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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

  • #106,441
  • Edited 4:46am Jan 27, 2012 4:31am | Edited 4:46am
Pinbar, Mike,

Thank you for your replies. It was really enlightening - I just looked back at my journal and found some signals that I had skipped in the past that were based on the same concept. I've found it (and stilll do find it) really uncomfortable in taking breakout trades vs standard J16 pitbull pins after a solid move (like the CHF Weekly) and/or decent sized pins at obvious PPZ/fibs, etc.

What do you guys think of some of these charts here? - they're based on the same breakout concept but I just wasn't comfortable in trading them at the time, so I skipped them - especially when I couldn't imagine Mike approving any of them 100%....

Would you have taken any of them at the time of their occurance? What would cause you to have taken them? What else would you need to see?

Looking forward to your replies,

Variance
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  • #106,442
  • Jan 27, 2012 4:42am Jan 27, 2012 4:42am
EU is going down becouse of obvious reasons hence market is selling off. Near the bootom everybody knows that europe is in danger and media shouts about the S&P downgrades and all the stuff. The smart money are liquidating their positions to retail traders who are thinking that price must come down becouse fundamentals are bad and all. Price starts to go higher. Brokers inventory and smart money is shifting to the long side but retail players are still willing to sell becouse price is high (they perceive it as an opportunity) and fundamentals are still in the ass. Now if that will continue then at some point retail will start to doubt and the fear will creep in resulting in higher amount of sell orders coming to the market (which is obvoiusly visible in the dealer order book). That will result in

A) Retail traders stop loss cascade @ point when keeping lossing position is giving to much emotional pain
B) Obviously market makers will be aware of this fact and they will start to liqudate their long exposure to the retail crowd. The long awaited short will come and frustrated losers will chase the price pushing it even lower.

Where are we now?? ...
Retail is still perceiving eurusd as a good short and most dealers have their inventory growing on the long side (there are a number of sources on the internet to check that out) .

It might be seen as too complicated at first for some guys here but all these pitbull PBs and other strong bars are nothing else then money shifting from weak to strong hands.
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  • #106,443
  • Jan 27, 2012 4:46am Jan 27, 2012 4:46am
Hi,
I'm posting my current trade and I would like some comments from you guys.
I will be still on demo for the next 3 months because I also did some stupid things this week

Regards,
Peter


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  • #106,444
  • Jan 27, 2012 4:48am Jan 27, 2012 4:48am
Quoting rami_8
I think that the weekly level didn't act as clearly resistance as it should have and compared to daily level. So I my mind the daily level is now better. It will be interesting to see how this week will close.

Btw. I think that you have great plan to trade NZDUSD. I mean wait for the break and retest. Now we just wait and see what the chart will offer us.... and this is the hard part of traiding .
Yes, I sort of suspected it was going to break through, with that strong daily uptrend that was really moving.

Still, I don't think it has that much more to room to move, the small weekly SL is actually a PPZ with the fibo confluence. Would be a great area to dump it. This one was driving my half crazy.

I suspect Jarroo also thought it may break through, and that is why he suggested I watch it.
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  • #106,445
  • Jan 27, 2012 5:14am Jan 27, 2012 5:14am
Quoting riandouma
Saw this today. Had a chuckle
Superb!
  • #106,446
  • Jan 27, 2012 5:27am Jan 27, 2012 5:27am
AUD/JPY D1
Great PA, i think.
http://ubuntuone.com/4NbuZ9p2T0J6ss5N8gznvr
Please rate it.
  • #106,447
  • Jan 27, 2012 5:33am Jan 27, 2012 5:33am
Quoting Pokemon
AUD/JPY D1
Great PA, i think.
http://ubuntuone.com/4NbuZ9p2T0J6ss5N8gznvr
Please rate it.
Area was good for a TT but as far as PA goes, the bearish PB is miniscule in comparison to the last bar up, in that Strong uptrend.
  • #106,448
  • Jan 27, 2012 6:05am Jan 27, 2012 6:05am
Quoting Greenhaze
EU is going down becouse of obvious reasons hence market is selling off. Near the bootom everybody knows that europe is in danger and media shouts about the S&P downgrades and all the stuff. The smart money are liquidating their positions to retail traders who are thinking that price must come down becouse fundamentals are bad and all. Price starts to go higher. Brokers inventory and smart money is shifting to the long side but retail players are still willing to sell becouse price is high (they perceive it as an opportunity) and fundamentals are...
that's some great analysis there
  • #106,449
  • Jan 27, 2012 6:24am Jan 27, 2012 6:24am
Quoting mbqb11
Hey Stock

