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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

  • #125,141
  • May 2, 2013 10:32am May 2, 2013 10:32am
Quoting Microtrader_
Hey Guys, I am in position with USDNOK, I am satisfied with the trade so far (0,5RR winning, SL is in BE). However I am thinking about how to continue. USDNOK has moved highly together with EURUSD in the last days and now EURUSD is facing 1,3 BRN and EMA-s on daily chart so I am thinking about closing the trade now. Any comments? {image} {image}
Hey Microtrader,

Its never recommended to execute an action on your trade that stems from something that you see in another correlated pair, unless you are trading a system geared specifically to trade correlation.

Yes many pairs move in tandem with each other and that is precisely why we get our trades in "bunches" followed by dry periods where nothing seems to be moving. But that said, 2 pairs may be positively correlated but what many people don't understand is that its never a rocket science. When EUR/USD goes up USD/CHF doesn't always have to go down. And when it does it doesn't necessarily have to go down in the exact same proportion as EUR/USD went up. Also this setting may change over time so unless you have some objective way of actually trading correlation the advice we pass on is to keep your analysis of trading systems restricted to the currency pair as this alleviates a lot of unnecessary stress and confusion that comes with trying to keep an eye out for pairs you think are correlated with the one you are watching.

So for this particular setup, more than anything else I would have my eyes on the RN PPZ price is now hovering at which is also the FTA. A lot for me would depend on how price decides to close from this point on. A good strong close and we maybe pushing on. Evidence of resistance and I would be cautious.

g.
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I believe . . .
  • #125,142
  • May 2, 2013 10:34am May 2, 2013 10:34am
Quoting jarroo
{quote} The structure of the DBLHC is correct but not its location we want to see them at Swing Lows . .not valid due to is location . . Check out the Weekly HCR Levels from this week . . {image}
Thank you for the response Jarroo. What about this hypothetical example here. Your help is very much appreicated.
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“Every single day, ordinary people do extraordinary things"
  • #125,143
  • May 2, 2013 10:35am May 2, 2013 10:35am
Quoting ken.b
Thanks for the answer, Magestic, Mak and Mike. It helps me understand divergence more. I was expecting something more complicated. Ghous, you said: "As Mike tirelessly teaches us, the value of watching price as it bursts through or holds up at trouble areas and basing our trading decisions on this (moving stops, taking partial or full profits or deciding to hold on) is way superior than having to exit at a stone cold level." If I understand correctly, you were talking about price bursting through or holding up at trouble area which is when...
Hey Ken,

Can't speak for Ghous, and I am sure he and others (Jarroo and Mike among other) will give very nice answers.

I'll just try and give the way I understand this.
This is a very critical point IMO.

I always have in mind Jarroo speaking about "a high quality setup being a high momentum setup".
I first understood this as "the better the setup, the faster price will break it".
Now, I also tend to monitor not only how the setup is broken, but also what price does at trouble areas (EMAs, bar H/L, RN, Fib ret, etc).

The main point here is. Imagine the price bursts through what I thought would be a major trouble area. It tells me price has a lot of steam to move forward.
On the other hand, if price stalls , hesitates, retests the PA setup, then it tells me there isn't such power to boost the trade. So I'd better cover my back - well that's the way I see it. Here comes what Ghous was speaking about: partial profit, move to break even, etc.

And you can assess price power at each trouble area along the way.
So, depending on the way price behaves at each of the trouble areas, you can manage your trade: tighten your sl, take full/partial profit, etc.

This is my major issue right now: position sizing relatively to how I will manage the trade according to price behavior at trouble areas along its way...

take care
Slow & steady
  • #125,144
  • May 2, 2013 10:39am May 2, 2013 10:39am
nasdaq future with a clear breakout. weekly chart for illustration purpose.
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meine augen sind die sterne
  • #125,145
  • May 2, 2013 10:53am May 2, 2013 10:53am
Quoting ken.b
Thanks for the answer, Magestic, Mak and Mike. It helps me understand divergence more. I was expecting something more complicated. Ghous, you said: "As Mike tirelessly teaches us, the value of watching price as it bursts through or holds up at trouble areas and basing our trading decisions on this (moving stops, taking partial or full profits or deciding to hold on) is way superior than having to exit at a stone cold level." If I understand correctly, you were talking about price bursting through or holding up at trouble area which is when...
I see...

