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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

  • #97,061
  • Jun 22, 2011 6:32am Jun 22, 2011 6:32am
Quoting human2
Think I have it now. This should be better. As I said my chart only goes back a month so not great for putting in s/r areas. What do you think? Would it be a valid setup?
yes, u got it.

ideally, the pinbar should have its close lower than the open.
anyway, if the PB low (9580 ?) gets broken... 9550/60 area is potential FTA.

i checked here, http://finance.yahoo.com/q/bc?s=^N225+Basic+Chart&t=3m
it's been in a downmove since April.
but in your chart, it seems to be in a range (9350 - 9650), so i wont be surprised if this PB gets triggered barely & then price continues upward.

given all these info, ask yourself if u are comfortable trading it.. (u can watch the chart unfold or trade it on demo)
  • #97,062
  • Jun 22, 2011 6:37am Jun 22, 2011 6:37am
Thanks SC. Will watch for now & try learn. Your reply is much appreciated.
  • #97,063
  • Jun 22, 2011 6:45am Jun 22, 2011 6:45am
Quoting human2
Will watch for now & try learn. Your reply is much appreciated.
u are welcome Sir.
do update us, let's see how terribly different the outcome is from my view.

stocks, indices are rarely posted but appreciated too
  • #97,064
  • Jun 22, 2011 7:07am Jun 22, 2011 7:07am
Quoting supremeChaos
yes, u got it.

ideally, the pinbar should have its close lower than the open.
anyway, if the PB low (9580 ?) gets broken... 9550/60 area is potential FTA.

i checked here, http://finance.yahoo.com/q/bc?s=^N225+Basic+Chart&t=3m
it's been in a downmove since April.
but in your chart, it seems to be in a range (9350 - 9650), so i wont be surprised if this PB gets triggered barely & then price continues upward.

given all these info, ask yourself if u are comfortable...
Hey supremo

good solid advice there - something you excel at!! Looking outside fx at indexes etc at moment but nothing doing that stands out. This is one of those times we must wait patiently. 5 or 6 good days a month is all(???) it takes to grow your account successfully so as the old saying goes less = better.

kal
  • #97,065
  • Jun 22, 2011 8:13am Jun 22, 2011 8:13am
Guys I'm having problem with understanding the risk management.

The general rule of thumb is that we should risk 1-3% with every trade. Thats fine. But the problem is, how do you guys determine s/l on daily entries, since ATR can go to around 100ticks (futures) depending on the volatility, so that would mean that i need to have 100k account approx. to trade on daily charts?

I am still a noob and still practicing demo account, but when i start, my account will not be bigger than 5k, and i have no means of making it bigger. Thats why i am trying to cope with small time frames, with going up to 5% as the biggest risk.
  • #97,066
  • Jun 22, 2011 8:15am Jun 22, 2011 8:15am
Quoting thermobee
If you are thinking of selling, I wouldnt. You are correct that its a huge outside bar but look what its going into. A very strong support that was tested quite a few times. If anything I would be looking for a price signal to buy it.
Thanks, it took us around the previous lows, got out 30 pips, and now lets see if S holds.
  • #97,067
  • Jun 22, 2011 8:24am Jun 22, 2011 8:24am
Quoting biDc
Watching this level up here
EUR/GBP is at that level
  • #97,068
  • Edited 9:09am Jun 22, 2011 8:40am | Edited 9:09am
Had this breakout trade trigger in my sleep. Looking to take profit a bit before the next BRN 1.3500.

Edit: That was a quick trade, out at 1.3510
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  • #97,069
  • Jun 22, 2011 8:42am Jun 22, 2011 8:42am
Quoting Morainer
..understanding the risk management.
i am trying to cope with small time frames, with going up to 5% as the biggest risk.
u just have to trade an appropriate position size, regardless of how/big small your account is.
find a broker (like Oanda) that lets u trade flexibly..

dont trade lower timeframes to compensate for your situation.
instead, trade higher timeframes (H4 & up), use a market-based (as opposed to arbitrary) SL, then calculate & trade the appropriate position size.
also trade a low leverage (+/- 20:1), if necessary.
also, dont trade 5% right from the start. start with 0.5 - 1%.

Oanda's trading platform has a built in position size calculator.
calculators found here can help too.
  • #97,070
  • Jun 22, 2011 8:47am Jun 22, 2011 8:47am
In and out. Love it when it works like this. Guess the market and I were seeing things the same today
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  • #97,071
  • Jun 22, 2011 8:49am Jun 22, 2011 8:49am
That H1 BEOB was a super easy trade
I love this method!!!
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  • #97,072
  • Jun 22, 2011 8:54am Jun 22, 2011 8:54am
The article was originally published in the MTA Journal in the winter of 1992/1993.

