Hi again, thanks for the information about last chart I posted.. I put a low in on my demo after your guys confirmation, and it made quite a few pips How about this pin bar on 4h gbpusd? Good indication of it falling? It's probably not a good idea to short gbpusd but still looks like a good setup(correct me if I'm wrong)
pin bars indicated strength opposite to wear the "nose" is. So in this case it is indicating a bullish sentiment. The pinbar itself is in some consolidation making the signal less strong/clear in my view.
Sorry , the dog ate the chart. After consulting my CSI contacts, here it is retirieved.
bit confused here you have your fib drawn wrong, and this bar is a neutral bar. The open and close are in the middle of the bar. This indicates indecision in the market. As for drawing the fib I think you meant to do this
I think you're on to something If you don't mind me asking however, why do you use candlesticks over bars? It seems like a lot of what james16 does involves the bars.
Much respect to you
Matt
Hey Matt
Bars(OHLC) and Candles are the exact same thing. It just becomes a personal preference.
Hey Wall street,
I see you use ibfx charts. Do you still have conection. Mine wont load & I see on the ibfx forum some others are having the same problem.
Ibfx dont open till 5 est. so no help till then.
Also where do you pull the time till end of bar indi from.
thanks Jeff
cant see his charts for some reason i think my browser is messed up but I assume this is what you are talking about
Dear mbqb11,
would you kindly tell me how can i use that indicator you sent ,
thanx ,
atef
Hey Atef
If you place that indicator in your indicators folder in MT4 and place it on your chart it simply lets you know when the next bar closes for whatever timeframe you are on.
Hope that helps
Mike
attached is the indicator again and a chart that shows what it looks like
thanx, mike, ofcourse it'll help , but the chart does not show up, thanx again ,
atef
yeah it is something with Forex Factory since they upgraded, firefox isn't settling well with things
if you go back to almost any chart I have posted in this thread you will see it, it is in the upper left hand corner just says "202 minutes till bar close"
Iam new on this forum and still reading threads. I found james 16 thread very intresting. I want a favour. Will u post chart which show following price action ?
1. dblhc
2. dbhlc
4. beovb
5. buovb
where do u place stop loss and entry for it ? Please post it and show it on charts.
note- dblhc and dbhlc are traded in two way. First breakout when price action break double top or bottom of last two or three candles. and another way is when double top or bottom work as a support. I need both example.
Please post chart. There are two many chart related to this. But i didnot found any chart who show entry and stop loss.
Please help me.
Sorry for my english. Iam not English.
Many ways to play these and all bars. The most conservative way is to wait for a break of the bar to enter(that means wait for the high when going to long, and low of the bar on a short). Place your stop on the opposite end of the bar.
Other ways to play these bars are entries on a retracement, or entry on the close(most agressive).
mike, i made the move to pa a few months back and its the best system i have traded so far. tps are something i still havent got the hang of.
one school of thought is to move the sl every day to the low/high of the daily bar.. the problem with that is you do give back pips quite a few times.
any suggestions?
I am from the school of trailing stops(cut ur losers, ride the winners). Most of my trade mgmt is like this. In the PF I have a thread dedicated to this that blew up b/c of just the reason you speak of. Depending on the timeframe I trade, is the type of exit strategy I use. For example when i trade the 4hr, I almost always use a 2/3 bar count(much like using the previous day, but instead I count back 2 bars from the last closed bar). There is more too it, but that is the basics, and it works. This insures a pair is at least still trending in my favor. If we fail to make higher highs and higher lows in an uptrend the bar count will stop you out. Vice versa in a downtrend. It is a bit much to go into detail but maybe this will spark some ideas for you.
Imho I think that taking your surroundings into account as well helps to gauge what's what better. It does have the risk of overcomplicating - but I guess that what suits my personality :P
Mike would prolly just shrug and say "order cancelled, moving on", I write little essays ;p
I didn't even have a pending order on this one. Me and Tom had a talk about this one yesterday. But yes order canceled moving on is a good theme
another q.. when you have setups like pin bars, beovb,buovb, dbhlc,dblhc etc.. do you treat all setups the same with the same kind of sl/tp? or would you rate, say pin bars, as strongest, and then have a different way of setting sls and tps for the setups?
thks
a Good setup is a good setup. Pinbars just happen to be my favorite. My sl is always the high/low of th bar. I don't normally set TPs. Only on some (now) breakout plays. In general I always trail my stops. I don't really believe in targets that much.
Thank you! Do any of you know when the pf will be open again, I wan't in !!
Looks like the launch date is the 3rd of Dec. But it might be a bit before it is reopened. James really just wants to make the transition as smooth as possible for everyone.
I am looking at the EURUSD and I'm seeing a TBH on the daily and is this an I4B on the 4H chart, and is it then an indication of a trendbreakout down? If that's the case, where to place an entry and what would be the target?
If I draw the fibo from the low on 17th of August (1.3360) til the highest high (1.4872), could I set the TP at the 23.6 fibo?
IB indicates consolidation in the market. This is obviously a direct result of the holiday market today. Yes a TBH indicates resistance, which can lead to downward action.
A lot of people choose to straddle IBs, or have a bias in direction. For example, since the euro is in a strong uptrend, you may choose too only take IBs long.
Another thing, IBs show up all the time on the 4hr chart. This is because many of the bars are during off action times. My strong recommendation is to not trade IBs on anything less then the daily, especially in the beginning
Do you guys also trade on break out? cos I see AUD/JPY in ranging.
I am setting :
Buy Stop 9660
Sell Stop 9250
The previous day was a BEOB(bearish outside bar). Which is indicating downward strength. The better breakout bars to play are inside bars, where price consolidates.
So a break below yesterdays low would indicate a continued downtrend, as we continue to make lower lows and higher lows
Here is a chart. We have a BEOB from yesterday, if that breaks we have a TBL, that would be the area to watch for a stall. If it breaks through that is a continuation of the downward play.
The purple line is a price pivot zone, of the flip of S/R. So we can see the BEOB is off resistance. This is all just showing continued strength of the yen pairs.
Let say that market is breaking upward.
Do you long or no position?
I don't see any near resistance, so that would be a good long for me.
I would need some sort of reason to take a long. Such as PA, on support. Right now there is nothing I can see that would warrant a long position. I am a very conservative trader(or so I consider myself). A long situation would be a break off the high of the BEOB from yesterday. And then finding support on the 96.65 area, which is the PPZ. There I would look for PA, or look for a continuation of the trend.
I have a pending sell order under the low of the daily pin on EUR/USD for the past two days.
Is it still valid signal, given we have only inside bars for couple of days?
Thanks much
TradeStar
I didn't have an order for the euro either way but I'll give my 2 cents
personally when pins don't break the next day I cancel my orders. I would want a very strong reason to short in this strong uptrend. You better believe there will be bulls waiting on any move down.
This isn't to say it is right or wrong, but I like to see follow through once I have a trade plan. Momentum.
Hi guys,
So can I please please pretty please call this one an mbq special (Mike?) Doesnt it look like the perfect pullback pin, to get back onto Trend Road...what do you think, has eur got enough steam left to take us up and away, take care all, Raz
Hey Raz
My favorite like you said is if we pulled back a lot more and got that pinbar
Euro is in such a strong uptrend though. This is like when the Cad just kept dropping. Any slight pullback turned out to be a great spot to get back in! lol
Seeking Light? Me too Could u enlighten me on the traffic clustered PinBars..Thanx
Here is an example of clustered pinbars. These can work too for sure, but the idea is to get in the highest probability trades if we are going to put our money on the line.
Pinbars will often occur when price is moving sideways, or when price doesn't have a chance to move "away" and create "space" from price to the left
I thought that this Pin bar on the 4hr the other day looked quite good. It was at a PPZ, with trend and at Fib retrace level. I also thoughth the actual Pin bar itself looked quite good but the trade didn't pan out? Could Seeking, Mike or anyone comment?
Thanks
Steve
The reason I would have passed is the size of the pinbar. Look how small it is in relation to the range of the other more substantial bars. I would have liked to see a much longer nose at that area
Yeah those 4hrly's need a lot more care. I just thought that the position and confluence was promising. Had the nose been longer Mike, would you have taken that one? Seeking, I'm real sorry but didnt fully understand what you meant.
Thanks for your comments.
Steve
yes with a MUCH longer nose. That little bar doesn't give enough info for my liking. Doesn't stick away from price enough.
have a question on a setup that has not been adressed so far I believe - consecutive pinbars. How do you play them. Do you the signal is stronger after two pinbars or would you consider this setup invalid since the bar after the first pinbar couldn't break the low.
Chris
Hey Chris,
This isn't consecutive pinbars, but rather a pinbar followed by an inside bar. Even though the inside bar has the shape of a pinbar.
Still with that said some would say that , this is another strong hint for a downward move, using the indication of the previous bar as a pinbar, and the IB, being a bearish looking bar.
I would still play this bar like an inside bar. That is with a sell below the low of the inside bar, and a stop on the top.
Hi, i came across this thread last week, and have been following all the posts ever since. This is the Best thread and provide simple and clear trading strategy to all. Thankyou james and all the people
looking at EURCHF daily chart, at the swing high on 13 Dec, do i see a DBHLC ? If it is, and my next question is how do I look for entry to go short ? Do i have to go to 60 min to look for entry ? Or simple wait for it to retrace based on daily chart ?
Appreciate all the helps anyone can provide.
Hey Nico,
Welcome
You have correctly identified the pattern , and it in fact is a triple bar high lower close(3rd bar back also stopped same spot).
Generally most people play a break of the low of the most current bar(so in this case it broke). It is perfectly acceptable to play a retrace and/or drop to lower timeframes to search for an entry. That becomes a personal preference, and it is just a matter of testing over and over to find your comfort level
The chart that you posted appears to me to be a daily chart with a Sunday bar. I'm still new at this, but I'm pretty sure that I remember reading somewhere in this thread that we generally ignore Sunday bars for PA. Can someone confirm this?
careful playing these bars on the 1hr. You have to find the best position for them or they can be really difficult to play. For example, the shorter term trend has been down for the Eur/Usd for awhile now. So fighting the shorter term trend on the shorter term charts is very hard to do. This is why sticking with the higher timeframes is what James recommends. Because they carry more weight.
Remember, it is where these PA bars occur that is the most important thing.
but, I consider PA to be proportionately weighted to its particular timeframe and the SR timeframe. For example, this trade on the hour went in the direction of the PA indication.
I agree with this statement, but have to clarify what I was saying more. PA is everywhere occurring all the time. This was simply a price bar setup. To me the words Price Action encompass all the different aspects involving a trade. To call this a price action setup is deceiving for the way I look at trade. I would just refer this to as the correct identification of a price bar setup.
So if you are going to play a price bar setup such as a DBLHC, why fight the 1 hr trend. Which is proportional to the 1 hr price bar setups. Which is what your statement referred to. I agree things are proportional, but one can not forget the "action" part in price action. Did this go up a few pips? Sure? but what was the rest of your plan on the trade. Entry is the easy part.
Here's a tempting little daily pin. with the trend.
stong fundies for the nzd as well.
thoughts / comments !!
I will throw my comments in, some of us were chatting about this in the chatroom.
I don't like to get involved in these pinbars on the daily timeframe, because you have to finesse your exits a lot more. I find it very difficult to play in a market that is moving sideways like this(although near the bottom of the TL. The bar itself isn't all that impressive. Would like to see a much longer nose. Overall I just find being in a market that is this choppy makes it much harder to hold for me personally.
If anything I would maybe use that as direction on the smaller timeframes for an intraday trade.
Just curious why you ignored the June 13th pin bar on your tutorial video in the guest area? Did you not like it or just have enough of other examples?
I was only picking some recent examples out at the time. I wasn't going through and picking out everyone(just the ones that fit on the chart at the time). I wanted to get a wide range of examples that I see people calling pinbars.
Understand you don't like to trade pin bars in sideway, could you show how you trade breakout . Thankyou.
Hey Nico,
I PMed you as well. I will give you an example of how I trade breakouts, but for those that are in the James16 PF, will know it is a large topic so here is an example of a pair I am looking at.
The AUD/NZD has put in a sharp move down. Price has now entered into a retracement channel. So After this channel, breaks and retests the channel, we can look for confirming price action .
I don't understand why you are waiting for a retest of the channel after it breaks before you look for a trade. Why not not just look for PA suggesting a move downward? That plus a trendline break is not enough confirmation for you? Are you not scared that assuming the price does break down resuming it's downward spiral that there may not be a retest and you will lose your entry?
It is just a very commonly used technique to wait for a retest of the area. This is MY confirmation that the previous area held. Waiting for a pure break can lead to a lot of false entries. Often time we are just running stops in these areas. By waiting for a retest, or a retest then a continuation we are getting the confirmation. There are tons of ways to play breakouts, this is just the way I do it personally. Sometimes you miss the boat, but there is always going to be a trade off. I am just looking to get the probabilities in my favor. Which it does.
I was waiting for a breakout , and price did but just pulled back into the channel. Price even close outside this area after a BEB. By waiting for my breakout area to re-hold(marked by red X), it is showing me an area where other speculators are finding significant also. My lines mean nothing unless others are doing the same.
Just how I go about it. I am a very conservative trader.
Now I re-draw my lines, and re-evaluate the situation for the future.
Don't you think this is a sign that the flag formation is about to break down?
Fabian.
Yes this could be the sign good eye and this is how I go about putting all the pieces together. Now it is up to the trader if they want to trade this to trade based on the pinbar, or wait for the channel to break with/without a confirmation.
Would like comment on this set up(SL,MBQ,Raczek......... ). Is this valid??
Of interest to me is Fozzy trigger with healthy divergence @ Double Bottom.
Regards
RBS
Hey RBS
the last bar on it's own is a BUOB, or a Bullish outside bar. Price went down lower then the previous bars low , and closed higher then the previous bars high. Also a reversal bar like a pinbar
What do you think about the daily pin on gj , I see confluence at the bottom of the channel with the 150 monthly, weekly 365 and monthly ppz. Any thoughts ? is the pressure to strong to keep pushing down?
I am weary of any longs on the xxx/jpy pairs
On my charts the actual bar itself isn't the greatest pin(I am on NF feed). The reason being the body is nearly the same size as the nose. Not a good looking pinbar. The cad/jpy is the one that caught my attention the most. The pinbar itself would have been a lot nicer if we had a higher close. But the reason it caught my attention most is because of the support it has arrived to again marked on chart.
I've pretty well done this thread from start to finish, bookmarked so many pages, so correct me if i'm wrong here but I can't recall James, SL or MBQM using a BUOB/BEOB as a reversal bar, only pins. I was aware of the BUOB hence the question on a 3 Bar Pin. I have really understood OB's as a continuation trigger/signal.
For me this trade had every tick in the box(Fozzy,Divergance,Significant Support) but no valid trigger. Part of my rules are that I can only trade against the trend if I have a) Pin or b) a Reversal Pattern with a trigger(like the 4hr#EPH8 chart I posted a couple of days ago). So I am very interested in your thoughts as I certianly would consider adding the 3BPin to the arsenal.
As it worked out, I had a valid 4hr entry which has worked out alright.
Thanks for your thoughts in advance
Regards
RBS
Outside bars as taught by james are best played as reversal bars. That is, at swing highs and swing lows like pinbars. Just like all the other price bars, they can work in many different conditions and one has to get used to defining when and where these bars work best for their methods. James just did an excellent video on Outside bars this week, and right before the OBRs give out many good pips on the daily timeframes.
Personally I trade pinbars more then any other bar simply b/c I have spent so much time incorporating it into my trading plan. But a good OBR at a spot where we might look for a pin can be just as deadly. We have to remember often times these bars are telling us the same story with a slightly different look. That is why on one broker feed you might have a pinbar, and on the other an outside bar. Same story, different cover page
Here is my daily chart from Fxdd meta trader chart.
I don't see an outside bar. Is it due to difference in data feed.
If yes, is there a more reliable source for meta trader for analysis purposes.
Thanks,
TradeStar
Hey TS
One feed isn't more "reliable" then another, b/c they all show price doing the same thing. Just due to the nature of the timezones, will appear different. If you want to try different feeds, you can try InterbankFX(which is what James uses), or North Finance. I used to use multiple MT4 brokers and check them all to get a better view in case something wasn't jumping out at me. You can try that, but in the end I settled in on one broker just to keep things easier.
Hope someone can help me there.
Is the the current 2 daily bars now for EUR/USD be considered as an IB or dble btm @ resistance zone? It doesnt seems like a dble btm as in a middle of traffic?
Thanks in advance.
Hey Ellipses if you are speaking of the currently daily eur/usd bar and yesterdays, we really need to see how it closes before making the analysis that we have a TBL(Two bar low), or an inside bar. By the looks of it price as already broke yesterdays low on your chart which would negate both those possibilities.
TBL would signify support(although how strong of support depends on what else is around price).
When I looked at USD-CHF daily I have several questions:
1. After PIN Bar on 15 Jan, the next day price broke below PB first
and after that broke upper PB.
Do you trade this PB when price broke upper PB ? because before price
broke up, price broke below PB first?
2. On 16 January it form BUOB after 15 January PB.
If price broke upper BUOB do you trade? or if there is PB and BUOB side by side then no trade.
Thanks!
Hey Jatis,
Once the low of a pinbar is taken out, that would negate that pinbar, and I would cancel any pending long orders on it.
You can absolutely trade the BUOB if there was a PB the day before. Some like to think that makes that BUOB even better to trade, because price tried twice to make a move down and both times was rejected higher. The reason to trade the BUOB or not would come with your trade plan and if you believe the bar is in a good spot
i really dont trust the last two daily bars - one hapenned with no trading in the US, and the other just reversed it all as if we started the week today..so - i am continuing with the minor downtrend in the EURUSD, USDJPY, GBPUSD (those three because i am in a trade with these pairs)
Yeah I haven't quite added BUOB as a staple to my trading yet, so I would rather wait for a retracement and miss it and get back in on the short side if things set up. But James put out a video recently on how deadly this OBs can be. I have to do more work with them before adding them to my toolbox
certainly has the signs of going short, but the words perfect and trading are quite misleading ...always remember to use proper Money Mgmt, and realize we are playing a game of probabilities.
One last thing Mr. Complicated(that's me) would like to point out about the GJ pin bar:
If you have a bullish outside bar+IB+break higher on cable, plus a weekly BUOB on GBPUSD, and GJ shows a bearish set up, if you were to take both, you could just as well be short USDJPY instead as you buy and sell GBP at the same time.
Only one of the two can be really right / end up working.
(imho it's actually not THAT much a complicated way of thinking)
Basically you have two witnesses for a crime scene, both of them are telling you their stories, and only one of them can be true
I have to disagree here SL, it often is very important how one exits a trade. You can get bumped out of one over the other based on how you exit, and then if you only took usd/jpy instead could end up greatly hurting your bottom line. I dealt with this problem for awhile when I was a pinbar trading machine on the 4hr and often you would have multiple pinbars across multiple pairs at the same time(often where two pairs were essentially trade xxx/xxx pair).
...Or have I just gone off in a totally different tangent to both of you? LOL
.
Yeah this is exactly what I meant, letting the trade play out, b/c the PA can dictate a lot of things since we are mostly chartists at heart. So it can really come down again to the traders style. Since I trail my stops one way or another, I can get bumped simply by the look of the chart on one pair over another like you said
But I'm not disagreeing with that
This is what I'm saying; taking both could very likely lead to one bumping out, while the other works. That's what I meant with only one can be really "true".
