james16 Chart Thread

Jarroo this's great stuff mate l know gold's off .. at the moment but that gold nugget has made my gold chart go through the roof!! keep shinning bro..

Hi Crusen
Well I am not jarroo or a wise trader, but is your lower red line not a ppz as it was resistance then price broke through and it became support.
Just my thoughts hope you do not mind
Grahame

PPZ levels are just that . . a makeup of a Support level and/or Resistance level. We like PPZs because they can either be strong Support or strong Resistance.

So your chart is perfect. What I am trying to show is this . . .Price is approaching a PPZ level . . What is that PPZ level acting as? Support ? or Resistance? If Price can't close above it .. its Resistance . . if it closes above it . . its Support.

So if Price comes upon a long drawn out Resistance level like #1 and Price break through and closes above (like your chart shows by the way) that PB (1#) is well supported from previous (long drawn out) resistance.

I think I can close to your question . .if not ask again.

Good question, I think the ppz is defined after it's respected from both sides. In my example I'm showing a trade at the first pullback from the other side.

Don't forget to wait for the Close ..

I see . . if #2's previous Resistance level is all there is . . .this is nothing else to the left forever . .like its making new Highs.

The basic premise is there and it works for me.

Oh, yes, for sure.

I shall just be watching it play out anyway, For Now!
Just trying to get my brain wired up correctly a bit more.

I am itching to trade these but, for the last 2 months, I have made a rule to just watch and learn from them.

I think you meant the 84.00 area. Yes, that excellent Kalbar . .

Don't forget the Monthly too . . . very strong levels up there. . .even if its just a single High, Low or Close.

Thanks greendiesel . .glad I could help.

Before I go away and study all you've said, Jarroo, let me just do an exercise to see what's sunk in so far. Sorry Jim, but I'm going to put some questions to you in there. If my analysis sucks, I'm sure your comments will still make the post worthwhile

I open up a 4H chart at random. AUD/CHF. Damn, two countries about as unrelated as you can get! (I won't get into watching AUD/USD/CHF in this post, but it's in the back of my mind It looks a mess. Let's try to make sense of it anyway.

I see
Good support on the .95 level and 50% fib from some move
Price broke down and retraced. .95 became resistance to the first little retracement.
Price has gone down and bounced off a 61.8 fib level from a down move.

Open weekly,
Draw a few fibs
In Oct 2008, price started to move up from under .70, and in June 2009 closed above parity, but shot back down to make a break South again. Within a week it had shattered the .95, but just couldn't close below it.
In fact, it took 6 more weeks for Price to Break Through and Close Below, but when it did, it fell hard, breaking .9 within a week.
But it couldn't close under the 38.2% retracement of the big move up (1)
Price moved up again, but turned on a penny at the 61.8 retracement of the retracement down (2)
Down it went again, but bounced off .90 (3), and was supported in the move by the 61.8 fib of the down move (4) at .9352, which had recently been a flip zone on the move up.
The upmove is stopped to the pip by the fib resistance line (5) and heads down again, only to be supported again today by the same 61.8 around .9350. It's now heading North again towards the pivot.

So, fib predictions:
Can't tell. Stuck around pivot of retracement. Has broken long once, short once, although the long looked more convincing.
IF it breaks short again, and IF it breaks all supports, it's going to have a go at the .9000 again, and maybe retry the 38.2 at .8920
IF it breaks long, and IF it breaks all resistances, it has lots of targets- parity, 1.0303, 1.0530, 1.0589.


That's a lot of ifs, and as my name would suggest...........


Okay, so we have possible targets, but no idea which routes price would take to get there. Reliance on fibs alone can lead to massive drawdowns.

So, I need to break the journey down, travel with price from junction to junction and see if I can even recognise a junction when I get to it! I suppose a junction would be a place where price flips. A place where price hadn't been allowed to pass in the past(the more times the better), but did pass eventually, and then wasn't allowed back again (the more times the better).

I put my fibs to the background so I get a clearer look for places where price has been resisted and then supported.
The 1.0000 level has been a good resistance, so I'll mark it grey, a colour I'll use in future to denote a Big Round Number. In fact, I'll go to all my charts and mark the BRN's on each of them. They look important.

Now I'll look for other areas of S/R.
I'll drag a purple PPZ line down from the top of the screen.
.9780 looks pretty good. I'll leave a purple PPZ line there for now. It's been support and resistance a couple of times on this screen. It got breached and closed above lately, so I'll have to ask Jim later what he thinks of it.
For now I zoom out and scroll left to see if this has been a Price Pivot Zone in the past. It looks pretty good. Okay, it doesn't touch to the pip everywhere, but it's certainly a zone where price has flipped.
I also see that the BRN's, .95 and .90 are very important levels. Glad I put them in.

I'm very sorry if I'm boring you at this stagebut this process, for me, is very important.