If this is violating any link posting rules or anything I apologize and will take it down. Anyways I think this is great: http://www.hankpruden.com/tentasks.pdf
  • #97,073
  • Jun 22, 2011 9:05am Jun 22, 2011 9:05am
it worked yesterday with EUR/USD, today with GBP/USD and hopefully again with USD/CHF, but indeed those BEOVB are amazing. Although i dont think its completely in the spirit of this thread
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  • #97,074
  • Jun 22, 2011 9:09am Jun 22, 2011 9:09am
Quoting Morainer
Guys I'm having problem with understanding the risk management.

The general rule of thumb is that we should risk 1-3% with every trade. Thats fine. But the problem is, how do you guys determine s/l on daily entries, since ATR can go to around 100ticks (futures) depending on the volatility, so that would mean that i need to have 100k account approx. to trade on daily charts?

I am still a noob and still practicing demo account, but when i start, my account will not be bigger than 5k, and i have no means of making it bigger. Thats why i am trying...
One of the things for me that was a bit difficult to grasp at first was volatility based stop losses. That is making the SL the size of the bar that you are currently trading. If you slow down and think about it though, it makes sense. The key to trading with volatility based SLs as we do is that it equalizes the risk in all trades. Just because the EURUSD may do 3 times what silver does that day (just an arbitrary example) does not mean a gain or loss will effect the account 3 times more one time than another in a gain or loss (the loss is unfortunately the one that we have to plan for )

I would not say the % risk on each trade is as important as trading profitably for 3-6 months in demo when you are first starting out. That is one of the biggest rules that is ignored in post number one, but what most who ignore it don't realize is that it is one of the most important. I would definitely 100% agree with supremeChaos about not trading lower TF for the reason of obtaining more trades.

Patience is really the key to all of this. The amazing thing is that by working on gaining it, it will one day appear and everything that the seniors say will suddenly take on a new, enlightened, meaning.
  • #97,075
  • Jun 22, 2011 9:13am Jun 22, 2011 9:13am
Quoting supremeChaos
u just have to trade an appropriate position size, regardless of how/big small your account is.
find a broker (like Oanda) that lets u trade flexibly..

dont trade lower timeframes to compensate for your situation.
instead, trade higher timeframes (H4 & up), use a market-based (as opposed to arbitrary) SL, then calculate & trade the appropriate position size.
also trade a low leverage (+/- 20:1), if necessary.
also, dont trade 5% right from the start. start with 0.5 - 1%.

Oanda's trading platform has a built in position size calculator.
[url="http://fxtrade.oanda.com/account/margin-calculator"]calculators...
Thank you m8 for reply.

Although, I am not sure I quite understand what you mean by position size.

Lets say I make an entry on 4h/daily graphs. Ok, so 1% of my potential 5k account is 50 bucks. So lets make that 3%, to have something to work with.
Now, time frames like that have candles/bars with ranges up to 80-100tick and more. So my s/l of 15 ticks, which is my 3% cant endure the movement, or i can't stay long enough in the trade. And if it goes in the opposite direction of my position + slippage, i can lose 1/5 of my account in a heart beat. And thats whats bothering me. I don't know about margins on forex trading though, i only practice with futures contract (oil, indexes, etc). And the only time frame that suitable for me, considering my account and volatility/range are ones up to 5min charts (i use vol charts though) depending on the instruments, sometimes less. Please help me understand where is the flaw in my way of thinking.cheers



Quoting gungriffin
One of the things for me that was a bit difficult to grasp at first was volatility based stop losses. That is making the SL the size of the bar that you are currently trading. If you slow down and think about it though, it makes sense. The key to trading with volatility based SLs as we do is that it equalizes the risk in all trades. Just because the EURUSD may do 3 times what silver does that day (just an arbitrary example) does not mean a win or loss will effect the account 3 times more one time than another in a gain or loss (the loss is unfortunately the one that we have to plan for )

I would not say the % risk on each trade is as important as trading profitably for 3-6 months in demo when you are first starting out. That is one of the biggest rules that is ignored in post number one, but what most who ignore it don't realize is that it is one of the most important. I would definitely 100% agree with supremeChaos about not trading lower TF for the reason of obtaining more trades.

Patience is really the key to all of this. The amazing thing is that by working on gaining it, it will one day appear and everything that the seniors say will suddenly take on a new, enlightened, meaning.
Thank you for extensive reply.

