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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

  • #129,661
  • Jan 27, 2014 5:25am Jan 27, 2014 5:25am
Quoting Beserker
{quote} hi, The part I've bolded would be my concern. Trade analysis aside, not sure it's healthy to make a habit of taking trades where your risk outweighs your possible profit? Not saying you are making a habit of it of course But i would pass on this trade for that reason, unless I could find a better entry on a lower time frame. Cheers, Beserker
I don't see anything wrong with R:R lower than 1. We don't play bingo here. We play high probability set ups. You don't need to play out odds, you just need to be picky.

That's my thoughts on the R:R only though, that does not mean that I think this setup is AA+ or something...
Twitter @raitchev
  • #129,662
  • Edited 7:03am Jan 27, 2014 6:45am | Edited 7:03am
Quoting raitchev
{quote} I don't see anything wrong with R:R lower than 1. We don't play bingo here. We play high probability set ups. You don't need to play out odds, you just need to be picky. That's my thoughts on the R:R only though, that does not mean that I think this setup is AA+ or something...
I'm very new to this, so great to hear opposing views to the 'rules' I have already established

So far my understanding is that I am looking for something called 'positive expectancy' - I am looking to make more than I lose ( duh! ).

So, if I take trades with a R:R of less than 1:1, I will need more winning trades than losers, ie more than 50% winners in order to come out top.

If I take trades of say 1:1.5 - 1:3 and upwards, then I can have more losers and still come out top.

Am I being too conservative? I understand that james16 price action is looking at high probability set-ups, but I still feel that it's difficult to get higher than a 50:50 - this is only me though, and I'm a newb
We are what we repeatedly do. Excellence, then, is not an act, but a habit
  • #129,663
  • Jan 27, 2014 8:07am Jan 27, 2014 8:07am
Quoting Beserker
{quote} I'm very new to this, so great to hear opposing views to the 'rules' I have already established So far my understanding is that I am looking for something called 'positive expectancy' - I am looking to make more than I lose ( duh! ). So, if I take trades with a R:R of less than 1:1, I will need more winning trades than losers, ie more than 50% winners in order to come out top. If I take trades of say 1:1.5 - 1:3 and upwards, then I can have more losers and still come out top. Am I being too conservative? I understand that james16 price...
There is more to "winning more than you lose" than just R:R. It is one component of risk management. For example another very critical component of your risk management is your strike rate. I.e How many trades are you winning on, on average. There is no system out there, that's going to allow you to shoot for 3R trades consistently with a 90% strike rate. If there is then its probably so low on frequency that it becomes a little pointless.

What we teach here, is that R:R although not totally irrelevant, should never be the trade maker or breaker. At the end of the day its about making money. If you are risking 50 pips for a 30 pip gain but the setup is high quality, than passing on makes little sense. Of course you're going to need good trade management too (For instance moving stops quickly and knowing your trouble areas well) but the point is, that the 30 pip gain itself versus a 50 pip stop loss isn't something to really worry about provided that those 30 pips are really quite obviously there to be had.

I know its kind of getting off on a tangent compared to what most of the literature out there suggests. Frankly I remember raising my eyebrows to this idea as well initially, but as I started to follow the material I realized how it was more about finding sure pips in the market more than weighing a potential gain versus the risk.

hope this helps.

g.
I believe . . .
  • #129,664
  • Jan 27, 2014 8:45am Jan 27, 2014 8:45am
RR is not something static. Your RR can be 1:1 on the first trade, 1:2 on the second one and 2:1 the third one. It doesnt say you to pass the trade. RR should be seen in long-term, on big sample of trades, not on single trade. My average RR is 1:2 (1 for loss, 2 for win) but it doesnt mean I dont trade with negative RR. If you cut your losses soon and you let your winners run then your AVERAGE RR will be positive. The important word is average.

The rest is written above. Hope it helps mate.
Lose small, win BIG
  • #129,665
  • Jan 27, 2014 8:57am Jan 27, 2014 8:57am
Quoting ghous
{quote}...hope this helps. g.
Sure does. Thanks for taking the time to lay out an explanation.

The R:R rule was always one I have found difficult to understand, as it has never fully clicked as to why I should pass up a trade just because a potential win is not going to cover my risk; for, as you say, just because I decide that the price target is x pips away, it doesn't mean I'm going to get there...

