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  #38149  
Old Jul 20, 2009 7:59pm
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Quote:
Originally Posted by raczekfx View Post
Hidden divergence on small TF?
It was good only for 20ps for now. Spotted on daily, could easily be worth 200ps.

& the 4hr view.
.
Trading like Ryan now Rac?
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  #38173  
Old Jul 20, 2009 8:40pm
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Quote:
Originally Posted by mbqb11 View Post
people often ask me how to trade without a chart. Somethings i keep secret, but here is the real way to view your charts once you get it setup right.


Now you can actually touch your pinbars!
Thank you for sharing this new Mike's Holy Grail Method with us. I have some questions.

1) Do you put the glasses on at London open? What time do you put the glasses on?

2) Can you explain your entry and SL for this method? Do you enter on the blue lens or the red? Do you place stop behind the glasses or in front of them?

3) Can these glasses be worn on the lower timeframes or will I go blind?

4) Is it possible to use yellow and green lens filters, changing to blue and red when daily stochastics cross over and RSI enters overbought conditions? When heiken ashi displays convergence with andrews' pitchfork I switch one lens out and leave the other in. I have found this simple addition helps your system much.

Thank you in advance for your help and for sharing this new system with us. I think we will all be millionaires soon!
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  #38351  
Old Jul 22, 2009 5:46am
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Quote:
Originally Posted by Jduester View Post

Patience. Discipline. Commitment. Direction. Sacrifice. Will. Determination. Dedication.

Josh
Amen Josh.

I have filled about three large notebooks with notes on this material. And each one has some combination of those words on the cover.

Great to have verbal and visual reminders of what I need to do to succeed, and what I am aiming for once I do succeed.
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  #38359  
Old Jul 22, 2009 6:07am
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Quote:
Originally Posted by jarroo View Post
Yes, I usually add the spread.



Once Price hit the 1st TP (blue) I will take half off and move to break even, most of the time.

1st half gave up about 30 pips and the BarBreak stop loss would be about -20 pips on the 2nd half. I may at times instead of moving to break even I will use the BarBreak when it still nets me positive pips, in this case it would have been a net 10 pips. That's if I got every inch of the move which is not likely.

The quality of this Usd/Jpy Daily PB was not an A+ setup by any means. So my approach, if...
So glad you posted this Jim. This was exactly how I played this. I thought "Not an A+ setup so play tight and go to break even at the previous highs." At the highs I went to break even minus 10 (because of the strength of the break I wanted to give it a little room) and then it stopped me out for a small loss before moving on to a 1:1 plus return. On my "Jarroo demo" account I had a similar result. Tighter stops but still the same approach and quick to break even.

But I felt a bit annoyed about it all day because of how it ran. This still happens to me but I have to remember this (and anyone new IMHO this is something to really tattoo on your brain):

You can't judge the success of a trade by whether it made money or not.

It'll drive you mad. Looking back over it and thinking "how could I have got into that move?" or "what was wrong with taking this trade? Why should I have left it and spared myself the loss?". This is mental curve fitting and will drive you nuts. Everyone takes losses. Start asking "Was my plan correct? Did I trade my plan?" and crucially "If I took a hundred of these setups and played them the same way then how would things come out?"

My first live trades were high probability setups on the daily and weekly that failed. Oh well. It set a few demons loose in my head, but I remembered that I am in this for the long haul.

Jarroo looked at that UJ and he didn't think "how could I have made money from that move?". He said "even though I didn't take this, I know that the way I trade I would most likely have been out for break even." That's maturity.

This is why we have good MM. Because some win and some lose and we come out on top. If you're scared about each individual trade being a loser, then maybe you're risking too much? I certainly think everyone should experience trading live with such a small amount that a loser doesn't matter and a winner doesn't matter. Maybe 0.5% risk for a while?

I admit the mental demons jumped on my head a little about my UJ, mainly because I have been perfecting exits and missing out on some big moves recently. Two of my four daily trades this month have run and run and run and I got out for about 0.5R between them. But the way I approach this is to keep a spreadsheet with various columns detailing different exit strategies, how far the trade went into drawdown after the breach etc so that I can perfect a SL and TP strategy from live data that I have comfort and confidence in.

After a few months, or whenever I feel comfortable, I will implement this strategy consistently. Spreadsheets with collected data on your live trades really are the most wonderful things for refining your trading.

Okay time for another round of 4H demo bars....

Aaron

Last edited by TiaForex, Jul 22, 2009 6:21am
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  #38370  
Old Jul 22, 2009 6:59am
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Quote:
Originally Posted by Jduester View Post
Good stuff Aaron....
Great stuff as always Josh.

Just adding to this discussion on spreadsheets and exit columns, the biggest problem I have found is that the exit strategy affects trade selection. So, for example, I have a column for a 2 bar trailing stop on my daily live trade spreadsheet, and it's pretty much useless because that is a tool to be deployed when a trade breaks fast. So I would have taken fewer trades if that was my exit strategy and that can't be reflected on the spreadsheet. In your example, if I was moving stops at the end of the day only I would have stayed out of UJ as first area of trouble was too close. This, in a nutshell, is why Mike is so picky.

Ultimately, if I was looking to only move my stops at the end of the bar then I'd pass on more trades. And in the recent ranging market for example, that would have kept me out mainly. Perhaps that's not bad thing. But I prefer the flexibility to adapt to the market and trade with quick hit targets for those circumstances.

So it's not always easy. And I think this is where you and I differ the most. I can really see the advantages of your fixed R based exit strategy. Takes all the thinking out, and God knows there are times when I wishes I had not had my discretionary attitude to screw things up. But I also believe in adapting to the market and employing a discretionary exit approach.

I have two solutions at the moment. One, suggested by a friend, is to keep a spreadsheet showing what would have happened if I has simply set a 1:1 set and forget SL/TP on the trade and seen which one was hit first. No moving stops, no nothing. The second is to write out an exit strategy for each trade. I don't have to stick to it, but I can see in black and white an "if this then that" strategy. I am little wary of the second one because I do so much paperwork per trade already.

The results so far on the first one have been amazing. Most of my trades, even the quick hitters, gave 1:1. My fear is that if I adopted this, then knowing I had to do it would make me even more gunshy than I usually am. But at the moment this is just an information gathering exercise.

Great to have you back Josh.
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  #38388  
Old Jul 22, 2009 10:37am
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Lots of waiting for me so far this week. One loss on my 4H demo and a break even (small loss..my break even stops are usually 5-10 pips behind BE) on the daily UJ.

I am being patient. I hardly trade as it is, but that constant state of readiness and watching can be frustrating and exhausting. That's the sniper rifle for you. I know Ryan regularly watched 5M charts for a whole week without taking a trade.

Plenty of time for education and research.
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  #38394  
Old Jul 22, 2009 11:08am
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Quote:
Originally Posted by mbqb11 View Post
I know I have posted on this topic before and what I am going to say is no different then what has been posted but in a different way.

