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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

I'd like to get some help on how to determine with confidence that price has hit either a support or a resistance, especially if it seems to be a "new" S/R. Does simply breaking it and testing it from the other side "confirm" for you guys that the S/R is now valid? How about a flat out rejection on 1 bar? A single touch? A close above/below? Basically, what constitutes a solid test of that for you? Secondarily, if you feel the S/R held, where is your most confident entry? The break of the bar that confirmed it for you? The open of the bar after the one that confirmed it? The touch itself? Obviously some of those are more risky than others but I'm asking for your most confident (highest probability) situation.

A huge mind block for me right now is being too nervous to pull the trigger because I don't feel confident the support/resistance actually held. I think, "well, what if the next bar just blasts it away?" It's embarrassing because it seems so basic but why is it giving me so much trouble?
Quoting LiFZ
I'd like to get some help on how to determine with confidence that price has hit either a support or a resistance, especially if it seems to be a "new" S/R. Does simply breaking it and testing it from the other side "confirm" for you guys that the S/R is now valid? How about a flat out rejection on 1 bar? A single touch? A close above/below? Basically, what constitutes a solid test of that for you? Secondarily, if you feel the S/R held, where is your most confident entry? The break of the bar that confirmed it for you? The open of the bar after...
Hey Lifz

I think the simplest(and most effective) place to start is using the bar confirmations James teaches in this thread to help confirm up your locations. So look for highly confluenced areas and wait for GREAT price action bars as taught here to confirm your entries. It's exactly what I do majority of the time.


New and old traders alike that struggle would do themselves a great favor by applying that simple mindset. James would agree

Best
Mike
Quoting mbqb11
{quote} Hey Lifz I think the simplest(and most effective) place to start is using the bar confirmations James teaches in this thread to help confirm up your locations. So look for highly confluenced areas and wait for GREAT price action bars as taught here to confirm your entries. It's exactly what I do majority of the time. New and old traders alike that struggle would do themselves a great favor by applying that simple mindset. James would agree Best Mike
Thanks for the quick reply, Mike. I guess I'm more asking for everyone's opinions when there aren't those GREAT PA bars. Yes, the majority of the time it's best to wait for them, I can't argue that. But how about on a box breakout where you even talk about in your videos of a break, retest, and entry? There aren't always those great confirmation bars on a box breakout and even you don't ALWAYS wait for them! I'm fine with the actual bars themselves, but I'm asking for the more specific (I know this isn't beginner stuff) instances and how this community feels about S/R with non PA bars. Just a general, "what's it take for you to feel confident about a new S/R line?"
Quoting LiFZ
A huge mind block for me right now is being too nervous to pull the trigger because I don't feel confident the support/resistance actually held. I think, "well, what if the next bar just blasts it away?" It's embarrassing because it seems so basic but why is it giving me so much trouble?
Do you mean you are nervous about taking these setups on a demo account or a live account?
Quoting LiFZ
{quote} Thanks for the quick reply, Mike. I guess I'm more asking for everyone's opinions when there aren't those GREAT PA bars. Yes, the majority of the time it's best to wait for them, I can't argue that. But how about on a box breakout where you even talk about in your videos of a break, retest, and entry? There aren't always those great confirmation bars on a box breakout and even you don't ALWAYS wait for them! I'm fine with the actual bars themselves, but I'm asking for the more specific (I know this isn't beginner stuff) instances and how...

Hey L

For me personally if I don't get the bar I am looking for 95% of the time I just pass and wait for the next breakout that does give me the PA. Doesn't mean you can't not trade without PA(called touch trading). I also do from time to time. Really the most important factor comes down to the confluence then


Example a breakout of a box. Price closes above the box, buy on a retest of the box. Yes that simple. What constitutes a good box is really the same as what constitutes one for me when looking for PA.

Ultimately it ALL comes down to location which is what I think your question is. A highly confluence area(which I call story) is the #1 most important thing

Best
Mike
Quoting LiFZ
{quote} Thanks for the quick reply, Mike. I guess I'm more asking for everyone's opinions when there aren't those GREAT PA bars. Yes, the majority of the time it's best to wait for them, I can't argue that. But how about on a box breakout where you even talk about in your videos of a break, retest, and entry? There aren't always those great confirmation bars on a box breakout and even you don't ALWAYS wait for them! I'm fine with the actual bars themselves, but I'm asking for the more specific (I know this isn't beginner stuff) instances and how...

