Jim,

quick question for you brother. Do you just pay attention to bar highs/lows or are you looking at open/closes too? And is it a case of "I look 90% at bar highs/lows because that's where price bounced but I keep an eye on closes out of the corner of my eye too". I mean what weight would you give to highs/lows vs closes/opens.

Sorry, not expressing myself too clearly. Shoot me a reply if you need clarification on what I'm after.

Thanks buddy.

Aaron

Thanks Jim

I was just about to agree with you when I saw the charts....lol

Shows me what a bias does to my head. I've been looking for PA hoping to not miss the big "intervention bounce" when it comes but it looks like someone used the quiet Asian session to buy a load of Swiss Francs.

That pair has just gone on to my "don't mess with this unless it's price action even my grandma would trade" list.

Makes me think though. With all this talk about fundamentals and working out the market, I say good luck to you with whatever works. Those who stay away from fundamentals do it because usually it gives them analysis paralysis. I am not terribly good at interpreting these things but the great great joy of price action is that we get to see these big orders as they go into the market.

I may not be good at interpreting the fundamentals but thank God those who are reacting to these things leave great big footprints in the market. And thank God that what Jim has taught us here helps us to see those footprints and hitch a ride along the way.

Touch trading still seems like voodoo to me...lol...my demo account fared badly.

That EURCHF chart.....madness. I don't see a high probability trade on that thing anywhere. Just the tempting promise of huge volatility to come.

That kind of tempting promise has burnt me so often I've got plastic fingertips. (Musn't miss out! Intervention coming!) Luckily we have other pairs to trade while all those looking to hitch a ride on the SNB's coattails get hammered.

Is it just me or is this the biggest moving pre-NFP day in years?

This is why I love you Joel.

When are we going to see JoelCF's 30 minute TV show? Kind of like The Daily Show but for finance.....

I love how after 3 pages of talk of the CHF madness Jim comes in and calms us all down with a safe obvious and easy trade (the NZD was also backed by 2 monthly bearish pinbars). Either a play of that outside bar or a touch pullback to 7000 with a 20 pip stop would have been a great trade (Full disclosure: I didn't take either because I don't do touches or continuation bars yet)

As I said before, volatility gets me excited. It gets us all excited. Big moves are what we love. Well, not quite. We love big moves signalled by PA. Find me some PA on that EURCHF chart because I can't see any. All I can see is a bunch of traders getting creamed because they thought that somewhere, somehow the SNB was due to intervene. And when price moved lower, well you needed a bulldozer to sweep away all those dead stops.

We trade here with relative certainty. Good PA, PPZs, A+++ setups, there really is relatively little doubt how it's going to pan out. Where we get killed (myself very much included) is in taking mediocre setups on hope. Or playing the tables with the EURCHF because, well, maybe, just maybe....

The last play I see on that chart was around 1.5. Bounces off that level and breakouts through it were good plays IMO. And that's because it was solid support. Anything after that was dancing with gorillas.

If you really think you can play SNB intervention ask yourself if you've studied all the past SNB interventions on that chart. What day? What session? How many pips? All in one go, or a little first followed by a bit later? How much did they retrace, and how soon? Remember, that every single retail trader in the known universe is looking at that chart and thinking 'intervenshunz coming!'. It isn't some dark secret that you've stumbled on in the bowels of the Vatican archives. Everyone is looking, waiting, getting ready to jump in. At the tiniest twitch in price upwards, the world and his dog would be buying that pair. If I was a mischievous hedge fund trader in a low liquidity session looking to grab some cash, I would make the chart look exactly like it did. Maybe the SNB jumped on the back of that too, maybe it was Blofeld in his cave, maybe it was a cycle of the moon.

The retrace from the move came far sharper than in previous 'interventions' and during low liquidity session too. In the past it's taken several days to retrace as much as it's done now. Does that mean it was the SNB? a mischievous hedge fund starting the gold rush that every man woman and dog watching that chart was looking for? some combination of that? none of the above? I don't know. Seems to me that intervention from a national bank the day before NFP is a little bit weird and not the best bang for your buck. The retrace was super fast too, which doesn't usually happen when the SNB flex their muscles. But then, I'm not Rac, that guy is a master and this is perfectly his style, he understands the big picture better than I do, and I bet he made a killing.

The one thing I know for sure is that I simply don't know. I have an infinitessimally small amount of the information available to those in the know and I simply see no pinbars, I see no outside bars... and even if I did I wouldn't particularly go for them on that mad chart. There are far far safer trades out there for me

Phew that turned into something of a rant. Thanks for indulging me fellas. This is pretty much the only place on the web where I feel I can vent this way and not get into some mad WWE style flame war.