As I see it there are some basic types of individuals

1....
Early morning? Did you move to California already? Or is 11am rise and shine time for Mike?

Seriously though, this is great stuff and encapsulates the stages of the learning curve and the pitfalls of every stage. We're lucky to have you here dude.

Now go shower. It's nearly lunch for pity's sake.
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  #38512  
Old Jul 23, 2009 5:22am
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Quote:
Originally Posted by batesmotel View Post
Perhaps you're right...but I was under the impression that you pay the spread to buy....and you also pay the spread to sell...(open and close of a position)....But I'm open to correction on that, since I haven't paid as much attention to that as I should....

Any other expertise on that from the James16 flock?

GregB
I have a little mantra. Buy at the ask, sell at the bid, bid price shown. My broker displays bid price always so if I am selling I am selling at chart price. If I am buying (or closing out a sell order which is in effect a buy) then I have to allow for spread. If you right click on your charts, go to properties and then click "show ask price" you'll see the two lines. You buy at the ask and sell at the bid. Simple as that. And all prices and bars are calculated on one of those, usually the bid.

And for my little mantra, I always remember that the letters are never the same, so you don't 'B' uy at the 'B' id. It sounds illy but it was the only way I could remember which way round it was. I even have a post it taped to my screen...

Now someone's going to tell me I had it the wrong way round all along...

Hope that helps.

Aaron
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  #38628  
Old Jul 23, 2009 3:29pm
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Just echoing what Mike said, there are a lot of pairs with that top heavy feeling and with divergence too. This is where I've been caught in the past, being so keen for any bar at a good area that I took iffy ones. So I need to be extra careful evaluating the setups when we get to good areas.

This NJ has my attention but I am in two minds about it because it's a small bar. Weekly PPZ though.

EDIT: I just noticed this missed being a pin by 1 pip. Which rules it out for me.
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  #38629  
Old Jul 23, 2009 3:38pm
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For anyone concerned about the future of this thread and the last day's controversy, there is something in my opinion that you can do...

Keep posting about the things that made this thread what it was. Keep posting your questions, your setups, answer new people's questions. This is the time to step up and carry the flame. Let's not let this thread get overwhelmed and deviate from its true purpose: helping people find their way in trading and change their lives.
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  #38630  
Old Jul 23, 2009 3:48pm
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Here's another one. GU has great divergence on the daily as Mike pointed out, and we are at the top of the consolidation "box". Nice pin, round number, 4H divergence but something in my gut is saying 'no'.

At this stage for me it's about working out what is fear and what is genuine gut feeling.

I am looking for GU to break higher and then give a nice pin from a new high. That would definitely catch my attention. As it stand I am weighing this one up. Trouble areas marked although the top shaded box should be taller.

Also, look how well the 150 has held as support, even giving a nice pin there. I am noticing that in these tight markets the 150 and 365 are offering great moving SR levels on the 4H
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  #38680  
Old Jul 23, 2009 6:42pm
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Quote:
Originally Posted by raczekfx View Post

I shared my intra day systems with a couple of guys from here, who are writing EAs to automate some of the manual procedures. These are solid money making methods and unbelivable simple. I asked them not to share it at this time, so I would probably not be happy if they did, but If later they decide to use EA comercially, to make few $, I wouldn't care less.
Watch now as your inbox gets flooded...
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  #38728  
Old Jul 23, 2009 9:23pm
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There's plenty of reading between the lines to be done even here.

1920 was indeed a good year Rac. Thanks.

I've watched some of those webinars 3 or 4 times and every time I get something new. Jim lets a few things slip here and there that make great aha moments. That's what a wealth of knowledge and experience does I guess.

I wanted to add something too. Bemac style.

In my eyes the measure of a trader's greatness is not how much money he makes. It's his character.

If that doesn't make sense to you then I suggest it will when you're profitable.
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  #38737  
Old Jul 23, 2009 9:38pm
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Quote:
Originally Posted by mbqb11 View Post
First beer down! Much needed

You all are the best

Elmer loves you

No 1 beer doesn't get me drunk wise asses
I haven't had a drink in 8 years.

Nearly started again today...
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  #38740  
Old Jul 23, 2009 9:42pm
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Quote:
Originally Posted by Matiasfx View Post
ur like moomy and Jim the daddy of this great family!! lol

Matty
That is the now the last image in my head as I get ready for bed.

Thanks a bunch Matty
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  #38744  
Old Jul 23, 2009 10:01pm
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Originally Posted by mbqb11 View Post
JEEZ YOU KIDDING ME LOL. Now I have to double the consumption
You'll have to go some before you catch up to my glory days.

Well I say glory....

Have a few for me buddy.
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  #38893  
Old Jul 25, 2009 6:24am
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Originally Posted by bundyraider View Post
Your not wrong with the increasing concept at all. In a trend. I'm working on this one continuously myself....
Awesome bundy. Just awesome. Post one material.

This is exactly how I think as well.

For me the bottom line comes to this. If anyone tells me that their way is the only way to trade they are wrong. Period.

And I will never tell anyone the same.

Many ways to skin a cat. Keep an open mind and you'll keep making more money.

Remember guys, if we told professional traders that we are amateur technical analysts who can make 1-3% a month regularly from just trading the daily charts, they would laugh in our faces. I have friends who run hedge funds who cannot believe this is possible. And on Wall Street and in the City here in London, technical analysis is considered no better than voodoo or astrology these days.

Ryan I can line you up ten who manage large hedge funds who would bet their houses that with your results, you're full of shit. And I'd take the bet. You know why? Because I know better. Because you know better. Because you're someone who came into this thread and showed me that something I thought impossible was not only possible, but that with practice, anyone could do it. That's all I'm saying. It depends on where you stand.

We're already doing the impossible here. So we should keep an open mind regarding what others are doing too.

Last edited by TiaForex, Jul 25, 2009 6:44am
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  #38956  
Old Jul 26, 2009 8:28am
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Default Letting them run: A beginner post

Hi guys,

Seeing as it's the weekend I wanted to post an analysis of a trade I was in earlier this month. Now this is one that I got out of for break even and then it ran and ran and ran. But I saw so many things on here that could be useful to new people, and as always wanted to get my thoughts in order by posting.

Best illustrated in a series of posts. Firstly, here is my reason to take the trade. See the 61.8, the swing high, the smooth run up. High probability in my opinion.

Now here's where it gets interesting.

As Bemac would say "okay I am in, what now?"

On this chart you can clearly see how old resistance turned into support through my two red lines. This, in a nutshell, is the James16 Price Pivot Zone or PPZ. This is what we look for. Trades taken off this level, trades managed through these levels. It's uncanny how often old resistance acts as support.

So that's the setup. Let's zoom in a little and ask some questions about the management.

(Next chart will be a little cleaner so notice how the 50 fib is matching with the silver line -365 EMA- and hold that thought)
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  #38960  
Old Jul 26, 2009 8:53am
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So we're in.

