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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

  • #106,581
  • Jan 31, 2012 8:24am Jan 31, 2012 8:24am
Quoting Pokemon
Hello everyone!
Metatrader 5 is amazing. You can even set the wallpaper.

AUDJPY seems pulled back to the 82.367, but i still hoping that it'll reach 79.074.

Attachment
I find that quite distracting though.
  • #106,582
  • Jan 31, 2012 8:26am Jan 31, 2012 8:26am
Quoting Rust
Hey Mike ,
I was watching EURAUD for some time and now I have this question :
do you see this pattern invalidated (or more of a not pretty enough) , by breaching the TL in the 3rd touch (still respected to some point) , then respected again on a 4th touch (what i was waiting to see if happens) .
All in terms for a breakout/pullback play .

Charts :
Hey Rust

This is still valid to me. It's a 4hr pattern in my books so that "spike" isn't a huge deal as the previous bars all respect the pattern as well as the spike down closed up high above the TL. Most likely I won't find an entry to the down side based on how this pattern progressed and where we are at. I will watch the upper horizontal under the 1.25 most closely though

Best
Mike
  • #106,583
  • Jan 31, 2012 8:27am Jan 31, 2012 8:27am
Quoting Pinbar
Did you not read post 1 and J16's minimum requirements for this thread?

MINIMUM REQUIREMENTS

If you are new to trading and/or you have had difficulty finding some consistent success, you must understand something. This is not a game and it's not a way to get rich quick. I suppose there is the odd exception of the person with a ton of money to play with, but if you approach this business without a business plan and the willingness to follow it, you are almost certainly doomed to failure. A doctor spends ten plus years in a grueling...
yes, I did demo trading on daily timeframe for 6+ months averaging about 8-10% gain per month using j16's trading method. i already traded real money a couple of years ago as a scalper but commissions and stress were killing me, and that's why i decided to switch to higher timeframe.

i'm now trading with a small account, i'm trying to be very picky because i've already done some mistakes (like all traders i think) in trading and i totally understand what james is trying to says with that post.

i've been following this thread since last year and i now take the chance to thanks all the wise and successful PA traders here. switching to higher time frame has been the best decision i could have ever made, and now i'm enjoying good performance with less risks (higher timeframes gives you much more time to think than 1 minute or 30 seconds charts, lol).

maybe sometimes i'm still a little too much aggressive, but overall it seems to work good for me. i would have never risked my money if i did't proven before that i could be able to go months without a loss. i know this business has always a lessons to teach you, but in some ways things are getting easier to me. i hope i won't screw everthing up.

  • #106,584
  • Jan 31, 2012 8:38am Jan 31, 2012 8:38am
if you are interested, there it is a very good article that explain the "trade like a ..." principle.

I read it some years ago when i was first approacing trading and it helped me a lot into getting the right way of thinking.

hope you enjoy it (i wasn't able to find a good link so i had to paste it in the message, i hope there's no problem with it).

Trade Like a Cheetah
by Hans Hannula, Ph.D.

The cheetah. An endangered species who has survived against the odds. It has survived by using a simple set of two rules: be faster than anyone else, and be smarter than anyone else. Sound like a good trading principle? At a recent Market Technicians Association conference, in a discussion with Dr. Van Tharp, a trading psychologist, I learned something about top traders that I thought was unique to my own style of trading. What I
learned was that many top traders use animals and hunting as a mental metaphor to guide their thinking when they 're trading. The metaphor I've always used is the cheetah.

To understand the cheetah you must understand a little bit of its history. The cheetah is a member of the large cat family, but it is a very different breed of cat. It was nearly hunted into extinction about 2,000 years ago. It somehow survived by retreating from populated areas and living in a confined space. The price it paid for this survival was a great deal of inbreeding, which has genetically weakened the species. Nevertheless, the species still survives, simply by following two "rules": be faster and be smarter than other animals. It is
knowing how the cheetah employs its two rules in hunting that can help traders. The cheetah hunts in six distinct phases, which I call the survey, the stalk, the spook, the chase, the kill and the rest.

