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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

  • #137,741
  • Dec 4, 2015 10:28am Dec 4, 2015 10:28am
Quoting antisystem
{quote} ...I decided to enter BEPB ... {image}
This is not pinbar. Rather outside bar. Personally I like location and I am ok with size but for outside bar it did not close bearish enough.
Vanilla
  • #137,742
  • Dec 4, 2015 10:35am Dec 4, 2015 10:35am
Quoting vanilla.sky
{quote} This is not pinbar. Rather outside bar. Personally I like location and I am ok with size but for outside bar it did not close bearish enough. Vanilla
Yes, marked bar is not a good PB. In fact, I watched previous bar & entered after marked bar was closed. For me this outside bar showed a new signal for short entrance, it also formed nice 2 day BEPB
  • #137,743
  • Dec 4, 2015 1:24pm Dec 4, 2015 1:24pm
Hi mike or james. I noticed that this thread doesn't talk about looking at news events at all but when you trade do you look at news events?
  • #137,744
  • Dec 4, 2015 2:20pm Dec 4, 2015 2:20pm
Thanks GB. Always appreciate your words of wisdom, thankyou friend

Yes I woke just now (I'm in Australia) to see my 3 entries from Friday all doing well (SGD/JPY, AUD/CAD, NZD/CAD -all of them BUOB on D1 coincidentally), 2 at 40+ pips and the other 100+ pips, profits locked.

I've never understood what a swing high/low truly means, how important it is and how to read it on a chart. I learn best from visual so perhaps Jim or Mike has a YouTube Vid on it somewhere, i'll try and find one Thanks for the input GB.

My trades were with trend, J16 signal bar and coming off of or broken through S&R levels. In my limited FX experience I have found these 3 factors crucial to successful trading for me. There are 3 other factors I need in place before I trade (to complete my checklist) but these 3 aforementioned are extremely important ones that, combined with the others, work well in most instances for me.

My trading system has evolved dramatically over the past few days and weeks as I have analysed my mistakes and analysed my long-term FX aspirations etc. Perhaps it will evolve more but for now I am in a nice sweet spot. The haze and confusion in my currency trading Brain is lifting and although I no doubt have a tremendous amount still to learn, I just wanted to say to all my fellow inexperienced traders out there that with a simple stress-free strategy and some more time/experience things will start to click and more consistent trading will occur. It just takes experience which is something you earn, not buy.

@antisystem I agree with vanilla, that is not a good pinbar as its tail is to short and its open and close are to close to the middle of the bar. They should be well down in the bottom third of the bar.
@forexfairy, I am pretty sure that Mike pays little attention to news, I think James is the same.

This post went about 10 sentences longer than I anticipated so I will stop rambling. Have an awesome weekend everyone. Looking forward to the coming week, see you all then!

Bill
  • #137,745
  • Dec 4, 2015 2:39pm Dec 4, 2015 2:39pm
Quoting Bill618
Thanks GB. Always appreciate your words of wisdom, thankyou friend Yes I woke just now (I'm in Australia) to see my 3 entries from Friday all doing well (SGD/JPY, AUD/CAD, NZD/CAD -all of them BUOB on D1 coincidentally), 2 at 40+ pips and the other 100+ pips, profits locked. I've never understood what a swing high/low truly means, how important it is and how to read it on a chart. I learn best from visual so perhaps Jim or Mike has a YouTube Vid on it somewhere, i'll try and find one Thanks for the input GB. My trades were with trend,...
This picture might help explain swing points.


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The game taught me the game.
  • #137,746
  • Dec 4, 2015 2:44pm Dec 4, 2015 2:44pm
Quoting antisystem
{quote} Unfortunatelly, can't say the same thing((( Again I'm moving directly to 30% loss))) Guys, can you help me in this situation? I decided to enter BEPB near strong S/R level on weekly & daily charts, under BRN, price reached previous box. It didn't work) Is it a bad luck or I missed something except trading against trend?) {image}
Here are my brief thoughts. Also, I am not sure if you mean a 30% loss in a real account or a demo account. Just for me personally (everyone is different), if I lost 30% in a live account, I would force myself to go back to demo for a while.