I used to look at hindsight trades and say "wow, if I had ridden that all the way I would have made 9 times my return". But what I want to do here is take a look at a hindsight chart and walk you through the process as it unfolds.

First thing to identify: where is it likely to have trouble?

Jim once said in a webinar that you can drive yourself mad by looking at every tiny area that price might reverse. Separating the major from the minor areas is critical.

1) First minor zone is marked in sea green. See how there are bar highs and bar lows there. Price reacted on the way up. If you dropped down a timeframe or two you'd see there was some reaction here. Would it scare you? Break even? Full or partial profit? Depends on what you believe about the strength of the pinbar. Do you think the pinbar is strong enough to trump this minor level? I would say that most people would say yes here.

2) Second level is marked in yellow. A couple of bar highs and bar lows here and confluence with the 365 EMA (and where the 50 was from the previous chart). The 365 doesn't always act as support or resistance. But when there has been reaction to it recently then I sit up and take notice.

We are also above 1R here. What would you do? Would your stop go to break even? Take profit? You've got 1:1. Are you willing to let that turn into a loss?

Look at the mammoth reaction to that level. If you were at break even, entirely reasonably, you would have been taken out by that. Price created a bullish pinbar too. If you weren't at break even, then seeing that contrary pinbar meant you had to have your stop above it by then in case it breached.

3) Third level shown in grey. Very minor price flip. Bar highs and lows. Look what price did. Bounced off it like a rocket. Where would your stop have been?

4) Fourth level is our red line marked from the previous zoomed out chart and confluence with the 150EMA. And also if you pull a fib from the lowest swing low on this chart to the tip of the pin you'll see it's at the 50 ret too. All these confluences make me think that this is our first major support level. We get a textbook bounce off that level, price then shoots down breaks through and then comes back to test previous resistance as support.

And then boom, down we go. I am thinking we will see the final red line at least. If we do then that's 7R.

Okay on to the final post with conclusions.
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  #38965  
Old Jul 26, 2009 9:18am
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Okay guys. So hopefully by now you've seen the reasons for taking the pin, the explanation of the areas of trouble. Great.

Now ask yourself, "what would I have done?"

I'll tell you what I did. I got spooked. I got out for 0.42R when it looked like it was turning at the first target. I think the best I would have got out of this is a break even if I'd let it run.

Why?

Because IMO those two huge bullish bars on the way down would haver caused trouble to all but the bravest of traders. I saw massive reactions of what I considered to be minor PPZ levels which made me think the strength of the downmove wasn't that strong. Ironically enough, at the major PPZ level price didn't bounce too much.

So how we manage is down to our styles and trader discretion. If you had left your stop above the nose of the pin (which is where mine started billye) all the way down then you'd be laughing and clapping your hands right now. But ask yourself this, how many trades would reach one to one and then reverse on you for a loss? And how would you handle that? I can post a chart but look at the recent BEOB at the swing high on GU daily, the one that started the consolidation. That would have gone to about 0.8R and then turned on you. You could happily have managed this trade either way. I'm just trying to get you to think of the big picture.

Here's the good news.

If these charts don't give you confidence in the material then nothing will. Price reacted exactly where we would expect it to. We can't predict how much it will react but we can pretty much tell where it's going to bounce. And if we break through those areas of support we can tell that they are going to act as resistance. No voodoo here, just PPZs plain and simple.

What I am encouraging you to do is rather than take a simple glance at this and think "oh man if I had held it all the way down then I would be laughing", really look at it bar by bar and watch it unfold. Ask yourself honestly how you would have felt when those big bullish bars appeared. Where truly would you have got our of this one? And across a hundred trades how would this style of trade management work for you? There is no right way. It's trader discretion. But whatever your style, you'll always end up making money on trades where some others lose and vice versa

This started because I was kicking myself at only making 0.42R from this move. But I did a detailed examination and realised that the way I trade I doubt if I could have held through those two big green reaction bars, especuially seeing as they came off minor PPZs.

And confession time. I saw Mike say that he wasn't taking it because it didn't have enough confluences for him to believe it was truly the beginning if the reversal and this affected my faith in the bar.

So I know my areas of weakness. 1) Overly influenced by another's opinion. Solution: awareness, confidence and experience. Will look out for this in the future. 2) Nervy when in profit Solution: Have a pre written plan knowing when my stops are moving up and where my TPs are. Have this written before I check "forum confluence". And so on...

I have taken four daily trades so far this month. The other reason I wrote this was to show you the process I go over with each trade at this stage of my learning curve. It's a little more complicated than "dang it. this one ran, i should have stayed in" because each trade behaves differently and we're looking for a plan that works across a hundred trades. But it's what I do to refine, learn and keep adapting.

There's a saying from something I read about "deliberate practice". Going to the driving range and hitting your golf ball for 8 hours a day won't make you a better golfer. Spending 8 hours a day hitting the ball, aiming for 80% of them to land within 6 foot of the pin, and taking note of what's wrong and making adjustments.... now that will get you where you want to be.

I hope with these three posts I can encourage you to find your own way of mining your previous trades for lessons and learning.

I am thinking of doing something like this every weekend for the thread. Next weekend I want to do something on spreadsheets.

Hope it was of use.

Aaron

By the way, the only reason I know anything in this business is James16, I consider this proprietary material of his, earned after many years of blood sweat and tears and graciously shared with us for free. I learn a lot from James about how to be a decent human being and what it means to give back. And while I have the ability, that is what I will continue to do here. With gratitude.

Last edited by TiaForex, Jul 26, 2009 9:57am
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  #39045  
Old Jul 27, 2009 5:14pm
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Quote:
Originally Posted by unlv_tj View Post
Thanks guys.

The toughest part of all this is pounding into my hard head that trading is so vastly different from anything else I have done. This isn't "right" or "wrong" or "you messed up", this is simply making money.

I may just be one of those who cannot do it. They say there are some people just unable to trade. But I will not give up until I am at least 35 (4 years away).
In my experience, and I think I've heard Mike say this too, the learning curve for trading is not easy and not smooth. There are days you think you've got it, and days you think you'll never ever get it. Remember Jim's story? 8 years of crawling under a table in the foetal position because he'd blown another account.

Time, practice, patience, dedication. And perhaps a degree of stubborn commitment to get this no matter what it takes. They'll help you through these times. You're giving yourself time, which is great. Now use that time wisely.

And another thing. A losing trade doesn't mean you screwed up, or did badly. It's just another trade. Don't focus on the individual trades, focus on a series of trades.

It can be a long and lonely road. Be gentle with yourself along the way.

Aaron
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  #39053  
Old Jul 27, 2009 8:17pm
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Quote:
Originally Posted by Jduester View Post
Some related material...

Darkstar:
http://www.forexfactory.com/showpost...1&postcount=18

Merlin:
http://www.forexfactory.com/showpost...07&postcount=5

Dopey:
http://www.forexfactory.com/showpost...92&postcount=9

(It pays to treat this stuff like a textbook... then it's all in your notes... you just have to find it!) - Josh
Josh you're an encylopedia.

