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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

  • #72,981
  • Aug 26, 2010 5:54pm Aug 26, 2010 5:54pm
Quoting jdl
I read that KISS method here but still do not understand it:
http://www.forexfactory.com/showpost...ostcount=72310

Rules seems to be:
1. You Fib the range of opposing PBs
2. you wait for price to break that range
3. you then wait for retracement to pivot (middle of Fib range)
4. you put pending order on at pivot point
5. you trade in direction of break to .382 extension

So my questions are:
a. "trade in direction of break" means in the direction of the step 2 break? So the thinking is it will often break again in the...
The thing to remember is that this is something that you will have to demo many times and make it your own. I highly recommend a testing software for training your eye to PA. I have used vHands (free) but have purchased a software package recently that is much more user friendly. Now going to be up later nights looking at this stuff. The idea on the opposing PB is that an entry after the break of the range ad back to the 50% retracement gives you a better R/R trade probability. However, there have been times that upon the break of the second Pin that forms, I will take the trade in true J16 style especially if the trade is in agreemet with the trend and use the outer .382 ext as my target.

K.I.S.S.
  • #72,982
  • Aug 26, 2010 6:18pm Aug 26, 2010 6:18pm
I hope that this chart doesnt look too much like what we see at the bottom of a bird cage.

http://cdn.forexfactory.com/attachme...3&d=1278558538


Here's a 4 HR GBPUSD bar chart. I have indicated pin bars, inverted pins, outside bars and engulfing bars. This is pretty much is all I trade except for that I also trade the same set ups on daily and weekly charts. I need to note here also that I would not trade most of these bars indicated. I just featured each of the pins, engulfing and o.b's for this illustration.

Eighteen bars from the left is an outside bar. This is not the best trade to take short as it is at a swing low. We will however use it for my example. Now, if nevertheless decided to trade this bar with J16 type rules we would enter 5 pips or so below the break of the bar. Using the -.382 extension from the range of this bar as a target. Why the .382 extension? I use it because it is a very high probability target once any range has been broken. Look for yourself. So the thinking here is trade a high probability bar to a high probability target and then allow compounding to do the rest.

When I plot my fib on the range of his bar, I look to my left for the first bar low (since Iam trading short) that I will encounter on my way down. If price would not encounter the low of the bar low to the left before the -.382 TP target is acheived, then the -.382 ext is my hard target. If the bar low to the left is encountered by price before th -.382 ext is acheived, I would manage the trade, differently or decide not to take the trade at all. If the -.382 ext is encounterd by price with still plenty of room to run, what trade managemet options do you have at the point that target is acheived? Close the trade, move your stop to breakeven, close half and let the rest run - this is the trader's choice. This is not necessarily my method to a detail as it evolves based on my experiences.

Now is the time to ask yourself, how can this information be used to maximize my results? How many trades like the one here would have worked out? The answer I believe will put you on a journey to profitable trading.

I think that Fudd (sorry if I am haveing a lapse but I think it is him)has a rule that he uses for an advantage and it is that once he selects a bar to trade from, the price must break to the upside or downside on the very next bar. (note the x's) This is all just a thinking excercise. What would I use to enter a trade? How do I best exit a trade? Exits are 1000 times more important in my opinion. This is not to say that trades should'nt be selected with caution. I say all of this because I have learned much from my price action studies.

If there is any one thing that I feel is valuable enough to repeat over and over again it is that we need to do our best to stack the odds on our side for each trade. Look for the best setups only. This thinking with discipline will have you pass on trades that sort of fit your strict criteria and go to th target that you saw in advance. Remember that it is o.k. There is always another trade setup around the corner.

K.I.S.S.
  • #72,983
  • Aug 26, 2010 6:30pm Aug 26, 2010 6:30pm
Morning guys!!

I find I tend to trade before I think or trade cause Im bored so I had a trade journal/ checklist before I actually enter the trade now and I find it really helps. It also has a rating system out of 8 based on trend, ppz, space, swing, divergence, fibo confluence, ema confluence, chart pattern confluence.

In short it gives you RR, Price action bar, Pattern type, Higher TF agreement (or lack of disagreement), With trend, whether its a breakout trade, space, at swing lo/hi, divergence, confluence (fibo, ema, pattern).

I am also using this to see how different pairs respond to different PAs etc, i.e. build some historical pair characteristics.