The survey finds the cheetah in its typical sitting position. This may look like laziness, but the cheetah is actually very busy mentally. If you notice, it will be sitting in a position of perspective, such as a treetop, on a mound or a hilltop overlooking a watering hole, and what it is really doing is analyzing a herd of potential food.
It is surveying the territory, like a trader tracking a group of stocks or commodities on a long-term chart, calmly watching the progress of price and time. Like the trader looking for emerging patterns, the cheetah is looking for particular movements in the herd.

The cheetah's next phase is the stalk, which is a patient stroll to more closely examine a particular opportunity more closely, perhaps a group of animals which may have separated from the herd. The cheetah leisurely walks toward or alongside that part of the herd, checking out the potential prey, focusing on such details as size, strength, nervousness and position. This is like a trader taking a closer look at a few stocks or commodities, following major trendlines, and observing cycles and oscillators. As a cheetah nears this smaller group of animals, he starts watching for motion, focusing intently on the weaker members of the group, much as a trader watches for the first price formation or trendline break or oscillator crossing that could indicate the start of a move for a stock or commodity.

The cheetah is waiting for its prey to become fearful and panic, just like a trader waiting for other traders to build up fear or desire and go into a buying or selling panic. Every trader knows you make your big money when a stock or commodity moves fast. Both cheetah and trader are looking for the initial twitch that signals rapid motion. Both are waiting for the target to spook.

As soon as an animal stalked by the cheetah selects itself, the chase is on. The cheetah kicks in the afterburner and sprints up to 70 miles an hour. At this point, the cheetah is in full control, driven by desire, while the target animal is in absolute flight, controlled entirely by fear. The cheetah feels confident that it can catch the prey, but also knows it can abandon the chase and select another animal. For the trader, this is entering,
selecting a stop, validating the move and pyramiding the trade. This phase requires absolute confidence in your own skills, something that gives me and many traders problems. If a trader becomes fear-driven, the trader may become the victim and not the victor.

Like the cheetah who knows there are other animals to be hunted, the trader must keep in mind there are other trades always coming along. Just as the cheetah does not risk exhaustion of all its energy in one chase, the trader should not risk exhaustion of all his or her funds in chasing one trade. Like the cheetah who has developed the judgment to tell when a chase is fruitless, the trader must develop the judgment to know when a trade will not succeed. This judgment is gained only from the experience of many hunts, chases, successes and failures. Failures are absolutely essential in this learning process and are simply part of the natural order of things.

The cheetah has a distinct advantage over the trader here, in that it is dealing with energy and not money. Many traders believe that their own self-worth is measured by the money they make, so that a loss triggers inner doubts, and may put the trader into the fear mode. This drains even more internal energy, hampers judgment and can lead to the inability to act. Even to stop the loss. I find it very helpful to tell myself that money is just the grease for the skids of life, and only determines how fast I can move, just as the cheetah's energy level determines how fast it can move.

The next phase is the kill and the cheetah kills its prey very cleverly. Since the lightweight cheetah does not have the jaw strength of big-boned cats, it kills by pulling up alongside its prey at 70 miles an hour, reaching over and tripping the animal with one smooth kick. The prey crashes to the ground, usually breaking its neck.
In the worst case, the cheetah will have to pounce on the prey and clamp its jaws on the throat of the already damaged, weakened and nearly dead animal. This is just like the trader who waits for a fast move to crash into a channel top or Fibonacci resistance point, waits for the change in momentum, and then closes out the trade.
The final phase is the rest. The cheetah and, I believe, the trader need a rest after a series of intense chases. Neither can run at high speed constantly. After the kill, the cheetah eats, celebrates and rests. I believe the trader should do the same. A good practice is to always reward yourself with a special lunch or dinner, paid out of the trade's profit, then rest from trading for a while. My rule is that after a trade, win or lose, I don't trade for a time. This allows me to refresh myself, stabilize my thoughts and return invigorated to the hunt.