And these guys said it better than I could ever hope to.

I've never read any of Dopey's stuff but I read everything Darkstar and Merlin ever wrote on here. They are the traders that I one day hope to be like, and I urge everyone to read all their posts.
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  #39057  
Old Jul 27, 2009 10:35pm
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Quote:
Originally Posted by KissFan View Post
Thanks for the great webinar today Fudd.

K.I.S.S.
I like this nickname for Mike. I may have to shout "HERE COME THE FUDD" at the beginning of every webinar.
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  #39071  
Old Jul 28, 2009 4:28am
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Quote:
Originally Posted by mbqb11 View Post
that's fine don't be so late next time pacino
HOO YA!

Here's my Al getting ready to smack down your wascally wabbit hunter
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  #39182  
Old Jul 28, 2009 9:21pm
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Quote:
Originally Posted by Jigsaw View Post

For trading the 4HR I used to have 4 feeds that close at different times so you get a "4HR close everyhour" if you get me, that way you'll get more setups, I have no idea why people who trade the 4HR don't do that more. You get more action and at better places too.

Jig
I totally understand why people do this. And I respect it too.

But it drove me mad. Because part of the advantage of the 4H was not ahving to check my charts every hour. I am trying to set this business up in way that means I can have a life, so hourly chart checking doesn't fit with my business plan. Also because I was essentially looking at 4 different charts I didn't have a sense of price "unfolding". Now that I look at one (okay, two...old habits die hard) I can hold the story of price in my head and am interested in it bar by bar. If I see a hugely key area I will pull up another feed.

It's all about finding what fits your personality.
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  #39204  
Old Jul 29, 2009 12:10am
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Quote:
Originally Posted by rustyjeff View Post
just to show what i mean by developing as a trader..


I am horrible at holding positions long term but I am trying to change that.
I do scalp.
I hate going negative..

but as a learning process I am demoing some trades. I will show you one.

Its not important to me weather this trade works or not but it is a lesson in sticking with the original plan till pa tells me otherwise.

I entered on the break of first pin & I thought this was a good area so wanted to give it some time....
Great to see you here today Jeff. I learn a lot from you.

And I echo everything you say. My time in the research and development part of this business outnumbers my live trading time by over a hundred to one. I have four different demo accounts in which I am forward testing ideas that I have put through a backtesting process. I have some index cards of things I want to try when i have time.

I really enjoy the learning part. And by the time something gets to the stage where it goes live, I usually have confidence and it's fairly effortless. Then comes the managing of emotions, accumulation of experience, discretionary exit practices etc etc.

I never want to harden my mindset so much that I think I know it all. I never want to get arrogant or cocky.

I really do feel that there aren't enough hours in the day for me to do everything I want to do in this business. The actual trading is pretty mundane, apart from the psych stuff. The R&D is just a joy.
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  #39214  
Old Jul 29, 2009 6:29am
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Originally Posted by rustyjeff View Post
There are not enough hours...

I am going to throw something outthere that I know goes against conventional thinking here in ff....
I don'tthink it's against conventional wisdom at all. The better I get at this the less I backtest an idea. It's just to give me a little confidence that I know what I'm doing and understand the system. I don't backtest a thousand trades and calculate expectancy or anything like that because, well, everyone's the best discretionary backtester in the world.

I've also adapt my forward testing time depending on hoew different the system is from how I already trade. I've discovered that "scaling in" to live testing is better than three months demo and then a switch to live. I start live sooner now but initially with the smallest position size possible. Just suits my psych.

It's also one of my psych flaws to want to be a "good boy" and "do it like teacher so that teacher approves". Stops me adapting and finding my own way. Been working on getting over that and doing what works. Botttom line is as long as we treat it like a business and give it the respect it deserves we'll be okay. No 5M charts for me for a few years if ever, but that's just me.

As for the Ashes, it's happy happy joy joy here. One test up, 3 to play, second starts tomorrow. Perfect thing to do in between chart time. If we can survive the loss of Pietersen I'll be crowing come September....
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  #39329  
Old Jul 29, 2009 6:27pm
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Originally Posted by encul?e View Post
Hi jigsaw, I personally love trading the e-minis, both intraday and on the dailies - I find the the PA much easier to read than FX both in terms of candle patterns and order flow.

One thing I find extremely useful is the use of tick based charts - they smooth out the PA much better than time based charts, and what looks like a bunch of noise on a time based chart usually translates to clean PA on tick based charts.

See the images for examples:

15 minute YM chart for the last two days


1600...
Hey Enculee,

I've been trying to find a demo platform that allows me to trade e-minis with tick charts and I'm not quite ready to go the whole hog and pay for tradestation. Which one do you use for tick charts?

Thanks,

Aaron
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  #39334  
Old Jul 29, 2009 7:34pm
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Originally Posted by encul?e View Post
Yea, I use thinkorswim paper money for my charts, they have live order flow too. My ToS charts on papermoney are not delayed at all...the price ladder is delayed, so you might want to use someone else like fxpro for demo order entry.

Maybe less accessible than FX, or less mainstream anyway, but I find PA to be more reliable.

I trade S/R reversals and break out/retracements, but I dont really wait for pretty candle formations anymore, I rely much more on gut instinct.

This is a trade from yesterday, I got in on the 512 tick chart and took profit...
Thanks Enculee. I ama ctually a long way away from being able to trade this timeframe, but what I find is that if my mind is busy with educational projects then I am less likely to obsess over the charts and timeframes that i do actually trade. So I am always looking at new things to elarn and demo for fun.

When i do day trade the mini dow, and it is my goal, it'll be after six months or so of demo. I put in six months of demo time and six months of education time prior to that before I started to trade live forex. I really felt the benefits. Especially seeing as my first live month was a losing month. With all that demo experience I didn't go crazy and change my methods.

Thanks again,

Aaron
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  #39338  
Old Jul 29, 2009 8:55pm
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Originally Posted by DynamicFx View Post
Try the NinjaTrader demo from Zen Fire. You get most things such as the ES, YM, CL and ZF.
Thanks, that's great. I can't see from the site whether they time limit the demo? They must do surely, otherwise it's basically a live data feed for ninja trader for free. And I haven't seen that before.
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  #39397  
Old Jul 30, 2009 6:19am
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Originally Posted by jarroo View Post
I might have spoke without looking a little closer. 2 Day BEOB englufing about 6 days. It doesn't show well on the period converter. That could be it.
And signals across the board last night to short NZD. All with divergence.

Many pairs seem to have that "turning over" feel. And many at crucial areas. Good PA will reveal itself (sometimes after a little periodcon digging) and these moves could be ones to last for a long time.

