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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

  • #128,101
  • Oct 17, 2013 10:38am Oct 17, 2013 10:38am
Quoting Winston Reed
Support and resistance + PA + HTF = less trading, less losses, growing account. Support and resistance + PA + LTF = more trading, more losses, ? account I am rereading the beginning of this thread (first 100 pages or so) when James was quite active. Somewhere around page 50 he makes a statement about the death of new traders is guaranteed when they start out trading lower time frames rather than higher time frames. One can quite easily prove this to himself. Take any pair. Look at a weekly chart and identify PA as taught here. Notice without anything...
James himself loves his day trading. Its not about choosing one style over another as a coercive rule for trading as per James16, we just emphasize that new people start off with the higher time frames as that just makes the learning process that much more natural and normal.

Lower time frames vs higher time frames, is a debate almost as long (and as pointless) as the technical vs fundamental debate. There definitely are countless intra day traders all around the world who love their high frequency trading, and the lower strike rates don't bother them at all. There will also be countless traders who like to stick to maybe taking 1-5 high quality trades and thrive on the comparatively higher strike rates. Its really about what suites your comfort zone more than "what is generally more popular amongst professionals". In the end nobody should (and doesn't) give a shit how and what you trade. As long as you're consistent its all perfectly acceptable.

There is no reason to believe that all new people here, that are trading the higher time frames, against their inner desires, will need to continue doing that 5 years from now. Its really just about following the minimum requirements in post#1 and just discovering your comfort zone, and settling within it, as you go along the journey. Some will eventually graduate to lower time frames because they always wanted to, others enjoy the consistency they achieve on the higher time frames and settle right there regardless of what they they initially thought or wanted. Again all part of the evolution process you go through as a trader.

g.
I believe . . .
  • #128,102
  • Oct 17, 2013 10:49am Oct 17, 2013 10:49am
Quoting jibson007
{quote} Senior i guess i will drift to you side more. no TF is better its all depends on traders personality and knowledge. A good illustration is Marty schwartz and Micheal Marcus or Ed Seykota. If you consider this set of very fine traders its obvious, no time frame is more profitable. But i will partially agree with Winston Reed 'Support and resistance + PA + HTF = less trading, less losses, growing account'. considering how Marty Schwartz couldn't be as successful as is counterpart like Goerge Soros, Paul Tudor Jones, Bruce Kovner. e.t.c. because...
Your "little view of the whole thing" is absolutely correct. Its about just hanging on and allowing yourself to to take the natural route to learning the odds of success in this business.

g.
I believe . . .
  • #128,103
  • Oct 17, 2013 11:00am Oct 17, 2013 11:00am
Quoting Winston Reed
Another one I missed. Just not near the charts when that BEOB formed at the top of the wedge. {image}
Hey Winston,

Don't think there is too much to fret about. It was headed into a lot of traffic and clearly, it wasn't off anything massive enough to counter that major spatial deficiency.

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g.
I believe . . .
  • #128,104
  • Oct 17, 2013 11:06am Oct 17, 2013 11:06am
Quoting jibson007
{quote} Shot Two. got out for few pips to precisely stabilize my confidence level. i think is good to end each day with net profit. I hope to get to dat land when its comes to me in a flash. Am sorry hope its better now. Thanx Jibson007 {image}{image}
Hey Jibson,

Wow, some nice runs there Jibson.

These were not triggered by a PA bars were they?

g.
I believe . . .
  • #128,105
  • Oct 17, 2013 3:35pm Oct 17, 2013 3:35pm
Quoting ghous
{quote} Hey P, Nothing wrong with keeping all your practice and tentative testing for the demo. If you can ensure that it doesn't distract you from your main objective initially which is to hunt for that consistency on the higher time frames, then surely some lower time frame demo involvement is only beneficial. Problem is, its quite hard to actually play this out. Its very natural to drift away when the higher time frames appear dry and the "intra day tentative testing" provides for some interesting short term results. Its near impossible to...

I agree about the need to stay on higher time frames and slipping on to lower time frames can reduce the focus. Expertise matters here so it is better to stay on Daily but so hard to wait for that one or two trades that may show up. Here when we say lower time frame charts it is just 4 hr chart and nothing below that.

I also agree about your opinion of taking those trend trades and they going sideways taking you out of the trade. We should go with PA even when we take a trend trade and move our stop to BE at the earliest.


