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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

  • #116,761
  • Aug 29, 2012 12:47pm Aug 29, 2012 12:47pm
Quoting PhAnTi'
actually i posted this in my thread, but it really fits the J16 stuff.... thought i'd share it here as well.....

Attachment

best,
Jonas
Hi Jonas, those are really beautiful charts and explanations. But I'm also confused: Isn't space, at least as Mike refers to it, free room to the left of current price? Or in other words: a place on the horizontal axis where price hasn't been in a long time? In your example it looks like you refer space to the room right above price (e.g until the next demand/supply area), no matter if there is room to the left or not. Or do I get you wrong here?

Mike, could you please give me a short definition of space? I got feeling I may have misunderstood you all the time.
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Thanks J16, Sam Seiden, Udine and Jacko
  • #116,762
  • Aug 29, 2012 12:47pm Aug 29, 2012 12:47pm
Quoting ghous
Hey Delta,

The idea is right in spotting that superb region of confluence. Notice however the size of your pin bar is pretty small which takes some points off of it. Notice also that it doesn't quite touch the region of confluence. Now if this very pin bar had a longer tail to it that penetrated or at least tested the 1500 BRN it would have certainly pushed this setup into the A grade category.

Be back with a post on space in a bit...

g.
Yep here is a post on size I was putting together

As for space, bars come in all kinds of space from HUGE to not so huge. That doesn't mean that if space is not there it's a bad trade, it just means the dynamic and story change. I highly recommend new traders to focus on big bars in space. Why? Cause I just think its really easy way to learn.

Best
Mike
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  • #116,763
  • Aug 29, 2012 12:49pm Aug 29, 2012 12:49pm
Quoting HanSolo
Hi Jonas, those are really beautiful charts and explanations. But I'm also confused: Isn't space, at least as Mike refers to it, free room to the left of current price? Or in other words: a place on the horizontal axis where price hasn't been in a long time? In your example it looks like you refer space to the room right above price (e.g until the next demand/supply area), no matter if there is room to the left or not. Or do I get you wrong here?

Mike, could you please give me a short definition of space? I got feeling I may have misunderstood...
Hey Hans

P is referring to space to move to the down side. That beob is formed in a sideways market so that by definition depending on the area will be running into trouble.

I will dig up some space vs traffic posts

Best
Mike
  • #116,764
  • Aug 29, 2012 12:59pm Aug 29, 2012 12:59pm
Quoting mbqb11
I will dig up some space vs traffic posts
Great, thank you Mike!


I just got short on AUDCHF. I'm aware of those massive bar highs on the weekly. And I'm not sure if this would be a valid Jarroo trade (I would love to hear your thoughts on this one, Jarroo).
But what convinced me was my definition of supply/resistance and demand/support. I think there may be not too much demand/support left underneath and price may go down.

I would appreciate to hear your opinions.

Thanks, Hans
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Thanks J16, Sam Seiden, Udine and Jacko
  • #116,765
  • Aug 29, 2012 1:04pm Aug 29, 2012 1:04pm
Quoting mbqb11
Hey Hans

P is referring to space to move to the down side. That beob is formed in a sideways market so that by definition depending on the area will be running into trouble.

I will dig up some space vs traffic posts

Best
Mike
firstly this post should be viewed after my video traffic vs space in the guest area. Remember this is not a topic that we can just say one size fits all. What identifying the space/traffic will allow you guys to do is judge trouble areas. Then you must place weight on those trouble areas.

Everything in trading has a range of things from very minor to very major. Everything does


Mike
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  • #116,766
  • Aug 29, 2012 1:12pm Aug 29, 2012 1:12pm
Quoting mbqb11
firstly this post should be viewed after my video traffic vs space in the guest area. Remember this is not a topic that we can just say one size fits all. What identifying the space/traffic will allow you guys to do is judge trouble areas. Then you must place weight on those trouble areas.

