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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

  • #132,981
  • Nov 14, 2014 11:01am Nov 14, 2014 11:01am
Quoting oradba
Would this (the last two bars) be considered a DBHLC, or should I take the tails into account? Normally I don't.{image}
Hey Oradba

For it to be a DBHLC the highs must be matching, so you should take the tails into account. You want two matching highs with a close lower than the previous bars LOW

Best
Mike
  • #132,982
  • Nov 14, 2014 11:04am Nov 14, 2014 11:04am
Quoting mmb91
{quote}depending on how price reacts around .87420-.875, would this be a good area to short? i see a heavy supply zone, an even numBer, and the 23.6fib with very little traffic. i noticed you have the .8896 area boxed, would that be a more ideal zone? {image}
Hey MM

yes you could short there but again I would want more infromation to support just outright shorting. You would be shorting back into the much strong PPZ and BOX low. Of course some that is enough for a quick trade.

Because we have sustained above a significant level i'll continue to hold my short looking for the gap to close and/or the top of the box. We are in a sideways market now so it's very normal for price to whipsaw like this

For me the more ideal level is the higher level of the box to look for PA confirmation to short(like we had PA confirmation to long with the buob)

Best
Mike
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  • #132,983
  • Nov 14, 2014 11:09am Nov 14, 2014 11:09am
Quoting Winston Reed
Closed it. Super trade. Tonight I'm celebrating with double single malt scotch whisky. Thanks J16!!! {image}
nice job brotha, i'd love a glass with ya
  • #132,984
  • Nov 14, 2014 11:13am Nov 14, 2014 11:13am
Quoting Adhavan
Hello Mike, {quote} I got a very good learning while playing AUDUSD daily bar on tomorrow from your post, i need little more correct myself when play the same situation in future. I came to conclusion that it was very good short opportunity in AUDUSD as mentioned in chart, can u guide me where I am failed to understand the chart in right way. expect your advice. Adhav {image}
Hey Adhavan

I assume you are speaking about the wedge you have drawn on your chart. If you look price just gapped out of that wedge and shot straight down to the massive support area around 8650. So really you don't want to sell into that area and if you look the next day price bounced right off there and then shot back down. So for me the trade of that particular brekaout was over once price reaches into the "base" of that pattern.

So if I am understanding you, you really didn't mess anything up and sometimes price just takes off without us. Always another one

Mike
  • #132,985
  • Nov 14, 2014 11:15am Nov 14, 2014 11:15am
Quoting Winston Reed
closed it {image}
doing great winston
  • #132,986
  • Nov 14, 2014 11:18am Nov 14, 2014 11:18am
Quoting jasakreatif
{image}
fantastic
  • #132,987
  • Nov 14, 2014 11:21am Nov 14, 2014 11:21am
Quoting jasakreatif
whats up james16 , is this correct {image}
yep it's just breaking today. There is a strong support area but it's looking to get above. If price can close above 1182 i'd be more likely to be a buyer into that level again, BUt buying a break price needs to get right through it

Best
Mike
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  • #132,988
  • Nov 14, 2014 6:19pm Nov 14, 2014 6:19pm
couple trades closed out this week, one for a tiny loss, other for a decent sized win

enjoy the weekend folks
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  • #132,989
  • Nov 15, 2014 4:45am Nov 15, 2014 4:45am
Quoting jasakreatif
whats up james16 , is this correct {image}
Nice selection of Pin Bar highs/lows and Engulfing bars at swing low/highs - I think Mike, et al, state that location (highs/lows plus space) is key
every Saint has a past. Every Sinner has a Future
  • #132,990
  • Nov 15, 2014 2:43pm Nov 15, 2014 2:43pm
I was going through some material online regarding Fx trading and came across some trading risk related items. My understanding was that in Fx our risk is limited to the stop loss that we define in our trade. For example the pip is worth US $10/- and my stop loss is 30 pips then my risk on this trade is 300 dollars. Let us say I have $10000/- account with the broker.

Now what happens if the price suddenly gaps down or up let us say 500 pips. Do I lose $5000/- of my account value in this instance or fifty percent of my capital with just one trade?? OR my stop loss is taken out first and my loss is limited to 300 dollars.

When we are treating this like business and putting real money on the line we should know the risks involved with this kind of thing. Gaps are not common in currencies but I see a lot of them on stock charts. All it takes is just one big event in the market to wipe out your account.

The seniors on this board can shed some light on this risk.
  • #132,991
  • Nov 15, 2014 2:54pm Nov 15, 2014 2:54pm
Hi,

You can't protect yourself from gaps completely. They are happening, especially during and immediately after news and also after Monday opening.
So, my protection would be not to trade news or at least wait 15 min after news.
After weekends, my practice never show gaps bigger than 10-20 pips.
Actually, it depends which pair you trade,
However, if you are afraid of gaps and not comfortable with them, do what is right for you, close before weekend.

Neb
  • #132,992
  • Nov 15, 2014 2:54pm Nov 15, 2014 2:54pm
I was also going through Options trading as of late and I have discovered one huge risk in that domain also. There are two things you can do with Options trading--buy call options or buy put options. There are four possibilities call option in the money , call option out of the money , put option in the money and put option out of the money as the option progresses towards expiry.

Now which one of these options leads to the possibility of the trader needing to buy the underlying stock. That is a risk because if you capital is 10k and you buy stock contract whose share is worth 200 dollars you need 20k to buy the underlying stock. If we dont sell before expiry then we need to buy the underlying. stock. Does this risk arise with both call and put options??