I have just assumed it's a rule one has to follow, however. Glad to hear some of the rules are there to be broken
We are what we repeatedly do. Excellence, then, is not an act, but a habit
  • #129,666
  • Edited 9:27am Jan 27, 2014 9:02am | Edited 9:27am
Quoting Beserker
{quote} Sure does. Thanks for taking the time to lay out an explanation. The R:R rule was always one I have found difficult to understand, as it has never fully clicked as to why I should pass up a trade just because a potential win is not going to cover my risk; for, as you say, just because I decide that the price target is x pips away, it doesn't mean I'm going to get there... I have just assumed it's a rule one has to follow, however. Glad to hear some of the rules are there to be broken
another view on this. I am huge on R:R topic cause I believe it's one of the most misunderstood and misspoken topics. Of course just like methods you have different beliefs on this one too and it just depends on what works for you

Here is mine
http://www.forexfactory.com/showthread.php?p=7192361#post7192361
  • #129,667
  • Jan 27, 2014 9:03am Jan 27, 2014 9:03am
Quoting ProsteJa
Hope it helps mate.
Yes it does, thanks. Averaging R:R across trades makes good sense.

There's a lot of subtlety to the methods in trading, isn't there? I can think I'm doing what the many sites and books tell you to do, but still seem to be missing something. Thanks for helping to clear things up.
We are what we repeatedly do. Excellence, then, is not an act, but a habit
  • #129,668
  • Edited 9:23am Jan 27, 2014 9:17am | Edited 9:23am
Mbqb11 - Thanks for your reply, although there is something funny going on with your link - it opens as a quote in a reply for me...

But - to comment on what that link said! -

Although trying to stick to a rigid application of R:R as I have learnt it, it has always irked me, and I think I am on my way to understanding why. The overall outcome of a trade can never be defined or predicted in a rigid manner, so the application of R:R should not be rigid either.
We are what we repeatedly do. Excellence, then, is not an act, but a habit
  • #129,669
  • Jan 27, 2014 9:27am Jan 27, 2014 9:27am
Quoting Beserker
Mbqb11 - Thanks for your reply, although there is something funny going on with your link - it opens as a quote in a reply for me... But - to comment on what that link said! - Although trying to stick to a rigid application of R:R as I have learnt it, it has always irked me, and I think I am on my way to understanding why. The overall outcome of a trade can never be defined or predicted in a rigid manner, so the application of R:R should not be rigid either.
i;ve fixed the link sorry about that

http://www.forexfactory.com/showthre...61#post7192361
  • #129,670
  • Jan 27, 2014 11:11am Jan 27, 2014 11:11am
Only watching this one right now (bar is not closed), but I am a big fan of reversal bars in the direction of strong trends. I especially like when several bars are "eaten up/engulfed" by the trigger bar.

N

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  • #129,671
  • Jan 27, 2014 11:31am Jan 27, 2014 11:31am
this big old pinbar just missed my bigger target, but such is trading. got stopped out for profit around the clear FTA which is the rising TL


aside from being on twitter @james16group we are now facebook live too https://www.facebook.com/james16group come say hi

Hello technology !
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  • #129,672
  • Jan 27, 2014 11:32am Jan 27, 2014 11:32am
Quoting dobe_r_man
Only watching this one right now (bar is not closed), but I am a big fan of reversal bars in the direction of strong trends. I especially like when several bars are "eaten up/engulfed" by the trigger bar. N {image}
Assuming it closes like that, I'll definitely play it - have a look at 60minuteman's H4 power thread

Take care
Slow & steady
  • #129,673
  • Jan 27, 2014 1:04pm Jan 27, 2014 1:04pm
Quoting ghous
{quote} There is more to "winning more than you lose" than just R:R. It is one component of risk management. For example another very critical component of your risk management is your strike rate. I.e How many trades are you winning on, on average. There is no system out there, that's going to allow you to shoot for 3R trades consistently with a 90% strike rate. If there is then its probably so low on frequency that it becomes a little pointless. What we teach here, is that R:R although not totally irrelevant, should never be the trade maker or...
That is a great post. And eye opening if you really think about it. Taking what the market gives.
  • #129,674
  • Jan 27, 2014 1:45pm Jan 27, 2014 1:45pm
Nice little reaction on GE @ $25. No surprises there.
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If you can't tell what the herd is doing...you probably are the herd.
  • #129,675
  • Jan 27, 2014 3:11pm Jan 27, 2014 3:11pm
Quoting str8
{quote}If you read other threads from FF you will see there are people who think this thread is a scam and j16 and the other traders from here are not winning
.

Hey mate,

Very true mate. A lot of people who see a thread where the authors are successful will inevitably think it’s a scam if they have tried their system and have not been successful with it.

I think most people who have read this thread in part or in full will at some point think J16, Mike etc are scamming people.

If I’m being completely honest I also thought the same thing. Although I have never stated this until now, I think you will notice that in the past I have implied this in some of my posts, and I’m sure Mike would have definitely sensed it in my posts in the PF.

However what I learned from the short time I was in the PF and the 'long ass' time I’ve been reading this thread (going through my old posts is quite amusing ) is that the 'traditional' J16 method doesn’t work FOR ME (which is the reason I don’t post much here anymore) But from what is taught, I discovered my own 'flow' and method that is influenced heavily by Mike and not so much James16.