Yep it sure is a PPZ

As for more experience. I believe that it can be more hindering then helpful. Most things in life we think of as more exposure = better experience. For example take any sport. It's all about reps most of the time. People try to do this with trading(its pretty much human nature IMO ). So they say well the more bars I actively trade the better I will become cause I am doing, and then I will learn. This has a role, no doubt. But for the large majority this couldn't be further from the truth. I am not...
After about 5 years of trading experience I am just starting to understand what you are talking about
  • #106,450
  • Jan 27, 2012 7:05am Jan 27, 2012 7:05am
Great analysis! Couple of questions:

Quoting Greenhaze
The smart money are liquidating their positions to retail traders who are thinking that price must come down becouse fundamentals are bad and all. Price starts to go higher. Brokers inventory and smart money is shifting to the long side but retail players are still willing to sell becouse price is high (they perceive it as an opportunity) and fundamentals are still in the ass.
In your view is this long rally down to much more than smart money faking out the weak hands who keep thinking that each stall/red bar/resistance/trendline (I got burned on that one!) is time for "the big short"?

Quote
A) Retail traders stop loss cascade @ point when keeping lossing position is giving to much emotional pain
B) Obviously market makers will be aware of this fact and they will start to liqudate their long exposure to the retail crowd. The long awaited short will come and frustrated losers will chase the price pushing it even lower.

If I understand correctly it looks like there are still some very in the red shorts hanging on that the big money are still waiting to flush out, and when they do it will have a cascade effect and the real short will happen?

Fundamentally I believe that this kind of stuff moves the market more than news...

What shark infested waters we choose to swim in!
Anything can happen.
  • #106,451
  • Jan 27, 2012 8:07am Jan 27, 2012 8:07am
Quoting Variance
Pinbar, Mike,

Thank you for your replies. It was really enlightening - I just looked back at my journal and found some signals that I had skipped in the past that were based on the same concept. I've found it (and stilll do find it) really uncomfortable in taking breakout trades vs standard J16 pitbull pins after a solid move (like the CHF Weekly) and/or decent sized pins at obvious PPZ/fibs, etc.

What do you guys think of some of these charts here? - they're based on the same breakout concept but I just wasn't comfortable in trading them...
Hey V

Most of those would be easy passes for me there. Just not enough behind them. No stories The usd/zar I liked and just closed out. Please note this is a continuation bar and for those that are new this is not the traditional spot James teaches us to take these bars. They are easier to play as true reversals when starting out in my opinion.

USD/zar had both a breakout pattern, BRN, and lots of space to a clear trouble area(blue, and also you marked it). I watched price when we got there and decided to close out now being friday and price rejected pretty good again off the major areas. The reason for closing was at the point price broke down again today I went to b/e. In my mind closing here is better then the more likely scenario of price having to get up to my entry point. So for me it is not worth assuming risk, or the likelihood is high that my entry gets hit again so I am going with taking my profit.

Best
Mike
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  • #106,452
  • Jan 27, 2012 8:12am Jan 27, 2012 8:12am
Quoting ddinnov
In your view is this long rally down to much more than smart money faking out the weak hands who keep thinking that each stall/red bar/resistance/trendline (I got burned on that one!) is time for "the big short"?





If I understand correctly it looks like there are still some very in the red shorts hanging on that the big money are still waiting to flush out, and when they do it will have a cascade effect and the real short will happen?

Fundamentally I believe that this kind of stuff moves the market more than news......
It was well known fact that market was very much exposed on the short side. If some big names need to realize their profits then they need someone big on the other side aswell. Was there a better time to liquidate their shorts then after S&P downgraded half of the Europe? ... dont think so ... (This news was all over the place during the weekend hence on sunday open price flip floped when everybody else sold euro).

Right now the big names need liquidity on the bid side if they want to sell hence they are squeezing the price higher knowing that retail is still selling. At some point liquidity on the offer side might dry up a bit making clear way to protective buy stops and this usually produce strong volatility. This scenario might have place assuming that current macro environment wont change drastically in weeks ahead.

This stuff moves the market all the time. Price is constantly looking for liquidity. Thats why these pinbars with long nose sticking thru well defined sup/res usually works so well.