Think like the cheetah when you trade. Break your trading into the same six stages. Remember it is absolutely essential to be in control, and not in a state of fear or panic, during the excitement of the chase. What gives you the confidence is doing the homework, the technical analysis, so you understand what is happening and can plan your approach. As I'm sure Dr. Tharp would tell you, you need a clear mind to trade, unburdened by preoccupations. If you achieve all this, you can be a clean, lean, mean trading animal.
  • #106,585
  • Jan 31, 2012 8:38am Jan 31, 2012 8:38am
Quoting R3ta
i understand your point of view. i have to admit that i based this entry most on my istinct (chart view) rather than on other factors. i'm a very pick trader and i usually don't risk my money on such tiny price action bars, but this time i felt pretty secure due to the good overbought situation. i know it wasn't a strong signal but i found it still reliable and profitable. (sorry for the late reply)

however, at the end, i risked less than 1% of my equity and i gained about 3.3%:
No offense at all man ! It was a nice trade actually , just the pin was so lousy . Your chart reminded me of a time when i was thinking "well , it's tiny and not showing much action , but it offer me much tighter stop and bigger position " So I just wanted to stress on this

All the best
  • #106,586
  • Jan 31, 2012 8:44am Jan 31, 2012 8:44am
SILVER(XAGUSD)
Outside bar+Not very good pin+pull back to resistance, that seems become support now.
I'll trade it at another demo account.
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  • #106,587
  • Jan 31, 2012 8:49am Jan 31, 2012 8:49am
Quoting mbqb11
Hey Rust

Most likely I won't find an entry to the down side based on how this pattern progressed and where we are at. I will watch the upper horizontal under the 1.25 most closely though

Best
Mike
Hey man ,
didn't quite understand why you think you won't find an entry short . Could you explain please ?

Second one :
You mean this horizontal (blue rectangle) ? For a long play, maybe ?
Counter-trend stuff looks still a little bit scary to me , but really want to dig into it
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  • #106,588
  • Jan 31, 2012 9:02am Jan 31, 2012 9:02am
Quoting Rust
Hey man ,
didn't quite understand why you think you won't find an entry short . Could you explain please ?

Second one :
You mean this horizontal (blue rectangle) ? For a long play, maybe ?
Counter-trend stuff looks still a little bit scary to me , but really want to dig into it
Hey Rust

Does this help

Best
Mike
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  • #106,589
  • Jan 31, 2012 9:48am Jan 31, 2012 9:48am
Quoting mbqb11
Hey Rust

Does this help

Best
Mike
In general , yes . But I am trying to distinguish what is different here from the better ones . After all , these bounces (the trouble areas you point) are in the nature of a descending trendline . So playing a breakout short of one seems common to find them as trouble points , i think . Am I missing something ?

As for long :
What gives you confidence to play such a pattern to the upside ?
What I see is , ok , a lot of space , some descending lows , no descending highs ... some of these maybe ? something more or else ?

Sorry if I overwhelm you with too many questions I'm just always very much interested of how you view things .

Wish you well
  • #106,590
  • Jan 31, 2012 9:58am Jan 31, 2012 9:58am
Quoting Rust
In general , yes . But I am trying to distinguish what is different here from the better ones . After all , these bounces (the trouble areas you point) are in the nature of a descending trendline . So playing a breakout short of one seems common to find them as trouble points , i think . Am I missing something ?

As for long :
What gives you confidence to play such a pattern to the upside ?
What I see is , ok , a lot of space , some descending lows , no descending highs ... some of these maybe ? something more or else ?