Hope this helps people who have the Russian roulette trigger finger like me.

If I am missing any other checklists please let me know as well as errors.

Cheers
Thanks regular posters ... i am watching and learning.
Attached File(s)
File Type: xls TradeJournal_100826.xls   39 KB | 524 downloads
  • #72,984
  • Aug 26, 2010 6:32pm Aug 26, 2010 6:32pm
Quoting KissFan
I hope that this chart doesnt look too much like what we see at the bottom of a bird cage.

http://cdn.forexfactory.com/attachme...3&d=1278558538


Here's a 4 HR GBPUSD bar chart. I have indicated pin bars, inverted pins, outside bars and engulfing bars. This is pretty much is all I trade except for that I also trade the same set ups on daily and weekly charts. I need to note here also that I would not trade most of these bars indicated. I just featured each of the pins, engulfing and o.b's for this illustration....
great post dude! Yes I use momentum in the same way

Thanks for sharing
Mike
  • #72,985
  • Aug 26, 2010 7:03pm Aug 26, 2010 7:03pm
Quoting KissFan
I hope that this chart doesnt look too much like what we see at the bottom of a bird cage.

http://cdn.forexfactory.com/attachme...3&d=1278558538


Here's a 4 HR GBPUSD bar chart. I have indicated pin bars, inverted pins, outside bars and engulfing bars. This is pretty much is all I trade except for that I also trade the same set ups on daily and weekly charts. I need to note here also that I would not trade most of these bars indicated. I just featured each of the pins, engulfing and o.b's for this illustration....
Hi KISS,
Great post !! I definitely got something out of this that I want to try next time I enter. Please let me know if I have misunderstood the post, I am still learning :-).

You are using S+R and PA ( OB,pin etc) to define where to enter, and using .382 extension to decide where to exit. I was contemplating 3 different exits
1. Exit half of the order at fix number of pips and move stops to BE for other half
2. Exit half of the order at first FTA and them move stops to BE for other half
3. Exit half of the order at .382 as there is a high probability it will reach there due to momentum ( is this what you have described in your post?), and then
move stops to BE for other half

appreciate your comments
cheers
  • #72,986
  • Aug 26, 2010 7:10pm Aug 26, 2010 7:10pm
Hi gurus,

I have tried to draw SRs on this pair but not sure if I am correct.In some pairs there are beautiful ranges and PPZs. I felt I could not identify them in this pair. Just wanted to make sure I am doing it correctly. solid lines are majors and dotted line is PPz.


appreciate your comments.
cheers
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  • #72,987
  • Aug 26, 2010 7:21pm Aug 26, 2010 7:21pm
Quoting Adilius07
The thing what I noticed is that on Daily it is rather impossible to have a conservative and tight SL like this. The conservative stop (behind PB) will be 100+ pips (if we take good big bar) and your FTA usually will be much much closer... that all brings us back to being more picky. But sometimes what we think are A+ would fail too, so the best would be to have RR positive... IMHO

EDIT: Positive RR is only either letting trade go, or thinking the ways to make SL smaller.... I think
Positive RR is meaningless.
Positive EV is not.

Unless you are taking coinflips, there is no reason to have a 1:1 requirement. And if you are taking coinflips, then you should be reading more of Mike or Jaroo's posts.

Quoting mihazupan1
Could you please write a bit more about trailing stop? I suppose you use it frequently. How big should a trailing stop be (in pips)? When to use it?
When I use a trail, it will usually be based on swings, trouble areas or ATR. An arbitary number of pips is counterproductive, imho.
When you have to shoot, shoot. Dont talk.
  • #72,988
  • Aug 26, 2010 7:22pm Aug 26, 2010 7:22pm
Quoting Imphilomath
Hi gurus,

I have tried to draw SRs on this pair but not sure if I am correct.In some pairs there are beautiful ranges and PPZs. I felt I could not identify them in this pair. Just wanted to make sure I am doing it correctly. solid lines are majors and dotted line is PPz.


appreciate your comments.
cheers
Hey Imp

Looks good to me here would be mine for the daily and 4hr(the most obvious ones)
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  • #72,989
  • Aug 26, 2010 7:24pm Aug 26, 2010 7:24pm
Quoting Imphilomath
Hi KISS,
Great post !! I definitely got something out of this that I want to try next time I enter. Please let me know if I have misunderstood the post, I am still learning :-).