Great spot Jim...
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  #39469  
Old Jul 30, 2009 1:16pm
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Originally Posted by StoragePro View Post
Have care with this - it is some sideways traffic. Just a word to the wise to keep an eye on it. I like the location - it is straddling the 1.9000, but not the right kind of MACD divergence...
Agreed. Of the CHF bars that printed GBPCHF seemed to me to be the better option.
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  #39475  
Old Jul 30, 2009 1:53pm
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Originally Posted by JamesL View Post
Hi all

I have scanned through the first couple hundred pages of this thread.

I like the price action stuff very much - it makes sense to me, though I haven't really traded it much - just a tiny bit in a demo a/c - basic reversal candles on lower timeframes on some currencies.

I just wondered if the PF is still as active and popular as it was in the first couple hundred pages, and still come highly recommended?...
Hey James and welcome.

James replies to all his email, it's just that sometimes it takes a little time because he gets so many of them.

In the meantime let me weigh in as someone who has been a PF member for over a year. I get no money from PF and I don't teach there. I am just a very satisfied customer. In fact I don't think you'd find many who joined who say otherwise.

I think it's misleading to think that PF is where all the action is. A lot of resources are available to you here, through the thread. Mike is always on here, and there is probably more posting on the thread than on PF (which can be both a good and a bad thing). In fact most people would tell you to hang in the thread for a while and read and assimilate what you can, start demoing, and then see if you still like it in a couple of months. PF will still be there.

What PF is, is an amazing library and support network. There are weekly video webinars with Mike and often ones with Jim too. They are al archived along with over a hundred other videos. There is a really good trading psychology section which in my opinion is worth the entry alone, and there are so many people on hand to help with stuff. I am really glad I joined. Added to that is the fact that Jim is always looking for ways to take it forward and there are some exciting plans for the future.

My take is always the same. If you are sufficiently capitalised that the monthly fee isn't going to hit you too hard then go for it, join up. But if it will be a stretch, then spend your time learning here first, because you don't need anything else. There is no secret recipe in the PF without which you cannot succeed, although there are advanced techniques.

Please feel free to shoot me a pm to ask about it too. I'm happy to answer any questions.

I always feel a little wary about these posts, because Jim doesn't do any pushing of the PF himself. But as someone who once faced the forest of forex educators and had to fight his way through the crowd of hucksters and snake oil salesmen, I consider it my duty to let you know when there is something that I do think is worth the entrance fee. And this is coming from someone who lost A LOT of money in the markets before finding my way home.

I hope that helps.

Aaron
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  #39481  
Old Jul 30, 2009 3:13pm
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Default PF

Just to add one thing on PF:

I am always very cautious when talking about PF and am keen to stress that everything you need is here. That's not because I am ambiguous about PF. As you can tell from what I wrote I think it's superb and the best money I ever spent.

It's more because I don't want someone reading this thread who can't afford PF to think "man all the good stuff is in there, and I can't afford it" This thread isn't a tease for the paid site. Everything you need really is here. It's one of the reasons I admire Jim, he basically gives it away here for free.

If you want further evidence of that I'd direct you to the posts of Jduester, Ghous and Jarroo. All of whom learnt the J16 material from this thread alone and didn't join PF (Jarroo finally joined a few months ago). Those guys show the level of learning you can get from this thread.
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  #39505  
Old Jul 30, 2009 5:30pm
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Quote:
Originally Posted by jarroo View Post
What were you looking at Tia? I'm a lifetime member. LOL
Oops :

THIS IS CRITICAL

Before typing information about Jarroo we MUST LEARN TO:

1. Do our research and establish the facts
2. If we do not do our research we must be prepared for Jarroo to "stop us out"

Once we have done our research and know the facts we have three choices:

1. Tell the truth
2. Make something up
3. Start a new group and take credit for everything, pausing only to call Jarroo a girl.

If we do not do this we have no chance in this business people. Period paragraph.
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  #39514  
Old Jul 30, 2009 7:32pm
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Originally Posted by KissFan View Post
I only wish that I could actually hear you say that with your British accent! That's the funniest thing I have read all week bro!

K.I.S.S.
This is the James16 Chart thread KISS. Where wishes come true.

Enjoy

Attached Files
File Type: zip critical.mp3.zip (514.3 KB, 172 views)
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  #39562  
Old Jul 31, 2009 7:36am
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Originally Posted by JamesL View Post
Thanks very much indeed. the thread is clearly still very active!

I'm very tempted to join up now to save time going through 2700 pages, though I feel I would be missing something. I've now scanned 500 pages so far, and made some notes.

It is very likely I will join up. It's just a matter of when. And then I'll throw myself into it - i do tend to concentrate my efforts on one thing at a time, and get very enthusiastic!

May I put a few queries as they pop into my head?



Are most of you members of the PF too?

How many here are...
Hi James,

No problem to ask a bunch of question. I'll pm you over the weekend with a detailed reply to keep things clean on the thread.

Aaron

PS A quick one: After 12 months paid membership to J16 PF you are a lifetime member. Meaning it's free for life from then on.
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  #39567  
Old Jul 31, 2009 8:39am
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Good point Jig. My answers below in bold. Edits to original post made for brevity.

I would add that most of the question will be answered by follwoing the thread over a month or two. You'll get a feel for how people trade.

But Jig is right. In case others have the same questions it's probably a good idea to put it all here.

A

Thanks very much indeed. the thread is clearly still very active!

I'm very tempted to join up now to save time going through 2700 pages, though I feel I would be missing something. I've now scanned 500 pages so far, and made some notes.

I am a member of PF and still find myself going back to the public thread often, both to keep current and to read and re read the archives. But yes, in PF material is more condensed and better laid out. And there are videos and webinars that will save you time.

It is very likely I will join up. It's just a matter of when. And then I'll throw myself into it - i do tend to concentrate my efforts on one thing at a time, and get very enthusiastic!

May I put a few queries as they pop into my head?



Are most of you members of the PF too?

That's not my impression. Although many here belong to PF, there are plenty who don't.

How many here are in or near my timezone (UK)?

Do many of you trade the London FX session?

Are many of you full-time traders here?

I am a Londoner. I have another line of work that gives me a lot of time off, so when I have that time off I trade full time. But I don't rely on it for my income. Trading the London session is misleading for this method because it doesn't involve sitting at a computer and watching price unfold. I trade the daily charts, so I check my charts at NY close, and then I demo the 4H throughout the day, which involves a few minutes at each 4H close. The rest of my time (most of it) is research and development.

Is most of the daily trading discussion done on there, rather than here? With the general chit chat, social stuff and comaraderie here?

There is chit chat there too, but the areas are clearly marked. But there isn't so much mutual weighing in on the day's bars. The seniors are always available to give their opinion and will answer any question you post. But there isn't so much "hey guys what do we all think of the GU daily pin?" if you get my meaning. There's more discussion here. And perhaps more focussed learning and Q&A there. That said, it feels like a very strong community and family there. I consider both places "must reads" and check them both during the day. One doesn't replace the other.