Quote
Even if someone else is winning this doesn't guarantee that simple playing his strategy will make you win since there are a lot of ways to make trade management. I can't win with the touch trading strategy

Very true again, and this is exactly what happened with me. I couldn’t win by trying to copy exactly what James16 does. Over time my trading kind of morphed without me realising to something that suits ME and my personality. Again based heavily on the work of Mike.

The thing that I was trying to get at in my first post was that people who call out others saying that they are scam artists and don’t make any money are really just looking for some comforting that trading successfully, whichever method that may be, can be done. Its not so much that they really believe that Mike etc are scamming people.

I’m speaking from experience because I’ve implied the very same thing in the past both here and in the PF. Again if Mike were to be honest about it I think he would agree that he sensed that in my posts. However, I never REALLY believed that he was scamming anyone. I just wanted help. And that was the way for me to get some sort of reaction. I believe I did apologise to Mike in a PM a while back. Sorry about that Mike. Dude has a lot of patience.

Off topic: I officially have the cutest German Shepherd puppy on the planet !!!

Take care all
Dan
  • #129,676
  • Edited 5:15pm Jan 27, 2014 5:04pm | Edited 5:15pm
Hey traders,
Would you please comment on my today's trade idea?

What I see: BEOB on XAUUSD. At a key support/resistance level (also on weekly, also a fibo retracement), in line with the weekly and daily trend, also happens to be a false break of EMA 100 (for whatever this is worth) (EDIT: also 1275 is a kind of BRN).

Trade idea: short, on the break of the BEOB low (grey area), TP at low of the recent bullish marubozu (green area), stop loss at a BEOB high (red area).
R ratio is poor, as usually if traded on the break, but I do subscribe to the idea that it matters less than taking a high quality & high probability trade.

What I do not like: the grey entry area happens to also be a trouble area / hurdle / power zone... whatever I should properly call it, but a place there the price may reverse.

Do you think it is a high quality trade?
I will very much appreciate your comments. Daily bar has just closed at my broker which uses 6pm EST as a daily bar close (so the last bar you see on my chart is just 1 hour of trading - ignore)
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Michal9
  • #129,677
  • Jan 27, 2014 5:36pm Jan 27, 2014 5:36pm
Quoting michal9
Hey traders, Would you please comment on my today's trade idea? What I see: BEOB on XAUUSD. At a key support/resistance level (also on weekly, also a fibo retracement), in line with the weekly and daily trend, also happens to be a false break of EMA 100 (for whatever this is worth) (EDIT: also 1275 is a kind of BRN). Trade idea: short, on the break of the BEOB low (grey area), TP at low of the recent bullish marubozu (green area), stop loss at a BEOB high (red area). R ratio is poor, as usually if traded on the break, but I do subscribe to the idea...

Hey Michal,

I have spotted this setup as well. As you said, grey area is very strong support and could be traded on long side too. Do you see that? Look on H4 chart, it could give you better insight.
It is not high quality setup for me as there are many doubts.

Did you trade it?

Adam
Lose small, win BIG
  • #129,678
  • Jan 27, 2014 5:48pm Jan 27, 2014 5:48pm
Quoting michal9
{quote} Thanks a lot. Very interesting comment you made on where likely the shorts are, waiting for a chance to get out even... thanks again Felix.
Well, well, well. The high of the 1/16 pin was 1.2749. The low of yesterday was 1.2748. Bounced literally to the pip.

Not saying it can't still bust through that level but ... this is the stuff to keep a tight eye on.
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If you can't tell what the herd is doing...you probably are the herd.
  • #129,679
  • Jan 27, 2014 7:13pm Jan 27, 2014 7:13pm
Quoting michal9
Hey traders, Would you please comment on my today's trade idea? What I see: BEOB on XAUUSD. At a key support/resistance level (also on weekly, also a fibo retracement), in line with the weekly and daily trend, also happens to be a false break of EMA 100 (for whatever this is worth) (EDIT: also 1275 is a kind of BRN). Trade idea: short, on the break of the BEOB low (grey area), TP at low of the recent bullish marubozu (green area), stop loss at a BEOB high (red area). R ratio is poor, as usually if traded on the break, but I do subscribe to the idea...
What immediately would stop me from trading this setup is this major trend line that was just broken. And expectedly the last bar stopped right onto it...

Plus, there's extreme chop on the downside. So big NO NO for me.
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Twitter @raitchev
  • #129,680
  • Jan 27, 2014 10:21pm Jan 27, 2014 10:21pm
Quoting raitchev
{quote} What immediately would stop me from trading this setup is this major trend line that was just broken. And expectedly the last bar stopped right onto it... Plus, there's extreme chop on the downside. So big NO NO for me. {image} {image}
Pretty much spot on.

Lack of space would be a HUGE issue here.

the 1250 is a pretty heavy PPZ.

g.
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I believe . . .
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