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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

  • #86,181
  • Jan 18, 2011 9:42am Jan 18, 2011 9:42am
Thanks, sometimes I feel I am on right track but sometimes I feel as if I don't know anything...

To summarise what i know!

PPZ levels
basic bar formations (Pin, BUOB, BEOB)
I can draw trend lines, fibs etc..

I understand we have to look to see how the price is closing around ppz level
- Strong close above - ppz is support
- Strong close below - ppz is resistance

Do we than simply just wait for price to form a specific bar formation like pin, beob, buob etc? if the bar as formed we check the size of the bar relative to previous bars, traffic, space etc..

I understand once you enter the trade, the important part of managing the trade comes in, which is individual to traders.. One thing that has to done is the FTA and stop loss price level identification.

This perhaps is over simplification of the process but does it roughly outline the correct approach and if not, what are the extra steps?
Trading is a test match not a Twenty20.
  • #86,182
  • Jan 18, 2011 9:44am Jan 18, 2011 9:44am
Quoting decentchap
Thanks, sometimes I feel I am on right track but sometimes I feel as if I don't know anything...

To summarise what i know!

PPZ levels
basic bar formations (Pin, BUOB, BEOB)
I can draw trend lines, fibs etc..

I understand we have to look to see how the price is closing around ppz level
- Strong close above - ppz is support
- Strong close below - ppz is resistance

Do we than simply just wait for price to form a specific bar formation like pin, beob, buob etc? if the bar as formed we check the size of the bar relative to previous bars, traffic,...
Hey DC

Yes this is the rough basics. Obviously each topic itself has a lot to it. We are looking for great locations and great stories to form around the locations. Price bars then become our triggers(or touch trades whatever floats ones boat). Now I many times have a great story/location but something isn't quite right with a bar and I pass, and vice versa. But your general outline is correct. Remember always this is a simple thing we are doing, buying or selling. This is why James says it is dirt simple. When we over think, try to do too much , and just generally get our egos stuck in there is when the biggest issues start to come out.

Keep at it
MIke
  • #86,183
  • Jan 18, 2011 10:07am Jan 18, 2011 10:07am
Quoting mbqb11
Hey DC

Yes this is the rough basics....
Hi Mike,
Many thanks for your response. I am glad to see I am on the right track for now. When we say location - that is ppz and stories are how price closes around it, is that right? Great story is a clear rejection of a level so we know the price doesn't want to go, hence we know where it wants to go?
Trading is a test match not a Twenty20.
  • #86,184
  • Jan 18, 2011 10:15am Jan 18, 2011 10:15am
Quoting decentchap
Hi Mike,
Many thanks for your response. I am glad to see I am on the right track for now. When we say location - that is ppz and stories are how price closes around it, is that right? Great story is a clear rejection of a level so we know the price doesn't want to go, hence we know where it wants to go?
Hey DC

Story can mean a TON of different scenarios.

It may just mean a double top with divergence. It might be a breakout pattern. It might just be a huge bar in space. It might mean a breakout and pullback. A bar off a strong PPZ. and the list goes on and on. This is why I always say everything is very situational and questions like this are impossible to give a one size fits all answer. Generally a story has a confluence of factors that make a trade a high probability situation(one persons story may not be another, there are no universal truths that one must follow to be successful, it is about learning tools that work and how to apply them best to fit you).

Take care
Mike
  • #86,185
  • Jan 18, 2011 10:27am Jan 18, 2011 10:27am
Quoting mbqb11
Hey DC

Story can mean a TON of different scenarios.

It may just mean a double top with divergence....
This is immensely helpful Mike and really clears up a lot for me. I really thank you and fellow posters for patiently answering my questions. It feels so good to get the questions out of my chest. I shall take on all the info onboard and learn.
Trading is a test match not a Twenty20.
  • #86,186
  • Jan 18, 2011 10:38am Jan 18, 2011 10:38am
Not sure if anyone has posted this yet -if so my apology
Gold. Huge weekly BEOB and PB are still in play. On 4Hour found a bearish PB at 50% ret of the weekly PB, off weekly PPZ and retest of Daily BEOB previous bar low along with 365 ema. Very nice. If this 4H PB breaks i am gonna hold and see if the weekly PB also breaks
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  • #86,187
  • Jan 18, 2011 10:47am Jan 18, 2011 10:47am
I just had a little AHA moment.
Maybe it will serve to someone anyhow, so this what I did.

