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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

  • #129,441
  • Jan 6, 2014 1:08am Jan 6, 2014 1:08am
I welcome myself and anyone just checking into the forum this year bck home and wish us all a profitable trading year.

There is a potential long entry i am looking forward to on the GBPJPY. Price is obviously in a channel. IMO we are in a major up trend while price is retracing for a continuation. Looking for a long entry maybe in form of a fakeout trade off the PPZ to take in fresh orders clearly there is a BEOB sitting just above the BRN. if i am able to get in arnd the BRN with a tight SL i will probably hold the trade long term. I will love to here your views.


jibson007

may the odds be in your favor
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Still trying to get to meet myself...
  • #129,442
  • Jan 6, 2014 8:24am Jan 6, 2014 8:24am
Quoting ghous
Here's a chart I am eagerly watching for some London open action. So far it has impressed with the way the BEOB hasn't gained any momentum to the downside. g. {image}
Yup! That hesitance to the downside was pointing north big time.

Unfortunately, the bar that closed above the RN did a bit too much with that close so high above. I would have preferred my trigger to be a bullish bar with a close only slightly above the 1.74 RN.

Still a good example of how to develop a strong story around your setups. Its all about confluence

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g.
I believe . . .
  • #129,443
  • Jan 6, 2014 8:42am Jan 6, 2014 8:42am
Quoting Hartlun
Happy New year friends! Since September last year i was introduced to this group by a friend and a brother (Jibson007) i haven't had time to be an active member, i only hang around and view comments while trying to grab some lessons, and i must confess u guys have really been awesome. My gratitude goes to the pioneers of this group and every other member that has being helping to make it successful. Now, i av learnt a few things i see reasons why i must get interactive, cos no man is an island of knowledge. And thus, i make this...
Hey Hartlun,

Glad to see you make the decision to step out of the dark. I have always felt that interacting, asking questions and answering to those posted by others is the fastest and the most effective way to learn. Looking forward to seeing your valuable input here.

The Aud/Yen BEOB (and also the Nu chart) represent sideways and choppy markets. We define setups in the middle of this mess as ones running into traffic. Since price is completely lost for direction even the minor trouble areas can jump out. Since in the beginning some people struggle with identifying trouble areas and more so, having to trade with multiple trouble areas clustered together in a web of sideways action, we always advise to look for clear cut PA in a nicely swinging / trending market. These are going to be the setups with decent "space" making trade management a hell lot easier and less stressful.

If you haven't already done so, I'd strongly recommend going through Mike's "space vs traffic" video on the guest side of the PF. Should answer some questions for sure. You can find it here -> http://www.james16group.us/Guests/guestmaterial.html

Also I am a little puzzled what exactly triggered an entry order on the Nu anyway. Can't be the pin bar cuz your entry is way lower. Its also headed straight into a lot of traffic and a major consolidation box.

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g.
I believe . . .
  • #129,444
  • Jan 6, 2014 9:05am Jan 6, 2014 9:05am
happy new year everyone!!
hope yawl had great hols
hope this year brings you everything you wished for


jlon
PATIENCE... DISCIPLINE
  • #129,445
  • Jan 6, 2014 9:06am Jan 6, 2014 9:06am
Being new to the thread, but not to trading, I was hoping to ask a question on the Nzd/Usd trade. It looks that the potential profit is way out of whack with the potential loss, in other words, it looks like on the chart that the TP order is for minimal gain and the SL order is for considerably more loss. Why? And is that normal trade when it comes to Risk:Reward?
  • #129,446
  • Jan 6, 2014 9:12am Jan 6, 2014 9:12am
Thanks a bunch G.
I really appreciate the eye opening analysis u had given. Guess i was just anxious to start sumtin, i'd alrdy learnt the hard way thou by loosing both trades.
and now i'l jus try to b more analytical.

Thanx again brov
  • #129,447
  • Jan 6, 2014 9:46am Jan 6, 2014 9:46am
Quoting fxpaulm
Being new to the thread, but not to trading, I was hoping to ask a question on the Nzd/Usd trade. It looks that the potential profit is way out of whack with the potential loss, in other words, it looks like on the chart that the TP order is for minimal gain and the SL order is for considerably more loss. Why? And is that normal trade when it comes to Risk:Reward?
Hey Paulm

I love the topic of risk:reward and trade mgmt. In fact it's where I spend most of my time explaining things to people these days. I have found that most people believe this topic is the most difficult part to trading. One thing I do believe is that this is not the case it's just misunderstanding ones trade plan from the jump.