I wasn't pointing at any particular post from Mike, but in general the way he talks about watching price as it hits trouble areas. The trades that he puts up here always show how he is using the concept of price reacting at trouble areas to take trade management decisions which is more logical and effective in the long run than exiting at per-determined targets all the time.

The concept in itself is really simply Kenny,

Attached is USD/CAD 1H chart with a bearish pin bar setup. Valid because of the lovely confluence.

Now that we have picked a solid setup, we need to locate our trouble areas and simply watch as price reacts around them. You can see that as soon price breaks the pin bar it hits the FTA and holds for a bit. As some one who lets price show the way, I know the FTA has (at least for now) held and its decision time. I could take full profit, move my stop from above the high of the pin bar a little lower to eliminate some risk or move my stop to BE which would have taken me out if I had played the pin bar on the break. However if I had done something besides moving my stop to BE or taking full profit, I would move on and watch price trickle under the FTA.

Similarly as price approaches the next trouble area again we are looking for it to give way, which it initially does. And then we have a quick sharp rejection and price moves and closes above our trouble area. A more stronger signal that the trouble area and the swing low have attracted bullish order flow. Depending on my personal style this could mean a full exit, or further risk alleviation possibly by taking more profits or moving the stop to BE or in the green.

The point here is not to teach you what should be done as price holds up at trouble areas or when it blows through, as these aspects vary from trader to trader, but rather to help you understand that using the strength of the setup as an initial bias, the best thing to do is to react off of the reactions of price at trouble areas instead of depending on achieving a certain R or pips or a certain per-determined target.

Hope this is clearer.

g.
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I believe . . .
  • #125,146
  • May 2, 2013 10:55am May 2, 2013 10:55am
Quoting patapouer
{quote} Hey Ken, Can't speak for Ghous, and I am sure he and others (Jarroo and Mike among other) will give very nice answers. I'll just try and give the way I understand this. This is a very critical point IMO. I always have in mind Jarroo speaking about "a high quality setup being a high momentum setup". I first understood this as "the better the setup, the faster price will break it". Now, I also tend to monitor not only how the setup is broken, but also what price does at trouble areas (EMAs, bar H/L, RN, Fib ret, etc). The main point here...
Yes that's exactly what its all about.

Thanks patapouer

g.
I believe . . .
  • #125,147
  • May 2, 2013 11:00am May 2, 2013 11:00am
Quoting ghous
{quote} Yes that's exactly what its all about. Thanks patapouer g.
good to know I sort of think in the same way as you

still you have a far better way of putting things in a very understandable way
Slow & steady
  • #125,148
  • May 2, 2013 11:00am May 2, 2013 11:00am
Quoting jarroo
{quote} Bam! Baby!! . . Same with the Swissy . .I'll let you check the 5min signatures on this one . . {image} {image} {image} {image}
Niccee!

You gotta love those "to the pip BAMMS!". Like price falling into the trap of behaving a little too perfectly for us and putting in danger the illusion of being random!

Work of art those levels.

g.
I believe . . .
  • #125,149
  • May 2, 2013 11:04am May 2, 2013 11:04am
Interesting consolidation wedge forming on WTI crude around $90.00 BRN and 50% ret...
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Anything can happen.
  • #125,150
  • May 2, 2013 11:08am May 2, 2013 11:08am
Quoting ddinnov
Interesting consolidation wedge forming on WTI crude around $90.00 BRN and 50% ret... {image} {image}
Hey Peter