The thing is i am relly not trying to find more trades. On the contrary, overtrading is a road to failure, that whats u guys have thought me, and i understand that. i am trying to find the high prob setups, but the thing is, even if i find A+ trade on higher TF entry, and lets say its a 80% probability trade, there is stilly 20% prob of failure. If that happens i lose easily 20% of the account. Sure, the next one can be a good one. But with account small as mine, i just can't afford that kind of a risk.
Currently i am trying to find A+ setups on low TF, but as you guys know, thats extremely hard, now matter how good charts look like there is always plenty of noise and false breakouts- even if the PA is perfect.
  • #97,076
  • Jun 22, 2011 9:16am Jun 22, 2011 9:16am
Quoting mbqb11
one too watch
updated chart, we got a beautiful beob

Bout as easy as it gets
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  • #97,077
  • Jun 22, 2011 9:20am Jun 22, 2011 9:20am
Quoting Morainer
Guys I'm having problem with understanding the risk management.

The general rule of thumb is that we should risk 1-3% with every trade. Thats fine. But the problem is, how do you guys determine s/l on daily entries, since ATR can go to around 100ticks (futures) depending on the volatility, so that would mean that i need to have 100k account approx. to trade on daily charts?

I am still a noob and still practicing demo account, but when i start, my account will not be bigger than 5k, and i have no means of making it bigger. Thats why i am trying...

If you use a broker with flexible position sizing you dont need to have a 100K account to trade daily bars and still trade with proper risk.

If you have a 5K USD account and you want to risk 1% then you want your position size to be 50 USD. With a 100tick stop you would have to risk .5 USD per tick. The number of units you buy will depend on what the quote and base currencies is but it is simple math.

You can size positions in multiples of just 1 unit with Oanda there may be others, FX gives you ultimate power in position sizing which is one reason I love it so much.
  • #97,078
  • Jun 22, 2011 9:23am Jun 22, 2011 9:23am
Quoting Morainer
Thank you m8 for reply.

Although, I am not sure I quite understand what you mean by position size.

Lets say I make an entry on 4h/daily graphs. Ok, so 1% of my potential 5k account is 50 bucks. So lets make that 3%, to have something to work with.
Now, time frames like that have candles/bars with ranges up to 80-100tick and more. So my s/l of 15 ticks, which is my 3% cant endure the movement, or i can't stay long enough in the trade. And if it goes in the opposite direction of my position + slippage, i can lose 1/5 of my account in a heart beat....
Most people on this forum are primarily forex. Mainly because it is suited so well to accounts of any size. I believe that Oanda allows for some commodities to be traded and if I understand correctly that is what SC is referencing. If it is not possible to trade futures with your account size that you have available then maybe look into trading more forex items? If someone else is more familiar please chime in. Morainer, is there a reason why you went with futures as opposed to forex?
  • #97,079
  • Jun 22, 2011 9:29am Jun 22, 2011 9:29am
Quoting Morainer
Thank you m8 for reply.

Although, I am not sure I quite understand what you mean by position size.

Lets say I make an entry on 4h/daily graphs. Ok, so 1% of my potential 5k account is 50 bucks. So lets make that 3%, to have something to work with.
Now, time frames like that have candles/bars with ranges up to 80-100tick and more. So my s/l of 15 ticks, which is my 3% cant endure the movement, or i can't stay long enough in the trade. And if it goes in the opposite direction of my position + slippage, i can lose 1/5 of my account in a heart beat....
Hi Morainer,

With futures you would not be able to efficiently trade daily charts with small account and this SL approach. Because in futures you have set tick value, i.e. the value of a tick is set by an exchange like with ES is $12.5.

Now in Forex we do not have this set value for a pip, it could be whatever you want. That means if you have 200 pips SL you can still make it $10 worth of money if you want so.

My advice would be to open demo with Oanda (you can trade whatever size) and see this Position Size calculator. Just go ahead and enter all fields right now, and you will see how it changes the position SIZE based on your SL pip amount.
http://www.earnforex.com/position-size-calculator
  • #97,080
  • Jun 22, 2011 9:36am Jun 22, 2011 9:36am
Quoting Morainer
Thank you m8 for reply.

Although, I am not sure I quite understand what you mean by position size.

Lets say I make an entry on 4h/daily graphs. Ok, so 1% of my potential 5k account is 50 bucks. So lets make that 3%, to have something to work with.
Now, time frames like that have candles/bars with ranges up to 80-100tick and more. So my s/l of 15 ticks, which is my 3% cant endure the movement, or i can't stay long enough in the trade. And if it goes in the opposite direction of my position + slippage, i can lose 1/5 of my account in a heart...
Trading futures I can see why you feel this way. I don't think futures will be an option for you with your account size. I myself would prefer the futures market. However my account size dictates that I stick with forex for now. Just my personal opinion, but I feel that trading a system that focuses on account size to determine whether or not you can take a trade will fail. Finding an A+ trade opportunity is hard enough.
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