Attached Image
The game taught me the game.
  • #137,747
  • Dec 4, 2015 2:48pm Dec 4, 2015 2:48pm
Sorry, I should clarify, the BEOB is too small. The PA bar marked in the original picture is a BEOB, and I believe someone already pointed that out.
The game taught me the game.
  • #137,748
  • Dec 4, 2015 2:59pm Dec 4, 2015 2:59pm
To contrast the small BEOB with a better BEOB, consider this alteration in the BEOB's shape, size, and close. I would definitely expect something of this magnitude to overpower the up-move and at least make it to the yellow line, which I would consider a trouble area.

Attached Image
The game taught me the game.
  • #137,749
  • Dec 4, 2015 3:33pm Dec 4, 2015 3:33pm
Thanks a lot for your comments, guys!
Gregory, I'm speaking about real account. If my loss reach 30%, I will stop trading real money immediately. I read first page, I won't repeat this mistake any more) Now I'm balancing again near stop level(((
So, my entrance (I mean short position) in this uptrend should be confirmed by stronger bearish PA setup, shouldn't it?
  • #137,750
  • Dec 4, 2015 3:55pm Dec 4, 2015 3:55pm
I agree 100% with James16 about demoing first. I completed 5 months of demo trading on D1+ on the James16 website, and prior to that experience, I had always "p'shawed" demo trading. It changed everything for me.

Here are some thoughts that I wrote, in regards to that, back when I was demoing (this was back in 2013):

---------------------------------------- OLD 2013 POST BELOW ------------------------------------------

I understand the importance of demo trading now. I always avoided demo trading for the most part. I did do some in the past, but it was not a real attempt. To me, it did not make sense. I had read and heard about so many people's experiences demo trading. They would say they did well in demo, but when they tried the real deal, they would lose their nerve and practically pull their ears off through the wild emotional swings trading can bring. Consequently, I spent 7 years trading various things and losing a small fortune trying to beat the emotional swings. I am not trading currencies with real money right now, but the good news is I do think the years of travel have quite numbed me to the emotional swings that occur in the heat of the battle. Nevertheless, I understand why demo trading makes sense now.

Demo trading makes sense because it forces you to wait. For those of us that have some money to burn, really, time is more precious. That is why we do not want to demo trade in the first place. However, this is why we need to demo trade first. If time is more precious to you, fighting through 3 months of demo trading will be really trying, but that is the point. Time is money after all, right? Since time is incredibly important, you will try that much more to succeed. Trading on micro lots just to "feel" some version of the emotional turmoil of trading is probably not going to be painful enough to push you to do the right things. Yet, if you mess around and do silly things, you may have to wait another month! The time factor will force you to be disciplined. WOW, that is rough, if you ask me, and now, I HIGHLY, HIGHLY, HIGHLY recommend it.

The above is why demo trading is a MUST.
The game taught me the game.
  • #137,751
  • Dec 4, 2015 4:09pm Dec 4, 2015 4:09pm
Quoting antisystem
So, my entrance (I mean short position) in this uptrend should be confirmed by stronger bearish PA setup, shouldn't it?
I would say, for me personally, I would only enter a trade, if I knew I could manage it with a reasonable amount of success.

How do I describe this in more detail?

I define "a reasonable amount of success" through experiential knowledge. For instance, 6 months of demoing can give one the experience to understand what can work or what will not work. Trading is similar to learning anything else. Consider subtraction. When someone taught me subtraction, they used real-world objects to explain that 2-1=1. They put 2 fingers up, hid 1 finger, and then had me count how many were left. That experience made it real for me. Trading is much more complicated than subtraction, in my opinion. Therefore, it takes more experiential knowledge to make successful judgements.

I define experiential knowledge as a few things:
1. Understand the basics. For instance, memorizing what a PB looks like, or a BEOB, knowing how a PPZ works. (The list goes on.)
2. Putting those basics into action through forward-testing (demo) and back-testing.
3. Analyzing the results of my actions and assessing whether I can do better, next time, in a similar situation, i.e. evaluating my losses, carefully, and hopefully with some guidance from nice people.
4. Jump back to 2.