Got your email

I would have mine drawn like this, with the most interest in the $100 mark

Best
Mike
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  • #125,151
  • May 2, 2013 11:25am May 2, 2013 11:25am
Quoting mbqb11
{quote} Hey Peter Got your email I would have mine drawn like this, with the most interest in the $100 mark Best Mike {image}
That does look a bit clearer - didn't really factor in VBRN $100...
Anything can happen.
  • #125,152
  • May 2, 2013 12:32pm May 2, 2013 12:32pm
Quoting ghous
{quote} Hey Microtrader, Its never recommended to execute an action on your trade that stems from something that you see in another correlated pair, unless you are trading a system geared specifically to trade correlation. Yes many pairs move in tandem with each other and that is precisely why we get our trades in "bunches" followed by dry periods where nothing seems to be moving. But that said, 2 pairs may be positively correlated but what many people don't understand is that its never a rocket science. When EUR/USD goes up USD/CHF doesn't always...
Thanks Ghous,

I will close the trade if it closes below 5,8 RN and let to run if it closes above that

Microtrader
  • #125,153
  • May 2, 2013 2:14pm May 2, 2013 2:14pm
Audcad spectacular divergence with EMA 365
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  • #125,154
  • May 2, 2013 3:44pm May 2, 2013 3:44pm
Looks like there gona be a 1H, 4H, 1D and a week pinbar on AUD/NZ looks good to buy!...

Input would be good,
  • #125,155
  • Edited 4:23pm May 2, 2013 3:45pm | Edited 4:23pm
Quoting ghous
{quote} Niccee! You gotta love those "to the pip BAMMS!". Like price falling into the trap of behaving a little too perfectly for us and putting in danger the illusion of being random! Work of art those levels. g.

I hear ya G . .

Interesting where Price found S/R today on many different pairs . .

129.84 HCR level on the EurJpy . .

Jim
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Indicators show the past. Price Action "Indicates" the future.
  • #125,156
  • May 2, 2013 4:03pm May 2, 2013 4:03pm
Quoting jclude25
{quote} Thank you for the response Jarroo. What about this hypothetical example here. Your help is very much appreicated.{image}
Yes the structure of this one could be better as DBHLC . .Even better if it was a BEOB. . . the size looks good.

But the key to these bar patterns are their location and are they representing a bigger picture of the market.

The swing high is not bad but its not at the highest swing point of current prices.

This bar pattern would be great if it was located at a higher swing high. .example . .
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Indicators show the past. Price Action "Indicates" the future.
  • #125,157
  • May 2, 2013 4:11pm May 2, 2013 4:11pm
Quoting Fx-chriz
Looks like there gona be a 1H, 4H, 1D and a week pinbar on AUD/NZ looks good to buy!... Input would be good,
A chart would be better . .
Indicators show the past. Price Action "Indicates" the future.
  • #125,158
  • Edited 4:42pm May 2, 2013 4:30pm | Edited 4:42pm
What about this lovely pin on AUDCAD? not much confluence besides being a former support level... also very large previous bar... comments?

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  • #125,159
  • May 2, 2013 4:53pm May 2, 2013 4:53pm
Quoting Jomi
What about this lovely pin on AUDCAD? not much confluence besides being a former support level... also very large previous bar... comments? {image}
Hey J

I see a lot of people asking about this one

Not a whole lot of confluence which always worries me. I see a very large previous beairsh bar and my pinbar barely closed within the prior bar

I would say the best thing going for this bar is FRIDAY. Friday being a notorious profit taking day could push us higher into the TL or FTA

Also notice how the left eye held. Price should NOT have to get lower than this area. I prefer an entry right on the close based on my bar and a very tight stop

Best
Mike
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  • #125,160
  • May 2, 2013 5:03pm May 2, 2013 5:03pm
Quoting mbqb11
{quote} Hey J I see a lot of people asking about this one Not a whole lot of confluence which always worries me. I see a very large previous beairsh bar and my pinbar barely closed within the prior bar I would say the best thing going for this bar is FRIDAY. Friday being a notorious profit taking day could push us higher into the TL or FTA Also notice how the left eye held. Price should NOT have to get lower than this area. I prefer an entry right on the close based on my bar and a very tight stop Best Mike {image}
Thanks Mike! precisely my thoughts!
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