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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

  • #131,761
  • Aug 10, 2014 12:28pm Aug 10, 2014 12:28pm
Hi to all of you trading indices, I think Mike too.
What about DAX 30 (Ger30)?. It`s at a very big Round Nomber (9000).
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Have a nice day
  • #131,762
  • Aug 10, 2014 1:06pm Aug 10, 2014 1:06pm
Quoting doerpn
{quote}[/color] I love your charts but please allow to have a question: If price returns up to the TL, it rebreaks the Trouble area again, right? Isn`t then the Trouble area again a resistance on its way down? Why do you prefer this scenario? What am I missing? Thanks a lot for your great work here {image}
Excellent analysis doerpn. I agree with the first area you have marked. Although just note that your chart is a 4H and mine is a daily. I'm a simple guy and experience has taught me when trading a chart, not to go down in TF's because you'll find all sorts of S/R which will scare you out of a trade (but this is just my personal preference).

I do hope I understand your question so correct me if I am wrong. My ideal scenario would be for some PA which tests the TL, the S/R 46000 zone and closes below both (the image below shows this better). If we close above the short term support/trouble area then I'm watching this trade and on the sidelines.

Forgive my awful MS paint job - note I've pasted a pinbar and how it closes below the level.
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Follow me on twitter @FxLester
  • #131,763
  • Aug 10, 2014 3:07pm Aug 10, 2014 3:07pm
Quoting FxLester
{quote} Excellent analysis doerpn. I agree with the first area you have marked. Although just note that your chart is a 4H and mine is a daily. I'm a simple guy and experience has taught me when trading a chart, not to go down in TF's because you'll find all sorts of S/R which will scare you out of a trade (but this is just my personal preference). I do hope I understand your question so correct me if I am wrong. My ideal scenario would be for some PA which tests the TL, the S/R 46000 zone and closes below both (the image below shows this better)....
Oh sorry, Lester- didn`t notice I screened a H4 chart.
Will try to follow your rule not to go down in TF`s ( the higher the TF the more weight it has, I know )
Yes, you understood my question as I meant it. Your actuel chart solves my problem perfectly: touches the TL but closes under the blue TA (never had the imagination that it could happen like you drew the candle.
OK, again I learned a lot by asking. And again thanls a lot for answering - and that so fast!
Have a nice trading tomorrow!
Have a nice day
  • #131,764
  • Aug 10, 2014 4:00pm Aug 10, 2014 4:00pm
hi all,

i've been following this amazing thread for a while and I gotta say it is amazing. there's so much to learn and so many great advices from wonderful people.

I will try my first post tonight with 2 pinbars that i am thinking to take. i've painted the FTA in blue, where im thinking to take partial profit and move to BE. what do you think about them?

thanks in advance!
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Market can stay irrational longer than you can stay solvent.
  • #131,765
  • Edited 6:59pm Aug 10, 2014 6:49pm | Edited 6:59pm
Quoting BigFisherman
First post here. I've been studying J16 method for more than 6 months now. Thanks for having this great thread alive guys! Really grateful to Mike (bmqb11) & some other J16 pioneers who were still active here after all these years to share your priceless knowledge & experience. Here's my thought of AJ daily. It appears to be a potential Long trade at first glance (PIN + Pivot + Yearly MA support). But after some further studying, I decided to pass on this. Reasons for not entering are the diverging MACD TL for recent tops +...
I think you've nailed the analysis BigFisherman. It would not surprise me if we see a bull move to test 95.x today or tomorrow. However, because I personally enter on a break of the pin+buffer, I could not see the reward of <10 pips worth the risk and personally could not make it work for my own style.

I've posted another way of looking at it which is more of a bearish wick play for educational purposes.

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I am entirely prepared for Mike to correct my analysis above however!
Follow me on twitter @FxLester
  • #131,766
  • Aug 10, 2014 8:18pm Aug 10, 2014 8:18pm
Quoting FxLester
{quote} I think you've nailed the analysis BigFisherman. It would not surprise me if we see a bull move to test 95.x today or tomorrow. However, because I personally enter on a break of the pin+buffer, I could not see the reward of <10 pips worth the risk and personally could not make it work for my own style. I've posted another way of looking at it which is more of a bearish wick play for educational purposes. {image} I am entirely prepared for Mike to correct my analysis above however!

