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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

  • #131,821
  • Aug 14, 2014 8:56am Aug 14, 2014 8:56am
Hi all,

I've been continuing with the updates on my trading journal, and recent there have been some people criticizing my risk/reward on trades. In the past, I've heard the R:R doesn't matter, as it is relative to winning percentage. Do you guys agree with this view?

Obviously we are taking the absolute best setups where there is strong confluence.

  1. Pivot levels
  2. Fibonacci levels
  3. Confirmed by price action


Am I missing something here?

  • #131,822
  • Aug 14, 2014 9:07am Aug 14, 2014 9:07am
Quoting Ivanyo
Hi all, I've been continuing with the updates on my trading journal, and recent there have been some people criticizing my risk/reward on trades. In the past, I've heard the R:R doesn't matter, as it is relative to winning percentage. Do you guys agree with this view? Obviously we are taking the absolute best setups where there is strong confluence. Pivot levels Fibonacci levels Confirmed by price action Am I missing something here?
Hi Ivanyo. Read this post from mike a while back....great stuff on R:R. I say trade your setups as you see them. Work on perfecting entries and exits (trade management) the R:R will take care of itself.


http://www.forexfactory.com/showthre...46#post3909546

Edit: Also keep in mind most FX markets are choppy and in consolidation right now. I personally expect lower R in these conditions as they are not conducive in my opinion to runners. I trade daily only, so it may be different on LTF's.
  • #131,823
  • Aug 14, 2014 9:09am Aug 14, 2014 9:09am
so after some research i have learnt i cant use a few of the US based platforms in australia. including the one mike uses

do people have any suggestions on some good platforms (or brokers which work with MT4) for equities and futures
  • #131,824
  • Aug 14, 2014 9:13pm Aug 14, 2014 9:13pm
I am facing psychological issues in trading. I am a workaholic by nature and this very nature is going against me in trading. In that, I place too many trades and some of them just don't work and they ruin the profits that I have made. I am unable to control my urge to be in the market all the time. Can anybody help me sort this problem?

Neytiri
  • #131,825
  • Edited 9:56pm Aug 14, 2014 9:17pm | Edited 9:56pm
I'm leaving for the airport in a couple of hours but couldn't resist reading this thread again and posting about this hot topic!

Quoting Donkey
{quote} Hi Ivanyo. Read this post from mike a while back....great stuff on R:R. I say trade your setups as you see them. Work on perfecting entries and exits (trade management) the R:R will take care of itself. http://www.forexfactory.com/showthre...46#post3909546 Edit: Also keep in mind most FX markets are choppy and in consolidation right now. I personally expect lower R in these conditions as they are not conducive in my opinion to runners. I trade daily only, so it may be different on LTF's.
I am on the same exact page as Donkey. The way I like to put it that my targets are not dictated by some random number that I decided. My targets are dictated by what the market context is showing.

These high R:R systems work psychologically if you're only trading a small account of $500 or $5,000 where the psychological pain of drawdown is not great.

If you're trading an account greater than $100,000. Simply entering the trade (paying spread&comish) you could be down more $$ than what people spend in rent in a week. If you're playing a high R:R system (which often advertise a win rate of 35% as acceptable), imagine stringing together 10 losses in a row (entirely feasible in our example). At 3% per trade, you're now in over $30,000 draw waiting for a few home runs to fix you up. This will kill most humans psychologically.

Some of you might remember a bozo who started the a scam price action website (it's now thankfully offline in the last few weeks). He essentially was charging new traders a large monthly fee for a high R:R price action system. He was bold enough to post his results to MyFxBook and started a $1,000 to $10,000 challenge. In his first month he had an unsustainably high return on equity (read: luck) and he suckered a lot of people in. The following months his myFxBook tracked him wiping out his account within a few short weeks.

My own opinion, is that he was trading a system which relied heavily on a trending market to achieve high R:R. However, he was trading this system in one of the lowest levels of volatility we've seen in Fx in the last decade, where most pairs on the daily are consolidating.

The lesson is you need to trade the market, not some magic number of R:R you've decided on some sunny day! The market is neutral and doesn't know or care what your R:R is.
Follow me on twitter @FxLester
  • #131,826
  • Aug 14, 2014 10:03pm Aug 14, 2014 10:03pm
Hi Guys, Just thought I would drop in again, going to be following this thread daily now, I found J16 about 24 months ago (even joined the PF) and got up to speed on the theories (or some of them) and have since been on a round-a-bout of system jumping, a few times I have proven myself with 3 months of demo with different systems (including J16 initially) but always failed once switching to live...