In short it's ok to have a SL that is larger than a TP. Now that statement alone comes with a a lot of caveats. Firstly one must know that trade is worth it in the long run. Often what a lot of people are doing with "poor" R:R ratios are taking too many bad trades. So they get lots of small winners followed by the big loser wiping out all the gains. This for me is not a flaw in thinking we can have a SL larger than our TP but rather a flaw in the overall game planning of trades.

I myself evaluate each trade on its own basis and decide at the time what the best course of action is before/during. Mostly for me this means learning to reduce my risk when appropriate and take profit when appropriate based on the type of trade. Meaning sometimes I take profit quick, sometimes I trail my stop out, sometimes I do a combo of both. This all flows into a topic I call dynamic risk:reward ratio. What most people fail to do is cut their losses when their trade no longer makes sense. Sometimes that might mean you take a larger loss then your initial reward, but many times this should not be the case.


Here was a short post on this large topic
http://www.forexfactory.com/showthre...36#post6851336

Of course the above are a lot of generalizations but they are important ones for me. Understanding this side of it is both reasons why I will enter trades as well as pass on many trades that ultimately don't make sense from a trade mgmt stand point that I will remain confidence and feel in control of my risk and the trade itself. It is a balancing act as their is no one right way to do this. People who say their is are naive. My best suggestion for someone who is learning to trade the style we teach is track your records like crazy. Track every piece of data you might find useful. Eventually you will begin to see things that clearly do and do not work. From there you can build off that. I eventually found my best strength is being able to take a trade and apply what I believe is the best style for that situation(instead of a one size fits all which I used to find better for my psyche and did work, but wasn't the best in the long run)

Some of this wasn't relevant to your initial question but I felt like getting into it for the start of the new year


Best of luck!
Mike
  • #129,448
  • Jan 6, 2014 10:12am Jan 6, 2014 10:12am
Mike,

On the R-ratio topic, would you consider this to be a right take-away?
- do not worry about initial TP distance vs. initial SL distance
- it is OK to enter a trade even if initial TP distance (i.e. before the first trouble area) is larger than the initial SL distance (e.g. last bar high/low plus a few pips)
- focus on entry quality (price action setup, level, trend, confluence)
- once in the trade, take profits for half the position at first TP level (FTA) and slowly trail the stop for the other half (behind S/R levels)
- thanks to the trailing part, even if very rarely, we will get some big winners, so as a result, the performance R ratio (not the upfront R ratio) should be good.

Have I summarized your reco more or less correctly?
I really want to understand it well, becasue, on one hand, going for wider SL and closer TP is a sure and easy way to increase %winners, which is a fantastic thing, also for the psyche, but on the other hand I kind of "fear" doing this, becasue Tharp and all books, and also arithmetic tells otherwsie ;-) (i.e. having small winners lets one loss erase 1,2 or more winners). I'd think though that around 1R is a bare minimum.

Thanks!
Michal9
  • #129,449
  • Jan 6, 2014 10:33am Jan 6, 2014 10:33am
Quoting michal9
Mike, On the R-ratio topic, would you consider this to be a right take-away? - do not worry about initial TP distance vs. initial SL distance - it is OK to enter a trade even if initial TP distance (i.e. before the first trouble area) is larger than the initial SL distance (e.g. last bar high/low plus a few pips) - focus on entry quality (price action setup, level, trend, confluence) - once in the trade, take profits for half the position at first TP level (FTA) and slowly trail the stop for the other half (behind S/R levels) - thanks to the trailing...
Hey Michal


It's not that one shouldn't worry about it, but one shouldn't make a judgement that a lot of people out there make which is you MUST get X amount above your initial risk on every trade. You will see many say that do not take a trade unless you can get 2R to your initial risk. This is simply NOT true. It's not enough information on a method to make that statement.


As for taking half off at FTA, again this is going to be up to you as a trader to begin to discover both what works and what doesn't. I never take partial profit. I also don't ALWAYS do something at a FTA. Again this comes down to the trade itself. Sometimes I take profit(full) at a FTA. Sometimes I go to b/e. Sometimes I move my stop down. Sometimes I do nothing.

Hope that helps
Mike
  • #129,450
  • Jan 6, 2014 10:50am Jan 6, 2014 10:50am
Hey Mike, got it, thanks. If there was the one standard right way, mechanical systems would have worked. Everyone needs to find theirs and , looks like, use it in a flexible way (as you do, sometimes one way, sometimes the other), which comes from experience. Ok, back to screen time & journal analysis.
Michal9
  • #129,451
  • Jan 6, 2014 11:01am Jan 6, 2014 11:01am
Mike,

Thanks for the reply and I agree wholeheartedly with what you wrote, but looking at that N/U chart that was posted it looks like less then 20 pips profit...

