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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

  • #129,081
  • Dec 4, 2013 5:00pm Dec 4, 2013 5:00pm
Quoting michal7
Here's my last trade. Loss on EURAUD. It was not nicest candlestick, could have lower close and/or longer wick that would penetrate higher. But I took it because locations seems to be perfect, BRN 1,5000 and triple top. My backtests showed me that if location is very good then candlestick doesn't have to be perfect for setup to work. (That's why I didn't trade GBPUSD monday pin bar, thankfully). Now I don't know whether I screwed up or it was good setup that didn't work out. Any thoughts, advices? {image} {image} {image}
Michal7, mate, I was with you in this one. Luckily, I moved my stop to BE right around 50+ pips because I was worried of that level 1.4840 with all the pin bars and stuff. But... I don't think you should consider this as a trade that you've screwed up. The entry just didn't work.
Maybe what we could learn from situations like this, and this is something Mike and the others have kept repeating forever, is that if the trade is not AAA+++ setup to move stops to BE at the first natural place where price could turn against our direction. In this case - 1.4840. I mean serously. We had got 3 pinbars off this level... It was obvious that things can go wrong. And they did with the GDP release for Australia.
So yeah. It's a winning trade, because we've learnt and improved, right?
Twitter @raitchev
  • #129,082
  • Dec 4, 2013 6:04pm Dec 4, 2013 6:04pm
Quoting raitchev
{quote} Michal7, mate, I was with you in this one. Luckily, I moved my stop to BE right around 50+ pips because I was worried of that level 1.4840 with all the pin bars and stuff. But... I don't think you should consider this as a trade that you've screwed up. The entry just didn't work. Maybe what we could learn from situations like this, and this is something Mike and the others have kept repeating forever, is that if the trade is not AAA+++ setup to move stops to BE at the first natural place where price could turn against our direction. In this...
Great post R!

One thing that a lot of new traders struggle with and rightly so is understanding how to place each of the different concepts we use within the current story. The natural tendency(just a human thing too) is to lump things. So people get confused with things like what to do at a FTA on any particular trade. It almost becomes just guessing and hoping. That over time becomes a very exact reason why a trader does things. It's not a very difficult thing either actually. But it's about seeing situation after situation and understanding what kind of trader you are. That's how i teach what I do because it's the only way I know how

In this case many asked me about this one and my response was basically very small pinbar. While things like the BRN here and that previous resistance are great, do they support a LARGE trade. Meaning a trade to sell and hold. In my view point he answer is NO. Not even if this fell 1000 pips. My approach is to think about the downside of things and how to protect against that. A situation like this for me the FTA becomes massively important. If that pin was 3 times the size then that FTA now becomes largely irrelevant for me. Bars like this aren't that difficult to see where price is going(which is amazing in itself when learned - and simple). But bars like this kill the small account holder for two reasons. Either A. they can't resist taking it because they want to be IN the market. Or B. they take it and know it's not the best trade and FTA is close and they do nothing and take a full bar loss because the move represents peanuts in terms of real money. THis is a tough and crucial hurdle to get over for you new folks. I can't stress that enough. No matter how you trade, that is the reality how I see it

Best
Mike
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  • #129,083
  • Dec 4, 2013 9:31pm Dec 4, 2013 9:31pm
Quoting mbqb11
{quote} Great post R! One thing that a lot of new traders struggle with and rightly so is understanding how to place each of the different concepts we use within the current story. The natural tendency(just a human thing too) is to lump things. So people get confused with things like what to do at a FTA on any particular trade. It almost becomes just guessing and hoping. That over time becomes a very exact reason why a trader does things. It's not a very difficult thing either actually. But it's about seeing situation after situation and understanding...

  • #129,084
  • Dec 5, 2013 2:50am Dec 5, 2013 2:50am
Thanks Mike, raitchev, Str8 and Adam(Nazdar :-)) for your opinions, very helpful.

So if I understand correctly what you say, then this setup was OK to take but it should have been managed differently and go to BE at FTA. And I should draw FTA higher than my purple line.
However my strategy(coming from my backtests) is to let the trade play out to be either runner (for about 2R) or loss.
And as Mike says, for this kind of strategy (sell/buy and hold) this setup was not good enough.