The reference to UJ simply meant that if you really believed that GBPJPY would go down, while at the same time believing that GBPUSD has to go up, then UJ would show evidence for bearishness, as there could be no other pair, which would cause GJ to go lower.
So instead of going long GU and short GJ, one would decide on long GBPUSD and then look at UJ. Is there a short setup here? If so, instead of GJ take this one here parallel to GBPUSD. If not, how can logically GBPJPY not rise/how is it supposed to fall, if GBPUSD is set to rise as well?
That's what I meant, not that you should take UJ alone
I see, I did think you meant just U/J. But even still in this case one might end up taking all 3. GBP/USD GBP/JPY and U/J. Because GBP/JPY and U/J could unfold differently. That is if all 3 show a setup.
So again I am the type of trader that treats each and every pair completely individually from another. No matter the case. Just what works for my style
very sorry if this query had been asked before but i'm with Oanda so would their 3 hour charts make me lose out on those 4 hour price action like pinbars, etc or there's no difference ?
also my daily bar closes about 3 hours before London opens so that not standard as well............again, is there any big difference or none at all ?
Hey Find
The basic rule is to play it as you see it. Our charts all have the same information, but depending on your broker will be aggregated differently across the bars.
So if you play 3hr price action it will look different then someone else using the 4hr chart. That doesn't mean you can't trade off the 3hr chart, you will just have your own formations.
Same with daily, your daily bar might look different then mine, but the same information is there. So one day I might have a beautiful pinbar, and you don't and the next time you could and I don't.
So generally we just say play it as you see it on your charts
Or you could use more than one broker/time offset, giving yourself access to more "pictures" with the same data. Can't say it is worth the trouble ( I honestly can't be bothered to do this myself) but I thought I'd throw that in as food for thought.
Good luck.
Yeah I did this for awhile, I used NF and InterbankFX. It was just too much to have to deal with. I agree
And to shock both of you - I have 4 MT4s open. Used to be 5, but that feed got discontinued and I haven't found another good GMT feed since.
SL you think anything you do shocks me at this point: How long have i known you now!
What I hope is that you have more monitors then you did before where you had these little itty bitty boxes all over the place! Do you still have that screen shot that I am talking about.
many thanks to MBQB11 and Seeking Light...........
so i guess you win some and you lose some, anyway there's no 'standard' charts around, right ? even different MT4 brokers have different closing times............
i'm trying with Alpari for their 4hr charts since almost everyone seems to say Oanda's 3hr charts are totally useless.......
many thanks again.
yeah there really is no standard. Some will say that having a closing bar at 5pm est is the unofficial standard (since this is when NY session ends). I find some validity in that, but in the end the charts are the charts, and price is price.
If you want to use the same broker charts as James then use InterbankFX. If you want a close of 5pm est bar. Use North Finance. Or really just find what is most comfortable for you
I like to know how to trade those big pins. I get stoped out every time for setting stops too close.
what he means is you treat a monthly pinbar the same as any other timeframe. So that means placing your stop at the bottom of the pin and entering on a break. Yes your stop will be 600 pts, but all that means is that you adjust your position size, everything else is relative. Some people may just choose to use that pinbar to give them direction and move to the daily or weekly, that is a matter of preference.
i've just started to go through this MASSIVE thread right from the beginning (though i've read this thread in bits and pieces previously).
so from what little i've gone through, am i right to say with all confluences being constant it would appear that the 'PinBar' and 'Double/Triple Bar HiLo Close' which is sort of like a 2/3-Bar PinBar seems to be most reliable ?
i understand that these formations are best traded off the Daily or 4 Hour timeframes but has anyone tried them with any degree of reliability on lower timeframes like the 1 Hour or 3 Hour (an Oanda anomaly) ?
most sorry if all these questions had been asked before..........many thanks.
One isn't really more reliable then the other. Most people tend to gravitate towards pinbars. For good reason. But it is always where these bars are appearing.
As for lower timeframes, yes PA works on all timeframes, but one must understand the different dynamics that comes along with each timeframe. The higher the timeframe the more reliable PA is. Less noise. Many people including myself trade off the lower timeframes(I am a big fan of the 4hr). But this was after doing it on the daily/weekly.
With that said, James recommends, and I highly agree that one should be able to trade PA on the higher timeframes daily/weekly before venturing lower.
Glad you are digging into this thread James started quite a beast here
Here are my observations -
1. Last week was a bullish pin confirmed by price action this week.
2. Yesterday Daily was a BuOVB
3. 4Hr is a BuOVB
4. 1 Hr closed as a 3 bar BuOVB
5. 1 hr close is above the resistance.
Won't all these patterns indicate a bullish bias?
on the short term, or for now maybe
but don't forget the overall trend is strongly down, which means, there will be bears lurking around a lot of corners :
maybe im just freakin out and not totally understanding the whole concept. what do you mean "within 33% of one end of the bar"? the open and close of the 2 circle bar is within the range of the previous eye and the what i thought was a nose stuck out alot relative to whats around it? and i thought it was going to keep reversing too because it did go down since the bar i thought was a pin came upon.
Please help. Any input on the entry?
Hey Jon
That bar is actually a neutral bar(which indicates indecision). The reason being the open and close are near the middle of the bar. For that to be a pinbar, picture everything below the close as not there. So basically we want the open and close to be within the previous bar(with not much under it in this case), and then a very long nose(high).
Here is an example of a chart with a pinbar, and a neutral bar.
This is what I see but using the daily chart. It may be heading up to the 50.0% fib retracement or maybe even the trendline. Maybe it will reach 110.00 then drop? Best position might be to sit tight and wait :
yep waiting is better then trading most times. I agree, and will wait for signs to get back in short on the longer term.
Hi everyone, I am still getting through this entire thread but Im noticing what could be a good price action setup on the EUR/GBP 4HR chart. There are 5 matching lows in a row all within 1 pip! Four bars have a low of 0.7414 and the other bar has a low of 0.7413. Each bar has a lower high. Is this a good setup for a trend continuation breakout? Plus considering the number of bars, it has the potential to go down quite far. Any input from the experienced PA users would be appreciated. Here is the chart:
Matching bar lows can be a good place to play breakouts
I am a bigger fan of playing breakouts and waiting for a pullback. Then on the pullback looking for PA.
On the chart below, we can see shorting would be fighting a very strong uptrend.
Orange Horiz lines are great places to search for PA. As well as a breakout long here of the blue line.
The upside to a short here would be there is quite a bit of room to run to the short side, before an expected support area.
Hi Jim, (or whoever else replies) I am reading this chart and about pinbars...this brings up a ? I have now regarding the EUR/USD...on daily, could be a pin after confirmation of another daily bar..4 hr is pin with small nose, hrly is pin, 30 is pin, even 15 min is pin at (1.4709). All the prior action leads me to believe this is a pin and can be viewed as a pin..I was basically really concerned about 4hr chart as you say longer time period is more reliable...so I am listening..Am I reading this correctly? Thanks!
Hey Krazy
Would help if you could post a chart as I don't see any pinbar on the daily or 4hr.
And yes higher timeframes are more reliable. Stick to the daily/weekly and simply look for the PA bars that jump out and smack you in the face
Here is a chart. It is a pin, but we want to look for the ones with a longer nose. If you look at the high of the pin and the high of the previous bar they are not very far apart.
This is why stick to the more obvious ones. Also as far as dropping down to match timeframes, sure you can do that but you really don't need too. Concentrate on the higher timeframe obvious pinbars. And stick to that one timeframe. A good price bar is a good price bar. But remember it is more important WHERE these bars are located.
Yes this trade for the long term is greate but i was talking on hourely trade...to take few pips close sl and big leverage....
My ALARM ALERT WENT OFF :
Shay, listen to Racz and James when they say trade the higher timeframes. Learn to be profitable off the daily/weekly with proper Money Mgmt. They say it b/c most trade the lower timeframes, and don't even give themselves a chance to stick around this long-term.
The reality is you must treat this like a business, and take the proper steps to help give you a chance at success. Because even with taking the proper steps, there still are no guarantees.
Learning PA on the higher timeframes, is not only easier, but less stressful and very rewarding.
James has a bunch of posts in here and on the new website(guest) about treating this as a business and what he calls "minimum requirements"
Such as demoing for 3 months consecutive profitable, larger timeframes etc. I can PM you the link if you want.
It is really important advice, and those of us that have followed it have been rewarded
Shay here is a trade on the daily timeframe, all the things James teaches. Pinbar at a swing high.
The beauty of this? I check it at the close of the daily each day and it takes me less then 5 mins to decide to move my stops to lock in profit. You have plenty of time to analyze your trade, and not make emotional in the moment decision. On the lower timeframes, you have to have your eyes and mind trained to act and react to situations fast. Train on the weekly daily.
You don't need to trade the lower timeframes. But if you can do it on the higher timeframes, and want to move down in timeframes, that is the progression you should take.
Just trying to illustrate the point for not only you but others new to PA. It is a crucial one.
i asked question before about trade on usd/jpy...can some one answer me please...just for the knowlege.
Thanks you all
Shay
First chart is the hourly zoomed out
You can see things have been a bit choppy but overall the choppiness has gone up. So taking a pinbar short, you have to fight a lot of this chop. Being the hourly you have even more noise.
The orange line represents where price has been flipping from support to resistance. If you see your pinbar stalled right on this area, no surprise here really.
Also your pinbar a couple bars later there was a counter pinbar. Another sign to get out of this trade.
But what I want to talk about is the pinbar you took was in the middle of traffic(blue arrow pointing sideways). We want to look for this pinbars at swing high and swing low. For example the red arros are swing high and lows respectfully. Granted only the swing high is almost a pinbar, I just wanted to show the "where" we should look for these bars.
So if you are going to trade the hourly, look for the best pins also. Too many opportunities to waste on iffy ones
CAD made a bit of a suprise today by gaining strength after various announcements and by CTA's buying (at least, alledgedly as reported by TTN), and it seems it may continue to gain across the board in the short term. Can be seen technically on the USD/CAD chart as H&S completing right shoulder on the daily and 1hr chart. .
I have been documenting this trade in the PF for weeks now. Here is the scenario I had expected to play out, and so far it is on track to keep going(next stop breakout and pullback chart 1)
Chart 2 was my original chart. I think this is a good pair to have on the old watchlist
I don't like to play in the tight spaces so i have yet to profit from anything. But I am waiting for the breakout(if it happens), and will act accordingly :
I've come to the rather dramatic conclusion that Gbp/Chf is about to fall off a cliff in the coming days. It is what I feel the price action is telling me. There is no particular setup just a gut feeling from watching it move very closely over the last few weeks. Hope you are all well and sorry to disturb
How do you guys manage a trade when a reverse signal appear? Do you add more lots or take profit?
I have long GBPUSD @ 1.9646, SL is at 1.9739. I have taken partial profit for this pair, is now letting it run. I have attached the chart.
On the other hand, looking at the chart, there could be a correction after the rally or even back dwn further.
Under such circumstances, what do you do?
Do you close the trade, or ignore the short signal and wait for another signal to add on to ur holding? (I thought of opening another account for such situation, but currently i only have one live acc which doesnt allow "hedging")
Hope someone can share your trade management here. Thanks!
cheers.
I would take profit and even consider close and reverse depending on how you trade.
I personally treat each timeframe independent of one another. So if I had a long GBP from a monthly chart, then I wouldn't allow the daily to change my thinking. But If I am long on the daily timeframe, and a reversal signal comes, I move my stops to under that reversal bar(in this case under the pin), to lock in profit or reduce risk.
Breakout!! Do do do di do da do do do di do da doooooo....
PullBack!! Do do do di do da do do do di do da doooooo....
Woooooooooaaaaaaahhhhh.....
....Price React!!! Do do do di do da do do do di do da doooooo....
How's about this pin bar. Shape looks good, but I'm not seeing any confluence. Nose is huge and would require a massive stop loss to put one at the bottom.
don't forget stop size just changes your position size. Your Risk per trade is still the same.
Guys I have a problem...I draw too many PPZs, I have weekly and monthly pivots plotted on my charts, and am a fib retracement maniac! Any advice on what to draw/not to draw? Horizontal lines are everywhere
We all go through this, just stick to the really obvious ones for now(Major ones). If you decide to add minor PPZ and such do that after you become good at the major ones.
ok so are you waiting to after the second eye bar, if not how do you know that its going to be a pin bar?
Sorry for this newbee questions
Don't worry too much about the second eye. The most important thing is the left eye. We want the pinbar to be within the prior bar(and even nicer within the close).
Here is a chart. See how we have the pinbar and then the next bar breaks the low of the pin at the red X. We would have a pending order to go short on the break of the low. So we don't have to wait for the right eye to form. We go short during this bar.
Hey Mike
it helps a lot, its always like this in the beginning of a learning process...... lot of thinking back and forth
Thanks so much,
Yep it just takes a lot of time and dedication. Just think long term and realize it is worth however long it takes you to figure this whole crazy game out.
Sorry I am asking the funda question again, just to confirm.
When you say pinbar to be within the prior bar, you mean the open and close of the pin bar should be with in the close or high of the left bar. right?
Thanks
TradeStar
Yes this is correct TS. It is even better if it is in the prior close. Sometimes the close is much lower then the high. I prefer them within the previous bars close also, but I will trade them either way(of course depending on location etc)
That is the thing about seeing the bids and offers it is very useful when you come into one of J16's key pivot levels.
Before I worked for a firm I had no idea that the level would hold until I saw a pin bar off it and then I knew it had a higher probability of reversing at that price. But now I can see how all the market players are positioning themselves.
On average you have around 80 contracts on the bid or offer for the euro so if I see 250 suddenly offered at 1.5500 I know that the market might come off because there is size coming in that will take out a few of the bids and push it down a few pips.
This, combined with the 1 pip stop, gives those in the direct market an edge. It's not 100% reliable because people spoof their size - much like bluffing in poker - but it is a good indicator.
Anyway, I know this thread is about price action but it is a good thing to know a little bit about market mechanisms.
I can see now how easy it is to do things like hunt stops. Often you don't even need to buy anything. If you stick some huge size on the bid then other traders will get infront of you because they know if your size is hit the market will move. That way, they do the work for you. They push the market to a key level and then you pull your order out and they have to cover their longs. All the amateurs just got screwed over and all from a good bluff.
- yeah most large orders are iceberged but good information none the less
The 365 EMA keeps cropping up in this thread, so I'm assuming it is one of the better MAs to use with price action, can someone be kind enough to explain this in a bit more depth?
Thanks
This is an EMA james recommends. He said he learned it long ago and he ALWAYS has it on his charts along with the 150 ema.
The idea is to look for PA or pure touches at these EMAs along with other confluence
If you sell short on the break of the pin bar and put your stop above it, you expose yourself to a large amount of risk.
You can cut your risk and increase your profit by waiting for the high probability turning points.
.
I know what you are trying to get at wiz, but you never expose yourself to large amounts of risk if you are properly position sized.
You expose yourself to the same risk if your stop is 10 pips or 1000 pips if you used a fixed % risk. 1% per trade, is 1% per trade.
So you aren't exposing yourself to more risk, you are simply taking on a smaller position size if you place your stop above the pinbar. Likewise if you can decrease your stop you are increasing your position size, but your risk is still the same.
Just thought I would clarify it b/c the new traders associate stop size with too much risk, because they do not position size right. If you do not have the flexibility in position size(then you need to find a different broker, or not have the constraints put on you, IE by your prop firm lol)
Maybe wizard means when you are trading with a fixed amount per trade (10 Lots etc ) and if you get in a trade on the retrace, you would have entered at a less risky level in the terms of avaliable future Reward profit and a smaller stop, so you get a better Risk to Reward ratio, and not forgetting that the market has retested a level, accepted that level, and the trend has now changed. Gann entered on a pullback.
As far as trading based on % of your trading account, i couldn't agree more.
Like I said if you are trading a fixed amount per trade, then you are really putting yourself at a disadvantage. Because then you have to adjust your trading to match your fixed amount. Instead of adjusting your position size based on your stop.
That is like people who see a daily pinbar that has a 200 pt stop, enter on the break, but close the trade if it goes -50 pts on them because they don't want to lose more then 50 pts. When in reality you just adjust your position size to your stop size.
It is a whole different topic of looking for a smaller stop size to increase your position size. But it should never be the other way around that you decrease your stop because you can't adjust your position size. With the granularity out there now especially
A lot of what wiz is probably posting has to do with trading at a prop desk. Where they don't allow him to position size up. That is just not the reality for us retail traders, which is what 99.9999% of the people who read this thread are.
Yes, couldn't agree more, like I said in previous post Mike.
Different styles of trading for different people, as long as the risk is controlled along with a good % accuracy rate trading set up, then alls well. I understand you are here to back James' Trading method, but there are other successful trading methods too which use fixed trading entry levels successfully, don't forget that once the trade is executed there's nothing to stop the trader from scaling in and out, taking partial profits at certain levels etc.
I am not here backing anything but smart Money Mgmt lol
I trade different then James, and everyone inside the Private forum will tell you that. But the idea that you are taking on too much risk based on where your stop is, just isn't true. And a different successful trading method wouldn't be looking at it that way either. Risk is still risk, no matter what your method is. If you want to have a larger stop well then you need to reduce your position size. I don't see any other argument. If you don't ever want to reduce your position size, well then your "system" has constraints on it and now you must trade within those constraints.
Taking partial profits scaling in and out is all fine, I really think you are running off on tangents now as this isn't what the point was. I have a system that has fixed s/l and tp levels. So I understand aspects of different style.
But the most common error I see and receive messages about is. How can I trade that weekly pinbar my stop will be 400 pts. So let's get the right info out there for those that are not familiar with position sizing and MM. If you understand your risk then that is a different story, but based on the amount of emails I get, it is a common problem(understanding position size that is)
now the way I actually reduce my risk or exposure once I am in a trade is to trail my stops.
So for example on the euro pinbar, since this is a counter trend trade, I will move my stops quicker then normal.
So my risk for the trade was 1.5% and my original stop was above the pinbar. After todays close I will move my stop as per the picture, which now cuts down my risk. This is how I always exit. I always trail my stops in order to cut my losses and ride my winners. With the trend, I try to ride winners more and against the trend, I am less lenient
There are 1000 ways to skin a cat, as well as trade. Just find what is most comfortable for you as a trader.
I have been following this thread for quite some time and now decided to participate. Let me just say THANK YOU to all of you who are taking your time to help us here!
I prefer this method of trailing stops too. My question is: If a PB on Daily is activated (as in this ?$ case) you trail your SL on high/low of the daily bars. What if you entered on activation of weekly PB, would you still trail your SL on daily high/lows ?
Would there be an exception when you would use H4's H/L as stops?
Hey bee
Good to see a new poster
For me personally I trail my stops as follows
If I am on the daily and weekly timeframes, I only exit on the same timeframe. So if I enter a weekly trade, I do not move my stops till the end of the week. Same with the daily. My stops are only based on daily movements and they happen at the end of the day. This prevents me from being emotional about my trades, personally.
For my 4hr and 1hr trading, I often trail my stops one timeframe under, as my trigger entry is often one timeframe under.
This is how I do things, and I don't just trail one bar back. I use a combination of trailing techniques. So I don't always put my stop behind the last previous bar, sometimes it i s the last 2-3, sometimes based on consolidation, PPZs, volatility based etc.
wiz, there are dealing desk and ECNs...there are many options out there for a traders in spot. One just has to do their due diligence. There are advantages and disadvantages to every market, broker model etc. The list is huge, but certainly one can be a serious retail trader. The biggest traders I know are all trading spot forex. They are just smart about who they give their money too. And this is not a knock to futures, but I couldn't let you get away with that comment : As for hitting it big time, the liquidity in futures is not even comparable to spot
But my bad for getting this thread off course, if anyone is new and needs more info they can do a search or PM me
can we consider this as a DBHLC even if the highs are not equal, but it formed right at a down sloping TL?