I've scanned this thread to around the end of October 2007 - has there been much detailed discussion of the methods since then? I notice James had not been able to contribute a great deal then but said he should be able to later and had great plans for the thread? More of the method etc

James continues to expand the group with new ideas and plans. And yes, there are different methods and styles taught in PF. Knife, BASE, Mike's Intraday, Rac's Voodoo . As for the thread, James has been active throughout and the story, method and discussion have unfolded across all the pages.It's a bit like panning for gold though. You need to sift.

What has happened to some of the old posters? I recognise mbqb11 very well (fabulous posts, Mike). What happened to other good posters, such as The-Wizard, and others?

Many are active on PF, including Seeking Light. Many look in from time to time like Habeeb. And many have their posts archived.

Is the method discussed here mostly trading pins, sometimes inside or outside bars and ocasionally the double high/low with a low/high close at places which coincide with support/resistance levels, fibs, trendlines, Moving averages when the price is moving/swinging around in uncluttered areas?

Yes. And aligning all those into a style that fits your comfort zone.

Currency pairs seem to be drifting sideways on the larger timeframes this year - are you all trading something else till they start moving better?

Once you get good at this you can trade a sideways market for breakeven or profit. There are very few methods you can say that about.

Do you trade mostly currencies, or do you trade other instruments too. It seems that some posters, in the pages I have looked at so far (eg james16 and The_Wizard), have actually or had a preference for trading commodities or other non-fx securities, finding them easier. What are the easiest instruments to make a profit from using this method? And, I suppose, at this time following the crunch?

This works on anything with a chart. My view is the more instruments, the more opportunities, even though each market has its idiosyncracies. I don't believe there is an easier market.

Do you specialise in trading one or two securities, perhaps with multiple strategies, or do yiu trade a larger range of instrument, perhaps looking for ideal setups with a single strategy?

See above

What kind of strategy do you find works for you with the price action discussed here?

Everyone is different. But we mostly start trading daily price action and working down timeframes using the guidelines listed in post one. There is nothing more complicated to it than that. Good bars in good places managed according to SR levels.

Do you all find the higher timeframes (eg 4 and over) less risky and more rewarding than lower ones where the stop losses can be tighter? At what level eg 30 min timeframe do you find the signals less reliable?

I would start higher (daily/weekly). What makes it hard for people to grasp is the fact that price action is the same on all timeframes. It's not about the reliability of the signal, it's about the reliability of the trader. Trading lower timeframes off the bat is a death sentence for most traders because the management needs to be nimble. Higher TFs give you time to learn. Everyone suggests it here, but many still go off and start on the 1H because "surely it's all the same". They usually end up back on the dailies with their tail between their legs.

Is perhaps the emphasis on trading only higher timeframes to get reliable signals a bit overdone if you can trade the most active session eg London, where there may be more ticks in a bar?

I think this is overcomplicating things. You might be thinking "lower timeframes=moresignals=more profit". Let me help you out here. Of my four completed trades on the daily TF this month, two were break evens, two were profitable. I got out early on the profitable ones for a small gain(my mistake...still working on trade management) but they are still running for a combined profit of 12 times risk. That means those two trades on a 1% risk, if simply left alone, would be 12% up by now. Simple and easy. No need to overcomplicate.

Do you use a variety of different timeframes eg TF to set a favoured direction, TF to find support/resistance levels, another for entry, another to manage the trade, another to exit, etc?

Do you trade retracements, reversals etc or range breakouts eg when an fx session opens?

What about other kinds of price action, such as trading 1-2-3 reversals?

Everyone is different. But the majority of us trade good bars off SR levels. I trade each timeframe as I see it. Don't want to overcomplicate things by chopping between them although I have been known to do that. No one here trades fx session open range breakouts that I know of, or 1-2-3 reversals. Some play retracements but it's best to get the basics down first.

I think I noticed in the early posts, that there was an emphasis on waiting for only trading perfect setups... it is said to be very easy to lose money trading so is this still the case with the methods used here?

Not only that. It's the case with all methods and all markets. Be wary of the method that tells you it's difficult or impossible to lose money.

Do yiu find you can trade larger positions on perfect setups, or do minimum amounts on less-than-perfect setups on lower timeframes do the trick too?

I have fixed risk on all setups. Why take the less than perfect ones? (That said, I still get cocky and do it sometimes. And usually end up regretting it). My risk is 1%

Don't you also find that you gain much more practice and experience if you trade on the lower timeframes? Doesn't it take a heck of a long time to gain experience trading perfect setups on the higher timeframes, especially if trading a narrow range of securities eg only currency pairs?

This is a common myth. My experience is that what you will learn is bad habits. Patience is the most important thing to learn and higher timeframes do that. Here's a suggestion. Why not have a ton of instruments open and check them all at daily close? And why not download forextester and get your practice from backtesting years worth of data on daily and weekly timeframes?

Also, thos with low funded a/cs - is it better to id a setup then drop down to a lower timeframe, and trade larger position with a smaller stop loss?

I think this is a recipe for disaster. Your account size should not dictate your trading style. You'll more than likely end up blowing an account.



Better stop there. Full of questions at first, as always, so sorry about that It's just enthusiasm, really. I do tend to ask a lot of questions when I'm keen. Let me know if that's a problem - I like it straight. .. I know when I ask lost of questions in a shop, car showroom etc, for example, the good salesmen treat my questions as signs of enthusiam, buying signals if yoiu like.... I'm very keen on this PA stuff and what I have read so far in the thread, and as i say, i have tried demo trading simple candlestick reversals so I'm sure price-action trading works very well if done properly - I just need to know how, and get some idea and this seems to be the ideal place. Hopefully I'll get right into it, perhaps full time eventually, and hope to then be able to enjoy giving something back.

No problem. Almost everyone had the same thoughts and questions as you. As someone who has tried a lot of stuff out there, this is the only thing I have found that works consistently. Here it is explained clearly without the bellowing ego you so often get on these forums and without the mystical cryptic stuff you get elsewhere too. It's clear, simple and easily laid out.

I wish you well with your journey and I hope this post can be referenced for anyone who has similar questions in the future.

Aaron
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  #39643  
Old Aug 1, 2009 9:29am
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Quote:
Originally Posted by squeezy View Post
yeah, i see wat u mean ghous
if i were to look at entering the weekly eurcad pin from maybe from my 4hr tf, i would set my buy stop above my 1.5487 ppz but im goin to treat it as a weekly trade & set 10pips above the pin for a break

quick question, when setting ur entry,stop loss & take profit, do you put into consideration the spread( do u add the spread to it) or do you just set 10pips above/below the pa setup....
The broker bases his charts on one price, usually the bid. Which is the sell price. So when putting in a sell order I don't need to factor in spread. But when putting in a buy order (which is also a take profit/stop loss on a sell order) then I do need to factor in spread on entry.

For example, if the top of my pin bar is 1.6755 and I am buying on the breach plus a ten pip buffer, then my entry goes in at 1.6755 plus 10 pip buffer plus whatever the spread is. My take profit (which is essentially a sell order) will not need to take spread into account because it is based on bid price.