I am back to J16 and more determined than ever, Daily TF charts make most sense to me, and the most sense for trading in this corner of the world (australia) IMO.
My problems with trading all come down to me and my psychology , lack of discipline and patience. One of the issues I have is just taking trades because of the perceived lack of repercussion, even when I have traded live they have been relatively small accounts where the $ value is basically of no consequence. I am going to stick to the initial recommendation of 3+ months demo whilst getting together a larger live account and then starting with half of it...

Look forward to trading "with" you all, lots of daily charts are wound up in consolidations at the moment, be good to see some break out soon!

Cheers, Callum
  • #131,827
  • Aug 14, 2014 11:20pm Aug 14, 2014 11:20pm
My first attempt at sharing some analysis with you for critique and feedback...

Its EURNZD, this is a weekly chart,

Attached Image (click to enlarge)
Click to Enlarge Name: Screenshot1.png Size: 44 KB


Upper and lower red zones are the resistance and support the pair has been in since mid 2012. the upper has had a few cracks at breaking 1.7000, despite managing a close above it was ultimately a false break, price fell back under 1.7 and ultimately retested 1.7 and failed. on the low side 1.5 has been tested just once and failed, a second revisit to the zone failed to reach 1.5 by ~75 pips. Since the high at the end of 2013 the pair has been in a down trend which is ultimately forming a large wedge.

for me this is a wait and see, as the wedge gets pointy there is near term S/R as well as BRN 1.55 coming into play.

Question, on daily which upper trendline would you think is more correct - I know it is subjective, but the Red one should have been drawn before the Blue one, so should we be viewing this as that upper wedge having been broken already? or is it a case of both being applicable in this scenario... see below;

Attached Image (click to enlarge)
Click to Enlarge Name: Screenshot2.png Size: 44 KB


Appreciate the feedback
  • #131,828
  • Aug 15, 2014 8:33am Aug 15, 2014 8:33am
New Chart

There's amazing confluence on this chart

 

  1. rejection of 50.0 level on fib
  2. both emas acting as support
  3. rejecting the daily pivot level

Attached Image (click to enlarge)
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  • #131,829
  • Aug 15, 2014 9:27am Aug 15, 2014 9:27am
Quoting Ivanyo
New Chart There's amazing confluence on this chart rejection of 50.0 level on fib both emas acting as support rejecting the daily pivot level {image}
Funny charts :-)
If not up, then down, otherwise sideways :-)
  • #131,830
  • Aug 15, 2014 10:06am Aug 15, 2014 10:06am
Quoting Magestic
{quote} Funny charts :-)
why do you say that?
  • #131,831
  • Aug 15, 2014 4:51pm Aug 15, 2014 4:51pm
Quoting FxLester
I'm leaving for the airport in a couple of hours but couldn't resist reading this thread again and posting about this hot topic! {quote} I am on the same exact page as Donkey. The way I like to put it that my targets are not dictated by some random number that I decided. My targets are dictated by what the market context is showing. These high R:R systems work psychologically if you're only trading a small account of $500 or $5,000 where the psychological pain of drawdown is not great. If you're trading an account greater than $100,000. Simply entering...
thanks a lot for the great info, Lexter. Its an eye-opener for rookies like me. Although 2:R or 3:R make a lot of sense in trends, I think its a sure way to account blow in these static market conditions. I will do my best to focus on A++ setups with maybe less than 1:R instead of average setups with desired 2:R.

enjoy your holiday.
Market can stay irrational longer than you can stay solvent.
  • #131,832
  • Aug 15, 2014 4:55pm Aug 15, 2014 4:55pm
Quoting Callum
My first attempt at sharing some analysis with you for critique and feedback... Its EURNZD, this is a weekly chart, {image} Upper and lower red zones are the resistance and support the pair has been in since mid 2012. the upper has had a few cracks at breaking 1.7000, despite managing a close above it was ultimately a false break, price fell back under 1.7 and ultimately retested 1.7 and failed. on the low side 1.5 has been tested just once and failed, a second revisit to the zone failed to reach 1.5 by ~75 pips. Since the high at the end of 2013...
hi Callum, welcome. We are both rookies on J16, so I wish you best of luck in the learning process.