Probably oversimplified, but unfortunately, I am running late right now!
The game taught me the game.
  • #137,752
  • Dec 4, 2015 5:44pm Dec 4, 2015 5:44pm
Quoting Gregory_
To contrast the small BEOB with a better BEOB, consider this alteration in the BEOB's shape, size, and close. I would definitely expect something of this magnitude to overpower the up-move and at least make it to the yellow line, which I would consider a trouble area. {image}

Thanks Gregory for the chart showing swing highs and lows. They are easy to identify well after the fact of course so I need to understand what creates them in the first place. I honestly thought it was just another term for "support and resistance" areas but perhaps not. There's Monday gone now, studying swing highs and lows! I find it exciting to learn, thanks guys and gals.

Regarding the AUD/JPY chart you posted, my chart feed shows no significant or "trustworthy" BEOB at all (your feed looks like a pretty good PB to me). Price is certainly near the top of a resistance line though and could make it down to the horizontal ppz area or the support line further below. For me this pair is in a pretty strong uptrend and that could be a problem if you are shorting. I think it will break through resistance at some point though and head towards the next ppz....

Bill
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  • #137,753
  • Dec 4, 2015 8:21pm Dec 4, 2015 8:21pm
Hey, Bill. You are right about the feed. That BEOB I posted was hypothetical. (I drew it onto the chart.) I was trying to contrast a large BEOB that I might trade versus the current small one on the real chart.

Also, your analysis sounds decent to me. Price is squeezing up into those boxes. I would like to see a large BEOB through the lower trend line before I pulled the trigger.

Attached Image (click to enlarge)
Click to Enlarge Name: 2015-12-04 20_16_29-9336269 - InstaForex-Server - Demo Account - [AUDJPY,Daily].png Size: 52 KB
The game taught me the game.
  • #137,754
  • Dec 4, 2015 8:40pm Dec 4, 2015 8:40pm
Quoting Bill618
{quote} Thanks Gregory for the chart showing swing highs and lows. They are easy to identify well after the fact of course so I need to understand what creates them in the first place.
This is a thought provoking statement. I agree that swing highs and lows are easy to identify after the fact, and I remember struggling with this as well. The best way I can explain it is a PA (price action) bar can predict price movement, in the right circumstance. This is extremely important: a PA bar can be predictive. Most people in this thread probably already agree with this, or they would not be here.

Armed with the above idea, in order to predict a swing high, I must understand how PA bars predict price movement. For example, a BEOB can be indicative of lower prices, in certain circumstances. As price trends, a PA bar, such as a BEOB, can form and predict the end of the trend.

This is the best way I can describe predicting a swing high in words. Swing lows are similarly accomplished, of course.

Historical swing highs and lows are definitely easier to identify, and this is particularly important. Through back testing, I can judge what kind of PA historically reverses a trend, forming a swing high or swing low point.
The game taught me the game.
  • #137,755
  • Dec 5, 2015 4:36am Dec 5, 2015 4:36am
Quoting Gregory_
{quote} This is a thought provoking statement. I agree that swing highs and lows are easy to identify after the fact, and I remember struggling with this as well. The best way I can explain it is a PA (price action) bar can predict price movement, in the right circumstance. This is extremely important: a PA bar can be predictive. Most people in this thread probably already agree with this, or they would not be here. Armed with the above idea, in order to predict a swing high, I must understand how PA bars predict price movement. For example, a BEOB...
HaHa, I should have looked more closely at your posted chart. Maybe then I would have seen that you had altered it. After all, you did say "consider this alteration...." and I still missed it

I wholeheartedly agree with you that PA bars can of course predict the way a currency pair will head. That's what this thread is all about - BUOB's, BEOB's, DBHLC's, IB's etc. The J16 signal bars are fantastic at predicting price movement when, as you say, the circumstances are right (my six point checklist helps me determine the current circumstances).

However, predicting the end/reversal of a trend - predicting a swing high/low - seems extremely difficult to me. The charts for any pairing are littered with J16 signals that had indicated a possible trend reversal that failed.

