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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

  • #131,101
  • Jun 2, 2014 2:59pm Jun 2, 2014 2:59pm
Quoting alphac
EURSEK - Daily. Starting to box up, already clear S & R halfway through the box, strong MACD divergence, I know people who will trade this just on the divergence alone and people who teach it this way, it really should just be added confluence, price action needs to come first. Worth keeping an eye on though imo. {image}
Since I love to trade similar setups here are a few hints:

1) I dont trade exotic crosses. They are not that reliable in my opinion (i.e. you see a giant A+ pinbar but on the next day it fails) - It doesnt mean you can't trade them. But you better concentrate on the major crosses. (or cfds whatever.)
2) They have a HUGE spread.

Anyway about the setup. This setup would look A+ to me, if it didn't get near to the swing high.
What I observed over time:
These breakout and retest setups are the best, when you still have the long term bias in your hand. (I.e.: I want to go long when I expect this to go further due to the daily bias. (Pinbar, BEOB, Trend whatever))
However If price makes a full swing (like in this case) - it changes the direction of the bias. So in this case you are not "trading with the trend" but against it.

For illustration:

GBPJPY made this AMAZING clean S/R. We also had a clean, fast break. (1H) Textbook example.
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But as you can see on the daily we already reached the bottom (swing low) - price formed a pinbar and now the trend is changing. I definitely dont like to trade against the daily bias. And in this case it wasn't wise either.

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But i strongly recommend to demo trade everything you see, keep a track record, cause that's the only way you are gonna learn

Cheers,
Stephen
It's all psychology...
  • #131,102
  • Jun 2, 2014 11:17pm Jun 2, 2014 11:17pm
Quoting alphac
EURSEK - Daily. Starting to box up, already clear S & R halfway through the box, strong MACD divergence, I know people who will trade this just on the divergence alone and people who teach it this way, it really should just be added confluence, price action needs to come first. Worth keeping an eye on though imo. {image}
Hello alphac,
Since price did not make new high, then its not divergence. Please correct me if I am missing something.
Regards.
  • #131,103
  • Jun 2, 2014 11:23pm Jun 2, 2014 11:23pm
Quoting mbqb11
Here was a quick trade I took friday while I was away in Atlantic city for my little brothers bachelor party This is just using simple s/r and price action bars. It's also important to understand the type of environment you are in. I got in at 22 mark where all the bar highs where. This was almost to the penny. I set a take profit at 21 since I would be away but it triggered today. I wanted to manage it down to the 20.50 area or low of the beob but I was a bit tired from this weekend and forgot to change it LOL Notice the MOST important parts...
Does anyone think that volatility will actually return to FX like it was, or is this low volatility how its going to be for the foreseeable future ?

Take care
Dan
  • #131,104
  • Jun 2, 2014 11:57pm Jun 2, 2014 11:57pm
Quoting dan89
{quote} Does anyone think that volatility will actually return to FX like it was, or is this low volatility how its going to be for the foreseeable future ? Take care Dan
Hey Mike,

Any chance you could upload that video on how you scan charts using TOS, and how you create your watchlist and chart setup ?

Take care
Dan
  • #131,105
  • Jun 3, 2014 12:22am Jun 3, 2014 12:22am
GBPNZD

Same stuff over and over...
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Cheers,
Stephen
It's all psychology...
  • #131,106
  • Jun 3, 2014 12:33am Jun 3, 2014 12:33am
Quoting vanilla.sky
{quote} Hello alphac, Since price did not make new high, then its not divergence. Please correct me if I am missing something. Regards.
Hello!

Divergence is nothing but an indicator that laggs.
Do you know what it tells you? Or do you simply use it because someone told you to do so?

Chart:
The blue line is the MACD line: Which is calculated as: 12period EMA-26 period EMA. If MACD line is in extreme positive / negative it means that the 12ema and the 26 ema are far from each other --> it means that price is trending fast. Hello?! I can see that from the chart!!! I have highlighted with yellow the fast bearish move and take a look how much it took the lagging indicator to show the significant momentum.