You are using S+R and PA ( OB,pin etc) to define where to enter, and using .382 extension to decide where to exit. I was contemplating 3 different exits
1. Exit half of the order at fix number of pips and move stops to BE for other half
2. Exit half of the order at first FTA and them move stops to BE for other half
3. Exit half of the order at .382 as there is a high...

Yes sir, you have a an accurate grasp of what I am conveying here. Each trade will pose different situations depending on SR.

K.I.S.S.
  • #72,990
  • Aug 26, 2010 7:27pm Aug 26, 2010 7:27pm
Quoting mbqb11
Hey Imp

Looks good to me here would be mine for the daily and 4hr(the most obvious ones)
Thanks Mike :-). I should get used to drawing 'zones' than drawing lines. But I am glad I am close to what you have.

cheers
  • #72,991
  • Aug 26, 2010 7:29pm Aug 26, 2010 7:29pm
Quoting KissFan
Yes sir, you have a an accurate grasp of what I am conveying here. Each trade will pose different situations depending on SR.

K.I.S.S.
Thanks KISS, I am definitely going to try that :-)

cheers
  • #72,992
  • Edited Aug 27, 2010 12:22am Aug 26, 2010 11:58pm | Edited Aug 27, 2010 12:22am
Quoting xmzhang
Good afternoon Jarroo, Mike,
I want to analyse the daily PB trade of the G-C today mentioned by some of the members today and share some thoughts of me with you. This PB quite a long story, but let me know if this is a correct way to manage a trade.

.
Quoting xmzhang
The attachements of the G-C daily PB-trade

Quoting mbqb11
Hey Zhang

I rarely go to lower timeframes to manage a trade I think it overcomplicates the process. .

Best
Mike


I agree with Mike, xmzhang, moving down to lower time frames can overcomplicate a very simple trade. But more importantly, it can be very, very misleading.

Don't get me wrong, it is very viable as Mike had said . . . I will tend to manage a Weekly setup on the Daily, but more often then not, I should have stuck with managing it on the time frame that it was presented.

Let's take the Daily Gbp/Chf Daily PB for example . . give me a minte.
Indicators show the past. Price Action "Indicates" the future.
  • #72,993
  • Aug 27, 2010 12:20am Aug 27, 2010 12:20am
Quoting jarroo
.

Let's take the Daily Gbp/Chf Daily PB for example . . give me a minte.

Quoting aserbfx
gbp/chf daily.
not the biggest pb, but one which comes from strong support.
good space till 1.61.
Quoting jdl
Anyone else enjoying this trade? It's running into some resistance now at BRN 1.600. But SL moved to BE, so a free trade. Gotta love it when it works as planned.
Let's say you saw, as maybe aserbfx and jdl did, that the 1.5800 level on the Gbp/Chf Monthly as a Support level and on the Weekly and Daily as a PPZ level. You also notice that Price seems to be in a nice consolidation area between the 1.5800 and 1.7000 for some time. As Price nears the 1.5800 level you saw this as a opportunity to look for some solid PA action to trade.
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Indicators show the past. Price Action "Indicates" the future.
  • #72,994
  • Aug 27, 2010 12:22am Aug 27, 2010 12:22am
eur/chf h4.
dblhc.
i ilke the fact that it tested the 1.300 a second time.
stopp below the bar (1.2988), tp 1.3135
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meine augen sind die sterne
  • #72,995
  • Edited 1:47am Aug 27, 2010 12:44am | Edited 1:47am
Quoting jarroo
Let's say you saw, as maybe aserbfx and jdl did, that the 1.5800 level on the Gbp/Chf Monthly as a Support level and on the Weekly and Daily as a PPZ level.

You also notice on the Daily, that the 1.5850 acted as Support a few weeks back and are now presented with a small PB on the Daily at this level.

Due to the PB's location and the bit of Space it has (not on its Size), you decide to take it to the 1.6000 to see if it can get over and above the 1.6000 and maybe back up to the 1.7000 . . .to the moon.

It gets to the 1.6000 and you protect yourself by moving to break even or take half then to break even or free trade it, etc.

You do not take the full position off at the 1.6000 because remember our plan was to see if the consolidation will continue to the 1.7000 or at least to the 1.6500 . . .we're looking for that runnnnnner.