Now I want to take this opportunity to ask you a question. I placed a trade recently on the Daily chart and when I happened to see the same trade on a LTF chart I found that there is some consolidation even before Daily FTA. Now do we have to take this into consideration or we should manage this trade only by what we see on the Daily chart. I have read that we can fine tune our entries by looking at lower time frame charts. Here the question is once we take a trade on Daily or Weekly....and if we find some consolidation on lower time frame charts which we could not see on HTF do we have to take that seriously...or do we need to consider that as noise and just focus on higher time frame where we placed the trade??

I am not sure if you understood that...
  • #128,106
  • Oct 17, 2013 4:19pm Oct 17, 2013 4:19pm
Hi all,

what do you think about Aud/Usd in resistance area formed by ema 200?

is it a good area to try a short?

thank you
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  • #128,107
  • Oct 17, 2013 7:27pm Oct 17, 2013 7:27pm
Quoting jimi
Hi all, what do you think about Aud/Usd in resistance area formed by ema 200? is it a good area to try a short? thank you {image}
That one is also at a massive resistance area that goes back to '09 on the weekly. It might be a good area, but wait for something to happen.
  • #128,108
  • Oct 17, 2013 8:06pm Oct 17, 2013 8:06pm
Quoting ghous
{quote} James himself loves his day trading. Its not about choosing one style over another as a coercive rule for trading as per James16, we just emphasize that new people start off with the higher time frames as that just makes the learning process that much more natural and normal. Lower time frames vs higher time frames, is a debate almost as long (and as pointless) as the technical vs fundamental debate. There definitely are countless intra day traders all around the world who love their high frequency trading, and the lower strike rates don't...
Well said Ghous. Yet, James stressed early in the thread and Mike continues to stress even now in this forum and in the private forum the importance of "beginners" starting with weekly and daily time frames. Perhaps no less than H4. While everyone will eventually choose their own trading path which may lead to LTF trading one is likely to have a more satisfying experience initially with the HTF. Few would argue that PA on HTFs is more reliable than on LTFs. Just look at any m5 chart and watch the abundance of false PA setups that occur. This fact alone underlines the importance of starting out with HTF PA.

Interestingly enough as I scan the weekly and daily charts I actually find many good trades that are not so "infrequent" as beginning traders fear HTF trading may be. Beginners as well as those experiencing less-than-profitable trading after 2,3,4 or more years may pleasantly surprise themselves by backtesting PA. Even just using horizontal s/r provides many A+ setups/trades. Patterns add another dimension but they are more advanced and can be confusing yet they are a valuable tool.

Finally, beginners and not-so-beginners should review the first 100 or so pages of this thread. I cannot stress this enough!!! Plus you'll get a blast out of reading Mike's early posts
  • #128,109
  • Oct 17, 2013 8:11pm Oct 17, 2013 8:11pm
Quoting jimi
Hi all, what do you think about Aud/Usd in resistance area formed by ema 200? is it a good area to try a short? thank you {image}
Hey Jimi,
Even in the absence of the 200 ema the weekly resistance is impressive. A short may be possible but we must wait for PA to show the way.
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  • #128,110
  • Oct 18, 2013 12:40am Oct 18, 2013 12:40am
Quoting jimi
Hi all, what do you think about Aud/Usd in resistance area formed by ema 200? is it a good area to try a short? thank you {image}

jimi

I saw this setup yesterday. If you look at the left, it seems like the FTA is very close. We have to wait for strong PA for this.
  • #128,111
  • Oct 18, 2013 5:10am Oct 18, 2013 5:10am
Hi Everyone,
I had difficult time for last 9 months in my trading development, I was too distracted and slipped from my plans, trying all different modifications of the basic J16 stuff and my results are disappointing. So I now try to stick with the basic ideas of PA and I am confident my performance is going to improve significantly.