Now you put another lagging EMA to this already lagging MACD, and you subtract the 2 lines. (This is how you get your histogram) Does it make sense to you? If it does the go ahead and use it, but I call it complete bullshit.

If you want to be a great trader stop using these lagging indicators. Professionals enter where the move starts. The big guy is already short, when your indicator tells you to go short - so literally by selling late you are doing nothing but pushing the price for him.

Learn to see divergence with your eyes. When price is about to make a new high, and it slows down, then you already know that the bullish move might end soon...

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Hope this helps.
Stephen
It's all psychology...
  • #131,107
  • Jun 3, 2014 12:47am Jun 3, 2014 12:47am
Hi,

This is in regards to the PBT method. Have I drawn the HCR's and LCS's correctly?

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  • #131,108
  • Jun 3, 2014 1:05am Jun 3, 2014 1:05am
Quoting EveningStar
Hi, This is in regards to the PBT method. Have I drawn the HCR's and LCS's correctly? {image}
Yes, they seem to be correct.

Cheers,
Stephen.
It's all psychology...
  • #131,109
  • Jun 3, 2014 3:30am Jun 3, 2014 3:30am
Hey Mike,

I have using the J16 trading method for quite sometime and i have modified it for day trading using daily charts. Note i trade in futures only.

I m getting good at finding the S/R levels,PPZs. The main problem is how do i confirm reversals at S/R levels. I have tried pretty much everything to confirm a reversal, below is the list

- price patterns(IB,pin bars,OB)
- indicators (Divergence)
- volume
- Chart patterns

I have tried everything and nothing seems to give an edge on the reversals. All the above works sometimes , but its not enough to give you a edge. Is there anything i can do from here onwards. IS THERE SOMETHING I AM MISSING.

I have tried almost everything(patterns, indicators,darvas boxes, harmonics, market/volume profile, line studies..etc) you name it. None of the these things work even with combination of J16. .Sure they work , but only for short term. None of them work consistently.

My method is now simple , i identify S/R on daily and look for confirm of reversals on 1hr. I don't go any lower than 1 hr because again it doesn't give you an edge.But i NEED TO DO BETTER.

I m tired of searching all over the place and scratching my head all days , weeks. I know there is not much help i can get here, may be i m expecting too much, but may be a different point of view may help.

At best now i am at breakeven or may be just a little in profit , but i have to do better. At least hit the 40-50% mark.
Thanks anyways.

If anyone follows a similar method and have any luck getting a edge. please do share.
  • #131,110
  • Jun 3, 2014 3:47am Jun 3, 2014 3:47am
Quoting zamfir
Hey Mike, I have using the J16 trading method for quite sometime and i have modified it for day trading using daily charts. Note i trade in futures only. I m getting good at finding the S/R levels,PPZs. The main problem is how do i confirm reversals at S/R levels. I have tried pretty much everything to confirm a reversal, below is the list - price patterns(IB,pin bars,OB) - indicators (Divergence) - volume - Chart patterns I have tried everything and nothing seems to give an edge on the reversals. All the above works sometimes , but its not enough...
Im trading a fairly similar system --> S/R flip.
Trading futures can have extra advantages - you have CME/Globex volume. That's a great starting point.
An example - Price broke a significant resistance (just as the above mentioned gbpnzd post) - price retraces back and that's where you need a confirmation, right?
If you have volume open up a footprint chart. If you see heavy selling, but price not moving anything it's a great sign that market sellers hit limit buy clusters. In this case pro traders tend to mark up price to trap these sellers, who sold into the limit buys. This doesnt occur ultra often, but when it does it gives you a great confluence.

See the charts for illustration:
USDCAD daily - price broke out now im anticipating a retest.
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USDCAD footprint - note that on the USDCAD price should come "up" to the resistance. Since the future pair is CAD/USD on the footprint chart it has to come "down"
When price hit the S/R heavy selling occurred.
150x63; 316x124; 64x18 etc.
Attached Image

USDCAD market profile
After the breakout price accepted the the level - we traded at the new price and for that day we formed the value area there. On the next day when price went back it went back to a low liquidity "unfair" area. Again - a signal for a trade.
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Another hint:
Also forget every rule that you were taught - (use a stop of 60 pips etc.) In my opinion in todays market you will get nowhere with 60-100 pip stops.
Try to use smaller stops - 20pips etc.