Fib extension and daily resistance turned support confluence. Man that's good. I would never have spotted that in a million years.

Spotting confluence is an art. When good confluence is presented, it just looks so simple sweet and obvious. That's what I love about this game. It's a complex journey but the end goal is absolute simplicity.

There is also this, going a way back. (the silver line is the 1.3675)

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You just made my weekend sir.

How good is it to have Jarroo back guys?

Don't for a moment take for granted what he's been doing these last 24 hours. He's been taking historical setups and teaching and explaining patiently how this thing works. A really clear simple explanation of PA and of course, the signature Jarroo management style. It's been a real joy to read.

This particular setup is a great little teaching tool. Big daily continuation BEOB retraces the round number produces 4H PA and then moves on. But look carefully at that 4H chart and the importance of getting to break even at those previous bar lows becomes apparent. Trading the retrace of the daily bar could have made this anything from a 1R loser to a multiple R winner.

Here's what I've been picking up from Jarroo on these posts. No matter the quality of the PA setup, you simply must know where the first trouble area is, and in most cases you must take some kind of action (even if it's stop reduction). As always with trading there are no black and white rules. I know Mike takes full bar losses sometimes from bounces at first trouble area (like his recent daily BEOB GBPCHF trade) but they are rare. James16 gets his super high winrate from always taking action at the first trouble area.

So it goes like this:

1) Learn to identify the best PA setups (bars and location, location, location)

2) Learn to identify the potential trouble areas, especially the first

3) Build a system/trading plan around this based on your preference and personality, allowing you to have a positive expectancy overall

The and only then can you start messing around with sub optimal PA setups because you know you can manage them appropriately. But I know from my own ongoing journey as a trader that trying to trade everything that moves before you can patiently wait for the A+ setups and manage them accordingly, is a road to disaster. (As regards patience, I haven't put on a trade yet this month. There were two 4H trades that I would have taken that I wasn't around for, but that's it)

Love ya Jim

(and the other Jim as well. Texan guy, hangs around here a lot. Some of you may know him... )

I agree with this completely lovejoy but there is an extra thing I have noticed based on my own experience.

Sometimes when I have a key level marked on my charts and I am looking for PA, I get very tempted to take the mediocre PA that shows up at that point because I am already primed and looking.

If our areas are correct then there will almost certainly be some kind of reaction there. Price will rarely smash straight though. So what we need to establish is whether the PA we see is a 'pause bar' or a 'reversal bar'. I've been burnt so many times from taking less than stellar PA at an area I've been stalking. Size of the bar can be a great indicator of strength.

As an example there was a very tempting 1H pinbar off the 7000 level on NU this morning (UK time) but it just wasn't big enough. As you can see it chopped around and retraced deeply into the bar, gave a move, came back. Who knows whether it'll pay off or not, but the big bars often have the momentum to run and keep running. The smaller PA bars are often initial pauses before some chop around our area (if we've picked it correctly)

I do mark areas on all charts, especially the big round numbers, but I always make a mental note to not just take any pinbar at those levels.

Great post Patrick and I've been thinking the same thing. There was a time when if the trade went ten pips against me after entry I would think "KILL IT". It was pure emotional trading. I either have faith in my entry or I don't. And while I won't stare at the screen like a lemming watching it charge towards my stop, I do allow for a setup to take a little time before playing out. Especially given that retraces to the second eye on pinbars and to the 50 level on outside bars are so common.

We do need to protect ourselves and reduce our losses. But that's not the same as blind panic if we incur even a pip of drawdown.

Individual comfort zone applies as always, but it's good to be aware if what you're looking for is the pain free trade. Because that implies you're not comfortable with your risk. And that can be a problem.

I think it's also worth putting this in context of Jim's "this is critical" post and mentioning that he is fanatical about taking action at first trouble area. So this isn't carte blanche to hold your trades in hope as they bounce from first trouble area and stop you out. It's more to say that price rarely moves in a straight line to get where you want to. I'd hate to be advocating losses to anyone in the name of patience. The move to breakeven is probably one of the most important parts of trading.

Wow, I've been looking for that one for ages. It used to change hands for hundreds on ebay after PTJ decided he didn't want it out there and tried to nix every copy. It's a trading legend like the Yeti....

I fully expect that page to be yanked in a day or so, so it's nice to have downloaded my copy.

Thanks!