here is H4 trade on AUDUSD that I am in now:
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  • #128,112
  • Oct 18, 2013 6:21am Oct 18, 2013 6:21am
2 weeks with no trades. Can find nothing to trade. Boring
If not up, then down, otherwise sideways :-)
  • #128,113
  • Oct 18, 2013 6:34am Oct 18, 2013 6:34am
Quoting ghous
{quote} Hey P, Nothing wrong with keeping all your practice and tentative testing for the demo. If you can ensure that it doesn't distract you from your main objective initially which is to hunt for that consistency on the higher time frames, then surely some lower time frame demo involvement is only beneficial. Problem is, its quite hard to actually play this out. Its very natural to drift away when the higher time frames appear dry and the "intra day tentative testing" provides for some interesting short term results. Its near impossible to...
If you don't consider that I am straying away from the core topics I want to discuss one more item. When I was introduced to the topic of support and resistance and PPZ I felt that that the concept touches the core of trading. The support and resistance points indicate buyers and sellers and when it combined with other factor it may result in good probability trades. I just can feel this in my bones...that it is true. Similarly there is another concept of fractals...that operates everywhere in nature. It works in markets too and so charts on all time frames have the same price patterns. By this logic the PA setups that are valid on higher time frames must be valid on lower time frames too. Now this being the fact why do we consider that PA does not work properly on lower time frames. I have not checked this but the fundamental nature of price and charts point that they should work on all time frames.
  • #128,114
  • Oct 18, 2013 6:42am Oct 18, 2013 6:42am
Quoting prasad99
{quote} If you don't consider that I am straying away from the core topics I want to discuss one more item. When I was introduced to the topic of support and resistance and PPZ I felt that that the concept touches the core of trading. The support and resistance points indicate buyers and sellers and when it combined with other factor it may result in good probability trades. I just can feel this in my bones...that it is true. Similarly there is another concept of fractals...that operates everywhere in nature. It works in markets too and so charts...
There is valid PA setup that is forming on hourly chart. Do you indicate that we should take similar setups on higher time frame charts.??? Please look at the screenshot for USD /AUD
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  • #128,115
  • Oct 18, 2013 7:34am Oct 18, 2013 7:34am
Quoting Magestic
2 weeks with no trades. Can find nothing to trade. Boring
Hey Majestic. The FX markets have been pretty quiet especially with the indecision over the US shutdown. But yesterday there some pretty good breakouts. I missed them because I didn't wake up from my slumber.
  • #128,116
  • Oct 18, 2013 7:37am Oct 18, 2013 7:37am
Quoting prasad99
{quote} If you don't consider that I am straying away from the core topics I want to discuss one more item. When I was introduced to the topic of support and resistance and PPZ I felt that that the concept touches the core of trading. The support and resistance points indicate buyers and sellers and when it combined with other factor it may result in good probability trades. I just can feel this in my bones...that it is true. Similarly there is another concept of fractals...that operates everywhere in nature. It works in markets too and so charts...
Hey Prasad,

While waiting for more advanced traders to reply...

I would doubt that old timers here ever said PA on LTF does not work. From my understanding, their message is a bit different.

From what I could read here, and experiment at my computer (…), the idea to keep trading the HTF VS the lower ones, especially for people starting out and/or struggling through their journey to constant profitability is based on the following facts:

- signal-to-noise ratio is better on HTF:
the signal (price action bar) doesn't scream as you (a general "you") on lower time frames as loudly as on the HTF, since it is hidden by small price variation.

- location:
People here (Mike, Ghous, James, Jarroo, and many others) used to say that day trading off of the daily chart is a very relevant option. Basically, you draw your PPZ levels on the D1/W1, and then look for PA bars at these locations on H1/H4.
This, in general, allows for a reduction of the SL, and that's great. I've personally had some amazing trades trading like that.
2 problems though in my view:
(1) well, I got a day job, and I cant afford checking my charts every 1 or 4 hours.
(2) as above, noise: you'll see many bar highs / lows, which will eventually make managing the trade not as easy as on HTF. Or you'll consider a H4 PPZ as strong enough to enter a trade, forgetting the daily/weekly situation.

- time:
Deciding to enter a trade on the daily (yes/no decision, risk assessment, money management, trade management) allows you to take the time to weight pros and cons, while on LTF, the decision process must be much faster, thus increasing the risk of errors…

- Patience:
Whatever the timeframe you decide to trade from, you have to wait for the best setup, and to skip the so-so ones. As for me, it's easier to scan my charts at the end of the day, consider whether this nice pinbar is sitting on a nice PPZ with Fib confluence is worth trading, finally deciding that no, there's too much traffic, close the laptop, then take a book, say good night to my daughter and then forget about it, than to check my screen every few hours to re-assess whether this location wouldn't eventually be worth a trade.
Patience on HTF is much easier for me than on LTF. Killed a few demo accounts for that matter. 2 months ago I decided to really stick to daily and weekly, and guess what, first month in profit…