So when price hits 1.6755, and let's say for convenience that the spread is ten pips, then what is essentially happening is that the charts show the bid price of 1.6755 but the ask price is ten pips above that at 1.6765. So if I didn't account for the spread I'd be getting in ten pips too early. When price hits 1.6765 which is the ten pip buffer I want to allow before I enter, then the ask price is actually 1.6765 + 10 = 1.6775. So I allow ten pip buffer plus spread based on whichever price is not shown by my broker. In my case, whenever I am buying (or getting out of a sell order)

Right click on your charts, and pull up the 'properties' option. Then click "show ask price" and you will see the two lines on your chart. That should make it easier to observe what I mean.


If I've got this wrong please feel free to correct me.
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  #39645  
Old Aug 1, 2009 9:42am
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Quote:
Originally Posted by jarroo View Post
Yes I see where the 38.2 came from now. My bad.

Very nice. There's is nothing like mulitple confluences at given level. I'm liking this one more and more.

Boy, that Nov 07 BEOB was A++.
Jarroo, can I ask you to say something on first areas of trouble, using this bar as an example? It's something I'd like your opinion on.

We are all by now familiar with Jim's 'this is criticial' post, but often when I see his charts he seems to not pay much attention to the very first PPZ if the trigger bar is super close to it. It's almost as if the bar itself is "off" that PPZ.

There are a few ways to deal with this. Your style from what I can see is to have a greatly reduced stop on a pinbar, looking for a hard break, so a break even/partial profit at the green area (on your chart) would be a sizeable profit. For a full bar stop that would offer very little and more often than not when the first area is that close price bounces from it, returns to test our entry and moves down.

It seems to me that some kind of first trouble area is always very close and something I am finessing in my trading is which areas to pay more attention towards.

I hope that makes sense. Saturday afternoon ramble...
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  #39658  
Old Aug 1, 2009 10:25pm
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Quote:
Originally Posted by JamesL View Post
LOL OK, I wont.

Come to think of it, there will be some points when i go back again and re-read the replies....

One thing I had wondered in the meantime.. how does the knife system work - just an outline if someone would - timeframes, tools used, entries, exits etc in brief..

Also, I wondered what live daily discussion there is in there about the individual markets (each fx pair, gold etc) as the charts are unfolding, what positions might be taken when the next bar closes in 30 mins - aggressive, conservative options etc -, which are...
Knife is a proprietary system so no information can be disclosed here without copyright violation. It's based on the Vegas Tunnel System which you can search FF for.

It's entirely your choice whether you stay in PF for a month or longer. Personally I think it doesn't work best that way (staying in a month) and I think you'll think that way once you're in there.

Most importantly, there is very little live trade advice in there. You won't get everyone weighing in on bars and whether they will trade them. A little happens on the daily TF but just as much happens here. But if you're looking for a "trade along with us" approach you won't find it in there. The focus is on education rather than live trade advice. Instructors will get back to you, but trading a lower TF it will almost certainly be after the bar close.

Once you have assimilated and demoed the information, you won't need advice on unfolding markets and IMO it can actually hinder the learning curve rather than help. Best to demo and make your own mistakes then evaluate what you're doing wrong. The danger with live advice is that things move towards more of a signal service and you don't end up learning.
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  #39703  
Old Aug 2, 2009 6:24pm
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Quote:
Originally Posted by jarroo View Post
I would think Jim pays very close attention to these near term areas of trouble like the green area on the Weekly Cad/Chf. But I understatnd your point.

The quality of this Weekly PB (Cad/Chf) is very high and a strong momentum break inherent in this type of setup will usually blow right pass this previous Highs. I, like Jim, would see that area and move to break even and/or take a partial position. Since those Highs line up with the round number, 0.9800 I will be more apt to do so. (Daily chart)

If it does hit this level and then...
Thanks Jim. It's moot for me as my broker doesn't carry the pair but I have a demo broker that does so I can get experience.
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  #39752  
Old Aug 3, 2009 7:37am
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Quote:
Originally Posted by KissFan View Post
I have said this before but will make the observation again for the newer traders here....
Amen KISS. Great post.

After learning the basics, it all comes down to psychology. And one of my demons is "not wanting to miss out". I'm aware of that so I keep my powder dry when I feel the itch to get in.

Divergence alone is the account killer, because it can go on and on and on. Sooner or later these ranging pairs will produce some killer PA that looks so obvious. When that happens we don't want to find ourselves thinking "man, even if that gives me 3:1 it'll only make me back what I lost by being impatient in waiting for it"

Wait mode is probably the hardest mode to learn. I know it is for me.
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  #39865  
Old Aug 4, 2009 9:16am
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Quote:
Originally Posted by StoragePro View Post
It ain't you - it is the market...

Watch carefully this week - It seems that we are getting ready to move again.
A big Monday push out of a range usually is a shot across the bows signalling an imminent big move. At least that's what I have noticed.

Listen to SP guys, the good trades will just jump out at you. And when they come you'll kick yourself if you're down 3R from taking iffy pins when you could have waited.

When these markets start to move again we'll all be smiling...

PS Thanks for the posts Joel. You made my week.
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  #39870  
Old Aug 4, 2009 10:43am
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Quote:
Originally Posted by Matiasfx View Post
Ej 1h ppz+50/61.8%+buob
Nice Matty!
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  #40009  
Old Aug 5, 2009 9:24pm
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Quote:
Originally Posted by SeekingLight View Post
I've got no opinion on that pair as it's not "one of mine"

When pondering a setup, usually occam's razor ends up being:
If despite weighing pros and cons I still feel (so) bad about a trade(as not to immediately want to take it) instead of seeing great potential, why take it?

Taking a trade with less than 100% conviction just lays a foundation for interfering, self-manipulation and general sources of worry.
I think Josh was joking Seek, see the rolling around laughing icons after his post
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  #40109  
Old Aug 6, 2009 8:19am
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Quote:
Originally Posted by kk007 View Post
Hi Joelcf,

Thanks a lot. Your reply was a very good detailed one indeed, although a bit personal.

I use 2-3 pip for H1 was to scale down the 10 pip for D1.

I seldom look at the daily pivot, but yes, I have to learn to look at it now.

The Fibo 61.8 was not some too exact here. It is just representing that more than half have gone.

I have to decide to use H1, until I master it. If someone can do it, I can too. Perhaps, it may take a bit longer.

If enter on retracement in your method, the inner end of the pinbar may not be broken, even...
Storage Pro pretty much said it much better than I could kk. But I wanted to add my advice.

You're on this thread looking to learn the J16 method. You see people doing well with pinbars and price action and the like and so you want to get good at it yourself. Makes sense. It's why we are all here.

So the first thing I would do, is find out the most successful people who trade here and ask their advice. Put yourself and your theories out there and ask for feedback. Which is exactly what you are doing. Congratulations, it puts you already ahead of most.

Now here's the tricky part. If every single one of those people says "If you ever want to get god at this you need to start on the dailies/weeklies" (and as far as I can see, every single senior has said that) and you choose to ignore that advice, then I have to ask why you were asking for the advice in the first place.