Thanks FxLester! Agreed with your analysis & thanks for sharing your thoughts, I've learned a lot from your invaluable posts as well.
Cheers!
  • #131,767
  • Aug 10, 2014 10:03pm Aug 10, 2014 10:03pm
Quoting BigFisherman
First post here. I've been studying J16 method for more than 6 months now. Thanks for having this great thread alive guys! Really grateful to Mike (bmqb11) & some other J16 pioneers who were still active here after all these years to share your priceless knowledge & experience. Here's my thought of AJ daily. It appears to be a potential Long trade at first glance (PIN + Pivot + Yearly MA support). But after some further studying, I decided to pass on this. Reasons for not entering are the diverging MACD TL for recent tops +...
Thanks for the kind words and welcome to the thread fisherman!

I agree with all you said and lester gave some great follow up
  • #131,768
  • Aug 10, 2014 10:03pm Aug 10, 2014 10:03pm
Quoting FXBat
hi all, i've been following this amazing thread for a while and I gotta say it is amazing. there's so much to learn and so many great advices from wonderful people. I will try my first post tonight with 2 pinbars that i am thinking to take. i've painted the FTA in blue, where im thinking to take partial profit and move to BE. what do you think about them? thanks in advance! {image} {image}
Welcome as well to the thread Bat!

Lester gave a great summary just below that I have nothing I could add to

Good to see some new faces popping in
  • #131,769
  • Aug 10, 2014 10:57pm Aug 10, 2014 10:57pm
Hey guys,

Saw this on a thread at babypips - what do you guys think of this?

http://i.imgur.com/25BHlNe.png

Quite interesting to read
  • #131,770
  • Aug 11, 2014 3:49am Aug 11, 2014 3:49am
Quoting Magestic
{quote} How do u like this one ,Mike? Almost the same story. Will ask God some PA below 10.50 {image}
Moving without me on board. . No PA trigger.
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If not up, then down, otherwise sideways :-)
  • #131,771
  • Edited 5:09am Aug 11, 2014 3:51am | Edited 5:09am
Quoting FxLester
{quote} I think you've nailed the analysis BigFisherman. It would not surprise me if we see a bull move to test 95.x today or tomorrow. However, because I personally enter on a break of the pin+buffer, I could not see the reward of <10 pips worth the risk and personally could not make it work for my own style. I've posted another way of looking at it which is more of a bearish wick play for educational purposes. {image} I am entirely prepared for Mike to correct my analysis above however!



Hello Lester and Mike.

Thanks to both of you for your continued contributions to this thread. Your inputs really are top notch!

Lester, I'm currently copying and saving all of your uploaded chart analysis to Evernote, so you can be sure that your efforts are not falling on deaf ears. Your clean charts and annotations are some of the best around, they really are. Long may they continue (hint - don't disappear).

If I may ask a question? On the last chart that you posted, there is a comment on the actual chart, and I quote, "Long wick into space indicates that the buy orders from the 94 level have been consumed".

I'm just trying to get my head around what you said, so correct me if I'm wrong. Maybe it's just your wording that I'm struggling with?

Here is my analysis: The large bear bar previous to the pin has obviously got momentum behind it, and is heading for the 94 level. The pin bar then takes over and carries on in the same vein. It starts off with loads of weight and momentum behind it, and is itself developing in to a large bear bar. It heads straight for the 94 level with no messing, but long orders are ready and lying in wait at this 94 demand zone.

The pin bar takes a hard bounce off the level, as the longs overpower (consume) the shorts, and push price right back up to the low of the previous bar. Hence, we are left with a daily pin bar. A long wick, that is evidence of price initially pushing strongly south, but which now shows us strong rejection. We are then left with a small body at the top of the candle, evidence of the long orders strongly overpowering the shorts, who eventually push price almost right back to where it started. Even though the pin bar ended as a black bear bar, the actual candle for the day has bullish signs written all over it. This shows us that price has a lot of work to do, if it is to go any further south, and may just be evidence that price is about to be turned northwards, with bullish intent?