Nope in order for it to be a DBHLC the highs should be equal or within a few pips depending on the timeframe
In answer to your last question yes those are pinbars, and of course they are against very strong trends. They haven't failed yet, but if they do nothing you can do about it. It is all about getting the probabilities in our favor, and just make sure to use proper MM
Gbp/chf
looking to short this one once it breaks yesterdays low, any thoughts on this?. I'm still pretty new working out these set ups so any help would be most welcome.
Cheers.
Hey Siam
The PA setup here is an IB on the daily + a TBL. So a break of an IB and a TBL can be used for trend continuation, and in this case gbp/chf is clearly in a downtrend
first I?d like to say thank you. Your Post been very useful and I appreciate your examples with pictures and stuff!
Today I tried to sign up at your website but unfortunately just Creditcard is accepted. Could you mail me for this sake? (2natic@gmail.com)
I also have 2 question if you dont mind
How did you setup the EMA? Median, Weighted?
Is the second indicator the PPMA?
Keep up the good work and thanks to all your posts.
God bless.
Hey suspect
The indicators are both EMA. So for mt4 simply add a moving average indicator and make sure it is set on exponential. One with a 365 and one with a 150.
I think you're doing the smart thing for now Saskui. The trend is always your friend, as you say.
Drawing in Pivot Zones has supercharged my trading even further.
Why not draw them in anyway and learn to trade them on demo?
It's worth the effort, as they can help you understand the beginning and end of trends as they slowly unwind and change directions. In my opinion. :
PPZs can be used so many ways in trading, I agree that they are extremely valuable. I tend to use them for managing my trades once in, as they provide great areas to move stops
what a great people we have here...sharing & learning...price, support resistance, fib retracement & confluence on the daily/weekly rules the market.
beside this great lesson, what is the best entry technique do u have guys ?..is it same approach for all price action or different approach between pinbar, beob/buob, dbhlc/dblhc or we go to lower timeframe to find something ?
care to share little bit.
thnx
Hey CP,
Entry like most other aspects become a personal thing.
There are a variety of ways to enter PA. The most common is waiting for a break of the high or the low of the price bar. Others like to enter on a retracement of the bar. For example on a bar such as a Bullish outside bar, some will wait for a retracement(50%) of the bar to enter. Thus giving them a smaller stop size and a bigger position size. Other will enter right upon the close of the bar.
As you may have guessed there are advantages and disadvantages to the different entries. For example entering on a retrace may end up being to premature, and the bar may never even break. But an advantage to this method is the ability to swing a bigger position do to the decreased stop size.
Eventually you will find what is most comfortable for you. Generally the more conservative you are the more likely you are to wait for a break of the bar.
And yes you can even drop down in timeframes to search for an entry. Although this complicates things a bit more IMO, and is not necessary to be profitable. But some are more comfortable using PA from a larger timeframe, and use the smaller timeframe to time the entry. I do this with my breakout trading.
from the chart below, we have 2 beob at two different time...both of them give very good impact bring the market downside.
what is the best way to enter the market after we have this price action ?
thnx
Hey CP,
you posted this just as I posted my answer above this one.
But again generally you will find most waiting for a break of the low of the bar. So you would place a sell stop order. Others might choose to wait for a retrace of the bar. In the case you would have a limit sell order at some determined area. Or perhaps even begin to search for PA on the lower timeframes for a sell.
When starting out I suggest trying all the different ways to find what is most comfortable for you.
Hello, do any of you guys have a list or a link for the abbreviations used here (ok, I know dbhlc )?
TIA,
Pedro
Hey Pedro
I assume you are referring to the Price Bar abbreviations.
Pin = Pin Bar
BEOB = Bearish Outside Bar
BUOB = Bullish Outside Bar
DBHLC = Double Bar High Lower Close
DBLHC = Double Bar low Higher Close
TBH = Two Bar High
TBL = Two Bar Low
IB = Inside Bar
I4B = Inside 4 Bar
BEB = Bearish Bar
Bub = Bullish Bar
NB = Neutral Bar
Might have missed a few this is off the top of my head, if you have any specific ones let me know
I've always traded with candlestix and know and trust the patterns well. Are there specific advantages in switching to bars and learning the james16 method- anyone?
Thanks
Hey shady,
you can use candlesticks or OHLC bars as James does. The information is EXACTLY the same. It is just a matter of preference. Although a lot tend to switch to bars because it makes it easier to learn alongside the material presented by James. But there are a great deal of traders that use j16 material using candlesticks. I often switch to candles out of boredom
I am going through these old postings, and came across this one by your, pretty interesting,and not for sure if could have your comment on it? if forget the last bar, we have a breakout of a TBH long, immediately followed by a bearish Pin Bar. in this type of situation, how do you usually plan your trade with all of these conflicting market information? I copy your chart below
Hey krue
If you haven't already taken profit on this trade, then I would move my stop to under the pin. This would reduce your risk and cut your loss if it broke down again.
Well said Swami, and I know there are going to be hundreds that need to hear this advice. James doesn't just go around saying trade higher timeframes first, use proper money mgmt, and treat this like a business for no reason. He says it because these are the steps that a trader needs to take in order to put themselves into the right position to last in this business.
For those that have found light in what James teaches regarding PA, you will find just as much light in his words surrounding all areas of this business. Listen to it, and put it into practice starting now.
I am reading this post of yours now, I thought MBT has very low commission, probably I didn't get a clear picture of their fee structure, but, my impression is they offer very competitive pips, as far as I can remember, for usd base, only charge 1/2 pips, probably I misunderstood what they are telling, it will be nice of you if you can let me know I mis-read something.
the other thing I am wondering is the trailing stop, I noticed they have this function in their preference setting, do you feel any difference than using MT4 ea? otherwise, that will be wonderful, as I am having an account with MBT, of course, blow off already,hehehe. I will remit some fund someday when I am ready for another try. thank you in advance for sharing. best regards
Hey Krue,
Yes they have the highest of all the ECN models out there(That I have seen or would trust). 10$ per 100,000 on usd based. Check out the website for a better understanding.
As for trailing stops, I don't use broker trailing stops. I trail my stops manually. I wouldn't ever use an mt4 EA. Because the EA is client side not server side.
I don't want to derail this thread too much with broker questions, contact me via PM if you have more anytime.
Quote:
Originally Posted by bee24
Hi/Lo!
I was wondering what's your preference on entering pin bars. Sometimes second eye does not retrace to certain fib levels, in that case it's more clear where the price will go.
1.Do you prefer to enter on a brake of a pin for a certain amount of pips (let's say 10 pips...) ?
2.What about entering on retracement ? Do you always enter at 62fib
or do you prefer other levels ?
If our entry is on 62 fib retr. then we have reasonably small stop loss. In other words, you have 3:1 chance to at least brake even (you brake even when the second eye actually brakes the hi/lo of pin). Meaning you can get stopped out 2 times out of 3, and make it to brake even on 3rd try.
Does someone have a journal on trading pins ? It would be nice to see the statistics.
Hey Bee, you will find that all these questions are up to the reader. For trading a break of the pin. People use anywhere from 5-10pips generally. It also depends on the timeframe. I would use a 5 pip break on the 4hr, but a 10-15pip break on the daily timeframe. Also it depends on the pair. I would use a higher pip amount on a pair that has a larger range/volatility such as gbp/jpy.
As for playing on a retracement. This is again up to the trader. And why a lot of back and forward testing needs to be done. The most common I see used is the 50% level. But again you can use any level if this is the route you choose to take. As well as a lot of people use the high of the left eye(bar to the left of the pins high).
Just because you enter on the 61.8% retracement doesn't guarantee you any kind of probability of breaking even. That is something you need to back and forward test to get those numbers.
As for journals with pin trading. The james16group site is loaded with them.
Just came across this post of yours,and happened to have a chart I think probably has something similar to what you were drawing. I attached the EURCHF daily for your advise. for this one, I have been wiped out for a couple of times, look at the breakout of IB and the trendline for the first trial, then, the standard Pin Bar no ideal location though as its retracement of test, now, I am considering another try,but, a little bit scared by so much fake signals.not for sure if you could lend me some of your insight to guide this potential trade through?
as always, I thank you for all the help
Hey Krue
I only trade breakouts with the trend. So that would be counter-trend breakout, which is a bit more aggressive. The IB, on the first breakout that sits on your TL never triggered, and the PB that did trigger is still valid. Although it is a bit up in the air. That is why I always trade with the trend on breakouts. Having the trend at your back ups the success rate greatly once you get used to it all. So I would stay out of longs on this one. If that most recent high breaks again, then I would be more likely to search for longs.
Anyone else take this and getting beat up as badly as i am? I have a sl at 96.00 and i think it will be hit. I don't know why but i do very poor at weekly tf's. Seems like days work out alot better for me.
edit. don't know why charts don't show up when quoted but this is referring to the Aud/Jpy weekly pin bar.
Although everyone has their own interpretation of PA, here is something I try to stress
When picking out pinbars, look for the ones that are not in traffic and create space away from surrounding price.
If we look at this pin, we can see it was on a sharp pullback but there was a lot of price(traffic) in the area.
Instead if we wait for price to find an area in space away, it usually makes for a better pinbar.
Thanks alot bro for your guidance. =)
I am having difficulty understanding his fibs in his initial charts. In some chart he has placed 2 fibs over lapped on each other and explains the 50% fib retracement. I am finding it hard to interpret. It would be great if you can clarify it out for me if you have time.
THANKS once again!! =)
Babz
Hey Babz,
As you work through this thread you will get a better understanding.
This concept is called confluence using fib retracements. The idea is when two or more fibs line up we have an area of confluence(or an area where price should react more strongly). Aka we look for PA at these areas.
Funny you ask this I just made a video for this for the site last night an intro to fib retracements and intro to confluence for the beginner section.
Just saw your video on intro to pin bars... Didn't realise it was you until I came back to this post to evaluate that failed trade. The video was really helpful by the way, I wasn't sure I understood the comment you made (quoted above) but it's much clearer now!
I am planning on joining the group when I finish my exams, was wondering if you've done any more videos available on the members area? If not you should! I like your style! Plus you expressed a desire to do a video on breakouts I'd love to watch!
Anyways, keep it up man!
Carlos
p.s. - trade the cherry!!!
Thanks for the feedback Carlos, yes I have a bunch of other videos. 12 all together so far with the beginner videos and my material.
hello everyone fairly new to this thread does anyone think these are possible shorts?
CHFJPY - DBHLC
EURJPY - DBHLC (not quite a signal yet bit still have 1HR till next daily bar)
using WHC MT4 platform
your comments please.
\
Hey woolley welcome to the j16 thread
Here is a chart of chf/jpy. I would have a lot of trouble pulling the short trigger because of all those bar highs. That is fighting into a lot of support.
As for eur/jpy this is not a dbhlc. For it to be the close of the bar, must be lower then the previous bars low. Common mistake.
also a follow up to the eur/jpy. We have been trending upwards. And found some resistance.
This is where I would look to play a breakout and for that resistance to turn into support. If it breaks down, oh well. But if it breaks up I will be watching for some PA on a pullback
I understand the Highs that are providing the strong support on the CHF/JPY.
My question is, wouldn't the DBHLC be the PA we are looking for to break that support?
Meaning: Bearish PA to break Support and Bullish PA to break Resistence. (with allowances for retrace before the break, of course)
Thanks,
Jim
Hey Jim,
Yes it could definitely be the hint for it, but I like playing OB, DBHLC, and pinbars at extremes that are not fighting into this(part of what I call creating "space"). It helps especially for the way I tend to exit trades as well. So when I see that, I would rather wait, or look to make a play on a lower timeframe.
With chf/jpy finally breaking out long after a lot of choppiness, that would be keeping me out from grabbing in short too. When I take a daily trade though, most of the time I am holding them for multiple days, so that also will change my opinion. I like things to flow out.
Again like you have mentioned so much too, it is all personal. But if it does stall out, it wouldn't be a surprise with that down there.
If chf/jpy makes its move down, we can see we have another large area of support to look out for.
This is why IMO it is safer to watch for a break long as there is less resistance on the way up, as there is on the way down. I trail my stops, and when there is resistance I often get bumped out before I can catch a move(this is a personal thing).
But I think we can all see how keeping things simple is so important. This is not magic, this is just the phenomenon of support and resistance.
Watch these levels no matter which way you are looking to play
Here is a similiar situation for those wanting another example of how I trade.
Here we had a BEOB, or DBHLC but there was so much support we were fighting into that it makes the trade a tough one for me to every take(note* if these occur at extreme swing highs they can be a beautiful thing).
So instead I am geared up for a long move, which of course things don't always work out the way you want, but I am always looking for these big areas to hold, rather then break(when things are trending better one way that is).
Mike
see Jim, you ask a simple question and I rant 3 posts doh
Which one has the higher probability, the retrace or the break?
I guess it is personal decision.
Where should I put the SL, is it the a few pips above the DBHLC bar?(it can be quite a large SL in many situations)
No one can tell you for sure which has the higher probability unless they take your trades. But by the nature of playing a retrace(an unconfirmed bar), you will be stopped out more and thus have more trades then playing a break. Again by the nature of the technique. But on the flipside playing a retrace you have the ability to have a larger position on, thus making up or even doing better then playing the break. So it is going to come back to your comfort level as a trader. Playing the retrace would involve me trading too many bars and thus I wait for the break. I am never worried about the stop size, because if the bar is in a prime location, that would mean it is justified. Remember to always position size accordingly. What kills most people, is they put on 100pt stop and then see 10pips and get scared to hold it. To me everything is relative. So yes you can play a break a few pips(depending on what you define as a few) below/above, and your stop a few pips above/below respectfully.
On a more general but related note.
The best advice I can ever give with PA is too wait for the cherries. Wait for the best setups. It takes all the thinking out and they really are the best out there! Remember every price bar has information, but we are look for the tip off bars. The bars whre we can actually understand the information and the importance of that information. If you try to trade every formation you see, you will go crazy(believe me and many others who have before you).
If it doesn't get easier then this I don't know what does. You can go an add all the fibs, TLs, etc that you want to this chart. But the reality of a great price action bar, is you don't even need them That is exactly what my chart looks like on my screen following this trade. James is the man!
Thanks for the detailed answer. One more thing come into my mind. It related to pin bars.
Let say the pin bar close at the lowest or highest point of the bar, no "tails". You cannot play the break of the bar. Do you enter trade at the close of the bar?
I think I get what you mean, but there still has to be a break. So even if the lowest point of the pinbar closes at say 1.5456, I would still wait till we hit say 1.5450. Because whenever price closes, that is the lowest point. So if the low of the pinbar is the low for the bar, I still wait for a few pips below that low.
LOL I literally just got an email from james(group email), about the eur/usd 4hr pin I just posted. Even the big guy loved it. To quote him (hope you don't mind jim ) "I get asked a lot from new people what is an A set up? I always tell them the same thing as those that have been doing this for awhile. After a little practice and demo they literally jump out at you."
It is the truth! if you don't want to listen to me listen to the big guy himself.
I've considered joining the james group even tho I don't know a pinhead from a pinbar.
I do know a doji from a shooting star. How often do these email come out. They must surely be winners!
Hey ShadyChars,
You don't even need to make a switch from candles to bars. Once you understand each price bar you will be able to identify it on either chart. Many members use candles over bars. We just use different names. For example a hammer is a pinbar, and a doji is a neutral bar(if i remember my candle names). See below for a candle chart with a few examples. Remember the information on a candle chart is the exact same as a bar chart(OHLC).
James sends out emails weekly sometimes a few times a week as his time allows for it, and they are always top notch examples.
When trading less than daily price action does time of day have to be considered for volatility to drive the move or is a setup a setup even in the off peak hours?
for me personally if it is a 4hr chart, I will take the trade anytime. But for under 4hr setups then time of day matters for me. So if I am playing a 1hr breakout with price action I will only take it during euro/early US hours
Do you consider a "break" an eye for the third bar and you play everything thereafter? Unless its at what you consider a swing high/low with confluence.....
R
a break is simply when the high or the low of the actual pin bar itself breaks
My only concern was that the rest of the pin in comparison to the nose was too big i.e. it's too close to a neutral bar. What would you say in regards to that, Mike?
It is ok that the open and close are the same. A neutral bar would be if the open and close was more towards the middle of the bar. This one had it's open and close withing the previous bar(on your chart). I agree the nose wouldn't hurt to be bigger. My main concern if i was trading this would be all the choppiness above it. Creating a rough road ahead so to speak
me and bundy have very similar interpretations of price action
here are the type of trades I watch. We have a uptrending usd/chf. Stalled and found good resistance at the 1.06 rd number, and a breakout formation is forming. Then we can watch for a breakout and pullback, and look for some confirming PA. These can be some great R:R trades.
Anyone looking at this? 4hr PB off the 50 fib...Mike is there enough space to the left for you? take care, Raz
Hey Raz,
you probably know I am ultra picky with space, so this one wouldn't qualify for me. I would rather see it come down some more and produce a pin at a nice swing low. All those bar lows to the left are what get me. But that is just my opinion
I didn't understand the "space to the left" concept at all ?
Is it the same thing than the "traffic concept" ?
Many thanks for your help
Happy trading
Cheers
Angel65
Hey Angel,
yes when I and others refer to space, it is similar to the traffic concept. I have my own take on opinions on it compared to others of course, that is the beauty of PA. I also thought I would mention that the only time I personally don't worry about traffic, or space with price bars, is when I am looking for a pullback after a breakout.
Okay, if I well understand "The Space" is the distance between the set-up, the pin bar in your example and the NEAREST resistance, in fact the OLD support.
If you take the example on the chart below, you didn't qualify it due to the lack of space or room. I mean that the high of the Pin bar is at a minor PPZ (the white horizontal white) as a resistance considering the low of the left preceding bars : am I right ?
Last question, does a minimum space require at least 1:1 R/R ?
Thanks for your attention,
Have a pleasant weekend
Sincerely
Angel65
Hey Angel,
The reason I considered this bar in traffic was all the bars to the left. It was created in a sideways range. What this means is that the pin nose shot down, but the actual bar itself was created in the same range. With that said, if you did play this one, which is not what I consider an A trade, it did stall where you would have expected it. So the pin still worked. As James teaches you would have at the very least got your stop to b/e at the highs where the arrows are.
As for Risk:Reward, by the very nature of how picky I am my setups usually have great potential, that is why I am picky. But I never directly say, this has 1:2 or 1:3, I trail my stops. So my reward has no cap to it. I like trailing stops(manual ones), because of the ability to stay in a trade(if it is a good one, hence the strict criteria), and the ability to cut your losses, but still giving things a chance to breathe.
i just wonder whether it would be a good idea to take the GU daily pin bar now , with the price having moved 70 - 80 pips in the direction....
no you certainly don't want to jump in this late. The idea is to buy when the high of the pin breaks, and put your stop below the pin(or some other level determined by the trader). By now the trader is already thinking about where to take profit/reduce risk exposure on this trade
Keep an eye out for this Weekly PB on E/U. Not necessarily an A trade (tail could be longer), but it sure looks nice on a support level in an uptrend.
hey Marsh, that bar is actually a neutral bar(a bar with open and close near the middle of the bar). These bars indicate indecision. Which could mean a move back up, but generally these aren't bars that we play(james16 material).