I kind of knew it and I was hesitate to take the trade but I just liked location so much... Itchy fingers...

I need to be more picky and take only A++ setups where I can let the trade play out OR take also not perfect setups buy in that case move my SL to BE at FTA.

Why is it so hard to be picky? It seems natural and easy to take/choose only best things in life if we have option. And we have that option here. But many (me included of course) are not able to do it here.

Cheers,
Michal
  • #129,085
  • Edited 4:22am Dec 5, 2013 3:35am | Edited 4:22am
[quote=michal7;7136765. Why is it so hard to be picky? It seems natural and easy to take/choose only best things in life if we have option. And we have that option here. But many (me included of course) are not able to do it here. Cheers, Michal[/quote]The problem can be in size of account. If your account is big enough you are not temptated to trade until this best set-up appears. If your profit is 30€ and you know you trade only 4 times a month you realise you cant make living from trades like that. But if your profit is 3k you can say: I will take this small profit and you are Ok because it is enough money for you. It is hard to be picky when trading with small account. But it help you to improve as a trader and then trade easily if you fund your account (or somebody else)...

Don't worry, be happy and trading will be easy

Do you use skype Michal?
Lose small, win BIG
  • #129,086
  • Dec 5, 2013 3:50am Dec 5, 2013 3:50am
Quoting michal7
Thanks Mike, raitchev, Str8 and Adam(Nazdar :-)) for your opinions, very helpful. So if I understand correctly what you say, then this setup was OK to take but it should have been managed differently and go to BE at FTA. And I should draw FTA higher than my purple line. However my strategy(coming from my backtests) is to let the trade play out to be either runner (for about 2R) or loss. And as Mike says, for this kind of strategy (sell/buy and hold) this setup was not good enough. I kind of knew it and I was hesitate to take the trade but I just...
Why it is so hard to be picky, you say? Well, for me it is because of that feeling when you pass on the trade and then see it going into your direction. It really sucks right? Just look at Dan89's example several posts ago. He passed on an amazing runner. Still, we have to realise that exactly those passes will make us profitable. Because you will pass on a few nice runners, but also on a big amout of losers. This will eventually pay out on the long run.
Twitter @raitchev
  • #129,087
  • Dec 5, 2013 10:36am Dec 5, 2013 10:36am
Quoting ProsteJa
{quote}The problem can be in size of account. If your account is big enough you are not temptated to trade until this best set-up appears. If your profit is 30€ and you know you trade only 4 times a month you realise you cant make living from trades like that. But if your profit is 3k you can say: I will take this small profit and you are Ok because it is enough money for you. It is hard to be picky when trading with small account. But it help you to improve as a trader and then trade easily if you fund your account (or somebody else)... Don't worry,...
Don't assume you have to make a living from trading. if you trade the Dailies you can earn a nice addition to your normal income for the treats in life
every Saint has a past. Every Sinner has a Future
  • #129,088
  • Dec 5, 2013 1:45pm Dec 5, 2013 1:45pm
Quoting ProsteJa
{quote}The problem can be in size of account. If your account is big enough you are not temptated to trade until this best set-up appears. If your profit is 30€ and you know you trade only 4 times a month you realise you cant make living from trades like that. But if your profit is 3k you can say: I will take this small profit and you are Ok because it is enough money for you. It is hard to be picky when trading with small account. But it help you to improve as a trader and then trade easily if you fund your account (or somebody else)... Don't worry,...
I also have a small account but what I do is the following: I'm not allowed to lose more than my wage in a month. If I lose my wage I stop trading that month. If I have profit in a month I may choose to reinvest a part of the winnings in the next month(so the next month I can lose my wage + a part of the winnings from previous month) or I can stick to only losing the wage and not reinvesting the winnings. I think risking a small amount like €30 is not good because it will take you forever to build a bigger account. Overtrading is also not an option.