As always, Patrick's (Seeking Light) words struck a chord and I thought that if I was a newcomer to the thread I wouldn't be able to see the method. So I figured I'd post a few more charts. This comes with the caveat that I am still finding my way and no zen master of this stuff. I won't post all my trades, I do that on PF. But I'll try and post a few more that illustrate what I learnt from James.

There are tons of variations posted here and threads do evolve organically but one of the mistakes I am prone to making and I know others do too, is to go look for the advanced before I've got the basics locked down. Get one simple style, get profitable, repeat, then look for more. That's my mantra these days. I remember the days when people here were scared to post 4H and 1H charts because they felt it would distract newcomers from the key focus on the daily and weekly. The bar has definitely dropped since then.

On a side note, I think it's because real A+ trades are few and far between. Whereas B setups come all the time. So Mike could post every one of his trades here and his 2-3 setups a month would end up drowned in all the noise.

Anyway, some guys posted the 4H GJ trade today. I took it because it was a good sized bar with a long nose that stuck out, and had good confluence. Namely the 150EMA, previous support (look to the left) and was between the 50 and 61.8 fib which is an area I like to see bars at.

I marked out the two trouble areas and took a snapshot of the trade for my records. Went to break even at the first trouble area and got stopped out for break even.

That's pretty much what I look for. Good bars with strong confluence, that also have room to run to first target. The I go to break even and look for bigger moves.

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Contests are useless usually because they don't account for the odds of repeating your performance. Say 100 people played roulette and we ranked the winner in a 'contest'. They all bet on a single number. Most of them lose....but one of them increased his 'account' by 3700% on one 'trade'. What a hero he must be!

You get the point I'm making here.

High risk behaviour going for the long shot is what these contests reward. There's another word for that. The Lottery.

Sustained growth, year in, year out. That's much harder to achieve. In my opinion percentage return is not the best way to judge a trader. The best way to judge a trader is through his or her consistency.

Absolutely. I was just using your post as a leaping off point rather than countering you.

Some of the big reputable contests have been won by great traders like Larry Williams and Buzzy Schwartz. And those guys have made fortunes from trading.

Agreed. Real money in meaningful amounts has a way of really focussing the attention.

Allow me to use your post to jump off into a general ramble Joel.

When Jim says 'Imagine what a 50 pip move on a large account can mean to you' he doesn't just mean the winners. Making 30 grand on 60 pip move is great. Losing 30 grand when it goes against you is awful. The larger the account gets, the more conservative you get. Both in trade selection and management. And your tolerance for drawdown decreases. Until then, it's tempting to just view it as a video game.

This is where someone usually chimes in and says that it shouldn't make any difference and that 1% is 1% no matter the account size. It's also usually said by a person with no experience of trading a large account. They believe it's easy to lose 30 grand if you have a million dollar account. I've yet to see anyone say this who actually has the experience of trading a large account.

There are so many ways to get psyched out on the way to the top. Simple consistent returns from predictable high probability setups, and a ton of waiting in between, always pay dividends. Let compounding take care of the rest.

Ask yourself who the best traders are on this thread. The ones you look up to. Make a list of two or three. Then ask yourself how many trades they take each month. Then look at how many trades you've taken. And ask yourself if you have good reason for trading four times as much as the guys you admire and hope to emulate.

I am pretty sure mbqb11 would be on that list. He took 2 this month so far (hope you don't mind me saying, Mike). Storage Pro has 2 so far I think. So if you're running at 10-15 already this month, why is that? And are they all great setups? Have you proved to yourself you can be profitable taking only 3 or 4 trades a month? Are you doing advanced material before you've mastered the basics?

That's the biggest road to ruin in my opinion. I know because I've walked down it. Jumping around, trying to get it all down at the same time. Not focussing on doing one thing until its profitable.

But anyway, it's 1:30 am and time for bed. This ramble could go on for hours...lol.

Come back Jarroo and whip us all into shape...

If anyone doubts the material, take a look at this 'after' chart. It bounced off both target areas I had shaded before. Any decisions after that are entirely up to your management style. I am more conservative and do not like drawdown after first target is reached (I hate winners turning into losers), so it was a breakeven trade for me. But crucially it was another confidence builder in the J16 material.

However you managed it, this is a good example of how, using this material and being picky in your entries, you can tell exactly where price is going.

As Jim would say, armed with this knowledge tell me what can stop you?

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And another one from today.

BUOB at big round number which is also a PPZ, two EMAs, and a pullback to the trend. The target areas are marked. Let's see what it does. (Update: It's moving)

A good bar with massive confluence means I sleep a little better and don't start to sweat the minute I enter the trade. Been there, done that and really don't want to go back.