I think Mike is saying that although it might be a pin bar/hammer when looked at by itself, it is not one in context i.e. it does not protrude from the previous bar.
yes I was referring to HIS chart that he posted. The bar I believe he was referring to was not a pinbar. The open and close were not contained within the previous bar. As well as it was stuck in the middle of a lot of traffic. Also it looks like he entered right on the close of the bar, which is a much more risky. A pinbar is NOT valid until the high/low breaks.
That is if it is the bar I believe he is referring to.
Been lurking for awhile, traded a bit in Forex and years ago in the Futures Market. This question goes out to those that have done both.
What should I trade Forex or Futures, and why? Having a full time job my time is either early in the morning or in the evening Florida time. My goal is to, when ready and making profits on Demo, yup it is back to Demos, is first to replace my income with a cushion, and go at it full time. This is a really great group and I value your thoughts and input.
Thanks,
Jimmy K
\
Hey Jimmy,
Due to your commitments, and like most people James recommends trading only the daily/weekly especially in the beginning. This means you only need to look at your charts once a day, place your orders and you are done. As for forex vs futures. Why not both,. This will give you more markets to look at and let you cherry pick the best trades on the daily/weekly timeframe.
James says if you can't trade the daily/weekly you shouldn't be trading lower then that. So it is a progression to the lower timeframes when and IF you ever decide to leave the higher timeframes.
If it closes above your top red line it will act as a resistance and good place to go long after retrace given proper PA
.
p.s. some of us actually went long when DB formed on 4hr with small stop
that is a hell of a trade mark , i got in a small cad breakout way later today
To me this is a good example of some failed trades. That SECOND PB looked like an A trade, and even came up, broke the high by 2 pips, before falling down hard. A conservative play where one places a limit buy above the PB high and a stop below the low would have just literally bought a high and sold a low. At least with the FIRST PB the nose was not broken, but still...
Any insight as to legitimate reasons to stay out of either of those would be great, or are these just "one of those trades"...
Hey
If you look at the next bar after the pinbar, neither broke the pinbar low(in first case) and high in second case. A good deal of us(if not most) cancel our orders if the next bar does not trigger (the low or high). A pinbar is not valid unless it does break the low/high.
but if it form another price action, like a IB, don't you trade it?
thanks in advance.
Not me, especially not the 4hr charts also. To many IBs on the 4hr charts. Some do, I don't personally. I like to see momentum(follow through) with the next bar
hello room ithink i locked on this one...it's going up EJ 1 hr
Hey Urchman,
I think you got this confused a bit. We want the nose to be longer to the down side for it to be a Pinbar. The long nose is going to go opposite where price is actually headed. In this case this is really nothing more then a neutral bar.
here is an example. With a long nose pointing up, this means were looking for price to go down. Also notice that the bottom portion of the bar is small.
What's the best way of playing this?
a) set a sell stop 10 pips from the bottom of PB and s/l at the top of pb?
b) wait for a 38 retracement with a stop loss above the 61.8 retracement?
My question is, if I were to go with the "b" option, do i need to wait for a certain PA at the retracement or just place a market order at that retracement blindly?
Please let me know what you guys think. Thanks.
Regards,
y.caesar
Hey caesar
If you choose to play a retracement you can put a blind sell order at any level you are comfortable with. That is all up to you. Some put the sell at the left eye, other at a fib level. Some will look for PA at the fib levels. There is no right answer. These are different variations, and depending on the traders style and how aggressive they want to be. Their are benefits and drawbacks to each and every type of entry play.
Wish there was more of a definitive answer, but just demo trade the different methods and find your comfort level.
Pinbar and triple top on 4hr eurjpy. Against the daily trend, so be careful.
Hey Simon,
That third bar is a neutral bar, the open and close are located in the middle of the bar indicating indecision.(first bar is neutral, second is pretty neutral also)
The great thing about trading PA is that you get an understanding of how the market moves. Once you know that then you just need to know WHAT to look for and WHERE to look for it.
You can take this knowledge and apply it to the markets you are interested in and the time frames that suit your personality and skills always remembering that there is often a big difference between what a person wants to do and what they are good at doing.
Structure is something that you can enforce yourself with discipline. Start with the basics and progress. If you ever find yourself confused take a step back and strip things away until they are simpler.
I can see a nice pin bar forming on the daily of CHF/JPY. Since I am still learning about pin bar and pa I am not too sure if this is a tradeable pin bar, any comment is highly appreciated.
Hey Shark
If we did close as is this would be a pinbar at a swing high. Of course still 3 hours to go so i tend not to check the daily until near close time b/c much can change.
I have posted a chart of the problem area with this pin. Since we are coming out of a consolidation sideways area the blue box area would be a potential problem zone(all the bar highs). Doesn't mean it isn't tradeable. Just something to look out for.
According to this definition, I don't think that the last bar on u/j is an I4B - it's just an IB. Is this correct? Just trying to get all of my PA terms straight.
Thanks,
Brian
Hey Brian
It technically has a smaller range then the previous 3 bars. Not by much, but it does.
Hello. A weeny question if I may:- regarding pin bars, must I wait for the second eye on the right? Or would it suffice to see the first eye and a nice protruding nose to say yes, it is a Pinocchio grinning!?
Lemme tackle some of the questions below see if I can shed a bit of light
Quote:
Originally Posted by fxgrinder
hi posters and lurkers ...
this brings me to some questions/need for clarification (a mere 12 questions after 11,000+ posts --- if i missed a post that would have answered my questions, please feel free to direct me there --- sorry for the length!!):
1. reference post #2831; mbq took the trade short, but it seems like that was driving into traffic or a PPZ? could someone please help me understand his reasoning for believing this was a high probability trade?
Had to go back and check this out. My style has somewhat changed since this date. I am more picky about my trades and my style is more structured. This post though, it was a 2 bar pinbar, first time back to the 365 after price had moved through. NOT a trade I would take now, but many would as a BASE system play
2. does mbq play every I4B as a b/o or only those that have the other supporting factors? i remember somewhere that he posted an answer stating that he will place 2 orders up and down and along the way, i'm not sure about whether these should just be used as more of a roadmap, play off a s/r level, or in the way mbq described When trading any Inside bar, I almost always have a bias now. For example looking for IBs on support to play long only. If you need an example let me know
3. as i read thru the posts, i would often cross-reference charts, or just visually try and spot examples on my own. i came across a DBHHC on the GBPCHF 4hr chart on 6/19/08 at 1600hrs (fxdd; 0000hrs = 2pm PST). can someone pls help me reconcile this w/ one of james16's samples in his 1st posts? (the price went south instead of north)
If you could post a chart as I don't have FXDD or someone else can check on this one. But you wrote DBHHC. There is no DBHHC. There is a DBHLC. Where the second and first bar have matching highs, but the second bar has a lower close then the previous bars LOW. And there is a DBLHC, where the first and second bar have matching lows, and the second bar has a higher close then the previous bars HIGH.
5. how many fib lines should be drawn to find confluence? and from how many time frames?
Confluence with fibs can be 2 or more. Sometimes multiple line up but even if you have just 2 that line up, that is confluence. But you can also have confulence with a Fib, and a PPZ. Or a fib and an MA etc. You should draw your fibs on the same timeframe.
6. there was some mention of monthly/weekly pivots being used by some traders. is there any value in the R1/S1 levels being added to the determination of PPZ? or does that just become a cluttered mess where it will freeze taking any trades at all? are the monthly/weekly pivot points treated as both support and resistance? I believe habeeb still uses major Floor trader pivots. You may want to ask him, or someone else can chime in here. IMO PPZs and simple support and resistance is all you need.
7. for TL b/o's, how many times do you wait for price to retest b/f you are confident it is or isn't going to bust thru ... or not? I personally play Breakouts as follow(simplified version). I wait for price to breakout of the TL, then pullback to the TL. So former support turns to resistance. Or former resistance turns to support. On the pullback is where I look for confirming PA to continue with the breakout. It goes with my conservative style. Those who want to play a pure break, some just place buy/sell stop outside the area, and others wait for a close outside the area.
8. i've heard mention of "proxy" pin. is this a bar that visually looks like a PB, but where the open/close is not contained w/in prior days price? Yes that is correct. And instead of using the prior days bar, you look for surrounding bars that the open/close still is contained within. A bit more advanced.
9. when a trade is going in your favour due to a good set-up and liberal trailing stop, but begins approaching a strong area of S or R, how do you manage? set a TP? TP immediately? move S/L tighter?
Most will move their stops, at least to b/e or take some profit off the table. I personally trail my stops till the stop gets hit. Rarely do I have price targets, or manually close a trade. This is all up to a traders style, play with both and find what is most comfortable for you.
10. ppz ... (no, i'm not going to ask you what ppz stands for!! ) how far back in time do you look to establish ppz? based on some example charts i've seen thru the thread, i think i am going back too far to find those s/r cross-over zones and am again creating a situation where i am not even taking an A set-up. i created a sample of what i am talking about with the gbpjpy ... (i've tried prtsc & 'saveas" method of pasting into my thread, but it's either too fuzzy or the top gets cut-off ... i must be doing something wrong .... hints?) Personally I like to zoom my charts out pretty far and look for the really strong obvious ones. You are going to have major and minor ppz. If I am trading longer term, then I zoom out more. But if I am trading more intraday, then I am looking for the minor PPZs and thus zoom out less. The reason for this is I am concerned with the "current" action in the market. If you are new to PPZs my suggestion is to just look for the really obvious ones till you get the hang of it. Otherwise your chart will be covered with them!
11. #11166: is this a more intermediate or advanced trade set-up? i see a lot of places below where price could get hung up (maybe this is my ppz problem --- see above) and doesn't seem to be at an "extreme" swing high ... (i have the same quandry about the recent usdcad trade many were playing). i can easily spot swing highs/lows in the past, but not so much in present time ... i think this relates to the trying to predict "bottoms", etc", but when it comes to when price is on the go, how do we know if we're at a swing point or not? I guess you could call this more advanced b/c you have to understand that market conditions. And being that GBP/USD was in sideways action, one has to not get greedy and move their stops quick. The idea is that where most traders are getting cleaned out in a choppy market, PA still works great. USD/CAD is similar. Personally I knew we were in a consolidated market, so I am going to be less lenient with my stops. And be quicker to move my stops up. I like to avoid choppy markets for the most part, their are pips there, but again back to my style.
12. is drawing a TL more of an art than science? i will see one chart with TL drawn from point A to B and another trader's chart has his/her's going from B to C, etc. if it is this discretionary, no problem; but if there is a more consistent way of approaching, i'd like to understand this better. Yes this is a very big and often heated debate. TLs unless drawn based on the same thing, are discretionary by nature(unlike Tom Demark TLs, which will be drawn the same every time). A lot of traders avoid TLs for this reason. They have their place in trading, but one must learn how to fit it into their trading, otherwise it can lead to a lot more confusion. So again I go back to I only like to draw the more obvious TLs that I believe many other traders are looking at the same thing. Once you start form fitting lines all over your chart, I believe you are straying from the simplistic natures of the markets.
okay .... i'm out. i am eager to begin my PA trading journey with you. THANK YOU FOR EVERTHING!! You found the right thread for it
What do you guys think about the Pin bar on CHFJPY on Daily at the moment, looks to be a pin at swing high that hasn't been broken for entry yet.
Hey Catch,
Just to clarify as this is a very common mistake and I still forget sometimes too. This is actually a BEOB. Since the low is lower then the previous bar, that would make this a BEOB instead of a pin.
Personally this BEOB is in traffic for me to play. For those that do play a bar like this One just needs to be quicker to move the stops and not try to get to fancy with it.
well
since u guyz are in a spreading m0de
What d0es traffic mean and how do i determine it?
And if the market is m0ving sideways the PA is insignificant?
Isnt it always m0ving bet ress and support?
L0oking back at my p0st it does l0ok like an exam
Have fun answering.
a picture is worth 1,000 words
notice price consolidating/ moving sideways. This pinbar is then in traffic because of all the choppy sideways movement. This is why we want them at swing highs and lows
i found this pin bar a just a few minutes ago on the 4hr and also has double bottom. what does everyone think?
Hey Syd,
That is more of a neutral looking bar since the open and close are near the middle. The Double bottom area makes it look better. But be careful, if you zoom out(why i recommed not to be too zoomed into price), you will see this pair in heavy consolidation mode.
p.s. anyone have a recent chart they could share showing me fib confluence? there was an earlier post by james16 where he states he will sometimes set his charts up in anticipation of price action which includes fib confluence. (i would reference the post, by alas ... it went into the vortex of my computer) anyway, when i do it, i end up with a mess on my charts and i'm just really struggling with the concept. thanks for any help.
Here is and example of Fib confluence. The 38.2 and 61.8 and BOOM it went with of course some nice PA to support it
good example thanks. here's one i tried for the eurusd:
have i drawn the fib lines correctly here? is it safe too assume there is no fib confluence here? (notwithstanding other factors)
Hey grinder,
You have your fibs drawn wrong. They must both go to the same swing point. So if you are drawing them looking for longs. THey must both hit the same swing high point.
So in my picture below, you have to swing low points. Point A and Point B.
They must both be drawn to the same swing high point which is marked by the number 1. This is because right now Point 1 is our current swing high point. Points A and B are both swing low points. Doing this lines up two areas of confluence.
well, i finally pulled trigger and placed some trades off the usdjpy, eurjpy, and gbpjpy pin bars from yesterday. so far, i closed 1/2 of all the trades at profit levels (approx. 100, 200, & 200 pips each); i also moved my SL to a little above b/e for all of them (using a 50% retracement level for the present move).
i'm stuck as to ways to manage the remaining halves. for instance, the eurjpy is at a level it was at before and couldn't bust through ... i'm thinking i might be happy w/ the remaining half of the position being closed out for profit here. the gbpjpy is in a similar boat, however, it has been higher than these levels prior to jan08. again similar for the usdjpy, but in that case, it's a bit more confusing since i don't have a lot of confidence in the u.s. (fundamentals aren't my thing, but it's hard to ignore the obvious).
in reading through the thread, there is much discussion about different exit strategies and how they are really up to the trader, but i was hoping to get a little feedback from anyone in these trades themselves as to how they see these trades developing from here (not asking for specific advice, i.e., "grinder" do this or that) to help me exercise good discretion and not just close them out based on my "emotions" based on the pips i see clocked in on my account so far. (hope my run-on sentence makes sense ...)
thank you in advance for your kind responses.
This is really where you have to develop as a trader yourself. There are a lot of different ways to handle your exits. Are you looking to hold these longer term/ shorter term etc.
One such method is too look for the PPZ to place your stops. An example being. If gbp/jpy can now push through this resistance, and use the resistance to flop into support. You can now tighten your stops and trail using the PPZ. And then it is a clear shot to the next resistance. But many people can't hold for this long. So then is it best to really tighten up here, take your profit, and wait for a new entry? Well all the above can be right. I think it is very important to know what type of trader you are. I am a trailing stop trader(as those from the pf know), I have a low win rate, and a high R:R. But many more are high win rate traders. Find your style through testing now. And then when you find a comfort zone, just keep working on that until it becomes your own.
i am ofcaorse still learjning to fully trust certain kinds and levels of PA indications and i need to find ways to take full advantag of a trade maximize my profits and reduce my losses if any. and that drives me to my question to mbqb11, since i trade off the daily was a 35 pips stop ok (specially for Gj and EJ)? and am i being too harsh to complain when i already did make 45 pips out of a trade (even though it was avaiablke to give 4 times of my current profit)?
Regards,
Ghous
Hey Ghous,
I personally don't believe in a manual trailing stop. That is I dont really believe that selecting some number like 35, 40, 50, is the right approach. Now this doesn't mean it can't work. I just don't believe in it. I personally manually trail my stops. That is I use price action and support and resistance as my trailing stops.
It is hard to break down in one post, but in the PF I explain one of my methods of trailing. And I use X amount of previous bar highs/lows, to help keep me in the trade. Now there is a lot more to this. For example trailing your stops does not work good in choppy markets, so a big part of it has to do with entries. There are other factors, but hopefully this will give you a bit more to think about.
So should you be happy/unhappy, I nor no one hear could answer that. Because that one trade is irrelevant, it is your overall game plan, and the long run of trades.
can you please tell me if i have located the PPZ on the usdjpy correctly? seems like i might be missing a level above it using prior resistance?? thanks.
hi mike ... can you please explain what you meant by "intersecting with MA's" ...
"If you look for the most practical places to be drawing fibs, TLs, intersecting with MAs...where OTHERS should be doing the same, you have a much better shot. " [for context, see, post #4028 on p. 101 (using FF's 40-pg viewer setting).
i feel like such a pest about these darn fibs, but there seems to be a strong influence here for trading PBs, etc. so i'm trying hard to figure it out so that i am one of the "others ... doing the same ..." (if you catch my drift).
thank you sooooo much.
Hey Grinder
Basically we are looking for confluence multiple factors that support our decision making process. For example (this is a 1hr chart, but it is the only chart I watched today sicne I am going on vacation tomm).
We have price retrace to the 23% fib line and the 61% of the smaller swing points, we have support(marked by the horizontal), and we have the 60ema running up on price. So we have multiple reasons(confluence), in one area. Now in that area, we had a PB(marked by red arrow) under the most recent swing low point form. The price action is our trigger, our confirmation, that the supporting confluence/area is a good potential area to look for a trade.
Hopefully this is a good example (same ideas are applied to all timeframes)
cont'd here is the daily view, of the recent daily pinbar
We have support that was previous resistance. An ascending Trendline. 60ema meeting up with price, and a retrace to a 23.6 fib. This is confluence. Pinbar is our confirmation.
Now also look where price is stuck out, the next area of heavy resistance. Also included is another potential way this will play out, and yet another good area of confluence to look for a new trade(marked by red x)
Is anyone playing or planning on playing these outside bars?
Hey Crown,
Careful here these aren't outside bars. That small bar that is making it look like an outside bar is the small Sunday Bar that is on some of the MT4 feeds(few hours when sunday trading opens). James says to ignore these bars, so just pretend they are not there.
Any takers? I'm tempted. Both are off of support. The Cable IB is off of the 61 fibo from the July 7th low to the July 15th high as well as the 200 and 150 EMAs. Thoughts?
I like the gbp/jpy IB best
I have quite a few positions built up on gbp/jpy but this is a nice possible add on spot
Just be careful with the look of these bars. The ones with such a short nose like this are much tougher to play IMO. If you are new to learning pinbars(this is a general comment post), Look for the real obvious ones with a long nose.
In this case if it closed as is on your chart that would be a pinbar, but there are better ones out there with longer noses. This one barely protrudes away from the prior days low.
Example 1 we have a large nose pinbar. I look at it as a bigger reaction. Price made a heavy move away from the previous bars high, and was rejected downawards. This large nose IMO signifies a better pinbar in terms of a potential move.
Where as example 2 is STILL a pinbar, but the nose is a lot smaller. Less of a reaction means we have to take more notice that their might be likewise less of a move the other way. Is this always the case? Absolutly not, but from my experience this often happens. In this case this pinbar went where it was supposed to still(red x). But in the case of pinbar 1 since it was a larger more reactive pinbar I would be more likely to let it ride past the first areas of S/R where as the small nose one should not(IMO).
Again this is just my interpretations, but maybe it will help someone
Question for Seek, Mike, Jim, or any senior member. Everyone asks about exits, what about entries? I seem to be struggling in this area..
Firstly congrats on your account performance.