Sorry if I overwhelm...
Hey Rust

That's because the resistance area is such a clear distinct area on this chart. If this breaks and we get above the BRN now we have two things at our back a pattern, a PPZ, a BRN and lots of room to run where we would now be making a new significant high. Generally I play breakouts with the trend unless the pattern is bigger or at a significant area like a BRN as well. This comes back to story and confluence

Best
Mike
  • #106,591
  • Jan 31, 2012 10:10am Jan 31, 2012 10:10am
Thanks Mike and sorry for bothering .
  • #106,592
  • Jan 31, 2012 10:40am Jan 31, 2012 10:40am
EUR/USD D1
Nice PPZ.
Nice double low bars.
But pin is not valid.
Is it possible to enter on Double low breakdown?
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  • #106,593
  • Jan 31, 2012 10:44am Jan 31, 2012 10:44am
Quoting R3ta
if you are interested, there it is a very good article that explain the "trade like a ..." principle.

I read it some years ago when i was first approacing trading and it helped me a lot into getting the right way of thinking.

hope you enjoy it (i wasn't able to find a good link so i had to paste it in the message, i hope there's no problem with it).

Trade Like a Cheetah
by Hans Hannula, Ph.D.

[i]The cheetah. An endangered species who has survived against the odds. It has survived by using a simple set of two rules: be faster than...
Nice article . Sounds like an advanced stuff
Nature is always a good example !
  • #106,594
  • Jan 31, 2012 10:44am Jan 31, 2012 10:44am
Afternoon all,

Is anyone else watching AUD/USD on the daily? Looking at the pinbar forming atm.

Would I be right thinking that a pinbar off a BRN 1.6, with the weekly looking good at this area.

Bearish pinbar close for a short?

Regards,

LT
  • #106,595
  • Jan 31, 2012 10:54am Jan 31, 2012 10:54am
Quoting R3ta
Trade Like a Cheetah
by Hans Hannula, Ph.D.
It's really great!
Thanks for posting!
  • #106,596
  • Jan 31, 2012 10:55am Jan 31, 2012 10:55am
Quoting Rust
Thanks Mike and sorry for bothering .
never a bother my friend

Mike
  • #106,597
  • Jan 31, 2012 11:13am Jan 31, 2012 11:13am
Maybe i post here too much... I am sorry about it.
I created a correlation table with indicator iCorrelation.
This table shows how similar are two pairs moving. Timeframe D1.

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  • #106,598
  • Edited 12:31pm Jan 31, 2012 11:40am | Edited 12:31pm
Quoting Lightrain
Afternoon all,

Is anyone else watching AUD/USD on the daily? Looking at the pinbar forming atm.

Would I be right thinking that a pinbar off a BRN 1.6, with the weekly looking good at this area.

Bearish pinbar close for a short?

Regards,

LT
Please read my yesterday's analysis.

Attached is today's update. We are still inside the triangle. I usually wait for triangles to break. Going short might feel nice - it looks like a double top after all - but notice how the candle interacts with the weekly support 0.10571 (cyan) and the RN 1.6 (yellow). Might definitely want to wait for the candle close before doing anything.
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  • #106,599
  • Jan 31, 2012 12:48pm Jan 31, 2012 12:48pm
Quoting Pinbar
Hi, Jim

Just looking at EU on the monthly TF and it was sort of giving me a bit of trouble. After a while, I am leaning more towards giving more weight to these two areas.

Just wanted to know if you also assign more importance to an area like these than the other SHs SLs.

Thanks in advance
I beg you pardon for intruding, since I have done a similar study it might be possible to exchange points of view about this topic.

I have drawn a blue and green rectangle where buyers are taking their liquidity. The green area is very strong, the support at its base is really where money comes from. It's resistance is somewhat weaker since it's buyers domain down there.
The blue area acts like the green but it sees more selling power, it's support is somewhat weaker while the resistance at its top is stronger.
The end result is more or less what you have seen.
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  • #106,600
  • Jan 31, 2012 2:47pm Jan 31, 2012 2:47pm
It's been a while since Jim himself posted here, has he ceased completely and focusing only in the PF now? Missed his charts

Anything new over there nowadays?
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