So now around current price I've got 3 grey BRN's and one purple PPZ, all tested for strength, and clear pathways and junctions are beginning to appear.
So now, just to prove the point to myself, I type the words Support and Resistance around these lines.
This gets me looking at other areas that would like the words printed above or below them.
For example, just above the .90 level there's an area where price has flipped on the last big move up. This level, .9084, also held up price further to the left of the screen. But it's very close to the .90. The screen will get cluttered if I carry on adding lines like this. I'll have to ask Jim later whether the BRN is more important to leave in than the PPZ.

For now I'll zoom out and scroll left to see if this area was important in the past. It seems it was, so I,m gonna leave it there for now.

My .95 BRN is a very nice PPZ. Except that at point A on the chart it wasn't an exact support, and at point B it didn't work perfectly as resistance. Must ask Jim for his comments about that later too. Poor Jim.
One funny thing I noticed about A and B, and probably means absolutely nothing- the highs of area B seem to fit exactly under the lows of area A.

Now I have some important lines on my chart, so what can I see?
Well,
Last week's bar (Price) Broke Through and Closed Below my BRN, hit my 61.8 fib retracement(also at what now looks like another historical((and recent)) PPZ. I'll colour it green for now, and ask Jim later about strategies for removing PPZs)

The weekly bar looks more bearish than it did when I started typing this.
I'll move down to the Daily and see what's happening.

So, PBT&CB BRN .95, retraced and carried on to fib/PPZ confluence and tried to bounce back. If it finds resistance at .95, it may range between there and .9339 for a while, until it breaks through and closes above/below one of them.

If it were to go north, I'd have to watch out for the bar highs around .96557, which is the 31.8% retracement of the move down.
If it broke them, I' d look for resistance at the .9780, but even if I got bearish PA there I'd be very wary of going short, as those bar highs are so very close.

If it were to go south I'd look for strong bullish PA on the D1 and H4 from the .9084 level, with a First Trouble Area of .9339. If .9339 proved itself to be resistance, I'd look for strong bearish PA to short from there, with FTA .9084

Should I now go back to H4 to see what's going on?
You know, I really don't think I need to right now


Anyone who took the time to read this, thank you so much.
Jim, all mistakes in this musing are my fault. Any sensible statements (if any) are yours

How you guys think about my view on GBPUSD?

Maybe you should consider writing a book yourself jarroo. At least you would grab your due credits before the 'invisibles' cash in on the $$$

lol

John you definitely have identified some PPZ areas that would be decent to take a trade off of. 1.59 is a definitely pivot but 1.60 seems much better to take a trade off of.

As you know the J16 method works in all different ways. I would just be aware that we are kind of in a sideways market and that the BEOB although large it had a weak close and didnt really test the high as much as i'd like to see.

I think you definitely could have a play here but is it worth putting your money on is what you need to ask yourself? Is it A+ for you? If not then why even bother?

Just my thoughts

Thanks for your answer but what you mean with test the high ?

Hey Crusen

#1 is going to be a much better place to look for a pullback then #2. As #1 is more established and price just stalled out before finally breaking through pulling back and retesting. The important thing to note is that the swing high created by the breakout is your trouble area for your price action(also the high that creates point #2 once it breaks above it). Now for #2 price has pulled back a former high but this high becomes less significant and is only really any type of information in the very short term. This is why we say not to play bars at that location cause you are immediately back into your FTA. The more confluence the better and simply a former minor swing point(as you said #2 has ntohing else), is not usually enough and most people misplay that expecting too much to happen all the time.

Best
Mike

When taking Outside Bars or Pin Bars traditional we are taking them as reversals at important ppz's.

One of the reasons these bars work visually is because you see that price has tried to advance and then shoots down showing that the market did not believe price should advance.

So when we get a BEOB at the 1.60 level we want to see it test above the range of previous bars and then get rejected.

I know you were talking about taking a retrace but when I said that the bar didnt test the highs I was commenting on the BEOB as a whole

Sorry if I am not the best teacher. Let me know if you need more clarification.

Hi DM

have just looked at my charts and what you are saying makes complete sense to me. This BEOB does not look right to me - it is too lop-sided and only a higher high than the previous bars would have got me interested.

Hey IFMYA

I know you are probably looking for some different answers from Jim along what he was speaking about earlier.

A simplistic way to view your chart though(with the BRNs you saw were important).

Last swing point at parity, great level to watch, simple as that.

9500 is a pivot for sure but we are chopping around it too so from a weekly perspective we are winding up = sideways market be more cautious)

9000 mark last swing low(the major swing points like this one and parity are super important when we retest it).

Ok thanks makes sense now

Thanks Mike

that's a beautifully clean chart!

So are you saying that because price is around a BRN in the centre of two VBRNs which have each recently been tested, that PA on the D1 and H4 may be unreliable until it's around these extremes?

BTW, great answers to the head and shoulders trailing stop question and the PPZ vs SR question, and the...................
Much appreciated

Michael