So my real confusion with swing highs/lows is how is it different to a resistance/support/ppz area. I just need more knowledge and experience. I'm less than 6 months into my FX journey and I still have a lot to learn. I also need more sleep!
Looking forward to researching it more next week.

I really appreciate your help so far Gregory.

Bill
  • #137,756
  • Dec 5, 2015 6:08am Dec 5, 2015 6:08am
its definitely not easy to say any one thing will be a swing ,
imo you have to learn how to add weight to any given pa action/zone ,to know with very simple method
of failure or size or number
etc ,
to come to an early conclusion ,this is something to be reckoned with
which is actually what Gregory is saying by changing the chart for what would be a great trade
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On-site guru & also FF member's' psychiatrist, when not drinking tea
  • #137,757
  • Edited 6:42am Dec 5, 2015 6:24am | Edited 6:42am
there going to be a history to a important number ,if price has been there before
you can judge then pa here is more important ,than almost all other,
fundermental will alien with this, like fundamental yet to come news is overlaid on a chart for the future
don't ask me how
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On-site guru & also FF member's' psychiatrist, when not drinking tea
  • #137,758
  • Dec 6, 2015 4:16pm Dec 6, 2015 4:16pm
Quoting Bones
So my real confusion with swing highs/lows is how is it different to a resistance/support/ppz area.
I would say that it can be different. To explain, I will post a chart. Now, this is not a currency chart. I know this is ForEx Factory, but I like to trade currencies and stocks. Here is one of the stocks I traded earlier in the year. As you can see, this chart describes one aspect of what I am trying to emphasize.

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As you can see, there is a huge pin bar at a swing high. How did I know that this was a swing high before it formed? That is a difficult question to answer.

Firstly, there is not a major resistance zone or PPZ at the pin bar. Therefore, I would definitely say that I did not use any idea of resistance or PPZ to make my decision. I suppose I would say that, through experience, I knew that the pin bar showed extreme downward pressure. Based on that experience, I made a judgement call and decided that the chances for price continuing lower were better than 50/50. Due to the chances, in my favor, I decided to risk a portion of my account.

The swing high then formed.

I will have to think about this question more to see if I can come up with a better explanation.
The game taught me the game.
  • #137,759
  • Dec 6, 2015 4:25pm Dec 6, 2015 4:25pm
I guess, my perspective is that, through experience, I learn to determine what types of scenarios are worth the risk. For instance, 3% of my account is worth a certain amount of USD, and as an American, I know that I can go out and buy stuff with that USD. Therefore, it places a value on that 3% for me. (This is also where a lot of the emotional turmoil can come into play.)

After some experience, I learn what is more likely to eat my account and what *MIGHT* increase my account. Then, when a similar scenario arises, I then make a determination that the 3% amount of money is worth the risk or not. The key is not to consider the risk on 1 trade. This is really important, so I will repeat it.

Risk on 1 trade is mostly irrelevant.

The idea is to understand James16 basics enough to gauge a situation for risk in the long run. Let's say a pin bar scenario, just like what I posted on that stock, happens 100 times. Sure, there may be some losses, but on average there will likely be more wins. That is the kind of situation upon which I want to risk my money.

How do I know that a situation is worthwhile in the long run? Experience. Thus, I go back to James16's recommendation to demo trade.
The game taught me the game.
  • #137,760
  • Dec 6, 2015 6:24pm Dec 6, 2015 6:24pm
Quoting Gregory_
I guess, my perspective is that, through experience, I learn to determine what types of scenarios are worth the risk. For instance, 3% of my account is worth a certain amount of USD, and as an American, I know that I can go out and buy stuff with that USD. Therefore, it places a value on that 3% for me. (This is also where a lot of the emotional turmoil can come into play.) After some experience, I learn what is more likely to eat my account and what *MIGHT* increase my account. Then, when a similar scenario arises, I then make a determination that...
Love it Gregory, gr8 post/s. Appreciate your insight. Sounds good to me. Thanks, GB.

Looking forward to making a few bucks this week. Looking at a long on EUR/AUD daily retrace on BUOVB. Charting software gone crackers so can't post chart as yet. Good trading all.
'Fail to plan, plan to fail'
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