For example in France the minimum wage is €1,430.22 per month. Let's say you win a little more than that, €2000. You are not allowed to lose more than €2000 in a month. You risk 1000 at the first trade. If you lose you can risk 1000 at the second trade. If you lose again you stop trading that month and you come back the next month with another 2000. You can choose the amount of risk that you want, maybe you want to risk only 500. Then you will have at least 4 available trades per month. If you are a good trader you shouldn't have many loses, the months where you will lose 2000 should be rare. As your account grows you can increase the maximum loss per month or you can eliminate the maximum loss per month rule and start risking 1%-2% from your account but the 1% or 2% should be something substantial. This is supposing your family also has incomes and can pay the bills without your help so you can use the wage only for trading.
  • #129,089
  • Dec 5, 2013 5:07pm Dec 5, 2013 5:07pm
I cant seem to find the original post for the following quote but here is my response/opinion:

Quote
The problem can be in size of account. If your account is big enough you are not temptated to trade until this best set-up appears. If your profit is 30€ and you know you trade only 4 times a month you realise you cant make living from trades like that. But if your profit is 3k you can say: I will take this small profit and you are Ok because it is enough money for you. It is hard to be picky when trading with small account. But it help you to improve as a trader and then trade easily if you fund your account (or somebody else)...

If im being completely honest, the only reason Im now able to wait a month for 1-2 A+ setups is because of the ridiculous number of B C D ...Z setups I took in the past. When you watch price turn against you the VERY second you enter a trade (over and over again !) you naturally question what is wrong with your method of trading. Either that or you quit trading for good ... before you really had a chance to prove to yourself that you can trade successfully.

For me the size of my account only played apart in over trading when I was constantly thinking in terms of pips and £ rather then % gain/loss. If you find yourself over trading why not try thinking in terms of percentages. How much will you gain this trade, loose this trade, %gain this month/next month. See if it changes the way you look at trades (A B C). For me I stopped taking B trades (most of the time anyway! ). The next thing I looked out was the power of compounding. Here is a quick example:

Compounded
£10,000 (opening balance)
72 trades (over 3 years)
8% (gain per month)
--profit is left in trading account and not removed
£160,000 (closing balance over 3 years)

Standard
£10,000 (opening balance)
72 trades (over 3 years)
8% (gain per month)
--Remove all profit at the end of each month (£800)
£28,800 (closing balance over 3 years)

I hope my maths is correct

In both scenarios the exact same risk%, trades, stops, profit etc are taken

Hope this helps

Take care all
Dan
  • #129,090
  • Dec 5, 2013 5:26pm Dec 5, 2013 5:26pm
True... compounding rocks!
Anyways, I love how people are worried that they can be successful but not make any money because their accounts are small. Dude, seriously! Be consistent in your profits for 3-4 years and you will be the man! Capital will find YOU, not the other way around...
Twitter @raitchev
  • #129,091
  • Dec 5, 2013 5:41pm Dec 5, 2013 5:41pm
Quoting raitchev
True... compounding rocks! Anyways, I love how people are worried that they can be successful but not make any money because their accounts are small. Dude, seriously! Be consistent in your profits for 3-4 years and you will be the man! Capital will find YOU, not the other way around...
  • #129,092
  • Dec 5, 2013 6:32pm Dec 5, 2013 6:32pm
the last set of posts really make me happy. This is information that just wasn't even available years ago. People didn't speak about such a simple yet crucial topic

I've been thrown into the role as a teacher now but let me tell you I can remember back in the day stumbling onto forums looking for information to compliment my trading and this stuff wasn't around. But that doesn't mean now that it is that people take the information to heart. One of the most common mistakes I see from new and even more OLD struggling traders(perhaps even more stubbornly) is this topic. And it really starts with the approach mentally. Most people who struggle with this concept attack trading with the idea of what they want to make. So they have a goal of I want X % a week, month, year. This boggles my mind now because it's as backwards thinking you can have! How can you know what you want to make before even learning how to trade profitably? It's a HUGE wall, one of the biggest. I always tell people to learn to trade right and then see how that develops for you and your bottom line. So rewiring your thought process this way in my view allows someone to educate and learn properly without most likely disillusioned expectations and instead you can just focus on your charts and method. Otherwise most try to do things like over trade, risk too much, etc and it all ties back to this mental aspect.

Does a baby try to run or roll over first?