Everything in trading has a range of things from very minor to very major. Everything does


Mike
Thank you very much, Mike. That makes it clearer to me. I will also have a look at your video again.
Thanks J16, Sam Seiden, Udine and Jacko
  • #116,767
  • Aug 29, 2012 1:32pm Aug 29, 2012 1:32pm
Jarroo, that do you think about this setup?
Anybody trades UsdMxn?
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  • #116,768
  • Aug 29, 2012 1:38pm Aug 29, 2012 1:38pm
Quoting ghous
Hey Delta,

The idea is right in spotting that superb region of confluence. Notice however the size of your pin bar is pretty small which takes some points off of it. Notice also that it doesn't quite touch the region of confluence. Now if this very pin bar had a longer tail to it that penetrated or at least tested the 1500 BRN it would have certainly pushed this setup into the A grade category.

Be back with a post on space in a bit...

g.
there seems to be this inherent grudge against trouble areas for a lot of traders. I guess its because of the anticipation of the trouble areas holding, price reversing, and the trader having to miss a big move. Obviously while too many trouble areas, as marked by bar highs and lows and consolidation zones can spell trouble for a trade its important to understand that you do need a logical first trouble area and then subsequent areas to help you manage the trade in tandem with the market rhythm.

Support and resistance and your S/R flips major as well as minor is what the entire market - the PA - the order flow, is tuned to at any given time. These areas run the markets. If you've carefully followed Phanti's charts you would have noticed this bond of love that price seems to have with areas of demand and supply and our PPZs. Since orders get accumulated here, all the big games are centered towards either capitalizing on triggered orders off these areas or steering price towards these orders.

Since a lot of your trade management ideas, as taught by the seniors here, deals with taking descisions as and when price hits your first and then subsequent trouble areas, their obvious existence is anything but bad (unless of course, as mentioned, there are far too many areas to make up for good trade management).

If we look at Delta's pin bar, and for a moment consider that it was a good sized pin bar that adequately tested the confluence zone, I wouldn't hesitate one bit to give it a shot to the swing high to the left. Would that make it a trade that doesn't have space at all? Heck no! The fact that price has clear path through to the swing high which is at distance just enough to allow for some sound risk cutting measures, actually goes in favor of the trade.

A better example is a chart I just put up under this text.

Over time I have started to like trades with obvious trouble areas over trades where I have to stretch too far back to find compatible trouble areas for trade management. I actually prefer trades where I have neatly placed minor flips all the way through that work like checkpoints for me and assist me in managing my trades more effectively. Can such a situation be deemed as worse than one where you have tonnes and tonnes of vacant space? Considering a ceteris parabus condition - I would disagree...

bear in mind though, that I have tried to isolate a single factor that makes up a trade namely the "space" issue. In real time though of course other factors like the bar itself and locational confluence would also mean a lot, so for example a strong pin bar at a region laden with confluence has better chance at working through more trouble areas than just "any" pin bar. For the purpose of getting my point across without having to confuse you by talking holistically, and to address an issue that pertains to space more than anything else I went ahead with the disconnection

So Delta,

In response to your question -
Quote
How rare is it to find a good setup with SPACE? every trade I take seems to have very limited space, but I know this going into it and trade accordingly.
- It is very rare to find a setup with a LOT of space. Fortunately though, moderate space as apposed to tonnes of space works ok - actually better IMHO...

hope this helps.

g.
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I believe . . .
  • #116,769
  • Aug 29, 2012 1:41pm Aug 29, 2012 1:41pm
Quoting mbqb11
firstly this post should be viewed after my video traffic vs space in the guest area. Remember this is not a topic that we can just say one size fits all. What identifying the space/traffic will allow you guys to do is judge trouble areas. Then you must place weight on those trouble areas.

Everything in trading has a range of things from very minor to very major. Everything does


Mike
Thanks, I already watched the video as well but I will go watch it again...I feel like I understand it, I just need some real world practice to really get it...
  • #116,770
  • Aug 29, 2012 1:47pm Aug 29, 2012 1:47pm
Quoting ghous
there seems to be this inherent grudge against trouble areas for a lot of traders. I guess its because of the anticipation of the trouble areas holding, price reversing, and the trader having to miss a big move. Obviously while too many trouble areas, as marked by bar highs and lows and consolidation zones can spell trouble for a trade its important to understand that you do need a logical first trouble area and then subsequent areas to help you manage the trade in tandem with the market rhythm.