Cheers..... and have a good weekend !
  • #106,453
  • Jan 27, 2012 8:38am Jan 27, 2012 8:38am
Quoting Greenhaze
It was well known fact that market was very much exposed on the short side. If some big names need to realize their profits then they need someone big on the other side aswell. Was there a better time to liquidate their shorts then after S&P downgraded half of the Europe? ... dont think so ... (This news was all over the place during the weekend hence on sunday open price flip floped when everybody else sold euro).

Right now the big names need liquidity on the bid side if they want to sell hence they are squeezing the price higher knowing...
well said G!

Have a good weekend too
Mike
  • #106,454
  • Jan 27, 2012 8:44am Jan 27, 2012 8:44am
Quoting Greenhaze
EU is going down becouse of obvious reasons hence market is selling off. Near the bootom everybody knows that europe is in danger and media shouts about the S&P downgrades and all the stuff. The smart money are liquidating their positions to retail traders who are thinking that price must come down becouse fundamentals are bad and all. Price starts to go higher. Brokers inventory and smart money is shifting to the long side but retail players are still willing to sell becouse price is high (they perceive it as an opportunity) and fundamentals are...
hey greenhaze it's always a pleasure to read your posts!

i was wondering if trading futures, where we can watch the order book, can help understanding smart-money strategy and traders psychology. reading some success stories it seems that every successful trader has started trading stocks/futures and not forex.

what are your thoughts?
  • #106,455
  • Jan 27, 2012 8:45am Jan 27, 2012 8:45am
nice box formed in middle of two good zones. took a TT from top of box with tiny SL just above box. closed for quick 30 pips or so. Ultimately looking for break of lower line to go short (as posted yesterday). We shall see.

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  • #106,456
  • Jan 27, 2012 8:57am Jan 27, 2012 8:57am
Quoting jc.
hey greenhaze it's always a pleasure to read your posts!

i was wondering if trading futures, where we can watch the order book, can help understanding smart-money strategy and traders psychology. reading some success stories it seems that every successful trader has started trading stocks/futures and not forex.

what are your thoughts?
Hey JC

That's because forex wasn't as accessible to the retail side for a long time. Doing this for awhile now a charts a chart in my eyes and thats how I play it. As for futures, it makes up a super small portion of the actual market. I am sure some use that information, as with most things. The problem is that % is so small to then extrapolate that to the spot market which is HUGE in comparison is a bit of a stretch(for me that is). If you had to unload a HUGE order would you do it in the spot or the futures market. I think the majority are going to do it in the spot market. Now with that said, go with what works. If something adds value then keep if, if not ditch it. BUT just watch yourself and always keep things simple. If I could go back ten years and tell myself one thing it would be keep it simple. As cheesy as that sounds

Best
Mike
  • #106,457
  • Jan 27, 2012 9:22am Jan 27, 2012 9:22am
Quoting jc.
hey greenhaze it's always a pleasure to read your posts!

i was wondering if trading futures, where we can watch the order book, can help understanding smart-money strategy and traders psychology. reading some success stories it seems that every successful trader has started trading stocks/futures and not forex.

what are your thoughts?
I would just repeat what Mike said...chart is showing almost every information you need. I would only add that futures order book even for centralised markets is highly manipulated by blackbox orders which doesn't represent any real supply or demand.... hmmm i think there are some succesfull stories about currency traders in "Market Wizards" books.
  • #106,458
  • Jan 27, 2012 9:43am Jan 27, 2012 9:43am
thanks guys!

I was afraid of overcomplicating trading studying this type of things.

p.s.:reading of market wizards is on my "things to do" list!
  • #106,459
  • Jan 27, 2012 10:04am Jan 27, 2012 10:04am
I don't want to stress you guys but i'm trying to exploit this moment of free time to make some doubt clear..

when you look for areas which could be the FTA do you prefer to look at recent bars? In the chart for example i was sure the FTA for the BEOB would have been the blue level. which level would have you chosen?
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  • #106,460
  • Edited 10:57am Jan 27, 2012 10:44am | Edited 10:57am
Saw this trade last night.....saw the bearish inside bar @121.30.Other indicators were lining up also. Looked like a reversal so I went short .... Per James16 rules I looked for bar highs and lows for target. Saw first area around 121.00 Wanted to test it out for a quick 30 pips or so..... Well It worked ....hit the area ..I exited 1/2 of my position and moved stop to BE. Still in this trade 90+ so far ....It looks like it is in the next trouble area. We'll see if it can close below.

Any feedback appreciated!
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