As a footnote I may have gotten a little greedy with this one as I have wanted to be long gold for a while and I am looking for it to breach the highs. It may come back after bouncing from those highs and stop me at break even, but that's the risk you take when looking for a runner.

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I don't play touch entries TJ. This was a 4H entry (if you're referring to gold) and there is a BUOB on the chart right there off the 1100.

If you're referring to the GJ chart I took the bearish pinbar at the swing high and the yellow shaded areas are just targets.

That's the reason right there.

A pinbar signals a reversal. A Doji or neutral bar signals indecision in the market and no direction on way or another. So this was not an entry based on a bar but more of a blind entry based on a level and IMO that's where it went wrong.

Even if it had been a pinbar it still went exactly where we'd expect. The two bar highs where your 38 fib is. But this is a sideways market at best with no real bar signal so I would say that was a very weak setup.

Looking for the bigger bars at the best locations pays off every time

I hope you don't think I was getting at you. I am just being honest with you or else what would be the point.

And Jim didn't say trading a sideways market was essential....he said trading a sideways market at break even or better was essential. That's a huge difference.

We do that by not trading marginal setups and only waiting for the very best.

I think your fib may well be a little curve fitted too as it wasn't really a huge swing high that you took it from.

Again these are just my thoughts seeing as you asked for comments. I really think that waiting for the very best setups gives us confidence and success.

Hey PM,

I didn't pull the trigger on this but I was watching and let me give you my take with a couple of charts.

Firstly on the daily you can see GU broke out of the range it's been in for months. I had the bottom of that range marked as 1.58.

Then on the 4H it produced a bearish flag with two opportunities to go get in. The 4H double inside bar (Dale's Double) at the retest of the 1.58 level, and then the pinbar that was the breakout an retest of the bearish flag itself.

I am still in testing mode with double inside bars so I didn't go for it, and with the second the Big Round Number of 1.55 and low of the bearish flag were close so I stayed off. But they both worked out well and they sure make for a clean pretty chart..... Playing both would have net you about 7R and counting. Who needs touch trades eh?...

This stuff really does work IF we wait for the good locations.

Best,

Aaron

EDIT: Oops, I forgot to look at that chart to closely. That isn't a Dale's Double at all but a plain ole inside bar. So no signal. The breakout/pullback is still valid though. That'l teach me to post while I am still waing up.... Thanks SC for pointing that out.

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You're darn tooting SC! My mistake. That'll teach me to post charts first thing after I wake up. I'll edit my original post.

It's not a Dale's Double so no signal. Ignore that and focus on the breakout/pullback bar.

Thanks....

The problem here longshot is that this is the James16 chart thread and a particular method is taught here. Price action, at PPZs, with sound money management. You have every right to trade how you will, but if you are trading against the main principles of this thread then there is no real way that anyone can offer constructive criticism.

You may be better served in another thread, because the view of most people on the James16 chart thread will be that you're going about this all wrong. You're perfectly entitled to trade your own way of course, and if you pull off your 8000% goals then you will have achieved a rate of return that makes you the best trader in the world (better than anyone one Wall St, better than any retail trader). That might be an unrealistic goal.

But all anyone here can do is give you constructive criticism from the James16 style of trading. And because your trading bears no resemblance to that style of trading, it's difficult to know where to start.

I also see two conflicting messages in your posts. On the one hand you're saying that "I'm not going to do it like it was suggested in the first post" and "this is what I believe no matter how others say I should look at it", and then on the other hand you are asking for constructive criticism. So it's difficult to know what you mean or want.

I don't know that there is any constructive criticism that can be offered in this case. My constructive criticism would be to say 'Follow the requirements of the first post, trade the dailies while you find your feet, learn to identify price action bars and PPZs, and practise sensible money management.' My view of your current plan is that you will blow out your account very very soon.

But you've already said that no matter what anyone says you're going to ignore this. In that case I don't think this thread can help you.

You're a star Benji. What a great set of charts and what a terrific amount of work you did putting them together. Great great stuff!

That's my feeling too. It's been pushing my buttons recently, but maybe I am getting more crochety in my old age

General thoughts follow. Not directed at Benji at all, but sparked by his post.

I think 'advanced techniques' are fine if you've been doing them for years and are consistently profitable at them. But if you haven't even proved yourself on demo with these supposed 'advanced techniques' then why are you posting them?

I use the term 'advanced techniques' very loosely because too often I think it's just a fancy way of saying 'overtrading'. It's only an 'advanced technique' when it's profitable.