You can also check out Tom Dante's thread cause he discusses S/R flip in a great detail.

Getting great at a setup takes some time. Make millions of screenshots, analyze etc etc. :-)

Cheers,
Stephen
It's all psychology...
  • #131,111
  • Jun 3, 2014 3:49am Jun 3, 2014 3:49am
Quoting zamfir
Hey Mike, ...
Thanks anyways. If anyone follows a similar method and have any luck getting a edge. please do share.
hey zamfir,

I trade basic S&R, however, the way you build any trading system is always the same - no matter what you are trading. I can share how I build my strategy over the years.

I decided that I want to trade basic S&R so I started drawing levels. After some months I got better and betterm being able to put the levels into places where I expected to see price stalling or reversing. And prices did.
So then i started taking screenshots when price moved into the levels and what it did there. I built a sample size of 200 screenshots and then I analyzed what they had in common with general knowledge of PA and orderflow. You will then get some statistics like:

145/200 price did xxx
123/200 price did xyz
92/200 price did abc
...

Then you can start creating a trading idea, creating checklists for your setups, forward testing, collectiing more data and so on and so on until you have a well defined and verified, and more important YOUR OWN, trading method that you can trust.

just my 2 cents
Learn from yesterday, live for today and hope for tomorrow.
  • #131,112
  • Jun 3, 2014 4:31am Jun 3, 2014 4:31am
Quoting LamerTrader
{quote} Hi buddy! I would be careful with the jarroo method / system. I tend to find some terms there complete bullshit, however the main idea - (support turns to resistance) is great. Instead of blindly drawing these magical monthly and weekly levels try to get better at drawing S/R lines on the - Daily - 4h - 1h charts. Don't follow too many pairs. Just a few (like the 7 majors). Draw the levels, and just watch whether price reacts to the level, or it completely disregards. Do this for a few months and you have a profitable trading system. At...

Hi Stephen nice to meet you!
Thanks a lot for the suggestions, what you wrote is exactly what i'm doing right now and in this last days... I've open an fx pro demo account too... so let's go to learn!
I've choice my operative tf in the daily tf i'm drawing line from Monthly do daily....
I have a lot to learn and the road will be tough, but i'm very happy to have found this trading system... i really like it!
  • #131,113
  • Jun 3, 2014 4:36am Jun 3, 2014 4:36am
Thanks LamerTrader & TraderRolf,

I m collecting samples these days, i guess that is the only way forward. Hope i am on the right track.

Thanks a ton to both of you.
  • #131,114
  • Jun 3, 2014 5:38am Jun 3, 2014 5:38am
Quoting LamerTrader
{quote} Hello! Divergence is nothing but an indicator that laggs...
Hello LamerTrader,
My point was that on screen of alphac, price did not make new high so there is no divergence in any sense - using MACD or your eyes only. Am I right here? Or we can call it trivial divergence since it will be always there but no much benefit from this.

Quoting alphac
EURSEK - Daily. Starting to box up, already clear S & R halfway through the box, strong MACD divergence... {image}
Regards.
  • #131,115
  • Jun 3, 2014 6:41am Jun 3, 2014 6:41am
Quoting zamfir
Hey Mike, I have using the J16 trading method for quite sometime and i have modified it for day trading using daily charts. Note i trade in futures only. I m getting good at finding the S/R levels,PPZs. The main problem is how do i confirm reversals at S/R levels. I have tried pretty much everything to confirm a reversal, below is the list - price patterns(IB,pin bars,OB) - indicators (Divergence) - volume - Chart patterns I have tried everything and nothing seems to give an edge on the reversals. All the above works sometimes , but its not enough...
Hey Z

The true edge in learning price action is really our ability to decipher each situation on its own. Price action bars, S/r , PPZs none alone are going to give you the edge. For me the Story of each individual situation and my experience to decipher the finer points is where I gain my edge. Likely their are certain things that you are missing in your trades that are hindering you from moving forward. These concepts work very well in the long term and I have been along with many others for a long time.