Is my analysis of the bull/ bear struggle for the pin bar correct?

Thanks, Steve (UK)
"Never interrupt your enemy when he is making a mistake" Napoleon Bonaparte
  • #131,772
  • Aug 11, 2014 5:22am Aug 11, 2014 5:22am
not saying aud jpy pin is not good ,but the big bearish candle prior is what makes it most risky ,

Quoting MushyPeas
{quote} Hello Lester and Mike. Thanks to both of you for your continued contributions to this thread. Your inputs really are top notch! Lester, I'm currently copying and saving all of your uploaded chart analysis to Evernote, so you can be sure that your efforts are not falling on deaf ears. Your clean charts and annotations are some of the best around, they really are. Long may they continue (hint - don't disappear). If I may ask a question? On the last chart that you posted, there is a comment on the actual chart, and I quote, "Long wick into...
On-site guru & also FF member's' psychiatrist, when not drinking tea
  • #131,773
  • Aug 11, 2014 5:25am Aug 11, 2014 5:25am
Hi guys,

I've got another question - do you guys trade the more exotic pairs where the spread is usually a bit higher?

Thanks for any help in advanced.

Cheers
  • #131,774
  • Aug 11, 2014 6:31am Aug 11, 2014 6:31am
Quoting Ivanyo
Hi guys, I've got another question - do you guys trade the more exotic pairs where the spread is usually a bit higher? Thanks for any help in advanced. Cheers
Yes we do, coz spread is very ralative. Big spred=big volatility, big moves, more space.
If not up, then down, otherwise sideways :-)
  • #131,775
  • Edited 7:13am Aug 11, 2014 7:02am | Edited 7:13am
Quoting MushyPeas
{quote} Hello Lester and Mike. Thanks to both of you for your continued contributions to this thread. Your inputs really are top notch! Lester, I'm currently copying and saving all of your uploaded chart analysis to Evernote, so you can be sure that your efforts are not falling on deaf ears. Your clean charts and annotations are some of the best around, they really are. Long may they continue (hint - don't disappear). If I may ask a question? On the last chart that you posted, there is a comment on the actual chart, and I quote, "Long wick into...
Hi Steve,

Thanks for your kind words.

I cannot fault your analysis and your logic is perfect. It was a pleasure reading through it. You have a good grasp of order flow, understanding that 94.x is a potential demand zone with lots of potential long orders sitting and waiting.

What you describe is a pinbar rejection. However, what I was suggesting is a potential wick play. This is a more advanced order flow concept, which I must admit I had no knowledge of until I met Mike. I actually think he's a pioneer of this concept. (SideNote to Mike: mate you should be writing a book on this stuff!).

As a primer, here is a video Mike has on their public youtube channel:
Inserted Video


There is a definite difference between a wick play and a pinbar, although both may look like the same signal, they actual demonstrate opposing things. What I want you to always remember is that price by the nature of order flow will have a tendency to go down the path of least resistance. In the case of AUD/JPY, there is clear close resistance above the pin overhead with only about 10 or so pips between the break of the pin and 95.0x. We also know that the buy orders around 94.0x are consumed by the wick of the pin from friday. Therefore, if the bulls have run out of steam (because of too much sell order flow at 95.0x), the bears may take over and push down before the buy orders reaccumulate at 94.x

Another way to put it, is this. Lots of resistance at 95.0x potentially. These orders must exist. We know nothing has consumed them. We also know that the wick from friday has consumed all the order flow buys at 94.0x. Therefore, lots of resistance above, not much below. Price may dip lower as it is the path of least resistance.

I think it is entirely possible for us to retest the resistance above at 95.x. The question is, are there enough order flow buys to push through this area for price to keep going higher? I don't think anyone can answer that question with absolute certainty. My opinion is that it is not worth my capital to risk finding out!

I hope that makes sense mate. Let me know if you need further clarification and I can try and put together some images or something.