Support and resistance and your S/R flips...
hey thanks for taking the time to write that. It really helped me to get over my worries about never having adequate space...
  • #116,771
  • Aug 29, 2012 1:49pm Aug 29, 2012 1:49pm
Quoting deltaskelta
hey thanks for taking the time to write that. It really helped me to get over my worries about never having adequate space...
What you want is a good bar at a good place with enough space to enable your trade management tactics to fire and you're good to go

g.
I believe . . .
  • #116,772
  • Aug 29, 2012 1:53pm Aug 29, 2012 1:53pm
Quoting ghous
What you want is a good bar at a good place with enough space to enable your trade management tactics to fire and you're good to go

g.
Yeah that is kind of the conclusion I came to myself as well, but it scared me that I was doing it wrong because I thought everyone else saw it differently...Good to know someone else thinks the same way I do
  • #116,773
  • Aug 29, 2012 1:56pm Aug 29, 2012 1:56pm
Quoting ghous
there seems to be this inherent grudge against trouble areas for a lot of traders. I guess its because of the anticipation of the trouble areas holding, price reversing, and the trader having to miss a big move. Obviously while too many trouble areas, as marked by bar highs and lows and consolidation zones can spell trouble for a trade its important to understand that you do need a logical first trouble area and then subsequent areas to help you manage the trade in tandem with the market rhythm.
A brilliant post, Ghous. And it answers one of the question I had in mind for some time: Why is price so attracted to these major supply/demand areas in the first place? Thank you.
Thanks J16, Sam Seiden, Udine and Jacko
  • #116,774
  • Aug 29, 2012 1:58pm Aug 29, 2012 1:58pm
Quoting HanSolo
A brilliant post, Ghous. And it answers one of the question I had in mind for some time: Why is price so attracted to these major supply/demand areas in the first place? Thank you.
Liquidity
  • #116,775
  • Aug 29, 2012 2:03pm Aug 29, 2012 2:03pm
Quoting mbqb11
Liquidity
Could you explain a little furter, Mike? Do you mean that these areas are where most orders get fulfilled and that's why price is attracted to them?

After reading Ghous' post, I had the following thought: If the important market turning points are made out of massive stacks of buy and sell orders then the big players must have a huge interest in getting price back there to fulfill these orders. Couldn't that be part of the process?
Thanks J16, Sam Seiden, Udine and Jacko
  • #116,776
  • Aug 29, 2012 2:14pm Aug 29, 2012 2:14pm
Quoting HanSolo
Could you explain a little furter, Mike? Do you mean that these areas are where most orders get fulfilled and that's why price is attracted to them?

After reading Ghous' post, I had the following thought: If the important market turning points are made out of massive stacks of buy and sell orders then the big players must have a huge interest in getting price back there to fulfill these orders. Couldn't that be part of the process?
It absolutely is part of the process. Market is nothing more then people trying to find liquidity. The reality is that there are a lot of different people/entities doing things for different reasons though. So things aren't as "clean" as we would imagine, but still things are repeatable.

There are TONS of various examples of markets setting up to provide liquidity. But in fact that doesn't always mean price will do what you expect either. But it can give us clues and give us a heads up.

But in the most basic sense the market is attracted to orders in the market place. Because without them price can't "move"

So try to think of your chart as a map for these different things. Start off easy with something as simple as a "false" breakout. See what you can come up with theory wise. THen try to see and apply that knowledge using S/R confluence PA. THis is how you formulate stories to support your PA. Of course there is simple and advanced to this stuff like all things

Mike
  • #116,777
  • Aug 29, 2012 2:26pm Aug 29, 2012 2:26pm
Quoting mbqb11
But in the most basic sense the market is attracted to orders in the market place. Because without them price can't "move"
What I still don't understand is this: Why does price say at 1.300 get attracted to an area at say 2.400? It's more than 1.000 pips away and still it seems like price inevitabely has to get there. I mean doesn't price always move one pip after another to the next pip where buy orders cancel out sell orders or vice versa? And shouldn't a chart with so many players in it therefore look much more random? Yet it doesn't, those big turning points attract price like a magnet. In this light big players driving price to their own big order stacks sounds so convincing and logical. But I understand that it can only be part of the equation. And I guess it is not as complicated as I try to make it but I just can't get my head around this.