I will give my 2 cents on entries.
I sum it up in one word. Consistency. That is for me, I want to be consistent. Because of this I play all my entries almost the same way. I am a very conservative trader as most will tell you, and for this reason I always wait for a break of the bar. I am comfortable doing this.
Can you play retraces, and all the other entry methods, absolutely. But I still think one needs to be consistent with it, no matter what path. Just practice and try a bunch of ways. Find your comfort zone and then just stick with what works for you.
Again this is just my view
Have a great weekend
Mike
Last edited by mbqb11, Aug 1, 2008 6:10pm
Reason: so it looks like i can actually spell :)
Hello everyone,
First of all I would like to thank James16 for this great thread. I have some questions however.
1) How long do you wait before canceling pending orders when you see a PA setup like a double bar high possible breakout ? If the price doesn't break out on the next bar, is the setup considered invalid ?
Bar patterns like TBH, or multiple Barh highs/lows IMO can be valid many bars later. Because that Resistance or Support has not been broken means that it was significant. I think a chart shows best what I mean, see below. At area B, you can clearly see we had multiple bar highs(my fav), and price didn't break out on the next bar, but when it eventually did breakout you could see the power with which it did. Now if you look over at Point A, which was a TBH, when price broke this area as well it continued higher. And you can see this didn't happen for quite some time. Again the resistance of the TBH was still a significant area.
2) For a double bar high with lower close setup to be valid, the new close has to be lower than the previous close or lower than the entire previous bar ?
Lower then the entire bar. So lower then the previous bars LOW.
3) When you look at smaller time frame like H1, do you check the trend on bigger TF's or do you just take a quick look at the H1 trend ?
This is really up to the trader. Again as James recommends if you are new to PA, stick to the larger timeframes(daily/weekly). Basically he recommends until you can prove to yourself you can be profitable on the higher timeframes don't drop down to the lower timeframes. But personally when I trade lower timeframes, I keep them separated from any other timeframes for the most part.
I'm just at page 6 of the thread, I might have more questions later. 810 pages left... Yeah you will find most of the answers to your questions as you move through(if not ask away!). I know a lot of people get discouraged by the length of this thread, but believe me it is well worth it. I personally went through it 3-4 times when I stumbled onto it. Then a few more times as I grasped the concepts.
Price Action does work on the lower time frames (Hourly PB on the Usd/Jpy), but their strength and consistency is no match to the higher time frame PA. (Daily PB on Usd/Jpy).
That's why Jim, mike and others stress the point of trading PA on higher time frames.
Yep listen to Jarroo(jim number 2 :P) he knows his stuff.
This hrly pin was a nice one, and based on how James teaches it went right to where we would expect it to stall
Of course depending on how you handle your exits you might still be in
Ive attached an image od eurgbp, of of what i think is a good valid A grade pin bar, take a look.
The one you've pointed out looks too small of a bar for me, i like them to stick out and leave a nice long wick
N
yep that is what we look for in an A+ pinbar.
Stopman, todays bar is an Insidebar(as of 4pm est). This is when it is contained within the previous bars high and low. A pinbar can not be an inside bar also.
I'm here 6-7 weeks, im on #400. Very nice, big thx to Jim, Wiz and Seekinglight.
Actually i trade real now, but i have some problem vs demo trading "that u cant learn"
1) Stay in trades? my fear about my money ( faster B/E, smaller stop loss after 50-100 pips open - sometimes it's not enough on Week trades).
How do u guys stay in ur trades? I'm addicted, I need to watch my open trade every 5 minutes while i want to stay here for some days / weeks. Usually i take fast profit ( some weeks ago, i take 160 pip profit with fear about my open profit and then in a few days the market make another 500 pips )
This is where it just takes time to fully learn everything and practice and demo etc. You will develop your own style by watching others. For now just keep demoing and learn. I personally trail my stops, many others just use S/R. You have to learn to start to put things together and this is really from just learning from experience.
2) How to 100% enter to my "best pin bar"? Sometimes i get stoned,i can only watch, what my pin bar is doing but im stoned and some hour after that i count pips and curse myself. What's problem? "fear of another loss" ?
You will find their are a lot of psychological bumps on your way to success(as you see in your previous question). My advice for being new to this. Just stick to the best of the best pinbars. A+++ learn to trade those profitably on the HIGHER timeframes. Be patient, discipline, begin to formulate a trading plan. It is a slow process, but listen to James, treat this as a business and you will get there. Learn to do this on demo, or a very small micro. Be smart about it and take the proper steps James recommends.
Thx for every tip and sry for not good eng. I like you guys, I'd like to stay here and some months later join PF. This is perfect, stick around read this thread learn the basics and how to apply them. If you then want to further your education check out the PF
You're right, this is not business, this is BEST business on the world.
Let's go, pinhunting
Man I love your excitement too. I can still remember the feeling when I found this thread. I remember always being like I just want to know why price is doing what it is doing, enough indicators pleeeeeease. Then boom James16 Chart thread
Today, I did not trade, but I have fear about fundament, how about you with PA ?
I assume you mean fundamental news worries you? I don't worry about news. James once said he avoids news like the plague. Why? Just let price guide you. A good price action setup is a good price action setup. Especially on the larger timeframes.
Just wanted to give some credit to Mike. You are a good man. The things you have been doing for me (member of J16) and other struggeling traders is just phenomenal. I wish you all the best the world can offer you. Imagine if the world was packed with people like Mike.... Keep those videos coming!!
T
I just read this and it made my week seriously.
Quote:
Originally Posted by james16
mike will probably go have a stiff drink after reading this. LOL.
jim
LOL would you not have a few beers after this could be seen from your house
My apologies for putting non forex in this thread, but usually it is James who gets to post these(We don't get tornadoes where I am from lol- yes the ones in texas are about 4000 times the size but still ), but we still got some mean looking golf ball hail
from what i understand the daily and weekly pin bars which is what i look !
Its a lesson to be learnt in itself, but most people loose because they have to be in the market all the time, making excuses to take trades, what they dont realise is that every trade you take your risking money.
the smarter guys all know that most of the time your either out of the market altogether waiting for a class A pin bar / set up, or your holding a trade you took, until you have a reason to close!
I have one question. Maybe the answer is somewhere in the thread, but it's huge, i'm only at the page 300 (and maybe just forgot the answer till this page).
In Jim's plan, first 3 step's is trading with Daily charts only.
That's about a year.
Shouldn't newbies (like me) use lower time frames to make a decision, where to put limit, stop orders and TP, SL? Or we need to concentrate ONLY on the Daily period?
Thanks for your posts Jim, always reading them with exaltation.
Kaspars.
Hey Kaspars,
You need nothing but the daily chart. You don't need to move down to place any of your orders. The reason people drop down is b/c they always want something more. A better size stop, so they can ahve a larger position size etc. But the reality is you can do all your trading off a daily chart. Check your charts once a day for 10-15 mins and be done with it. Or at least as James recommends until you can PROVE to yourself(ie with his timeline), that you can do it profitable.
hi mike, hope i caught you before you sign off ...
i was thinking about playing a breakout trade on the gbpchf ... i am unclear about the S/L for my trade. if i am taking it long, maybe set the S/L on the lower TL that created the wedge for the breakout?
thanks for your help ...
hey grinder
I was just looking at the gbp/chf
Here are some possible scenarios. I always place my stop below/above the pullback price action bars like other trades.\
The red X is where I will be watching for a pullback and price action
This fiber daily PB is about to close in less than an hour on my charts.
Pros: What I like about is what Mike talked about before.... the space created around it ( the grey area), 365 ema.
Cons: of course, the huge recent drops and the cable is dropping and about to close with a big clear bearish bar.
It'd be really great if we hear from Mike and you guys about it.
Hey 2mas, how you been
Yep I like this one too. I try not to let what else is going on around cloud my judgment. I just like to look at each pair trade by itself. This is in a good location, would have liked a bigger nose, but it sure is a high probability trade to me.
Combing the last two daily bars it looks like one big doji. Should we be concerned by this when considering taking a long position of todays pin bar?
I wouldn't go too crazy with combining bars and what not, of course this is up to you. All my goal is to pick high probability trades. They certainly won't all work out nor do I expect that.
I just like the level we formed at, the rest is up to the market
Dealer sets price in the forex market. So for example Oanda isn't showing pinbars on NZD/USD or EUR/AUD right now, but other brokers are.
That totally sucks!
This has to do with when your broker bar closes. Oanda has a different daily close then say FXpro does. This will cause a different look to the bars, but price still did the same thing.
I have heard this phrase al0t everywhere .
In my definiti0n the trade loses when my sl is hit(in case of pin my sl is bel0w the n0se)
So i leave it untill the sl is hit
S0 h0w do i cut losing trades short in case of pinbars?
I am n0t sure what ppl mean by saying that phrase
If it means to sh0ot the trade if it retraces t0ward the sl to minimize the l0ss
then I Am COMPLETELY AGANIST THAT PHRASE
This phrase means different things to different traders. For me cutting my losses short and letting my winners runs is built into my exit plan. I am a trailing stop trader so I look to minimize risk but at the same time allow for the chance at the bigger move. Having an initial risk of say 1% on a trade, and coming out with a .1/4% loss is a great thing for me.
To some cutting your losses short can mean just having your initial stop in place with your risk and when it's hit its hit. You cut your losses at point X.
My terminal time is GMT+4, so my H4, H1,H30...bars should be the same as the actual ones (GMT) . But Daily/Weekly open/closes (and sometime hight/low) are the different so my bar configuration on Daily/Weekly charts is different from the GMT's ones which I suggest as the real ones.
How is it critical for a price action based trading?
go with whatever charting time that is comfortable for you. Forex is not centralized thus we have this problem. I personally prefer a daily close of 5pm est as this is when New York is closed and thus the main US session is done. But the general rule is play things as you see them. We are all seeing the same price, just different patterns based on how that price is aggregated.
Do you consider TL breakout as a PA? If so, do you still look for additional confirmation of the trade, or take it "as it happens".
This is a style thing, but regarding Breakouts I prefer to always wait for a pullback and PA at the pullback. The pullback can happen on horizontal breakouts(ppzs), trendlines etc.
This gives me the confidence in the trade and a specific point for my stop.
Breakouts occur on different orderflow levels.
For example.
Say we have a breakout short, and price moves up quickly. This could be the triggering and cascade of stop loss orders that sit below a clear support level(plus other sell orders, take profit etc,) . Price then is rejected upwards after the burst down, and back into the former breakout area. Many would call this a "false" breakout.
Now in scenario two, price breaks short out of the support area triggering the orderflow below. Price is then rejected up again like in scenario one, but as price comes back towards the former breakout area that it broke from we once again Find NEW sellers(this is the flip of support to resistance). We see this in the form of PA, and this gives us confidence in the validity of this breakout as being sustainable rather then a "false".
This is simply the mechanics behind what a chart can tell us.
Nothing is a guarantee but this can help give us stricter areas to look for trades with definable stop and entry points.
Yes there are MANY many ways to play all kinds of price action. Here is just another way that I find works for me.
Mike, thanks A LOT for the explanation and charts, your point is very clear. I do agree that a verification via pullback does improve the chances of BO not being a false one (but as a downside indeed that mane valid BOs could be missed).
Yep indeed this is true very true
Every style of trading has benefits and drawbacks, simply find a style that fits your personality.
People always want the best of both worlds in trading. Same goes with entries and stops.
Example I don't want to put my stop below the pin b/c I don't want a 150pt stop. Well that is fine, but then one must realize what the consequences and advantages are of that.
Example. I don't want to wait for the break of the pin bar to enter. Again this is fine but understand that a pinbar is not valid until it breaks.
Best piece of advice I can give, is to find ways of trading that you are comfortable with. Test the hell out of it, and make it your own. This will give you the confidence and discipline to trade it through the ups and downs
so when price just goes zooming on down, you are standing aside and then just look for another set-up? or do you have somewhere else you might jump on board? last dumb question ... you are watching price from the hourly for the 4hr trade? or even lower TF?
i know that it takes time to make these posts and they are appreciated greatly. thanks.
I rarely enter on a PURE breakout. I have certain criteria where I will make exceptions.
Normally I am scanning my charts for breakouts with the trend. So for example on the gbp/usd I posted, I saw a breakout formation forming on the 4hr. I will then drop down in timeframes too look for price action on the pullback(after the initial burst). Sometimes you find PA on the pullback on a lower timeframe, sometimes on the same timeframe you are looking at.
Again that is the basics of it. Another example I was watching this weekly eur/gbp for a break long. Today we got a push outside my area and price quickly pulled back. But since I wait for a pullback I didn't get caught in the initial move. Now there is a way to not have to look for PA on this type of false. You can buy a break of the new high(which would be buying when price breaks above todays high. THen you can use todays low as your stop point(if price breaks that high tomm). That is my least favorite way, but this is what I call sometimes buying a failed pinbar. So if todays bar is a pinbar, I wouldn't short it, rather look to play a break of the high(a failed pinbar).
Now all that happens is I will keep this in my watchlist. I have a watch list I make and set alerts for areas to watch for priceaction after the break.
Generally though
If I am looking for a breakout + pullback on the weekly. I will use the daily and rarely the 4hr for a trigger point(pa)
If the BO formation is on the daily I will use the daily/4hr and rarely the 1hr
For the 4hr - 4hr/1hr/rarely 30min15min
For the hourly I will use the 1hr/30mins/15min with the rare 5 min.
How do you technically implement your watchlist and alerts? e.g. I was thinking of dedicating one of the monitors to the charts I am watching.
I just have my pairs that are on my watch list minimized at all times. Have alert indicators for when price breaks out or hits a certain area so I know what to watch(for example if I am looking for a pullback, when price hits that area it will set of a sound alert in case I am sleeping). Nothing complicated, always keep things simple
These good looking Pins just nose dived on EJ. Are Pins working as before? Have the Brokers cracked the Pin code and go on stop hunting as they know everyone is thinking and doing the same thing!!!
lol no. But that did get a smile from me
Pin one on your chart never broke the high, a pin is not valid till the high breaks. Great long nose, my order never triggered, if you played it on the retrace then you took a loss
Pin two was in traffic with a small nose = no trade
Pin 3 in even more traffic, and again not a long nose protruding away from price = no trade
Hi Mike, first of all I want to thank you for all your efforts to help us and I really like your comments and looking to learn something from you whenever you post something. However, about the E/J pin bars i have question. I agree with you regarding the first one not being broken, maybe the second one has small nose, but as I see the third one has very nice long nose, it was in location, swing low and after very big drop and has all the space. Why the hell then is it failed? Just simple answer, because it does not have work everytime. By the way I took the pin into my live account, because i thought it was worth the risk. Can you please show a few example where there is no traffic? I ask this question because as I said, I know you are great trader and can learn something from you. By the way I have already watched your video about pin bars three times. Thats why this traffic issue has confussed me, because all I can see was it was after big drop, no sideways markets and created well space. Thanks....
Cheers,
Nuriksari
Hey Nuriksari
Marked A on my chart is the one not in traffic. Traffic I used refers to when price is moving sideways OR when there are prior lows/high getting in the way
See on my chart the low of Bar marked B. Well pinbar C, the nose barely was getting below this bar. So the bar itself has a LONG nose, but it is where this nose is piercing that is very important to how I pick pinbars. If you see with bar A, there is nothing to the left, this is good bar in open SPACE. Also look how the price bars to the left are all moving sideways. This is what is going to hold up this bar on the break up. So it really stalled right where one would have expected(blue horizontal). So IMO if you are willing to play a bar like bar C, you have to be ready to move your stops at the blue horizontal, because the bar is occuring in more traffic. Where as on bar A, if it broke I would be willing to hold it longer.
Is it possible to update the word or pdf document whith these rules? I never listened about "traffic". I know that James has a pay-site and I understand well why document attached here are so quite poor.
well in Italy we say "to try doesn't hurt"
That PDF document was put together by a reader of this thread. So it is unofficial but still did a good job of covering some basics.
If you go to the "guest" section on the james16 pay site, and go to guest material check out my video called pinbar introduction. It will help introduce you to the traffic concept better then I could ever do with words.
Also within the next week or 2 I will have more video clips for the guest section
Okay, here is my recent daily chart of USD/CHF. I have still around 3 hours to close the candle, however it looks very nice, long nose, at extreme high pin bar. I am not gonna take it, because it is in TRAFFIC. When you look the bars at the left of the pin, it is sideways movement clearly for a while an price is in the range between 1.1019 and 1.0850. If anybody will play it just play the break first target being around 1.0850. Anyway, all I wanna say is this pin is in traffic, however I still can not see the same thing for EURO/JPY posted earlier. CAN anybody especially MIKE enlighten me please? (this is my first trying to attach a chart, hopefully it appears on the screen)
THANKs ALL of you guys
Nuriksari
Ok sorry I just took over this thread for a bit lol
This is a perfect example like the eur/jpy.
See how price is overall sideways from where this pin was created. Then the nose is just barely sneaking above that other bar high(the purple horizontal lines).
This is traffic to me, meaning if I was to take a trade like this I would be looking to the lows(marked with blue horizontal), for price to likely stall, and meaning move my stop to b/e or taking full profit.
Hi folks,
question, there is big one problem, I see pin bar, a great pin bar, @ Oanda. but Interbank no pinbar, my broker - retarded pinbar..What do you play as #1 ?
I dont really know where I should trade. I cant watch 3-4 brokers every day,it's crazy.thanks a lot
Some people watch multiple broker charting.
My opinion(after doing the former), is just find one broker charting you are comfortable and stick to that
Keep things simple
Also here is an update to that USD/CHF chart. What James teaches works over and over and over, no indicators, no BS.
Pleased to read this comment. I was beginning to think I was the only one that thinks it takes 3 bars to make a pin bar. (If the 3rd bar has not formed how do you know the 2nd bar is a pin bar?)
We do not need the 3rd bar to close in order for us to trade the pinbar. A pinbar is considered valid as soon as the high/low of it is broken to validate it. So really you only need 2 bars to know if it is a pinbar.
We can play a break of the bar(the most common method, conservative, lets us know the bar is valid)
We can enter right when the bar forms(more aggressive, slightly better entry achieved thus a slightly larger position size, bar not valid yet).
We can enter on a retrace before the bar breaks. That is we can enter as price retraces against the bar(to a fib, left eye, s/r). We get a better position size(smaller stop), more aggressive, price has not yet confirmed the bar by breaking.
Then there are other various ways. Such as; Waiting for a break of the bar. Then still waiting again for another retrace to get back in. Again now the bar is valid, but we are trying to get a better price in, we might never get that price as it will never come back for the retrace.
As you can see there are good and bads to each of these. It is going to come back to your personality and testing you have done for what will work best for you. I prefer the conservative nature of waiting for a break, simple and works.
There is nothing in any of the material both on here, and in the private forum **, about not trading against a strong downtrend.
On the contrary, it is taught that we should look for "space" around the pin and in order to get space there needs to be strong momentum.
This was a valid signal and unfortunately another loser.
** please correct me if I am wrong
I would say there is some caution to trading against such a strong downtrend. Usually I will pass on these types of trades, unless we get a much bigger reaction pin bar. Meaning the overall size of the bar stands out compared to the recent strong move.
With that said I really liked to location of this pin, so I place a buy order but it was never hit. This happened recently where my order was also never hit on the AUD/USD. What I do is look for rd numbers to place my order just on or above. In this case xx50 was looming right above, so I place my order just above that. Similar to what I did on AUD/USD a few weeks back. Just my spin I have put on some of the material and my knowledge of orderflow tendencies. I tend to do this in these types of markets more then I might when things just look very right.