Best
Mike
  • #129,093
  • Dec 5, 2013 7:18pm Dec 5, 2013 7:18pm
Quote
I always tell people to learn to trade right and then see how that develops for you and your bottom line. So rewiring your thought process this way in my view allows someone to educate and learn properly without most likely disillusioned expectations and instead you can just focus on your charts and method. Otherwise most try to do things like over trade, risk too much, etc and it all ties back to this mental aspect.

Does a baby try to run or roll over first?

Thank you Mike , Totally agree with you
d df d dfdfffffffffffffffffff fffffffffffffffffffffffffffffffffffffffffffff
  • #129,094
  • Dec 6, 2013 3:50am Dec 6, 2013 3:50am
I agree with you guys in every aspect.
Lose small, win BIG
  • #129,095
  • Dec 6, 2013 4:27am Dec 6, 2013 4:27am
Quoting dan89
I cant seem to find the original post for the following quote but here is my response/opinion: {quote} If im being completely honest, the only reason Im now able to wait a month for 1-2 A+ setups is because of the ridiculous number of B C D ...Z setups I took in the past. When you watch price turn against you the VERY second you enter a trade (over and over again !) you naturally question what is wrong with your method of trading. Either that or you quit trading for good ... before you really had a chance to prove to yourself that you can trade...
And I'm struggling now the things you were struggled before. My trading was not super but OK, but last 2 months made me feell awful. I have 6 loss trades in a row, so I belive I need to calm down and to gather thoughts together. Spent too much time to give it up, but I'm so frustrated...
If not up, then down, otherwise sideways :-)
  • #129,096
  • Dec 6, 2013 4:51am Dec 6, 2013 4:51am
Quoting Magestic
{quote} And I'm struggling now the things you were struggled before. My trading was not super but OK, but last 2 months made me feell awful. I have 6 loss trades in a row, so I belive I need to calm down and to gather thoughts together. Spent too much time to give it up, but I'm so frustrated...
Hey Magestic,

Im just off to work now but before I go I just wanted to say that everyone has been in the situation you are in now so try not to feel too bad about it.

I know its easier said then done but dont give up !

Ive been exactly where you are and many times thought about giving up trading but I kept coming back to it after a short break.

If you need some help/advice, ill be home this evening around 7pm London Time. Ill PM you my skype name and we can chat over that if you want, maybe go through those 6 losses and see what happened

Take care bud
Dan
  • #129,097
  • Dec 6, 2013 10:31am Dec 6, 2013 10:31am
Quoting Magestic
{quote} And I'm struggling now the things you were struggled before. My trading was not super but OK, but last 2 months made me feell awful. I have 6 loss trades in a row, so I belive I need to calm down and to gather thoughts together. Spent too much time to give it up, but I'm so frustrated...
My personal best for the most number of losing trades in a row is 16. This was on a live account stretched over 2 months. Perfectly normal trading months too. A brutal yet an honest means to learn about me and the weaknesses I posessed.

You cant fake the flow of negitive emotions or the resulting urge and determination to bounce back. Love this business

g.
I believe . . .
  • #129,098
  • Dec 6, 2013 11:45am Dec 6, 2013 11:45am
I will be looking for long entry at AUD/USD. Pins, thgouh not perfectly looking, at some interesting zones on Weekly, Daily, H4 and H1. Hadn't seen that much confluence for a while...


Weekly:
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Daily:
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H4:
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H1:
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Twitter @raitchev
  • #129,099
  • Dec 6, 2013 12:08pm Dec 6, 2013 12:08pm
I forgot to add a trendline... but.. you get the point.
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Twitter @raitchev
  • #129,100
  • Dec 6, 2013 2:43pm Dec 6, 2013 2:43pm
Quoting raitchev
I forgot to add a trendline... but.. you get the point. {image}
Don't think its terrible by any means, the confluences and stuff I surely would of never noticed. I think the bar is a bit weak though, and the space is limited (I'd be weary of .9120 given the strength of the setup).
Good confluence is nice, but for me personally I don't care how much confluence is there if the bar itself isn't that strong and the space is limited, it'll always be a pass for me. I'd keep hunting, I haven't spotted any A+ trades but I think there are some better setups out there that may be worth trading for some.
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