If someone is posting charts of their one winner in five on these variant methods then they are not helping the newcomer because they are presenting the cherry picked highlights of an unprofitable method. It gives a false impression.

I think if you have been profitable for three months on demo then three months live with a variant method, then by all means post charts. Until then, stick to classic J16 setups which anyone at any stage of the learning curve is welcome to post here.

Until you've proven themselves for 3-6 months at touch trading or whatever, it's no use posting posting a chart saying 'this is an advanced technique and not for newcomers'.

Because until you have 3-6 months under your belt, dude, you are the newcomer.

These were the facts I based it on. Apologies if I misunderstood your intention but it seems from these quotes that you are intent on ignoring the most basic advice this thread and its founder have to offer.

Fair point Chatzi, and you're right. (Edit: I also see that you have amended your original post and added a paragraph. My response below was to the original unamended version)

I didn't express myself too clearly. It's always okay to throw up a chart and ask for help. But recently there have been a ton of charts that aren't asking for help or comments at all. Just 'woohoo look at this trade I took'. And they aren't based on J16 methods at all.

Breakouts, intraday, daily etc are all J16 styles. As for touches, Mike doesn't trade em, Jarroo doesn't trade em, SP doesn't, I am pretty sure bundy doesn't. Jim only occasionally trades them and hardly comments on them. And Rac, when once asked about 'touches' said 'if I told you I'd blown two large accounts from trading touches then would that affect your decision' (direct quote). So I don't really know which James16 senior a touch trader would expect advice from.

One of the enshrined basic principles that James lays out in the first post, is to start at the basics and work your way up. The way things are taught here is not 'come on in, pick your style whether it be touches or classic J16 PA and then learn'. The big guy makes clear that if you don't start with price action at higher timeframes get profitable there first then move down then you're doomed. His exact quote is "YOU MUST FOLLOW THIS APPROACH IF YOU DON'T WANT BLOWN ACCOUNT AFTER BLOWN ACCOUNT." His caps not mine. I feel this message is being lost in all the noise.

I don't for a moment want to discourage anyone from posting a chart and asking for help. However if I can discourage one person from touch trading before they've mastered price action then I'll be very very happy indeed.

Posting potential locations to watch out for, and posting PA based charts is always great IMO. And I love your charts Nasir.

My worry, like Patrick's, is that this descends into another Cable thread. So I was taking the opportunity to vent a little...

I see you amended the original post that I replied to. Just for clarity, I added that to my reply otherwise it looks like I am making points you already answered.

As for Rac, I won't say too much because I know that he doesn't like people to talk about this a lot, but a lot of times it only looks like he's touch trading.

Anyway, I made my points. I fully understand that you find 'all this preaching offputting' and so I am done for now.

I don't want to get too much into speaking for Rac, and he may even ask me to remove that remark because I know he keeps his cards close to his chest. The quote in question came when he was actively warning people away from touch trading. He wants you to do some digging through the charts and work out what he's doing, but very little of it is actually touch trading. So it's not that he's teaching a method that he blew up accounts on. It's that when people assume he's touch trading, that's not exactly what he's doing.

The way Jim does it, is to wait for a huge daily price action bar straddling a round number, then he plays a pullback within that bar to the round number (especially when confluent with a PPZ or an EMA) with a tight stop on daily only. As always, patience and pickiness apply. In this way, touch trading is not a dead end at all.

Also, most people go for touch trading to increase their opportunities and increase their R multiples. Sadly it often increases the account depletion process.

I know one guy on PF who trades pretty much dailies only with price action and makes an astronomical return a month. He's grown an account from $1000 to nearly $150,000. There are many approaches on the daily (like the touch trade scenario I outlined above) which can produce incredible results. It starts with waiting for the best setups, and then during the course of that, different ways of approaching things become very clear.

No apology needed. My post wasn't directed at you personally by any means. Just a general frustration with the flow here recently, and an echo of what Seeking Light picked up on.

Wise stuff Benji. It made me reconsider. I apologise for getting a bit preachy/ranty about things. Everyone is of course free to post what they want here and there is no 'thread police'. I too focus on certain posts more than others, but the learning curve is the learning curve and I have done crazy things along the way. So it is not very dignified of me to be judging anyone for where they are on the curve. My own journey is far from done and I am far from the finished article.

That's very decent of you Chatzi. As I mentioned to Ben, I probably have got a bit ranty/preachy and it isn't my place to do so. I apologise.

PM me your email and I'll send you a daily chart or two....