To me and my style of trading that is not worth it, but to each his own.
  • #129,452
  • Jan 6, 2014 11:47am Jan 6, 2014 11:47am
Quoting fxpaulm
Mike, Thanks for the reply and I agree wholeheartedly with what you wrote, but looking at that N/U chart that was posted it looks like less then 20 pips profit... To me and my style of trading that is not worth it, but to each his own.
I agree with you here too Paulm, I went off on a rant with the in general about that idea.

Mike
  • #129,453
  • Jan 6, 2014 12:22pm Jan 6, 2014 12:22pm
To anyone who has been here, would this be a typical pin bar trade? The chart is the GBP/CAD 4 hour, my hesitation is price already fell and now had strong bull candle. It is by a BRN though and the pin went to the 50% Fib level.

Any thoughts, I would short at 1.7475 with SL at 1.7540 and TP at 1.7300
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  • #129,454
  • Jan 6, 2014 12:29pm Jan 6, 2014 12:29pm
Quoting fxpaulm
To anyone who has been here, would this be a typical pin bar trade? The chart is the GBP/CAD 4 hour, my hesitation is price already fell and now had strong bull candle. It is by a BRN though and the pin went to the 50% Fib level. Any thoughts, I would short at 1.7475 with SL at 1.7540 and TP at 1.7300 {image}
Hey P

I would be careful with this. You defined a pinbar but the location for me is in a lot of traffic. This is similar to where we spoke about it back here

http://www.forexfactory.com/showthre...84#post7190584

In this case it's just a pin vs an outside bar. Price is very sideways here making it a very tough area to play for me without more confluence

Best
Mike
  • #129,455
  • Jan 6, 2014 1:46pm Jan 6, 2014 1:46pm
Quoting fxpaulm
To anyone who has been here, would this be a typical pin bar trade? The chart is the GBP/CAD 4 hour, my hesitation is price already fell and now had strong bull candle. It is by a BRN though and the pin went to the 50% Fib level. Any thoughts, I would short at 1.7475 with SL at 1.7540 and TP at 1.7300 {image}

Sure Paulm, the Pinbar is facing traffic and as such would bewary of this setup. This is my view on this setup.

Al.
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  • #129,456
  • Jan 6, 2014 3:14pm Jan 6, 2014 3:14pm
http://tradingroup.eu/wp-content/uploads/2014/01/70.png

I have decided to open short audnzd because of rejection of previous S/R zone.

When the actual candle closed I have moved my SL above it's high price. Tp is placed only for half position.
http://tradingroup.eu/wp-content/uploads/2014/01/71.png



Adam Ondrejicka
Lose small, win BIG
  • #129,457
  • Jan 6, 2014 4:48pm Jan 6, 2014 4:48pm
I love these types of moves and set-ups. See supply come into the market and then price hesitate at established level before resuming the trend. Both of these are daily charts with inside bars, the EUR/AUD and the EUR/NZD. I usually look to the 4 hour for a strong PA signal to enter.
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  • #129,458
  • Jan 6, 2014 10:13pm Jan 6, 2014 10:13pm
Quoting ghous
{quote} Yup! That hesitance to the downside was pointing north big time. Unfortunately, the bar that closed above the RN did a bit too much with that close so high above. I would have preferred my trigger to be a bullish bar with a close only slightly above the 1.74 RN. Still a good example of how to develop a strong story around your setups. Its all about confluence {image} g.
Hi Ghous,

nice one. Why 150 ema is powerfull?. Do you think institution keep an eye on that?. What could be the logical or mathematical reason?
  • #129,459
  • Jan 6, 2014 10:21pm Jan 6, 2014 10:21pm
Quoting Fxyogi
{quote} Hi Ghous, nice one. Why 150 ema is powerfull?. Do you think institution keep an eye on that?. What could be the logical or mathematical reason?
Hey F,

I think a lot of people who prefer to follow the longer term MAs also use the 150 EMA. And this answers your second question too - this is exactly why it works.

I find it to be specially useful when price returns to it following a pull back to a major trend, i.e as part of the BASE context.

g.
I believe . . .
  • #129,460
  • Jan 6, 2014 10:22pm Jan 6, 2014 10:22pm
Quoting ProsteJa
{image} I have decided to open short audnzd because of rejection of previous S/R zone. When the actual candle closed I have moved my SL above it's high price. Tp is placed only for half position. {image} Adam Ondrejicka
Hey Adam,

I am guessing this is a touch trade?

g.
I believe . . .
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