Hey Lifz,
Just my 2 cents here but this is what I think. The story is the most important and the stories can be multifaceted. The story can be a weekly, daily or H4 story. Sometimes even a H1 story but when learning it is best to stick to the higher time frames. Watching Mike's videos will help with this. Recognizing the story is crucial whether it is boxing, TLs or PPZs or combinations. Once you become familiar with defining the story then the trading plan starts to not-so-magically reveal itself. I can say for sure when you are learning this style of trading you should really only trade when there is a strong price action candle whether it be a very nice large pinbar, a big ass BEOB at a swing high or a huge BUOEB at a swing low. Look only for these candles as Mike has described over and over. Pass on everything else. Forget the small stuff for now. Sure you will have to pass on trades where a nice PA candle does not appear. But often you will find when a PA bar does not appear price sputters out and nothing happens. Yes sometimes price will take off and you will watch it wondering why you didn't get in. Interestingly I think because of human nature we all have to try to do it our way. I know this because I have done it and seen others do it too. I think it is part of our trading education and that is OK. But once you've tried it your way then do it the way proven to be successful. Why reinvent the wheel when something works.
Quoting Winston Reed
{quote} Hey Lifz, Just my 2 cents here but this is what I think. The story is the most important and the stories can be multifaceted. The story can be a weekly, daily or H4 story. Sometimes even a H1 story but when learning it is best to stick to the higher time frames. Watching Mike's videos will help with this. Recognizing the story is crucial whether it is boxing, TLs or PPZs or combinations. Once you become familiar with defining the story then the trading plan starts to not-so-magically reveal itself. I can say for sure when you are learning...
WR,

This is a fantastic, fantastic, fantastic (yes 3x fantastic) reply. Just about everything you said resonated and will stick. You pretty much just solidified my resolve to stick it out. I will absolutely try things here and there (either with extremely small lots, demo, or a completely separate account) because I'm human. But the "real deal" trades will be dictated by PA stories. It's just not worth risking $ on "maybe" trades.

Is 1 trade per week extremely normal?

thanks again,
~Lifz
I'm going to post another chart in a minute (the one I asked you about Mike) but here is one that I'm curious about. For the sake of learning, if we assume the current bar closed right now, how would you guys analyze this trade? The bar ins't a monster bar but there does seem to be nice confluence (a good "story"?):

  1. 2 fib retracements (38.2 from this month's low and 61.8 from the previous swing low)
  2. A well respected PPZ
  3. BRN
  4. 150 EMA
  5. Minor pin bar

Note the divergence also.

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As Mike has related much this summer, trading at this time of the year especially in FOREX can be frustratingly slow. Mike looks at many FOREX pairs and many more equities to find viable trades during the dog days of summer. What is important is not how many trades you take per week or per month. It is how many good trades you take in whatever time period. If the story was good and the PA was there then it really doesn't matter whether the trade went your way or not. We already know that if you take only the A+ trades that in the long run you will do well.
Here is the bigger story IMHO. Price is forming an ascending wedge. The .8200 seems to be a PPZ and might be a decent place to look for PA. It's a good idea to start from the HTFs even as high as monthly but the weekly seems to do well and work your way down to daily and H4 time frames. Fibs and MAs are OK but I don't use them. Confluence at TLs, PPZs and big round numbers work well.
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I just emailed the private group this but I feel it's a good post to make here to with the way the markets have been(FX specifically). It's always important to me that when I speak about something it's for good reason rather then just to run my mouth. Believe me I blab enough



Some may be asking why my emails have decreased the last few weeks. Simply
speaking the markets have been pretty uninteresting. I am NOT going to send
fluff out for the sake of emailing you all. Quality far out weighs
quantity in trading(same goes for teaching material)

I am getting a significant amount of emails of antsy traders and people
just feeling uncomfortable with the markets.

This is NORMAL. Markets going into periods of consolidation or chop. It is
JUST as important to be able to keep yourself out of markets that are not
clear then it is to be able to know how to trade good entries.

I have been primarily focused on equities while the FX markets have been
choppy the last few weeks. This is a huge reason why myself and James have
constantly spoke about watching many markets. It's much easier to pass on
something when you know you can look elsewhere. This is one of the biggest
lessons I have learned in over a decade of trading now.

The point of this email is to say do NOT over think things. Continue to
watch for clear signals at important areas. Like I spoke about on the
forums I think this week or quite shortly we will begin to see some more
movement as the markets reach their breaking point.

I have attached a few charts with some general thoughts/areas to watch

Reminder I also have a webinar at 2pm et NY time tomorrow

Also welcome to all our new members. I am glad to see the new folks
getting involved and emailing me/posting on the forum

Best
Mike
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  • #127,012
  • Quote
  • Edited 8:05am Jul 30, 2013 12:50am | Edited 8:05am
Quoting LiFZ
I'm going to post another chart in a minute (the one I asked you about Mike) but here is one that I'm curious about. For the sake of learning, if we assume the current bar closed right now, how would you guys analyze this trade? The bar ins't a monster bar but there does seem to be nice confluence (a good "story"?): 2 fib retracements (38.2 from this month's low and 61.8 from the previous swing low) A well respected PPZ BRN 150 EMA Minor pin bar Note the divergence also. {image}

Wouldn't even notice it.
In the middle of things!, price is going sideways, traffic and no tail on the pin which means, they have not drawn in enough people to push it up.
hi mike, Winston

it seems that Eur/Aud has broken out of the box and just wanted to know if you feel that the previous ppz may now act as support as marked on the chart with the arrow. the confluence(s) i see are the box is broken and the resistance may turn to support which is just above the box. 3 touches of the trendline, the trendline and the merger of the ppz zone..i do know that if price does come back then we have to wait for PA.