Cheers,
Lester

Edit: Just to add further. What would change my mind and make me play this signal as a bullish pin is if the first trouble area of resistance was much farther away. In this instance, what we are doing then is actually trading with the bullish momentum that the wick itself represents. This bullish momentum still exists in the AJ example, however the first area might have enough order flow to stop this momentum in its tracks.
Follow me on twitter @FxLester
  • #131,776
  • Aug 11, 2014 8:00am Aug 11, 2014 8:00am
Quoting Ivanyo
Hi guys, I've got another question - do you guys trade the more exotic pairs where the spread is usually a bit higher? Thanks for any help in advanced. Cheers
Hi Ivan. I personally follow over 30 Fx pairs and 20 odd indicies and futures.
I've listed them here http://www.fxpep.com/my-trading-style/

Spread doesn't bother me with the exotics. For my trading, it is relative to the pip value per lot and also relative to how much the pair moves/day. For instance, the spread on my broker at the moment for USD/CNH (Chinese Yuan) is 5.4 pips, and on GBP/USD it is 0.5 pips. However, note that the pip value per pip on a standard lot is $1.75 on USD/CNH and on GBP/USD it is $10.79.

Therefore, for me to enter 10 standard lots on the CNH at 5 pips will cost me a spread of $80.75 and on GBP with 0.5 pips is $50.39. So saying "the spread is 5! that's so much compared to 0.5!" is actually putting a wood for the trees situation. You need to work out how much the spread costs you in real dollars and work out if you are happy to pay this.

I factor the spread into my trade if it's more than a pip (because I'm a cheapskate). If the spread is more than 2 pips, then I look to see if the move I am expecting is worth paying the spread. If the move looks good, then I'm happy to pay the spread.
Follow me on twitter @FxLester
  • #131,777
  • Aug 11, 2014 8:28am Aug 11, 2014 8:28am
with aud jpy ,I'm thinking its set to fail in some way ,under 9600
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On-site guru & also FF member's' psychiatrist, when not drinking tea
  • #131,778
  • Aug 11, 2014 8:31am Aug 11, 2014 8:31am
Thanks for the explanation Lester - That was just what I was looking for. Very good teaching.

Also, to Mike, that is a super video you've made there. Many thanks for your efforts.

By the way, I have just purchased 'Forex Tester 2' software. It only cost me less that $US100, so I felt that I had nothing to lose by giving it a try. Trading years worth of data, in a fraction of the time, as you can speed up the time-frames as and when you want to.

You can also try out different strategies and perfect your trade management skills, without risking precious capital. For instance, whether a particular strategy works best with a trailing stop, or by moving the stop to break-even, or a no intervention play where you let it run either for its original TP/ or let it come back to your entry point for a full loss. This has to be a good way of gathering information for calculating statistics and R/R ideas?

Just wondered if you have come across the software before, and if so, how you best get it to work for yourself? What tests you ran? What your findings were, and if there were any particular ha-ha moments? What trade management plays did you find came out on top?

For instance, I read elsewhere that a pro trader ran statistics, which proved conclusively that leaving trades to run for their original TP came out way in front in the long run, and that messing about with trailing stops and break-evens was an account killer over time.

Would be interesting to know your thoughts and experiences?

Regards,

Steve.
"Never interrupt your enemy when he is making a mistake" Napoleon Bonaparte
  • #131,779
  • Aug 11, 2014 9:52am Aug 11, 2014 9:52am
Quoting Magestic
{quote} Moving without me on board. . No PA trigger. {image}
You'll get em next time M
  • #131,780
  • Aug 11, 2014 9:54am Aug 11, 2014 9:54am
Quoting FxLester
{quote} Hi Steve, Thanks for your kind words. I cannot fault your analysis and your logic is perfect. It was a pleasure reading through it. You have a good grasp of order flow, understanding that 94.x is a potential demand zone with lots of potential long orders sitting and waiting. What you describe is a pinbar rejection. However, what I was suggesting is a potential wick play. This is a more advanced order flow concept, which I must admit I had no knowledge of until I met Mike. I actually think he's a pioneer of this concept. (SideNote to Mike:...
thanks Lester

i should note though that beginners and new traders should be sticking to the basics. I always want to drive that home especially in this thread. I do release and give more advanced information as I like to share, but new traders don't worry about this stuff and stick to the basics of this thread while getting your feet wet. More tools will come as you progress

Best
Mike
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