Still even if you took a loss on this, I wouldn't go kicking myself around about it.
I also had a pending buy order above nzd/usd at .6910 but I have since canceled this as the pin has since broke the low.
I would also say that traders that play pins on the retrace might want to take heavy trending markets into consideration and have rules that might prevent them from playing retraces in this type of market. Again testing to confirm any such thought.
The bar low I have highlighted on my chart is at 1.4571.
If we waited for the break of the 1.4550 we have this bar low to contend with 21 pips later.
Why not wait for 1.4600 to break as it is a double zero?
I did not loose anything btw as I didn't trade it.
cheers
FXP
Well it depends on the style of trader you are. If you trade ala James16 he moves stops quicker takes profit etc and these types of areas. I trail my stops. So once I am in a trade ,a bar low such as that is not going to scare me out of my trade. This is how I personally trade.
Hi,
you always say " I trail my stops " , How can i imagine it? you trail 30 pips,40?15?100?
Hey
I manually trail my stops. That is using discretion. Most are familiar with my 2 bar exit strategy as one of my many trailing tools. You can use prior bar lows, simple PA, support and resistance etc. I don't use a broker trailing stop as you refer to above.
Im done trading pin bars! tried them for 2 months, 90% failed. They suck according to current market conditions. Please spare me of all the PPZ and long nose and bla bla BS. And mostly spare me of the different brokers feeds, thats the worst excuse ever.
Why isnt James posting charts of failed Pin bars? of course, he will always find an excuse. Different broker feeds. Or risk 150 pips but take profit very quickly at 50 pips. Great MM. Whatever. Im sorry for the angry message, Im just pissed off because Im trading pin bars instead of trading the obvious.
Going back to the basics which is S/R.
If anyone thinks that putting 2 months into this material, which is a hell of a lot more work then just picking out any old pinbar and thinks they will succeed, I will spare you the time, this is not the thread for you.
This thread is about learning multiple concepts including support and resistance, coupling that with understanding of price action bar analysis, putting the parts together with confluence of factors and taking high probability setups. From there it is about further understanding these concepts in order to develop an appropriate exit strategy that suits ones style of trading. This goes from the extremes of taking profit quicker getting your stop to b/e , to letting your trades run more. This is easier said then done.
James posted a video today on the failed Eur/Usd trade. What did he say? Well he said that this one failed, he took a loss on this trade, and he knows it doesn't happen often. Why would he go out posting a video to all his subscribers about a trade he lost if he was hiding something? Because it is simple, nothing NOTHING is fool proof in this business. It is a cost of doing business and James doesn't have to hide behind anything. Day after day he shows how this stuff works. So please don't go slurring yet again untrue remarks about a guy who has done so much for so many of us.
It is unfortunate for you that you believe you have spent and given this material that appropriate amount of time. But if you believe it doesn't work then please move on from this thread and allow those of us that use this material day in and day out to help others, and those that are here to learn and further their forex education because they know what it is going to take to learn this material.
There were a few posts here about playing continuation pinbars. I thought I would chime in how I play these. These can also look like pinbars in traffic.
The way I play them is part of breakout trades I take. If you look for a breakout then a pullback. At this pullback area you can look for price action. Here are the gbp/usd charts with the BO + Pullback
Breakouts make up the large majority of my trading. These bars by themselves are traffic pinbars that I personally could never pull the trigger on. But by looking deeper into S/R and what price is doing I play them as part of my breakout trading. Traffic does not matter in Pullbacks for me.
I see what you mean Mike. I also understand the reasoning behind it. This certainly opens up another trading opportunities for me. I do notice some PB's in the past that I passed on because it wasn't on swing high or swing low. Of course combined with trendlines it all start to fall into place.
Are there any other criterias that you have in order for you to take a PB in a traffic or isn't in swing high or swing low? In your charts, visually I can see that the PB occured after the break of the trendlines. What about in reference to the PPZ? Do you place more importance to the break of the trendlines or the position of the PB in reference to the PPZ in a continuation set-up?
Regards,
I personally place more importance on the Breakout Pattern area, whatever that may be. IN the above example it was in the form of a channel or trendlines. But it can be PPZ also, horizontal, wedge patterns, etc. Then I look for the same concept as a PPZ, that is a flip in Support and Resistance.
i'm really studying and getting experience w/ exits/entries ... trying a host of different methods as i go ... i want to experiment using s/r as you described it throughout this thread and just have a question about if i have picked a logical place for that in this trade (the "x") ... or would you use something more historical (back in 2006-ish?) ... or not as close as this s/r point due to my impression this currency has some more to go b/f truly stalling out ...
thanks for your help ... again! and thank you for your continued positive and constructive approach to your responses to our posts ... i don't know you, but your character as a person really comes through in your posts.
Hey grinder
Thanks for the kind words, means a lot!
I think I understand your question, but if I am mis-interpreting just let me know.
If you zoom out a lot on the daily, we can't see any support areas. This tells me we are nearly in "no mans land"(see pic 1). So this immediately lets me know I have to go up a timeframe or two.
So if we jump up to the weekly now we can start to get a better idea of the zone for potential support(marked by the blue box on pic 2). This is the area for me. If you jump up even higher to the monthly you can see even more the zones effect on previous price (ie PPZ).
Now there are a few things. Just because I have this area marked off doesn't mean any old PA is going to be good enough. IMO if you found the Support on a weekly timeframe, you should wait for a weekly PA trigger. My reasoning for this is that the weekly should allow enough information where as the daily might give us false triggers until we find the appropriate area within this "zone". Be patient for the appropriate signals.
With that said also, we still have a gap to close, and these are something I will always take into consideration.
I hope I properly addressed your question let me know though,
HA!!! blame my unclear post, but your response is too good. i meant the "x" to move my SL to protect my profits ... sorry, i should have reviewed my post before hitting submit ...
ah well, when price free falls like this, I tend to use the previous days high to protect my profits. This steep of a move is just due for a retrace, and with the gap there too. So that looks good to me, I would even use todays high and just lock profit up.
Beauty of a trade there, well done...it's nice when the hardest part is deciding how much profit to cover
.......your thoughts on this daily PB in EURCHF please.
Hey pat,
On my chart feed we have a body that is equal to the nose length. So this to me is not really a pinbar. When they are equal length like this I pass on these.
Attached is a picture of what I mean.
Attached also is the gbp/jpy with what I consider a high probability trade. I have multiple long positions already built from the gap, but because we have such a beautiful pinbar and still a gap to close(highlighted in blue), I will even add more on the pinbar.
Are you trying to tell us that you went long because of the gap and you are still holding 1,000 pips lower?
no my gap plays are completely different then then what is discussed on this thread. I scale into my gap positions in very small chunks and is the only time i do this.
Mike
here is my post from the j16 site for those interested
Quote:
Originally Posted by mbqb11
This is a continuation of a question from another thread.
Gap trading can be extremely profitable. It has treated me and many others on this site very well. One trader(rockrat - check out his journal for another way to play them) ONLY(as far as I remember) trades gaps. Like everything else in the trading world, everyone is going to have their own take on it.
But I will give you the run down on how I trade gaps. It really is the most discretionary part of my trading.
Firstly I only trade large gaps. large enough that you can see the gap on the 4hr chart. A lot of times you get these 20 pt gaps around and they usually fill too, but I have a problem with trading them. Liquidity is usually very thin during the opening on sunday which means wide spreads, and slippage. So they aren't worth it to me.
Next what I do is see how large the gap is about. For example the gbp/jpy is around 150 pips. I use this as my starting point. I then take that ~ stop size and get a position size. Usually 2%. I then cut that into quarters and put my first position on right when I am at my computer/broker opens.
So the key to me for gap trading conservatively is to scale into your position. Instead of sticking the whole 2% on right at the open, scale in and feel it out. This way when it tumbles you don't panic. You can simply wait it out. And use fibs/ppzs/PA to begin to try to time entries with each piece of your risk. If it ever comes to the point where I have around 3% almost about to be hit in the negative, I tend to throw on one last position and max out around 4-5%. With that said only once have I ever taking a full loss, and it was I just couldn't take the pain of the trade anymore during a summer gap I believe. Shortly after it filled.
So yes a lot of times you put your first .25% on and it closes and you make very little. But I would always rather be safe then sorry. There are a few other things I do here and there, but really I think that is all I need to explain as far as how I do it. No exact science, and I tend to never wait for a complete fill. Sometimes I build up such a nice position I don't even wait for a fill cause I might end up +4-6% because I scaled in so well.
So overall, wait for larger gaps. Enter your first position. Then scale in y our other positions slowly and spaced out. This way even 300-400 pips on a pair doesn't bother you. Of course the other way is to just try to put all your position at once and draw a line in the sand(s/r or ppz for a stop like anything else). I just think you are going to have much larger drawdowns that way.
Thanks for your post. So can you briefly tell me what happens when you are long GBP/JPY and it gaps up over 100 pips like it just has done? Do you cut and reverse until the gap is filled and then cut and reverse again? lol
Cheers,
Wiz (Tom)
Hey Wiz this is the first time I can ever remember seeing this with another significant gap. You could just have short gaps open, but since I am up quite a bit(biggest right now is over 600 pips) I am just going to hold my long gaps only so hoping for the gap to close down then pop back up
I will get in on other gaps not on the pairs I am already in(for example short eur/chf
I also closed out my gbp/chf gap longs just now(and eur/gbp shorts fri). I don't wait for a perfect close ever. When the rest close up it will be quite some nice gains
Question for the vets, How do you determine which part of your trade program is discretionary vs rule based? This is the one question I have struggled with for years. Does it all come down to personal choice and what feels right for each trader? For example Mike has rules that must be filled before he enters a pinbar. ( correct me please if im wrong Mike) But he uses descretion to manage the exit. Your thoughts would be much appeciated.
Jason
Hey Jason,
Speaking purely for myself, I see discretion as that extra edge that comes from screen time and experience. The rule based part of my trading is simply to keep me structured and on the right path. The rules aren't set in stone they are merely a framework from which I work off of. Some traders will be more discretionary others more rules based. I think it is something you build up with over time. Such as being comfortable making certain plays over others, recognizing when they occur and trading them. So yeah I do believe it comes down to the trader to develop the style that best fits you and works too.
just for clarification, i had planned to play the USDJPY on the break, but i always wait until after the weekend to place my limit orders ... the pair has now moved well past areas where i would have already locked in profit and trailed my stop ... i think what you are saying is i might have another kick at the can by waiting for the gap to fill ...
... would it be better just to place orders on friday pins on friday rather than waiting on the open of tokyo to enter them? (i do this b/c i use oanda for my orders and the spreads increase to 10-25 pips on all pairs until tokyo open) ...
I would always wait till sunday to place your orders, this volatility is simply b/c of all the other volatility we left off with last week and friday. This is the exception of a day rather then the norm.
Mike sorry, but i read it many times and i can't get it. Could you explain with a example? If you can't find one, a example made in Paint Brush with 2, 3 bars is enough.
sorry for bothering you again.
best regards.
Basically we are just selling a new high/low on a breakout trade.
So here on the nzd/jpy. Price broke out and the pinbar was formed and also part of the pullback(marked by the red x). Now say we get no good price action at the pullback area(former support trendline) where is where I like to look for Price action. We can now also just sell a new low of the breakout, or in other words the low of the pinbar, which would be a "failed pinbar". I rarely trade these but sometimes it is the only way in a breakout I have been watching.
Follow up, I did not use RSI on those trades I just posted. Only added it to show ryanmcd that I understand the theory behind it.
Mike I noticed that you used a delayed entry on your pinbars. Do you do this to increase win/loss ratio? Or just because you like to watch the price action after the break before you make your move?
Thanks for all the helps, back to reading this thread...
Jason
Hey Jason,
My last post was a bit more advanced technique in terms of playing pinbars and PA with breakouts.
Normally I simply play a break on the next bar, and keep it very simple
True it's whatever works, I may get sick of the 5min and go back to the daily but right now I am having fun, will I be burned out of the 5min in 6months whoknows.
I agree PA can be appliied across all timeframes. In fact I have traded the 5 min with success as well(I got burned out real fast). Heck I even started to get burned out on the 1hr. So yes PA is universal in that sense.
Here is a post I made in the beginner section over on the site. I think it is appropriate with all the timeframe talk. There is no LAW where to start, that is going to be up to everyone. But taking the recommendation of James with all his experience makes the most sense to me(especially for those that are very very new to this, some people find PA that have been around the block and simply apply it to other things they know. James not only likes that but encourages people to do that). In the end everyone will have their own journey in this.
Take care,
Mike
Here is my post:
Quote:
Originally Posted by mbqb11
Q: What Timeframe should I start to learn to trade price action on?
A: James recommends as do most of us that have been here for awhile, that you should start to learn to trade on the daily/weekly timeframe. Trading on these timeframes helps a trader for multiple reasons. I will list some.
1. The higher the timeframe the more accurate these price patterns tend to be. While you can use them on all timeframes, the larger timeframes have more information thus they tend to be much more reliable. This helps a trader gain the appropriate confidence.
2. Less of them. By this I mean, trading on a weekly and daily, you have much less to be looking at. If you try trading off an hourly timeframe, their is so much 'action" and "noise" going on, it is VERY VERY difficult to be successful in the beginning. This does not mean you will never trade the 1hr, but you need to learn to do it on the higher timeframes first.
As James says, if you can not trade profitably on the daily/weekly, most likely you will never be able to trade profitable on the lower timeframes.
3. Time. By only needing to check your charts once a day, or even once a week, you will have proper time to analyze and make the right decisions. If you check your charts on the new bar close each day, there is plenty of time(b/c it is not during main trading hours), to analyze the bars and make a well thought out decision. Once you begin trading on the lowertime frames, you need your instincts and everything must be second nature, because you must react much quicker. Trading these higher timeframes is MUCH MUCH less stress and will help give you the confidence and discipline to suceed.
4. You might never leave them! Some people have a misconception that you must learn on the higher timeframes and graduate to the lower. This is absolutly NOT true. You might, and many do, decide to never leave the daily/weekly timeframes. This is perfectly fine!
5. Treat this as a business. James has laid out some of these rules and it is in your best interest to follow them.
Do you think that trade 5 min in Forex is more difficult only or really impossible in the long run?
@Mike same question
It is certainly possible and doable. The point isn't that you can't trade the 5min, it is just to take the right steps to get to the point where you CAN trade the 5mins if that is where you want to be. Most people want to go from, reading parts of this thread, to trading the 5 min TF in their spare time after work thinking they are going to clean up. And we all know the results. Ryan has been around this game for awhile now. He knows the way this business works. There is a harsh reality to this, and the steps James recommends is to help most avoid the harsh reality and give them a fighting chance. I
The whole thing about trading higher timeframes, is to just treat this like a business and take the proper steps to help one remain in this business for a long time to come. Most of those that I know who took the right steps did graduate to a lower timeframe. Not all felt the need too. Just as a side note, one of James favorite things to do is trade intraday the mini-dow. He has been doing it for years. So I think some people are taking the whole start on the higher timeframes the wrong way.
Mike, please tell me if this an example of the advanced pinbar entry concept you were talking about yesterday? I pin bar or other pattern off a throw back?
Found this example in 1991 UJ dailies.
Thanks in advance
Jason
Hey Jason,
Yep this is exactly the technique I use for Breakouts + a Pullback and then you can find these continuation looking bars. In this case it is just an Inside bar. But this is the one time I look at an inside bar then more then just that, and would call it a continuation pinbar.
@Mike do you take some $$ of the table on a wining postion to ease the pressure?
Jason
Hey Jason,
I don't want to go too off the scope of this thread with my personal exit styles. It is very lengthy and beyond the scope here IMO.
I never take partial profit on my regular trading(price action/breakouts). I 95% of the time trail my stops in a variety of ways(using previous bar high/lows, price action, support resistance, PPZs, volatility indicator, etc). It highly depends on the type of trade, timeframe, and the situation. There is never a one size fits all for my style of trading. I use %R for my position sizing.
I know this isn't very detailed but it has taken > 500+ posts on this subject to cover it to the point I believe does it justice. I have some new excerpt clips on the guest side of the PF that I believe a few of them might give you some ideas better on how I trail my stops. Every trade is a new situation, and especially the larger timeframe trades are much more discretionary in my trailing. I never use a broker trailing stop(i get that question a lot). Often times the larger the timeframe I mark areas, where we might get conflicting PA. At these areas I look to tighten up or lock in more profit depedning on the PA and what not. On some of the lower timeframes I tend to use more mechanical style trailing in the form of a (2bar exit, 1bar exit, volatility indicator, conflicting PA(ie reversal bars). The reason I believe trailing stops fits my style is my conservative nature of picking entries which have a built in higher R:R. Meaning waiting for those perfect pins on the daily, means they tend to run better since I take them in "space" and what not. Breakouts are a bit different scope here too though.
If you have more specific questions please shoot me a PM so I don't take this thread off course to my personal styles on exits.
Have a great weekend I am off to the Yankees game(perhaps my last in the old stadium as the playoffs would be the biggest miracle every at this point )
It's not my method it's just trend trading Also the PB stuff is Jim not me I just mess with it on a shorter time.
What Ryan does is what I think ultimately everyone needs to do. Is take the material they learn and formulate it in a way that works for them. I do exactly what both Ryan and James does. I look for breakouts with the trend, and use Price action to help me enter and exit my trades. Trending markets, that consolidate and breakout are my bread and butter. Ultimately though price action is your guide through these markets. It is just the way you decide to put it all together and that might be on the 5min, the daily, breakouts, using a system like the base, or the knife etc.
Do you consider the GBPJPY a good setup Mike? This is not profitable yet unlike the ones you posted so would be really interesting getting your opinion before the trade plays out.
thanks
IMO this is a good trade also. But the real trades on gbp/jpy are all the gap trades that showed up on it the past 3 weeks. It was like free money if you ask me
I know you hate people posting "after" the fact(yes I read all the posts in here ). But it really isn't. Anyone who couldn't see the clear pins on the weekly charts is crazy if you ask me.
I know there has been a lot of this, "oh it is after the fact". I really never felt the need to address it. But those of you who doubt, that is your choice. But let me just say that the second I post a trade in real time, I receive the following emails/PMs. "that was awesome I made so much on that (insert pair), here thanks!". and "man I really thought that trade was good, too I lost on that, I put extra risk down cause you posted it". That is not what I want on my plate. Do I discuss trades before the fact? You bet all the time in my webinars. But this whole post before and after the fact. Just is a bunch of bologna with price action. This stuff plain works.
The fact is that this stuff is easy and hard at the same time. It take practice and time, but I promise you all this stuff works. I for one am so glad to have stumbled onto James and this thread. Just demo/trade small and build your confidence. It doesn't happen over night, but if it did none of us would be here and trying to learn to trade.
I for one was heavily playing the gaps across all pairs the last 3 weeks. So for the eur/usd I waited for the gap to fill to enter the weekly pin(still placing my stop below the low and calculating my position size based on that). I tried to do the same on USD/CHF, but never found good PA to get in short.
But the good thing is usually there are a few ways to get in trades. This was talked about a few pages back about the Breakout + pullback and the continuation pins. These are the biggest part of my trading(breakouts). You can see price broke out of the trendline, pulled back and gave us a pin. By istself this pin is in heavy traffic, but when we dig deeper and find out why and what is going on in increasing the probabilities and is what we need to do when trading price action. Location.