Regards

Dennis
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Mike

Would u consider trade like this?
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  • #127,015
  • Quote
  • Edited 8:42am Jul 30, 2013 8:09am | Edited 8:42am
Quoting LiFZ
I'm going to post another chart in a minute (the one I asked you about Mike) but here is one that I'm curious about. For the sake of learning, if we assume the current bar closed right now, how would you guys analyze this trade? The bar ins't a monster bar but there does seem to be nice confluence (a good "story"?): 2 fib retracements (38.2 from this month's low and 61.8 from the previous swing low) A well respected PPZ BRN 150 EMA Minor pin bar Note the divergence also. {image}
Doesn't look so good now, does it.

Hope you were not in it.

Anyway, read post 1 about using the Weekly & Daily TFs when starting out. It is important.
Don't mess with H4 for a while.

I made that mistake and it cost me years of time.
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Quoting Pinbar
{quote} Wouldn't even notice it. In the middle of things!, price is going sideways, traffic nd no tail on the pin which means, they have not drawn in enough people to push it up.
This.....it wouldn't register for me either. No space, tracking sideways, nowhere near perfect pinbar. You can draw lot's of lines/fibs on a chart and try and justify a trade, adding credence to something that you no is not an "A" trade and subsequently jump in and get get cleaned out. Stick to the basics, trade only A-grade setups....just concentrate on pin-bars at first on demo, adding in layers of more PA setups as you gain confidence and you will find that these high probability trades work.

Write a trading business plan that lays out what patterns you will trade, what the perfect PA pattern works like, on what time frame, what % you will risk, etc and put it on the wall above your monitor. Mike's advice above is spot on.....don't feel the need to "Be" in the market.....let the market come to you on your terms and when it ticks all the boxes on your trading plan, place your pending trade and let it run its course.

If markets are crabbing sideways or boxing, sure you can drop timeframes, scalp and end up feeling like a shaken up can of coca cola after getting whipsawed around....if FX ain't playing the game look at other markets until FX decides to give you the setups that you require.
Quoting tehuringa
{quote} This.....it wouldn't register for me either. No space, tracking sideways, nowhere near perfect pinbar. You can draw lot's of lines/fibs on a chart and try and justify a trade, adding credence to something that you no is not an "A" trade and subsequently jump in and get get cleaned out. Stick to the basics, trade only A-grade setups....just concentrate on pin-bars at first on demo, adding in layers of more PA setups as you gain confidence and you will find that these high probability trades work. Write a trading business plan that lays...

Totally agree Tehruinga

The years I wasted on lower tfs,

I still trade lower tfs, but off the monthly and weekly levels.

Right now, I am studying HCR and HHR +SFP with Ghous in the thread we opened so we would not confuse people in this thread with small tfs.
Drop in, your advice is always welcome.

Some order flow learning going down there.


http://www.forexfactory.com/showthread.php?t=435416
Quoting tehuringa
{quote} If markets are crabbing sideways or boxing, sure you can drop timeframes, scalp and end up feeling like a shaken up can of coca cola after getting whipsawed around....if FX ain't playing the game look at other markets until FX decides to give you the setups that you require.
Feeling like a shaken can of coke...

I think, I have been there.
Quoting Pinbar
{quote} Doesn't look so good now, does it. Hope you were not in it. Anyway, read post 1 about using the Weekly & Daily TFs when starting out. It is important. Don't mess with H4 for a while. I made that mistake and it cost me years or time. {image}
I read post 1 along with everything else I read when I started out. However, I think there is some confusion as to the intent of the question. I did not intend to trade it, nor did I trade it. It never even triggered. However, I do greatly appreciate everyone's passionate replies...

It was simply a question regarding how strongly people feel with great confluence IF the bar had closed right then. It was a learning exercise only and to see how much "faith" people put into confluence vs PA. It wasn't the best PA but it was great confluence. My question was (and still is) to find how people felt about that in general. It was a pretend scenario, not a "can I pretty please jump in on this trade"?

But honestly, P, I disagree that it all "doesn't look so good". Yes, that specific bar doesn't, but NO ONE should've taken it even if only for the fact that it never triggered.

As long as the BRN 8200 holds, it's a good area to look for PA. That's a strong PPZ. I'd rather know my areas and look for PA to come to me than see PA and start making up areas to fit it. If it breaks, it changes the story, and what you should be looking for.
Quoting LiFZ
{quote} I read post 1 along with everything else I read when I started out. However, I think there is some confusion as to the intent of the question. I did not intend to trade it, nor did I trade it. It never even triggered. However, I do greatly appreciate everyone's passionate replies... It was simply a question regarding how strongly people feel with great confluence IF the bar had closed right then. It was a learning exercise only and to see how much "faith" people put into confluence vs PA. It wasn't the best PA but it was great confluence....

You can read all you want into a bar like that, as T said.
I think you missed the bigger story going on.
I just see it as having dropped back into this box of consolidation, with the 365 and 0.8250 as confluence to contend with.

You are entitled to your opinion.

So, tell me, why did you ask the question about this irrelevant H4 would be PB?

Because, you thought it was a good location with confluence, right?

If you don't like the answers which appears to be the case, why ask the question in the first place?
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