I took 6 pairs: AUDUSD,EURAUD, NZDAUD,GBPUSD,USDCHF,EURGBP.
Marked BUOBS, BEOBS only, and only those appearing at BRN's I had on chart. For 1 year, starting 1 january 2010 until today.

The only purpose of this backtest was to see should I use Breakeven mechanism or not.

I thought my ability to pick good entries is still weak so I made this "mechanic" rule: trade only buobs appearing on BRN, target at exactly 1:1 RR test same entries with breakeven and without.

And results were quite interesting. For example without breakeven at all and with 1:1 RR I was able to make +6R on AUDUSD (12 trades for the year) but lost -3R on NZDUSD (5 trades for a year). Where with using breakeven concept I got +4R on same AUDUSD and 0R on NZDUSD.

Same correlation was on other samples. Don't want to bug you with the details, but the point is that with using BE I got a little less reward on some pairs but was able to completely have no losss for other pairs 0 at worst.

My average profit for this 6 pairs is just +2R for the pair for a year. Looks really awesome as we have so many other pairs to trade... Little tired with this, will try to make some 6 more pairs later, just to confirm this.

Ok, so I think breakeven is a must. It let's me avoid loss. Really so. It may be seen as it cuts profits for some pairs but it will really save you on the others, and most important it prevents from lossing streaks and yeah with fast breakeven as I had it's a bit hard psychologically for example EURGBP from 7 trades I got for a year 6 were BE and only 1 winner

Sorry for the long post, hope it will help at least 1 person
  • #86,188
  • Jan 18, 2011 11:20am Jan 18, 2011 11:20am
Hi what was your aim before you put your stop to breakeven? 1r:r? Also how did you trail your stops?
Trading is a test match not a Twenty20.
  • #86,189
  • Jan 18, 2011 11:23am Jan 18, 2011 11:23am
Quoting decentchap
Hi what was your aim before you put your stop to breakeven? 1r:r? Also how did you trail your stops?
Hey DC, yes traget was exactly the same as risk. No trail at all. either target or loss. But remember it was a super quick test, with very stupid entry criteria. And I love the results!!! Maybe really my problem was complete absence of Breakeven mechanism... now I will try to use it (as was suggested in the very beginning, lol, I should have listened)
  • #86,190
  • Jan 18, 2011 11:31am Jan 18, 2011 11:31am
Quoting Adilius07
Hey DC, yes traget was exactly the same as risk. No trail at all. either target or loss. But remember it was a super quick test, with very stupid entry criteria. And I love the results!!! Maybe really my problem was complete absence of Breakeven mechanism... now I will try to use it (as was suggested in the very beginning, lol, I should have listened)
when you say breakeven mechanism, you mean you put your stop loss to breakeven at some point while being in the trade - reducing the loss to 0. But you say you either took loss or profit? So I don't understand when the breakeven takes place.
Trading is a test match not a Twenty20.
  • #86,191
  • Jan 18, 2011 11:34am Jan 18, 2011 11:34am
Quote
Ok, so I think breakeven is a must. It let's me avoid loss. Really so. It may be seen as it cuts profits for some pairs but it will really save you on the others, and most important it prevents from lossing streaks and yeah with fast breakeven as I had it's a bit hard psychologically for example EURGBP from 7 trades I got for a year 6 were BE and only 1 winner http://cdn.forexfactory.com/images/s.../yim/happy.gif

I had the same realization a while ago after I had a string of losses and watched the videos in the guest area again. In one of them James talks about this while looking at a huge run: something like 6 B/E and 1 winners a month.

Fromyour experiment 1 winner a year might be a bit too few but how about 1 winner a month with a return of 3R (guess you can get even higher runners but 3R seems reasonable to achieve somewhat regularly with enough experience...) and the rest break even or averaging out to break even? Assuming you risk 2% in each trade that gives you around 6% (depending on the sequence of trades if you do have losers) which in turn is (1.06^12)-1 = 101% compounded interest per annum...