) I was really enthusiastic about the info provided by the James 16 chart, but I?m changing my mind and honestly I?m feeling disappointed by the uncertainty that you generate. Plus the disappointment as I wanted to join your site and I realized that you charge $129 monthly for a year. I don?t know doesn?t seem to be really fair, I don?t want to offend but it?s my view
That is ok, this material won't be for everyone. There is a lot of information out there, hopefully you find something else that meets your needs. No one is going to be offended, but certainly this thread really is for Price action and learning more then it is offering an opinion on what is fair to you. There is a ton of amazing information in this thread helped and supported by many. The paid site is for those that find value in additional information/support/community. No one has to do anything they feel is unfair/
eur/cad I would like to see a bit more consolidation into the wedge, but it is actually my favorite if it consolidates more. Reason being the angle of the lower tl of that wedge.
Mike, would you consider this EU a goog break and retrace setup?
Hey Judith,
Someone had asked the same question in the private side with a similar looking chart.
I will post my response I gave them with the chart I had posted.
Quote:
Originally Posted by mbqb11
Hey
Yes this is one I wouldn't have taken personally. One thing with the breakouts, are getting to creative with the lines and patterns one draws. For example. Notice how your trendline is pointed up. If the line is going up, then this is never a line I would look to go long on. For me the line that you take the breakout on is always going to be opposite the direction of the trade you are going to be placing.
So for a short trade, the line should go anywhere from horizontal to point up. And for a long trade horizontal to pointing down. I am not too much into these more creative connection of trendlines. Not that they don't hold up or have validity from time to time. But if I started doing that I would be in the market 24/7 so I try to keep things even more straight forward.
Let me know if that makes sense, but yes the concept of the breakout + pullback is still valid in your picture. Now just to show you something. If you look at the trendline I drew in my picture. It actually has the breakout + pullback exactly the same as the one you drew but just with the appropriate angle of a trendline to go long on from my perspective
This was not meant as slight against Ryan or his style of trading. If I offended anyone that was not my intent. Amen to safe trading was meant as to not risking 5 to 6 %! Defining a strong trend, then selling rallies or buying pull backs is a time tested method.
Jason
Yes I am very big on risk/expectancy and how the math side comes out. Many people have no idea how much moving from even 1% a trade to 2% effects things. In the most simplest form you are effectively doubling everything. Including most importantly your drawdown(which we ALL have). That is what we always have to be prepared for. Because the hole we dig is much harder to get out then it was to get in. So think about it in the most basic sense. Say your method produces x% a year with a drawdown of max 25% on avg at 1% a trade. Now you bump to 2% a trade b/c well you still made money at year end. But you forget that when that drawdown comes you are now sitting in a 50% hole, and getting out of that 50% hole take more then getting into it.
The simple rule is never more then 1-2% per trade. But even 1% is too much for some. I get a lot of emails a day and I forgot what it was like to being very new when you can not grasp that trading 4% a trade is very very different then trading 1% a trade.
The hardest thing for most is that the account is so small that 1% is so little that they think in $ terms, when you should think in % returns until you can bring your account up to size. Same goes for pips. Search the forums for threads like "pips don't matter".
Sorry for the rant but I am very much into this aspect of trading as those who taught me and I look up to all were, so even if it helps a few new traders lurking I think it is worht posting here.
My broker equity is less than 1% of my total trading capital
I just cannot trust all of my hard earned coin with a broker, if they fell over, I'd lose the plot.
Plus our interest rates here in Australia are great at the moment (8+%). I have most of my capital sitting in term deposits and savings accounts. My company account alone pays me 8.5% p/a for a balance of 10k and above.
Doing it this way, I trade extremely conservatively. Very rarely do I risk more than 0.5% of my total capital. Any trades I consider high risk (not 5 star or A+++), I'll only be risking 0.01-0.05% (1-5% of my broker equity).
Sure I have to pay broker fees to refund my trading account, but it happens rarely and it certainly ensures I do not over trade.
MM is key, MM is key, MM is key, MM is key
yes you are quite right, I meant of your total capital. A lot of people only hold what is needed to cover margin on their positions with their broker and have all other available funds else where
Hey ghous those patterns aren't quite complete/large enough for me on those timeframes, and don't quite fit as nice on the hrly so I would pass on them. Of course that is just personally could work out great.
PS. I think I said some of this on the phone about 8 hours ago
Yes we certainly did talk about this.
Ryan I enjoyed talking to you today, we are very similar in personalities more so then I think we both thought LOL. What Ryan says is true. He is very to the point and that is good(much like James, no need to blow smoke). The truth is no matter where you are it is going to take hard work and dedication. If you have the right mindset that can go a long way. There is no fast lane to trading profitably. Maybe some know it, but it took most of us a long time and a lot of failures/work to get there. But to me that is a good thing.
IMO if you stumbled on to this thread you are so far ahead of most people it is crazy. Learning to read price is so important, then you can dig deeper to understanding price, and put it all together.
i see that EURCHF had a PB but after a lot of false breakouts.
GBPCHF after the break made a BUOB, then a BEOB and then a DBLHC (2 pips difference) and went up again.
did take any trade here?
thanks in advance.
gbp/chf broke down no great confirming PA on the pullback- no trade
gbp/cad pulled down no confirming pullback - no trade
sorry about EURCHF, my mistake. I mean EURCAD. There was a PB 10 bars ago. I see that the bodey is within 50% of previous. Was that the problem or the fact that there was only 4 bars up before it?
GBPCHF there was a BUOB after the break, was not the case of enter in the break of the low like you do with PBs or 4 pips is not enough?
thanks for answer.
Hey
Not quite sure what you mean. I look for a breakout then a pullback, at the pullback area which I look to be clean and clear, I look for confirming PA
So here is the eur/cad . Just because price breaks down and pulls back doesn't mean we have to enter. There are too many of these to take so-so ones
about EURCAD is clrear, it was not that breakout anymore. Ok.
but GBPCHF there was a BUOB before the break. So in the last posts you said that you trade against a bullish PB after the break of a UP TL. So Why not trade agains the low of this BUOB?
I'm sorry I am not quite sure what you mean about trading against a bullish PB. You are simply going to look for Price action to go short, not long.
Do you mean short a break low of the BUOB?, you would only consider doing that if the TL holds, the TL has since been invalidated so this one is no good to watch. Or are you referring to the BEOB after the BUOB. This never broke short.
The only potentially valid signal would be to short this BEOB, or there was one on the 1hr, but it wasn't a clean looking BO+PB, which is easy to see after you see the good ones. If you did take the 1hr BEOB then it was a loss
So the bar here with an arrow above it is a BEOB, but the low never breaks.
That question had to do with ways of playing a "failed" pinbar. Then is selling a low of a failed PB. I suppose you could do the same thing with BUOB/BEOBs, but you want to limit yourself to those(including playing failed PBs). That is my least favorite way of entering a BO + PB. Because you are just selling a new low(or buying a new high). I much prefer and 95% of the time am always just using confirming PA on the pullback. It is much simpler to do. And I have only done the other thing with PBs.
I would be more prone to sell a failed PB when you have a much longer term TL breakout play such as that shows on the daily. This is because it is going to carry much more weight then a 4hr or hrly trendline. There are so many potential breakout plays on the lower timeframes(4hr/1hr) there is no need to fiddle to find extra entries. Just wait for the clean ones that jump out at you(this is the patience and discipline part).
I know that my question might sound silly (just learning) - on GBP/USD 23.09 was I4B. Thought, that it's going to brake up. But question is not about PA...
Thing I could not understand - if fundamentals for dollar are bad (like on 23.09) it should get cheeper - for one GBP You "should get" more USD. So the price from 1.86 should go up, lets say, for 1.93...
But on 23.09 the price broke down...Even after all news and indecision of bail-out...How it could be?
Sorre for my english...
Hey Initex,
That is the catch with fundamentals and most things in trading. It is never as cut and dry as it seems. It has much more to do to how people are going to react to the information then anything else. This is why a lot of us(including James), completely ignore fundamentals. Not saying that they can't be helpful or you can't integrate it with price action, you certainly can. Just another route you might possibly take.
Hi mike .. just quoted this message to get your attention.
If i can i want to pull up a stupid question about gaps.
Nowadays, don't know why every week i'm seeing gaps on opening, now... i don't remeber in which post you mentioned your gap play something like there was a good PA towards closing a gap.
My question is why does a Gap have to be closed? I mean on my feed, todays asia session on gbp/usd opened a with 30 pips gap down, it's a 10% approx daily move, why does it have to be engulfed??
A gap to me is telling that basically nobody is buying, we know that price moves in order of the match up af buying and selling order .. so today on the opening the first buy order to match up to selling was 30 pips south, that's showing me great selling preassure.. why couldn't a gap be lifetime opened... ??
Re-reading my question it seems such as those articles on a scientific magazines with titles .."How do traders close a Gap"... in past maybe i would have bought it .
However going to get some sleep.
Giuseppe
Hey Giuseppe,
Gaps in the forex market tend to close much more then they don't. In fact all gaps I have ever personally watched have closed. This doesn't mean they close right away, or when they will. They could take weeks to close.
To me gaps are just like a lot of other phenomenons in trading and they are self fulfilling.
You say a gap to you means nobody is buying/selling, but a lot of times these gaps occur because of pre market trading where a large order might come in, hit some stops say below the market FORCING action lower, then the markets open across the board and the action is towards closing that "gap".
Also be careful when your broker opens. Sometimes these gaps are just because your broker open so late, because the forex market is technically open 24/7. The earlier your broker opens the better you can see where price is. I like to use FXpro, as they open the earliest of most mt4 brokers. And I also watch oanda charts since they are open 24/7. You get a better idea if/when price gaps. I look for the big gaps, and don't mess around with the small 30 pips gaps as they usually are either just due to charting difference(time broker opens), or happen so early that spreads are so wide and liquidity is still so thin, that slippage and spread factors are too high for me.
Please note gapping in equities markets are much more common because of the nature of the markets being centralized. I am NOT familiar at all with gaps in those markets, just forex.
Hello Mike. First, I just want to say that I love your posts and I'm always trying to keep track of them. May I ask you a little more detail on how you use the oanda charts to gain insights for your gap trading as I find that Oanda never shows gaps on the Monday open. For example Eur-Usd "closed" at 1.4612 on Friday and after opening went down to 1.4580 then up to 1.4635 before falling again. My MT4 broker opened at 1.4549, a 60 pips gap... Thank.
Hey OGW,
Once and a while(for example a few weeks back with the high volatility.) There were a bunch of pairs that had small gaps on the oanda charts as well as my broker charting. This extra gapping on even oanda gave me even more confidence to employ my gap strategy. Other then that I stick to FXpro charts and the big gaps that can be seen on the 4hr charts
Hi guys, a nice breakout trade waiting to happen on the Usd/cad...Mike you watching it?
Hey Ghous,
Yes I have been watching this(posted a pic a few pages back in this abyss :P)
But I only trade breakouts especially shorter term with the trend. They are usually more sustained and you can avoid fake outs such as below. Granted there was no good pullback on the long so that should have kept you out. I would much rather fade breakouts against the trend, but that is another story.
As for gbp/usd SL asked me also about gbp/usd. It was definitely a valid setup with the daily trend. Not one I would have taken though. Just didn't look right, but glad you guys made some nice pips.
you're right abt Usd/cad, a major reason why the breakout failed could well have been the fact that it occured against the trend which did not allow it to flourish for long, but tell you what i entered the trade...
if you notice on the 4H the bar that peaked over the top of the range sort of closed with a tail beyond the range, meaning when i go down to say the 1H i see that the price breaks out then comes back to the line (this is the time when the 4H is abt to close) and on this occasion it gave me an IB 5 pips above which lied my long pending order, it got hit but then when i went back to the 4H, and DAMN! the thing showed me a sort of pin bar, ofcaorse the trade was a looser...can you comment a bit on this, a breakout is a breakout on the 1H or on the 4H, and why should it be that a retracment on the 4H would have been a legitmate situation while the 1H was not (or was it??)?
Regards,
Ghous.
Hey Ghous,
Not sure if I understand you correctly so feel free to re-ask.
The usd/cad was clearly against the trend to take a breakotu long so that should have kept you out of that if you follow that rule(you may not).
As for the BO+ pullback. If you used the 4hr and the 1hr to find an entry I really don't see any good entries on the 1hr. Just because the 4hr, closes outside the range means nothing to me personally. It is all about the PA on the pullback. Using an IB at the pullback is the riskiest PA you can use(but again you can get high reward from it). In this case you are counter trend, so I would always wait for more distinct PA then an inside bar. But again, counter trend BOs have less shelf life if you ask me and are much better played on pure breaks for only a few pips.
Mike, do you change SL, TP, B/E based in another correlated pair?
example, now we had a PB on GU, but if look to EU, the resistance is close while GU resistance is way above.
and more, when happened the breakout of the 4h pin on GU there was a perfect 5 min pin on UJ.
what you do?
Hey
I keep all trades independent of one and another. So I will trail my stops based on THAT trade, not what some other pair is doing. You can't help but notice when one currency is the strength of the day, or in the spotlight, but I do my best to keep things separate in order to keep my sanity
Thank you Bundy! I still don't really know what a ppz is. From reading back threw the thread I would venture a guess that its a "price pivot zone" and is an area that has acted as both support and resistance? Thank you so much for the chart. I am attaching a chart for critique please and tell me if I have the idea correctly.
yes a PPZ is simply an "area" where there is a flip b/w support and resistance
These can be zones, and are often not one specific point. Often times they line up with other things such as round numbers
Thanks Mike, You are the man ! My pc was down most of Sunday and Monday. PC hell, had to run sys recovery, use chkdsk to fix bad sectors on my HD, reloaded vid drivers and ran driver sweeper and even cleared the cmos on the motherboard. That being said, I missed the throwback pin on EU 4hour. It broke the flag down, then retraced and threw a huge hammer. I don't want to chase a market but I really regret missing this move. You mentioned before that their are several ways to "catch" a market. Would mind mentioning one please?
Edit: Like wait for a rally to short, or wait for a new consolidation to form or ...just sit on your hands and wait?
Thanks,
Jason
Hmm, I don't think I quite understand your question.
For me generally my thinking is this.
1. Is there a trending market(specific to the timeframe I am looking at).
2. If yes where are we at in that trend(ie, retracement - so we can look for confirming PA at specific levels / or are we consolidating, which in that case we look for a BO with the trend confirmed by PA).
Then you have.
Reversals
1. Are we at an extreme high and low?
2. Is there confluence(double bottom, divergence, round numbers).
3. What does the PA look like(ie, a long nose pinbar that is larger then the move and shows considerable reaction.
but Mike, you never take setups based in Steve Nison (i never read the book) candles?
thanks for aways answer my questions.
nope never read to much of his stuff, too many patterns if you ask me(just my opinion). I like to concentrate on the patterns James teaches and just try to keep things simple and in the end to me it is all about location location location
I meant if you miss a breakout trade do you let it go or wait to re-enter? The one that I missed is EURUSD at the start of the week. I drew to arrows on the chart, one arrow is the missed trade the other is where you are at theoretically. Assuming you wanted to be short what would you be thinking at the lower red arrow? Thanks for letting us pick your brain
Jason
Hey Jason,
I never go chasing the market(intentionally at least lol). If you miss the trade that you had planned out, that is it...time to move on. I see too many posts "missed my entry, but I still think we have room to run a bit". To me this is totally breaking ones trading plan and where we have to watch ourselves. Many more trades to come. A lot of that behavior comes in these volatile markets. People see huge moves, upset they weren't in on them. Enter at will, get rewarded(which only temporarily rewards your pocket, and more then anything rewards bad behavior), or you get a slap on the wrist(sometimes a real nasty one).
Having a trading plan is very important to me. A lot of people here the old cliche plan your trade, trade your plan. But ignore it, when it is a good cliche to have. It takes all the surprises out of trading(for the most part).
Hope that helps
Mike
countdown to bailout! who would of thought drinking a beer and watching c-span?
I am watching this Uj 4H chart and found this nice looking setup.
Most importantly it's not a "raw" but one of those "ripe" ones Mike talks abt pretty often, the "Bo+pullback+PA=entry" kind of setups, i see a nice BEOB (if the 4H closes on a bearish note) on pullback to a trendline breakout.
Regards,
Ghous.
Hey ghous
The trendline you have has already been invalidated with that move back through it. A bit too messy in there for me. Patience :0
Haha! amazing how two traders trading the same concept the same pair and the Tf can look at it in such different ways...
Anyways you're kinda right, but the range on your chart is wide enough to accomodate a trade is it not? i know that you don''t trade while we are witihin a range but that's where we differ... the BEOB looks nice provided it closes in a similiar shape.
ps ps i always wonder whre do you suddenly descend from, after posting my chart up i was wishing i would get an opinion from you but you namely "mbqb11" never appears in the window right down at the bottom of the thread in "curretnly viewing" ppl...is that some kind of a style...lol!
Regards,
Ghous.
Yes there is certainly room to work with, but my opinion(and again just the way I trade), is that you are stretching it a bit with that trendline, more Looking to be in a trade then a solid setup. Again it will come back to styles and how agressive you are. But IMO that is a rather agressive trade, and all that sideways action could really get your hands full.
There is a setting so people can't see what you are viewing and when you are online. I think it would scare people how much I don't sleep so I am hidden )
Still not trading, you guys do good in big swings I do good in the 90% when we dont have these huge swings I guess i am too lazy to change my 10 / 10 pip gain/loss to 40/40 lol.
A good trader knows what conditions are best for his methods.
A GREAT trader knows when these conditions are/are not happening and is either out, or in to take advantage of them.
Pin Bars in the right location, be it with the trend as in a retracement or as a reversal, can be very powerful. This Pin Bar with its location and the confluences you have shown (nicely, I may add), could not be ignored.
Price Action formations, in and of itself, is not enough. We need location, trending or consolidating market and other confluences to support or conflict a given trade.
Nice chart stoli.
Jim
This really sums everything up perfectly, well said Jim.
Bars like the gbp/chf, gbp/jpy pins. If we can just train ourselves to wait just for these perfect ones, you will become profitable long term. I was talking in my chat last night, and saying how it is all the fiddling that we do in between these A+ setups that usually lead to breakeven trading or, negative trading.
After doing my due diligence i am posting my find of GBP/CHF (pissy-pound/swissy).
My feed is GMT+0. Other pins on the GBP didn't quite form according to the rule of having both eyes within the previous bar. This one is also kicking off a PPZ, correct?
I'm going to wait for a retrace and scale myself in. I'd love to hear some feedback as i'm still learning and would like to know if you think this is an A++.
Nick
Hey Nick
I would consider this pin and many that formed today C pins. If you notice the pin is in a heavily sideways area. This is what I call traffic. What this means is that even if price does break your way there are a lot of barriers that can come in the way.
I marked off one such PPZ area, that price may stall at. So IMO these pins are much more difficult to play then the huge nice one we got at a swing low that had room to run.
You have to be quick to move your stops or take some profits with these ones in traffic, they take a lot more time to learn to play right if you ask me.
Sorry for an off the topic Q, guys: do any of you ever get a 24-pip spread during a non-news morning (6am GMT) on GBP/USD with your broker?
Also, do you often get filled with a price different from QUOTED one - whilst that quote is still shown on the screen?
Many thanks!
Yes, there are many times and reasons for this and it all comes back to liquidity. These are illiquid times, just as news is illiquid, or early sunday before banks are opening and the books are thin. This will cause all spread widening slippage etc. For example aud/usd has been highly illiquid which has lead to some crazy spreads, which means less money to move the market etc. Check out darkstars thread on The structure of Forex brokers.
