high probability setups with lots of confluence, so that I know 9 times out of 10 they are going to get to that first trouble area.

Best,
Chris
lol i keep saying i wont debate it - but the only question i'll leave u with is what if that 1 out of 10 loser is this massive GU bar that you are taking about a 130 pip risk - 130 pip loss is going to hurt anyone and i'd challenge those who say they would "just get out earlier without a full loss" as to how are you going to handle it mentally when you get out "earlier" with 30 pip loss instead of 130 and then it runs back up in your direction .. How do you know that 30 pip negative wont come back in your favour as opposed to going on towards the original 130 pip SL.
  • #72,173
  • Aug 19, 2010 5:16am Aug 19, 2010 5:16am
Quoting pipmyride
lol i keep saying i wont debate it - but the only question i'll leave u with is what if that 1 out of 10 loser is this massive GU bar that you are taking about a 130 pip risk - 130 pip loss is going to hurt anyone and i'd challenge those who say they would "just get out earlier without a full loss" as to how are you going to handle it mentally when you get out "earlier" with 30 pip loss instead of 130 and then it runs back up in your direction .. How do you know that 30 pip negative wont come back in your favour as opposed to going on towards...
While it seems to mostly be sideways a good chance to debate this perhaps?
For all the reading of charts etc, the other side to this business is a psycholgical one (certainly a major factor). If you commit to a trade surely you should stay with it? If you have analysed the entry, exit stop etc, what has changed since you entered? We all want winning trades but some may pull back further to start with, thats why we have a stop. Trade management will also play a part. Would I enter as much on 130 point stop as a tight one? No, greed my lead you down that route, ie big candle big move. I would take a smaller position of what may be a larger move.
  • #72,174
  • Aug 19, 2010 5:52am Aug 19, 2010 5:52am
Quoting Chelski
I would take a smaller position of what may be a larger move.
Controlling the position size is a good practice in situation where big stop loss is required. It can be 130 pip stop but the lot size can be used to reduce the actual loss. Yeah, the profit will also be less.
  • #72,175
  • Edited 6:12am Aug 19, 2010 5:57am | Edited 6:12am
Quoting pipmyride
lol i keep saying i wont debate it - but the only question i'll leave u with is what if that 1 out of 10 loser is this massive GU bar that you are taking about a 130 pip risk - 130 pip loss is going to hurt anyone and i'd challenge those who say they would "just get out earlier without a full loss" as to how are you going to handle it mentally when you get out "earlier" with 30 pip loss instead of 130 and then it runs back up in your direction .. How do you know that 30 pip negative wont come back in your favour as opposed to going on towards...
IMO the size of the bar is taken out of the equation by using proper money management. So whether I'm taking a position on a 250 pip bar or a 20 pip bar, I still risk 1R. Now if 9 of my trades hit my target at an average gain of 0.5R, then I'm up 4.5R. If I then take a loss of 1R, I'm still up 3.5R. As long as you position yourself properly on every trade, and risk the same portion of your trading account, the size of the stop loss in pips doesn't factor.

The way to prevent a loss from affecting you psychologically, is to only risk a proportion of your account that you are comfortable with. Losses are part of the cost of trading, and should be expected. As for moving stops and getting out early etc, this should all form part of the initial trade plan. As long as you plan for every scenario before a trade and then execute that plan, you will be in a position to amend rules if needed. The real mental damage comes from not following a plan to the letter, because how can you improve if you can't follow your own system?

Best,
Chris
  • #72,176
  • Aug 19, 2010 6:11am Aug 19, 2010 6:11am
Quoting Chris P
IMO the size of the bar is taken out of the equation by using proper money management. So whether I'm taking a position on a 250 pip bar or a 20 pip bar, I still risk 1R. Now if 9 of my trades hit my target at an average gain of 0.5R, then I'm up 4.5R. If I then take a loss of 1R, I'm still up 3.5R. As long as you position yourself properly on every trade, and risk the same portion of your trading account, the size of the stop loss in pips doesn't factor.

The was to prevent a loss from affecting you psychologically, is to only risk a proportion...
Excellent Post!!!
  • #72,177
  • Aug 19, 2010 6:33am Aug 19, 2010 6:33am
Quoting Chris P
IMO the size of the bar is taken out of the equation by using proper money management. So whether I'm taking a position on a 250 pip bar or a 20 pip bar, I still risk 1R. Now if 9 of my trades hit my target at an average gain of 0.5R, then I'm up 4.5R. If I then take a loss of 1R, I'm still up 3.5R. As long as you position yourself properly on every trade, and risk the same portion of your trading account, the size of the stop loss in pips doesn't factor.

The way to prevent a loss from affecting you psychologically, is to only risk a proportion...
100% correct but who actually does this ?

And for that matter, who can quantify they have a 90% win rate ? Those that do can do whatever they like
  • #72,178
  • Aug 19, 2010 7:37am Aug 19, 2010 7:37am
90% win ratio, i see some people can do it, but, it is impossible task for me, sometimes, i wonder those who can win 90% of the time sounds like not human being

jeurre


Quoting pipmyride
100% correct but who actually does this ?

And for that matter, who can quantify they have a 90% win rate ? Those that do can do whatever they like
  • #72,179
  • Aug 19, 2010 7:49am Aug 19, 2010 7:49am
Looking for a little advise on IBs. What would have been the correct entry point, break of the red arrow or the green one?
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  • #72,180
  • Aug 19, 2010 8:01am Aug 19, 2010 8:01am
Quoting pipmyride
lol i keep saying i wont debate it - but the only question i'll leave u with is what if that 1 out of 10 loser is this massive GU bar that you are taking about a 130 pip risk - 130 pip loss is going to hurt anyone and i'd challenge those who say they would "just get out earlier without a full loss" as to how are you going to handle it mentally when you get out "earlier" with 30 pip loss instead of 130 and then it runs back up in your direction .. How do you know that 30 pip negative wont come back in your favour as opposed to going on towards...
Well as i see it eventually, with your experience growing, you will learn how to recognize good setups before PA shows you the way, and you will be ahead of the crowd who will follow you after the PA shows them the way. And when you will be able to touch trade, then your stoplosses would be tighter.

Well Bundy explains it much better here: link and there is alos raczekfx strategy about fib touch trading this and this

But for now IMHO the best is to wait for PA to show you the way. I dont like this kind of setups either, but before i become more experienced, following PA setups is the best for being profitable.
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