Quoting mbqb11
So try to think of your chart as a map for these different things. Start off easy with something as simple as a "false" breakout. See what you can come up with theory wise. THen try to see and apply that knowledge using S/R confluence PA. THis is how you formulate stories to support your PA. Of course there is simple and advanced to this stuff like all things
Mike, I think that is key to really master the art of trading and it's a very good advice. I did this a few months ago. Took a random chart and wrote down bar by bar why in my opinion it did what it did. That was very helpful. I should do that on live charts more often.
Thanks J16, Sam Seiden, Udine and Jacko
  • #116,778
  • Aug 29, 2012 2:35pm Aug 29, 2012 2:35pm
Quoting HanSolo
What I still don't understand is this: Why does price say at 1.300 get attracted to an area at say 2.400? It's more than 1.000 pips away and still it seems like price inevitabely has to get there. I mean doesn't price always move one pip after another to the next pip where buy orders cancel out sell orders or vice versa? And shouldn't a chart therefore look much more random? Yet it doesn't, those big turning points attract price like a magnet. In this light, big players driving price to their own big order stacks sounds so convincing and logical....
Don't forget there is a long term and short term flow. So the long term flow can be for tons of fundamental reasons, interest rates and the like(for the longer drive of a country, but that won't be the only drive). BUT that doesn't mean that it's going to play out exactly how we all expect either. But there is a rhyme and reason to the markets. Just think of things that they have their own scope. The day has its own rhyme and reason, the week, the month etc. Now again that doesn't mean every single day, or week. That's what I think people get mixed up with. And different days/weeks/months will mean different things to different players in the market.

There is a large amount of people buying/selling in this market. Many things drive the market from interest rates, to unexpected news, to option plays(heck watch option expirations in the market day to day and alone you will see some of this at work). We stack all that stuff together and you get what you see on your chart. As a chartist our job is to decipher when we find and area, opportunity, place to potential exploit ourselves. In other words an inefficiency. They can look different as we all know

So thinking is very good of course but don't over think either. Remember it's better to do a few things really well then a lot of things poorly. That's also the beauty of being a small trader we can access the market instantly



Mike
  • #116,779
  • Aug 29, 2012 3:14pm Aug 29, 2012 3:14pm
Quoting rafstraszek
This is why I wrote "to pbt guys".
I can understand why people don't like this method, but "smaller sl - no bar confirmation" suits me better than bar "confirmation - bigger sl"...I just like jarroo method better

I want the best price, the lowest risk and the biggest gain I can get.
sure, nothing wrong with it.

''never change a running system'' . I sometimes also enter without any signal or confirmation of a reversal, but i dont use pendings... mindset thing

best,
Jonas
Hero calls followed by margin calls...
  • #116,780
  • Aug 29, 2012 3:21pm Aug 29, 2012 3:21pm
Quoting HanSolo
Hi Jonas, those are really beautiful charts and explanations. But I'm also confused: Isn't space, at least as Mike refers to it, free room to the left of current price? Or in other words: a place on the horizontal axis where price hasn't been in a long time? In your example it looks like you refer space to the room right above price (e.g until the next demand/supply area), no matter if there is room to the left or not. Or do I get you wrong here?

Mike, could you please give me a short definition of space? I got feeling I may have misunderstood...
Quoting mbqb11
Hey Hans

P is referring to space to move to the down side. That beob is formed in a sideways market so that by definition depending on the area will be running into trouble.

I will dig up some space vs traffic posts

Best
Mike
Quote
P is referring to space to move to the down side.

exactly.
When i say i do want to trade into open space i ask myself ''whats ahead?''
If we want to buy, where's the next supply zone or where is the next trouble area ? Is it close to our entry we shouldnt enter the trade, even if we get a huge and powerful buob or pinbar, just because we wont be comfortable doing so in the long run.
Always ask yourself before you enter :,,What is ahead ? , where might we go to ? Which area might block price to go on ?'' ,then check how big the stop is that is necessary to enter the trade anyway, check your r:r , if you do have a bad feeling dont enter since trading does have a lot to do with emotions and our subconscious.
If there's nothing close ahead, we can trade into open space and will have a lovely trade going.

best,
Jonas
Hero calls followed by margin calls...
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