Since I realized this and made those calculations I started accepting break evens as a win (like James says) and just wait for one of those 3+R runners...
  • #86,192
  • Jan 18, 2011 11:34am Jan 18, 2011 11:34am
Quoting decentchap
when you say breakeven mechanism, you mean you put your stop loss to breakeven - reducing the loss to 0. But you say you either took loss or profit? So I don't understand when the breakeven takes place.
Yes. I marked setups and made two different tests. First test with breakeven the next one without breakeven. Targets in both cases were 1:1RR. Then I just compared the results, with breakeven look better (more consistent)

Sorry if I didn't understand your question. Did you mean this?
  • #86,193
  • Jan 18, 2011 11:40am Jan 18, 2011 11:40am
When did you decide to move to break even? next bar, at FTA, etc...?
  • #86,194
  • Jan 18, 2011 11:40am Jan 18, 2011 11:40am
Quoting sebby
I had the same realization a while ago after I had a string of losses and watched the videos in the guest area again. In one of them James talks about this while looking at a huge run: something like 6 B/E and 1 winners a month.

Fromyour experiment 1 winner a year might be a bit too few but how about 1 winner a month with a return of 3R (guess you can get even higher runners but 3R seems reasonable to achieve somewhat regularly with enough experience...) and the rest break even or averaging out to break even? Assuming you risk 2% in each trade...

Hey Sebby, thanks for your post. I really needed that someone to prove my thoughts too. I know James talked about it of course, I also watched those videos several times...but I don't know I could not truely make that concept mine. I strated my demo with BE then I slowly took it off... I will bring it back now. for sure, with discipline.
  • #86,195
  • Jan 18, 2011 11:43am Jan 18, 2011 11:43am
Quoting Adilius07
Yes. I marked setups and made two different tests. First test with breakeven the next one without breakeven. Targets in both cases were 1:1RR. Then I just compared the results, with breakeven look better (more consistent)

Sorry if I didn't understand your question. Did you mean this?
Sorry adi for the confusion. When you did the test with breakeven what did you differently compare to the other test? You moved your stop to breakeven at some point to eliminate the risk right? My question is when did you do it?
Trading is a test match not a Twenty20.
  • #86,196
  • Jan 18, 2011 11:47am Jan 18, 2011 11:47am
Quoting sebby
When did you decide to move to break even? next bar, at FTA, etc...?
If the next bar (entry bar) closed in profit (even 1 pip) I moved to BE.
Some trades were in loss for 3-4-5 days, then if a bar finally closes a few pips above my entry - I move to BE. I did not reduce SL by any another means, only BE.
  • #86,197
  • Jan 18, 2011 11:49am Jan 18, 2011 11:49am
Quoting decentchap
Sorry adi for the confusion. When you did the test with breakeven what did you differently compare to the other test? You moved your stop to breakeven at some point to eliminate the risk right? My question is when did you do it?
Oh, this is what I have just answered to Sebby. I think
Not considering FTA just move to be when a bar closed in profit even at least 1 pip
  • #86,198
  • Jan 18, 2011 11:49am Jan 18, 2011 11:49am
Quote
Hey Sebby, thanks for your post. I really needed that someone to prove my thoughts too. I know James talked about it of course, I also watched those videos several times...but I don't know I could not truely make that concept mine. I strated my demo with BE then I slowly took it off... I will bring it back now. for sure, with discipline.

In teh same boat. Need to regularly do those numbers quickly to convince myself again... Also just starting to not get angry when I get stopped at B/E and then it takes off... Guess it's allpart of the process...
  • #86,199
  • Jan 18, 2011 11:56am Jan 18, 2011 11:56am
Quoting Adilius07
If the next bar (entry bar) closed in profit (even 1 pip) I moved to BE.
Some trades were in loss for 3-4-5 days, then if a bar finally closes a few pips above my entry - I move to BE. I did not reduce SL by any another means, only BE.
Thanks adi
Trading is a test match not a Twenty20.
  • #86,200
  • Jan 18, 2011 12:00pm Jan 18, 2011 12:00pm
Quoting sebby
In teh same boat. Need to regularly do those numbers quickly to convince myself again... Also just starting to not get angry when I get stopped at B/E and then it takes off... Guess it's allpart of the process...
Yeah, we really need to eliminate any kind of emotions with this. That eurgbp for example, first trade was a winner then for the rest of the year there were BE's only. Lol. But we never know so we have to just continue to trade.

But again as you see everything was too simplified in this test (entries, no fta, dumb target etc) so I believe with more experience we will get much much better results!
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