What I would suggest is posting some of your trades so we can help evaluate and give you tips on where you may be missing out. The one thing is that you don't necessarily need more, I would say likely it's to refine the simple concepts used. The less i've done over the years the better I do as a trader, not opposite. And I have at some point examined many of the other tools out there but never found them personally to lead to more success, just more information to decipher. I'm on my 12th+ year and if I could go back in time it would be to tell myself exactly that less is more in trading.

I tend to think those people at breakeven don't need to make massive changes, but rather the nuances of trading are where they need to focus. This usually is being more picky as well as managing their trades better

I'd be glad to help so don't be shy to post some charts and i'll share my experiences

Best
Mike
  • #131,116
  • Jun 3, 2014 6:43am Jun 3, 2014 6:43am
Quoting TraderRolf
{quote} hey zamfir, I trade basic S&R, however, the way you build any trading system is always the same - no matter what you are trading. I can share how I build my strategy over the years. I decided that I want to trade basic S&R so I started drawing levels. After some months I got better and betterm being able to put the levels into places where I expected to see price stalling or reversing. And prices did. So then i started taking screenshots when price moved into the levels and what it did there. I built a sample size of 200 screenshots and...
yep exactly Rolf, it's the finer details of ones method that creates the edge. Their is NO secret silver bullet. I've never seen it and those that try to say their is one are generally lost themselves or blowing smoke. I hate to see people looking for that. It's experience , time and you gotta push through each of those plateaus that one hits. Breakeven is in my opinion the hardest plateau. Those that are losing bad are generally making very obvious mistakes, breakeven traders have to explore the finer details of ones trading

But you gotta keep pushing through it!
Mike
  • #131,117
  • Jun 3, 2014 7:39am Jun 3, 2014 7:39am
Quoting vanilla.sky
{quote} Hello LamerTrader, My point was that on screen of alphac, price did not make new high so there is no divergence in any sense - using MACD or your eyes only. Am I right here? Or we can call it trivial divergence since it will be always there but no much benefit from this. {quote} Regards.
I guess if divergence is defined by: "Price diverging from the indicator" - you have a MASSIVE divergence there. That +-10ticks that is necessary to make a new high doesn't matter that much. (I think.)
Although it's a wonderful example of the lagging indicator. Price made fast a new high - and the indicator shows divergence, cause BEFORE the breakout price chopped around with no momentum. So in this case the MACD simply says: "We have a chop down there."

Anyway my point being: MACD lags - see the divergence with your eyes and you will be right on spot

Cheers
Stephen
It's all psychology...
  • #131,118
  • Jun 3, 2014 7:55am Jun 3, 2014 7:55am
Quoting mbqb11
{quote} Hey Z The true edge in learning price action is really our ability to decipher each situation on its own. Price action bars, S/r , PPZs none alone are going to give you the edge. For me the Story of each individual situation and my experience to decipher the finer points is where I gain my edge. Likely their are certain things that you are missing in your trades that are hindering you from moving forward. These concepts work very well in the long term and I have been along with many others for a long time. What I would suggest is posting...
Thanks Mike, will post more often.

Completely agree with you on less is better. I too have tried pretty much everything out there only to come back to simple S/R.

I do demo trade FOREX with my method, but i trade mostly futures. I will post FOREX so that it would help others as well.
  • #131,119
  • Jun 3, 2014 7:58am Jun 3, 2014 7:58am
AUDNZD going really well. Entry on the 4H.

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  • #131,120
  • Edited 10:12am Jun 3, 2014 9:58am | Edited 10:12am
So here we go!
After theory comes the practice and i have chosen the EU for my frist practice
Take a look my work and all suggestions are welcome
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And This is AU
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