As for getting the quoted price if you are using market order , which you are by the wording then you are telling your broker to give me any price out there in the world, that all you want to do is get in. Protect yourself with bounds or LIMIT orders.
Illiquid markets + market orders = at the mercy of your broker/market
Trade safe out there
Out for a small trip for the weekend cya guys sunday!
Here is what could make Ej in a nice trade situation;
@ Mike: you watching this??
wondering if he is back from the trip yet...
Hey Ghous,
I am not overly convinced with any of the patterns yet on the 4hr. I will prob end up seeing how the week plays out and then see what patterns emerge. Most of the patterns just have a slight choppy look for me, and I found myself fitting things and not being overly excited, so when I get like that I know it's time to hang back.
I would like to see the eur/chf wind up some more and then I would be watching it.
an it be said that we have a pin bar on he daily TF? If yes, How tradable is this one
I would call this a traffic pinbar for several reasons. Firstly if we look to the left of price we can see this pinbar is located in a sideways market(ie not a great swing low). Instead we hit a former bottom swing area, and bounced. Which by itself could be a sign of a temporary bounce but the problem is how to manage such a traffic bar. If one is to play a bar like this you have to be aware of all the resistance coming up above it. I marked in blue the problem areas, and we can see there are a lot of them. Basically how I look at pins are, traffic pins = need to manage trade with more finese, vs non traffic pins which tend to flow smoother and have more room to run.
Eur/gbp is overall a small daily range choppy pair which usually means the areas of resistance will give some bounce.
For me I would stand aside and get my money in better, but for those that play it you better watch this trade. I consider these the trouble trades especially for new traders. They get antsy when they can't find trades and find a pair that is showing a price bar(like a pin), but they find it hard to pass and instead end up misplaying the exit on the bar.
As always just my views from a conservative trader
Hello Guys
Please can you tell me whether for TML what should the candle colours be the same or the can be different?
Can you explain the same for TMH as well for colour colours?
Thanks
Would really appreciate it.
Hey adler ,
I believe you are asking in regards to if you have one color for a bearish bar and one for a bullish bar on your charts. Either way the colors can be both the same and different.
All we are looking for is two lows to be equal(the bar can close bullish or bearish), and saw thing for a TBH(or two matching highs).
Thanks for your reply Mike regarding TMH and TML's
If they can be different color or same colour do they indicate direction atall like up or down?
1. When is it up and when is it down
2. When do they work like fib confluence? stoc divergence? Any thing like
that?
Thanks
IMO the best way to play matching highs/lows are with the trend. So when you are in a downtrend, and you have a "pause" created by a TBL. Or vice versa for an uptrend.
I rarely play those, my favorite is to wait for multiple matching highs, when you get 5 or 6 bars with matching highs over a short period of time, a break usually gives out some pips.
The longer the timeframe the more rare these are, but the are out there.
Hey Mike,
Do these TBs hold any significance as trend reversal indications? i often watch two similiar lows/highs giving quite a bit of direction against the current trend.
take the examples mentioned in the charts below, the TBs don't appear to be perfect in shape but their occurence on trend reversal points does hold some signifcance, i see these very very often. Can you comment a bit on these...
Yes absolutely. When they occur, this is showing at least a temporary pause in action. So a TBL is showing support and a TBH showing resistance. Sometimes you get a TBL, and the second bar has matching lows and is an inside bar. Or a TBL and a higher close which then gives us a DBLHC. So there are many ways again to skin a cat here. Check out how the after you have a TBL, and say price moves up even for quite some time. When we finally come back and break that former TBL or resistance and continue on. Actually happens over and over
I am pleased to say I am starting to get some success (on demo) with pin bars on the longer TFs - 5 winners and a B\E trade on my last 6! Its hard not to feel a bit elated sometimes when this stuff works.
However I wanted to ask your opinion about the bearish pin which formed on the GB|JY daily yesterday. I took this trade and closed it out today for some 300 points, one of my biggest winners yet! My reasons for taking this trade were:
1. Pair in a downtrend
2. Fib confluence at 23+38 from previous swing highs
3. Period of retracement\consolidation before next likely swing down
4. Possibility of a retest of the recent lows at 166/67
Was this a high probability tade in your opinion(s)? Sorry, do not know how to post charts from my platform yet! (VT, not MT4). Any comments welcome.
Hey Bertie,
Firstly congrats on your success, it is a great feeling when the studying practicing starts to click.
I am a very conservative trader, so for me this is a trade I wouldn't take. Not because it wouldn't give some pips, but just doesn't fit my style. Jarroo might be more likely too.
My reasons for staying out would have been the sideways market the it is located in. This would tend to hold price up at some of the trouble areas(blue box area). Had you been watching your short around this area that would be the time to lock in profit, scale out, move to b/e etc. So overall I think you still played it well as you knew not to get carried away with a trade in traffic.
This is where James would say, if you take a loss on a trade like this you are crazy, because of the location of the bar.
Many thanks for your kind comments. I would like to base my style on yours, ie quite conservative, because most of your comments and insights are usually spot on. My over-riding reason for taking this trade was that it was a pin with the trend, and I was able to watch it closely. I realise that it was in traffic but felt that the probabilities were good whilst realising that it was not an A+ pin bar. Still, to get a winning tade helps the feelgood factor and just encourages me to learn more fom you and all the other good guys here and on J16.
As someone who dabbled a lot on lower TFs, I am starting to enjoy trading the longer TFs and would recommend this stuff to any newbie!
Best wishes to all and good trading,
Bertie
Here is what I would be looking for in terms of still trading with the trend, but being in a better overall area for price action. I want to see a pullback to the purple horizontal former support area, and then price action around the Rex X. I drew some fibs to show some extra confluence in this area (61.8% of the smaller and 38.2 of the larger).
The overall main trend is still very much up(we could go as low as 600 and I would still say we are up.. Temporarily yes we are in a bull market, but we are at an extremely crucial "area" in gold. the 700-650 area is clearly a PPZ area. Everything you play has to be relative to how you are looking at things.
So gold, is in an uptrend for a long time(shorter term bear market). Now we are at a crucial area. I am not looking to buy and hold and hoping for 2000$ an oz But there are going to be pips both ways
PS for those that are more aggressive style traders( ala raczefx - ppz touches fib etc) if you put a buy limit at 700 you had a cool 28$ move with relatively small risk. Beauty of a trade(maybe Mark even caught this one wouldn't surprise me).
Thank you guys for the explanation. Yes, for sure it takes tons of practice to get \"enlightened\" ....but first I need to understand the meaning of PA in general. So as far as I understodd it basically comes down to the size of a candle compared to the others. The bigger the candle/pinbar the more action and vice versa..is that, how it is?
Well not necessarily. Just think of price action, as reading price. All of its components. So think of your chart as a puzzle with a lot of pieces. These pieces include the actual bar itself, the size of the bar(both big and small are all important), support, resistance, round numbers etc. These are all pieces, we then combine these pieces(price action analysis), with other areas such as confluence of factors to formulate a trade idea. As you go from post 1 to post gazillion in this thread this will become more clear. There is not a do this, then this the that, and trade. It isn't that simple and that is why a lot of people steer away from learning to read price. But after your learn it all it does become simple. Kinda weird.
The red highlighted is found, for example, in a wedge sometimes, right?
And reading through the thread ( I still have a gazillion pages to go ) I think, I understood, that one is looking for big price-action near R or S and/or certain Fib-and Pivotlevels?
Yes this can be it. It comes in many forms. For example sometimes you just get a pinbar at swing high, or a BEOB(bearish outside bar), at a swing high. THere might be no fibs there, no resistance, but it can still be tradable. This comes with experience to learn what is good from bad(and that is the journey and what is trying to be taught here). A lot come to this thread because they hear about this pinbar(just an exhuastion reversal bar), and think everytime they see one it is a good trade. Far from the truth, one must learn the little nuances to get this down.
BTW: is there an indi you know of, which draws the Fib-levels automatically ( for example daily and 4hrs? )
And if I have to draw them myself: how do I do this correctly? I have seen so many variations of it - I am pretty confused...where is zero? I think, it is, in daily, for example, from the lowest to the next high? Or the highest over all? I can?t figure it out...
This is a waste of time. I know it sucks, but forget about any indicator that will do the so called work for you. The fact is that you will benefit much more greatly by learning to do it yourself(and no indicator will do it near what you will be able to do). I created a video on how to draw fibs inside the PF, but through charts let me do my best to show you how simple it is. THe first important point is learning to identify swing high and swing low points. You have both major swing points and minor. You then can use these swing points to draw your fibs from. Below is an example chart.
Now at first this will look like a big mess but I assure you it isn't. What I did was label 5 swing points. These points are A, B, C, D, E. I then drew Fibs from these swing points.
Point A , C, and D are swing lows.
Points B, and E are swing highs.
Now I draw fribs from swing to swing. A swing low to a swing high. Never a low to a low or a high to a high. So for example I have one Drawn from A- B, A-E. And I have one from C- E(I used a purple trendlines to show where they are going since it is easier to see).
Notice you can draw one from A to B, and also A to E. THis is because point A is still a swing low, and then we made a new swing high at point E.
So using points A to E(the big fib). and Also drawing one frmo Point C to E. We have an OVERLAP of fibs(the blue box). This is confluence. Notice the 50%(of the C- E fib), and the 38.2% of the A-E fib, overlap. This is an area of confluence, and then notice where price reversed at(point D). After price reversed at D that created a NEW swing low point.
I know that seems a lot for you right now, but the best thing you can do is start from page 1 and read read read, then read it all over again. It will take you weeks and months, but I promise you I did it(more then 10 times), and many others have and you will get through it and be better trader for it. Many questions you have are asked 100s of times in this thread, b/c it is natural we all have the same types of questions. So grab some coffee and go for it
nice chart, question though - do you think this was a higher probibility setup than the daily pin bar on the 22nd Oct that failed? That pin looked to be at a 'nicer' level to me, with 50% fib confluence from the down move on the monthly chart.
Thanks
Hey Eltrot,
I had a pending order on the pin also(as well as the nice BEOB), but it never got hit. This is something I stress to do to keep out of some of those false breaks. Firstly volatility has been high as we know so one should adjust their "buffer" on the entry for that. If you look and see a close round number by your pin, place your order to sell in this case under the round number. In this case 1.2400, was right under the pin. This saved a bunch of people I know out of this one.
Thanks Mike and Jim. Round numbers are not something I've paid attention to before, but I will now - another thing to look for when finding reasons not to enter a trade, or where not to position yourself! So what is it about round numbers that makes them significant - its just another number after all!
ahh it is far from just another number. Round numbers are psychological areas, which means they attract orderflow. Prices move with orderflow. Without this orderflow we have nothing. It is a longer topic then that but understand price tends to react heavily around these areas(for many reasons). Plot round numbers on any chart, scroll back and observe all the reaction around these areas, you will learn A LOT.
A few cherries out there to chose from Mike. Harvest time.
Actually for me these are all far from cherries, and most are in too much traffic for my liking. Location is just not prime on any of these for me. So no trading here
So its just like another PPZ to watch out for? When I looked at my USDCAD charts I didn't note much action around the 2400 area so didn't have any PPZ lines pencilled in, but I've just gone back and looked at the monthly chart and I can see there was some nice reaction at that area back in 1992-93, 1988 and the early 80's! That's quite a few years back! If it wasn't a round number, would you say PPZ levels going that far back would still be significant today?
Thanks for your time
When PPZ and round numbers line up it is even better places to watch. What i mean on a smaller level is intraday these round numbers are also important. Basically you have orders piling up on both sides of this number. So for example lets put out a hypothetical situation for this USD/CAD to illustrate what I mean.
We were in a very strong up trend, and then price temporarily exhausted giving what we call here a pinbar. At the low of the pin(the daily low), was just above the round number 1.24. So now the next trading day starts. You have a bunch of people look at their charts saying. Ok right below yesterdays low, people have their stops. They say ok if yesterdays low breaks I am out. Now you also have people who placed limit buys just ahead of the round number. So price breaks the low, sellers come in, but buyers come in to absorb this liquidity to get in long. All the while 1.24 is NEVER even hit. The orders ahead of this number prevent price from going lower, pushing price up higher and invalidating our pinbar. Now does this always happen, NO. There are a ton of various scenarios. But from my experience the fact that orderflow clusters around round numbers gives us incentive to help us a little bit more. In the case of buying and selling, my order always goes above(when I am buying), and below(when I am selling), a round number.
There are many other scenarios why round numbers don't get breached. Sometimes it is option barrier protection, etc.
On the longer term you might see round numbers line up with PPZ, but they also play a role intraday.
I regretted posting that soon after. The closer you look the more you see the previous support/resistance areas.
hehe, well it isn't to say they won't give pips. Eur/usd is off some previous support, and it is a large pin. But the way I trade, it is still in to much congestion for me. So being that it doesn't rate very high on my scale I will stay out. But for some this may be their ideal setup. Really comes down to style. My way is just my interpretation of what James has so graciously taught me.
to continue a bit with round numbers. Watch USD/JPY if we reach the 100 level. Right before we got there we had HUGE sell orders come in at 99.70ish. Look at the huge bearish bar that was created even with price exploding higher. You know you had big sellers(I am not talkinga bout you and me), to sell in right ahead of that number. There could be barrier option they were protecting or various other reasons. Now because we know 100 is a very psychological number, next time around we can expect. This area again to be protected, or I can nearly guarantee we have heavy orderflow in the way of stops located above this number. If you watch price on a much smaller scale when it goes through this number you can literally see these orders hit a price cascade upwards.
Sorry to continue to ramble(I do that often), if you have more questions you can always PM me.
Hello Jarroo, Thanks for your answer. I always knew I must be missing something about the PB's. From my picture, please point out to me, which is the breakout line 1 or 2 ?
Hey ALM The breakout point would be the low of the actual pinbar itself which would be Point 1 on your chart. But always use a little "buffer". So you would want to put it a bit lower then the low(depending on the timeframe).
The 'Buffer' you were talking is really mystical. Is there any formula or tool to calculate. What can happen if we make immediate entry as opposed to entry after buffer level you were speaking about? This thread is the best, Iam getting alot of knowledge and getting to discuss trading matters with many smart people. Thanks
ALM
The buffer you use will vary depending on the trader. The basics of the ones I use are as follows
Now this changes constantly based on a few things.
Volatility. Low volatility = smaller buffer. Higher volatility = higher buffer. IN a market like this my buffers have gone up.
Another thing that I mention back are round numbers. If you have your buffer say on the daily of 10 pips to enter on a break. And there is a round number 2 more pips above you. THen my buffer is going to be around 14 pips(not including spread), so that I know we are also breaking the round number.
Just little things like that, it becomes second nature after some time
I have to admit all though i understand Jim's comments on the chart very well i don't understand how to always apply mm to it. The Thursday pin was 271 pips. If you took the pin on a clean break of say 15 pips you would have a short entry of 1.4620. Now if you have you sl at the top of the pin that is 286 pips away... yes there is a potential tp level at the low of Wednesdays bar (and also confluence at the 61 fib) however that only gives you a potential 75 pips of profit.
I have usually felt an obligation to have at least 1:1 RR so my tp in this case would have been 286 pips. That probably would not have worked out to well in this scenario.
So can you trade with poor RvsR and stay alive...
Hey
It all comes back to win rate. If you have a poor R:R and a high win rate you are fine. James always says he doesn't care about R:R, he trades his charts. There are a million ways to skin a cat in trading. I have a lower win rate and a higher R:R, because this is how I am comfortable. People were asking me if I was trading these types of pins when they popped up everywhere, and my answer was no. B/C it didn't fit into my style. But if you do trade these, you can not go looking for a big home run trade, you ahve to be well aware of the situation and at least get your stop to b/e at these areas. That is the difference in my opinion b/w a pin in traffic, and a pin not in traffic. They both offer opportunities, but it is how you handle your trade mgmt which is going to decide your profitability.
It really is just basic math in the end, if you have a win rate of 80+% you don't need to be getting 1:1 on every trade. So you have to find your style. I am very conservative in my entries, and look for entries that I feel usually give larger reward possibilities. But I still don't look to get a certain R:R.
James also always brings it back to account size. If you have a large account either A. These pip moves are going to be substantial, and you are going to take your profit at these areas, or at the least move your stops up. If you are trading a smaller account where the trade is worth 20$, you are never gonna want to take profit b/c the money is so little. Or B. You have a large account so you are not going to take setups that you feel are iffy. Find your balance as a trader and practice practice practice.
some nice breakout trades seem to be cooking out there, would be nice to see some with the trend BOs from any of these...
these traingle breakout setups seem to be common in most pairs throughout the major and there crosses, i'll have to watch these.
Mike if you could shed some light on these, or any other...
Regards,
Ghous.
Hey Ghous
One thing I am big on is the steepness of the trendlines in brekouts. These are all two steep for my liking which if they do break often lead to false breakouts, or breakouts minus pullbacks. B/c if price is going to pullback, it has to pullback very high(due to the steepness), which then tends to chop price with the next move down(as the move up in a downward break has usually created some support on the way up).
A bit difficult to explain but basically steep trendlines = no trade for me. Often these steep trenlines show price forming a bottom of sorts - at least temporary. So right now I wouldn't be look to initiate positions on these lines. Rather wait to see what happens depending which way we go. If we move lower, then we should create new less steep trendlines after price finds support somewhere. Then these would be playable to the downside.
Hope that makes sense, again just some of the things I personally do
Mike
ps, most of the downward sloping trendlines for a breakout long are much more appealing by the angle. Just as a side note
Just thought I'd let you guys know I've had 17 winners out of my last 19 trades using the J16 methods, my most consistent run in trading(demo).
Today i took entries on 4hr pins on G/J, G/Chf, and cable, and came out with 275 pips....
Wow way to go bertie 17/19, don't change a thing !
The most important thing is to find what works for you with this. Each persona will have different things that they do. There is no one perfect way. For example I trail my stops almost all the time. These gives me a basis for how to manage all my trades in a similar fashion. This helped me be more consistent. Some of my exit strategies are time based. For example when I utilize a 2 bar trailing stop. That has a time based element, but I often use discretion on the longer timeframes coupled with that. For me if a trade starts lingering for a few days it is time to tighten up and prevent a full loss from occurring. Don't be upset when you don't catch a whole move. If you are having such a high win rate, as long as those 2 losers aren't completely wiping out 17 wins you are more then on the right track.
If you can hit 17/19 trades a month, you are going to be just fine at this .
I have a question about bullish and bearish vertical outside bars. They only signal a continuation of a trend?, or is a signal to enter?. Anyone has checked a bulish BVOB on the daily EUR USD?.
Please check it out and let me know about it. Resistance to enter, also match 38.2 Fib Retracement from Oct 2000 to July 2008. A break of 1.3050 would be a signal to enter... what u all think about that trade?
Best wishes
WP
Hey WP
Like all price bars they can be played as both reversals and continuations. The best ones(especially for new traders), are going to occur at swing high and swing lows as REVERSAL bars. Just like a pinbar. So you want to see them really sticking out there and not and traffic. But just like pinbars, you can play them as continuations as the trend. The only reason myself and other traders here warn a bit against this is initially most traders have a lot of difficulty with trade mgmt, when a trade is in traffic. Continuation patterns tend to be the patterns that occur in traffic most often.
My chart is marked with both BUOBS. Arrow one was at a swing low, where as arrow 2 is already in more consolidation. Blue box is a potential trouble area.
Also attached is a great BEOB at a swing high on the USD/CAD that many of us took and are still in.