But again, this is all nothing but my personal opinion, from my readings here and my little experience.
I firmly believe that it all comes down to each trader's personality. Mike's "comfort zone". What works for me may not work for you. Yet, I've had some difficulties to find what really works for me. And following the guidelines in post 1 really helped me focusing on the important things to work on, so my way of trading will match my personality. Still in progress

Sorry, quite a long post…

take care
Slow & steady
  • #128,117
  • Oct 18, 2013 9:04am Oct 18, 2013 9:04am
Quoting patapouer
{quote} Hey Prasad, While waiting for more advanced traders to reply... I would doubt that old timers here ever said PA on LTF does not work. From my understanding, their message is a bit different. From what I could read here, and experiment at my computer (…), the idea to keep trading the HTF VS the lower ones, especially for people starting out and/or struggling through their journey to constant profitability is based on the following facts: - signal-to-noise ratio is better on HTF: the signal (price action bar) doesn't scream as you (a general...
If you watch for PA on 1hr/4hr using daily levels you won't trade much more than if you trade only daily.
That's how I trade, only important levels from daily and watch intraday for PA but I still take only a few trades (most of the time price isn't even touching my level).

What I found works for me is to be super picky. If I try to take a trade not so good I often lose or break even.
But if I take only very good trades I have a very small lose rate. In poker it doesn't work to be a nit because you have to pay blinds but in forex it works very well.
  • #128,118
  • Oct 18, 2013 10:26am Oct 18, 2013 10:26am
Quoting prasad99
{quote} I agree about the need to stay on higher time frames and slipping on to lower time frames can reduce the focus. Expertise matters here so it is better to stay on Daily but so hard to wait for that one or two trades that may show up. Here when we say lower time frame charts it is just 4 hr chart and nothing below that. I also agree about your opinion of taking those trend trades and they going sideways taking you out of the trade. We should go with PA even when we take a trend trade and move our stop to BE at the earliest. Now I want to take...
Hey P,

I for one, always tend to keep my time frames separate. So if I see a daily setup it is extremely unlikely that I would want to drop down the time frame ladder provided that I enter on the daily. Of course if you choose to "fine tune" an entry by taking a trade on a lower TF based on a bias from the higher time frames then by all means the story on that lower TF will be important to you.

A general rule for me is that the trade gets managed on the time frame that is executed on. Its rare for me to bypass this rule, but happens once in a while when I get "stuck" on a higher time frame because of lack of price movement or a sudden hault in momentum. I might then, just drop down a time frame to see if if a lower TF trend line/PPZ/MA that could be holding up could be used to tighten up the screws on the trade.

g.
I believe . . .
  • #128,119
  • Oct 18, 2013 10:33am Oct 18, 2013 10:33am
Quoting obmepa
Hi Everyone, I had difficult time for last 9 months in my trading development, I was too distracted and slipped from my plans, trying all different modifications of the basic J16 stuff and my results are disappointing. So I now try to stick with the basic ideas of PA and I am confident my performance is going to improve significantly. here is H4 trade on AUDUSD that I am in now: {image}
Hey bro,

Always great to be back to the good ol' basic stuff yeah?

Nice trade there. Although I'd prefer a deeper pull back I can see you spotted a nice flip and some PA to hop on the trend.

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g.
I believe . . .
  • #128,120
  • Oct 18, 2013 10:42am Oct 18, 2013 10:42am
Quoting prasad99
{quote} If you don't consider that I am straying away from the core topics I want to discuss one more item. When I was introduced to the topic of support and resistance and PPZ I felt that that the concept touches the core of trading. The support and resistance points indicate buyers and sellers and when it combined with other factor it may result in good probability trades. I just can feel this in my bones...that it is true. Similarly there is another concept of fractals...that operates everywhere in nature. It works in markets too and so charts...
PA should, and does, work on lower time frames.

Higher time frames are "easier" because there is less noise inside your head and outside on your chart. Extending this to lower time frames, the lower you go the fewer the pip margins and hence more the noise on your chart. The time you have to make the decision also continues to reduce as you go down which amplifies the noise inside of your head too. Trading on the lower time frames thus becomes "tricky". You obviously have more space to a trade that has a 100 pip SL as compared to a trade that has a 10 pip SL. In the latter case, you're expecting the market to be dead on target which isn't going to be the case even often. This is where the lower time frames can give you the impression of being "less accurate" when in reality a great pin bar at a great location doesn't care what time frame its on. Its what happens between the 2 A+ trades that can get so many in trouble in attempting to trade the lower time frames.

g.
I believe . . .
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