for me, the blue TL makes more sense, it unites the 3 peaks perfectly, and with the friday candle, its seems it's been respected the 4th time too.
Market can stay irrational longer than you can stay solvent.
  • #131,833
  • Aug 15, 2014 5:07pm Aug 15, 2014 5:07pm
Quoting FXBat
hi guys, as i said before, i took the 2 trades as a learning process, although i heard some very good reasoning from the senior members here to not take them AY was good enough to reach the second FTA where my first target was. Reg. EY, im still waiting on the development. in both cases, i moved my stops following the new lows. I dont know if i should move them directly to BE, maybe i should leave some more room for the trade to develop.... cheers, {image} {image}
I decided to close my 2 trades started by PBars, as they reached my targets in light blue. Didnt see any meaning to hold longer, since the downtrend seems to be regaining its strength.

im happy i got lucky with these first 2 trades
Attached Image(s) (click to enlarge)
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Click to Enlarge Name: AY3.png Size: 19 KB
Market can stay irrational longer than you can stay solvent.
  • #131,834
  • Aug 16, 2014 2:19am Aug 16, 2014 2:19am
Quoting Magestic
{quote} As I'm not a great fan of channels I chose this one. Big BEOB that close right at beautiful PPZ. Wathcing closely as it can still go opposite direction, so must react quickly. {image}
Its moving nice so far. The wick was filled, the majority of risk reduced.
Attached Image (click to enlarge)
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If not up, then down, otherwise sideways :-)
  • #131,835
  • Aug 16, 2014 3:39am Aug 16, 2014 3:39am
well done ,nice trading

Quoting FXBat
{quote} I decided to close my 2 trades started by PBars, as they reached my targets in light blue. Didnt see any meaning to hold longer, since the downtrend seems to be regaining its strength. im happy i got lucky with these first 2 trades {image} {image}
On-site guru & also FF member's' psychiatrist, when not drinking tea
  • #131,836
  • Aug 16, 2014 4:16am Aug 16, 2014 4:16am
trade update ,

Quoting Bones
gbp chf has broke up trend line id look for h4 bear signals {image} {image} {image}
Attached Image(s) (click to enlarge)
Click to Enlarge Name: gbp CHF h4 (DFB).png Size: 46 KB
Click to Enlarge Name: gbp CHF w1 (DFB).png Size: 39 KB
On-site guru & also FF member's' psychiatrist, when not drinking tea
  • #131,837
  • Aug 16, 2014 4:45am Aug 16, 2014 4:45am
Hi guys,

Doing some more testing/learning on ForexTester. This trade turned out well, but would you guys consider this an A+ trade? Here are is my reasoning:

  1. double bar high with lower close
  2. DBHLC occurs right a 50.0 Fibonacci level
  3. negative divergence on the MACD

Attached Image (click to enlarge)
Click to Enlarge Name: WDju7Yu.png Size: 24 KB


Thanks for any help guys

Cheers
  • #131,838
  • Aug 16, 2014 7:16am Aug 16, 2014 7:16am
update

Quoting Bones
Hi Ivanyo , with gbp nzd it a very fast mover ,and in consolidation so prob one of the most tricky charts there is gbp chf may be good for you short, how do you read gbp chf ? {image}
Attached Image (click to enlarge)
Click to Enlarge Name: gbp NZD d1 (DFB).png Size: 31 KB
On-site guru & also FF member's' psychiatrist, when not drinking tea
  • #131,839
  • Aug 17, 2014 12:13pm Aug 17, 2014 12:13pm
Quoting str8
Here is a setup I traded from AUD JPY daily. A pin bar that was rejecting the previous swing low. What I didn't like at this setup is that the pin bar was smaller than the previous bar. For me usually it's a must that the pin bar should be bigger than the previous bars because this shows strong momentum. However if you zoom out the chart the pin bar still looks big (an above average bar). The pin bar was rejecting an important swing low. And this setup had space, something most pin bar setups don't have. I still wanted the bar to be bigger than...
great job str8 enjoy those pips
  • #131,840
  • Aug 17, 2014 12:14pm Aug 17, 2014 12:14pm
Quoting Magestic
{quote} As I'm not a great fan of channels I chose this one. Big BEOB that close right at beautiful PPZ. Wathcing closely as it can still go opposite direction, so must react quickly. {image}
stealing my charts again Mag

In the same one, see if we can get a final push
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