Now to the your question about managing this on the 4 hour time frame . . .
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Indicators show the past. Price Action "Indicates" the future.
  • #72,996
  • Aug 27, 2010 12:55am Aug 27, 2010 12:55am
Quoting jarroo
Let's say you saw, as maybe aserbfx and jdl did, that the 1.5800 level on the Gbp/Chf Monthly as a Support level and on the Weekly and Daily as a PPZ level. You also notice that Price seems to be in a nice consolidation area between the 1.5800 and 1.7000 for some time. As Price nears the 1.5800 level you saw this as a opportunity to look for some solid PA action to trade.
Hi everyone, I'm very new to forex trading and am very lucky to have come across this thread and learnt more stuff on trading than any other sources that I've come across. However, I'm still pretty unfamiliar with a lot of things and would greatly appreciate if you guys could explain it to me.

Jaroo, I was looking at the daily and weekly charts you posted but I can't seem to figure out how there is a PPZ level. Could you enlighten me on this? Thanks
  • #72,997
  • Edited 1:48am Aug 27, 2010 1:14am | Edited 1:48am
Quoting jarroo

Now to the your question about managing this on the 4 hour time frame . . .
Looking at the 4 hour we have a PB (BEOB on your feed), not too bad . .nice size, off a BRN 1.6000, a bit of space and with the trend. Target . . previous bar high in green and/or the top of our Daily PB.

We know what a setup will do when it hits our FTA, it usually reacts. This 4 hour PB could have easily reacted as I have drawn (magenta line) but it didn't. A free trade could have given it more room with less risk but that too would have closed out with a net zero loss. So now we wait for a better setup to present itself.

Managing a setup on a lower time frame can be very misleading.
We know that Price doesn't move in a straight line . . its just part of the normal vicissitudes of the market.

Could you have ended your Bullish Daily PB by the 4 hour bearish PB . .sure you could . .but if the 4 hour PB hit its target then when to the 1.6500 or 1.7000 you wouldnt be srcatching your head. . .now would you ?
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Indicators show the past. Price Action "Indicates" the future.
  • #72,998
  • Aug 27, 2010 1:25am Aug 27, 2010 1:25am
Quoting melvin87
Hi everyone, I'm very new to forex trading and am very lucky to have come across this thread and learnt more stuff on trading than any other sources that I've come across. However, I'm still pretty unfamiliar with a lot of things and would greatly appreciate if you guys could explain it to me.

Jaroo, I was looking at the daily and weekly charts you posted but I can't seem to figure out how there is a PPZ level. Could you enlighten me on this? Thanks
Hi, and welcome.


Looks like Jarro is busy so, I will show you my humble understanding of it, while I read his continuation post with Glee.

Hope this helps.
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  • #72,999
  • Aug 27, 2010 1:39am Aug 27, 2010 1:39am
Quoting melvin87
Hi everyone, I'm very new to forex trading and am very lucky to have come across this thread and learnt more stuff on trading than any other sources that I've come across. However, I'm still pretty unfamiliar with a lot of things and would greatly appreciate if you guys could explain it to me.

Jaroo, I was looking at the daily and weekly charts you posted but I can't seem to figure out how there is a PPZ level. Could you enlighten me on this? Thanks

Hey melvin . . . welcome to the Thread.

I can see how the 1.5800 doesn't look like a PPZ level. More recently it has acted as a strong Support level on the Daily, Weekly and Monthly.

But if we look back in time on the Weekly and Daily we can see that it did act as a PPZ level. But more recently as a Support level.


Edit: Hey . . Thanks Pinbar . . .
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Indicators show the past. Price Action "Indicates" the future.
  • #73,000
  • Aug 27, 2010 1:54am Aug 27, 2010 1:54am
Quoting mbqb11
Hey Ander

I can see you are not a complete newbie b/c you target was perfect and understanding the importance of that area. THat makes me less worried about certain things you are doing. But just a note as always a pinbar is not valid till the low breaks so I take it you understood that and since your target was close.

Again overall I think you played that situation as well as you could

Mike
Hi mike,

Yes I completely agree on the low breaking before it is valid. Sometimes when I am convinced about a trade a jump the gun and enter on the opening of the new bar, this is something I must work on though as it will definately burn me in the long run. Thanks for the heads up. Sorry for the late reply but I am gmt+2....

regards,
Thank you j16!
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