People talk about all these trading instruments like options, futures stocks etc but the core skill involved in all of these is to be able to catch the price movement. I have not seen people talk about that. Chart study, to be able to tell the price movements seem to be the basic thing but nobody talks about that. A lot of my friends will tell me something like "I have lost 15k in stock market" they dont know the difference between investing and trading.
  • #132,993
  • Nov 15, 2014 3:11pm Nov 15, 2014 3:11pm
I have also had some other thoughts on risk management and 2 percent rule. If you want to treat trading like a business percentage rule is critical it does not matter if it is 2 percent or 3 percent but it has to be in terms of percentages. When you apply the risk in percentage terms to amount of capital you can risk decreases as your capital decreases thus protecting your trading account. If you apply it in numbers then the trading account can become ZERO and that is the end of your trading life. This rule is set in stone if one treats this thing like a business.

Now the above rule and arrangement is very good let us say when you have a trading account of 100k or 200k. What about the folks who are just beginning?? Do we still apply the same rule?? If the goal of the folks is to become a successful trader which involves building sufficient capital to trade can this rule helps?? The thing is we cannot apply any rule blindly however important that might be. Now this rule applies only to trading capital and now if you are getting money from some other job or resources then that can be used as RISK capital to trade and the profits can be added to your trading capital. For example if I use 1000 dollars from a job or some other income source as risk capital that is equal to 50k trading capital if you apply 2 percent rule. That way you can grow your account while still applying the percentage rule to your trading capital. If you dont do this it will take a lifetime to build a 5k account and then we will die without realizing our goals. Among all the rules we quite often tend to forget that time is the stuff life is made of and everything is time bound.

I am not sure if that makes sense to the folks here but I have a sense of comfort with that of approach.
  • #132,994
  • Nov 15, 2014 5:34pm Nov 15, 2014 5:34pm
Quoting prasad99
I was going through some material online regarding Fx trading and came across some trading risk related items. My understanding was that in Fx our risk is limited to the stop loss that we define in our trade. For example the pip is worth US $10/- and my stop loss is 30 pips then my risk on this trade is 300 dollars. Let us say I have $10000/- account with the broker. Now what happens if the price suddenly gaps down or up let us say 500 pips. Do I lose $5000/- of my account value in this instance or fifty percent of my capital with just one trade??...
Gaps occurring over the weekend are not technically gaps. Currency transactions continue to occur through-out the weekend between big money such as businesses, banks and even countries. This may or may not lead to a large enough price fluctuation or difference to occur over the weekend so that the opening price on Sunday afternoon is different than Friday's closing price. Never the less traders treat these weekend price differences like gaps and thus they behave similarly.

If you have a stop loss in place and price gaps it will almost always activate your stop loss. If it does not you can call your broker and they should make good on it. It's important to have a reputable broker. If you exceed your margin often your trade will be automatically shut down and your account will not be wiped out. To wipe out your account you must actively trade in a way that wipes it out.

Risk is personal and must be defined by each trader. High risk trading is likely to lead to unrecoverable losses no matter how good your method. Consistent reasonable risk trades even with a low win rate can be profitable. Although the reward can be great it is a fallacy to think trading forex or any other financial market is a get rich quick venture. This think will get you poor quick. Treating trading as a business is all about consistency and taking reasonable risk. What is reasonable is personal but I think 1,2 or 3% probably fits quite nicely. It doesn't matter whether you have a $500 account or a $500K account.
  • #132,995
  • Nov 15, 2014 5:36pm Nov 15, 2014 5:36pm
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  • #132,996
  • Nov 15, 2014 5:39pm Nov 15, 2014 5:39pm
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  • #132,997
  • Nov 15, 2014 5:41pm Nov 15, 2014 5:41pm
Weekly chart with PPZ at a BRN.

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  • #132,998
  • Edited 7:06pm Nov 15, 2014 6:46pm | Edited 7:06pm
Quoting prasad99
I was also going through Options trading as of late and I have discovered one huge risk in that domain also. There are two things you can do with Options trading--buy call options or buy put options. There are four possibilities call option in the money , call option out of the money , put option in the money and put option out of the money as the option progresses towards expiry. Now which one of these options leads to the possibility of the trader needing to buy the underlying stock. That is a risk because if you capital is 10k and you buy stock...
Trading with options actually carries much less risk & requires much less capital than trading the underlying stock/future/forex.
The biggest risk in options trading is selling naked puts or calls. Buying calls or puts only risks the amount of the purchase. You're never required to purchase the underlying if you only buy calls or puts.
  • #132,999
  • Nov 16, 2014 6:21am Nov 16, 2014 6:21am
well usd sell off late friday didnt change the overall picture for aussie. Still in upstream to gap level and prev. highs.

I will add short at 8850, stops at 8915. I have 8405/8315 in the cards before christmas, if 8875-8900 holds. Some aussie fundies on tuesday,

expecting a stronger us dollar again next week.

Lets c,

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Hero calls followed by margin calls...
  • #133,000
  • Nov 16, 2014 11:05am Nov 16, 2014 11:05am
Quoting Winston Reed
Weekly chart with PPZ at a BRN. {image}
Hi Winston,
how will you trade this huge bearish candle in GBPCHF? I don`t think you are entering long at the top of it. You treat it as a touch trade? Long at sunday open with SL 1.49XX?
Nice weekend
Have a nice day
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