Reagrding your 1H pin charts I have to be honest and say I would never consider taking those pinbars. And I don't think you'd find many here who would. They are poor grade setups. And that in itself tells me you should be looking at the dailies and weeklies only. You will learn patience there.

You are discovering what many of us did. Initially we thought "well if I get my stop to break even quick then I can take less than optimal setups". Then three or four of those C or D grade pinbars move one pip turn around and bite you. And you're left scratching your head.

You are also saying "if this stuff works it should work regardless of the timeframe". We all did that too. If you want to do that no one will stop you. But one thing you must be aware of is this. You are ignoring the advice of everyone who has travelled this road and got good at 1H timeframes using the James16 method. Just be aware of that. Let it sink in. You are ignoring the advice of everyone who was successful at what you are trying to do.

I think the reason you have attracted so many helpful responses is because so many of us recognise ourselves in you and identify with where you are in your journey. That's why many are jumping in to help. It's now up to you whether you accept their help or decide to go it alone and do it "your way".

As a footnote, retrace entries are an advanced technique on any timeframe. On the 1H timeframe taking a pinbar retrace is, in my opinion, trading suicide.

I understand that you are eager to succeed. But get good at the basics first and this stuff will come quicker to you. If you start on higher timeframes I can almost guarantee that you will eventually be trading the 1H successfully quicker than if you you continue the way you're going.

You've had a ton of well meaning advice from a lot of very smart and profitable traders. I hope you take it in the spirit in which it is intended.

Good luck!

Aaron
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  #40213  
Old Aug 6, 2009 8:13pm
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Quote:
Originally Posted by ghous View Post
It's just simple amazing KK,

It's like me speaking a year ago...

truly amazing...

And hang on,
I have something to share...
Approx a year ago from today, I felt something very very close to what Kk just posted above...

This was a time when I had just begun my journey here with the J16 staff...

I had lost 6 consecutive pin bar trades on a live account,

I have a habit of "free writing" whenever I am not feeling normal, I.e when I am super happy or super sad or super exuberant or just feeling like superman.

This is what I wrote on a piece...
Ghous buddy, my respect for you just tripled.

To share the lowest point of your journey, so openly and honestly really is a gift. May you be rewarded for that.

The greatest ting we can share sometimes is our struggles.

Hats off to you. I am in admiration.
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  #40214  
Old Aug 6, 2009 8:23pm
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Quote:
Originally Posted by phpscott View Post
Here is a trade a GBP/CAD trade I was in earlier today....
I did exactly the same on this one Scott (except I was out at break even). And I am getting to the stage of my trading where if it turns into a home run I don't mind. This first PPZ was strong and if we didn't plough through it I was going to get my stop to break even pretty quick. Even if this turns into the runner of the year I am happy. Been burnt the other way too many times.

My lines were exactly the same as yours too.
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  #40223  
Old Aug 6, 2009 8:55pm
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Quote:
Originally Posted by phpscott View Post
I went down to the 1hr timeframe to exit. What I do is watch for a strong rejection on that timeframe. If anyone tries this, please demo it first as it is easy to get too "cute". I did not exit right after the first bullish bar of of the 1.8050 zone as an example.

Scott
I like your style Scott. I think we did this exactly the same way.

I did what I've been reading for weeks but not implementing. The James 16 "this is ciritcal" post. My first trouble area was 8050 and I watched price around there for a long time. Didn't get out straight away. But when it looked like it was forming consolidation I decided to move my stop to BE (or rather BE -10 as I have noticed price often tests BE points and then moves on).

Jarroo's been preaching it for so long. The first potential trouble area is the key. Trade management centred around an awareness and respect of this area can only lead to profits.

I often drop to lower timeframes for trade management just because I get a clearer picture of the action unfolding. But I always remember what timeframe I took the entry off and try and give it the room it needs accordingly.
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  #40304  
Old Aug 7, 2009 5:55am
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I just want to express my appreciation to you guys for the great work on the thread this week. Joel, your posts remind me of the great Darkstar. COmplicated concepts, simply and clearly expressed so that everyone can understand. Come to think of it there's someone else who does that....the fella who started this thread....

It's one of my red flags now when an educator is unnecessarily enigmatic. (I am not talking about Rac here. Actually when you get a little further down the road you realise Rac's stuff is a lot lot simpler than it looks and that he is pretty clearly laying it out in his charts). But in my time in the forex wilderness, oh man, the number of people who would use unnecessarily complicated language and huge ego to mask their lack of knowledge, or only hint at things expecting you to work it all out. "You don't think I'm just going to tell you how this works?" they seemed to be saying. "Well, why not?" I always thought. I tried to follow how they did things but it made no sense. Of course there was no substance behind their methods.

To quote a great man, this stuff is dirt simple folks. And anyone who claims otherwise should really make your alarm bells ring. Joel explains the most complicated concepts so simply. As do most of the seniors here. It's why it is such a beautiful environment.

And then there was Ghous' heartbreaking honesty, the responses to kk....it really has been a great week.

I wanted to add to this RR thing that gets talked over endlessly when talking of this method.

The usual RR theories simply don't apply here for one reason IMO. When people talk of RR that are not taking into account dynamic trade management. For traditional RR theory you set your SL, your TP and you walk away. One or the other gets hit. Here we do things differently. Our trade management is done on the fly. We get stops to break even. We let trades run nestling our stops behind PPZs on the way down. We don't let ourselves take many full bar losses. So many approaches. All of which make traditional RR difficult to calculate or apply.

Say I have a 200 pip stop and I look for a fifty pip profit. But what if after ten minutes and a hard break I move my stop to break even? You see how traditional RR doesn't begin to be able to deal with this concept? Say the trade started to go against me and I killed it after 50 pips. What did I risk for what reward? It's virtually impossible to work out using traditional methods.

I think anyone who sees the dynamic trade management style employed here, who then says that high RR is crucial and that anyone who doesn't factor it in is an idiot..... well they have simply misunderstood what goes on.

As SP said, just don't be an idiot about it. RR concepts are common sense. We're not moving average crossover system traders who don't move SLs and TPs. We are discretionary price action traders who move stops and take profits dynamically based on support and resistance. That alone should make anyone think of RR in a totally different way.

The seniors here preach it simply. Good bars off PPZs, heavily confluenced and managed in relation to support resistance levels. Do that and everything else just takes care of itself.
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  #41084  
Old Aug 15, 2009 8:50pm
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Quote:
Originally Posted by fxvision View Post
NZD/USD daily pin bar off highs. Daily and weekly bearish divergence.
The return of fxvision! Welcome back. Great to see you here again.
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  #41304  
Old Aug 18, 2009 9:32am
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Quote:
Originally Posted by fat_tom View Post
Guys/Girls,

I know we have already done position sizing and % risk to death....

but if I may ressurect the bones briefly....

I'm trading daily candles at the moment and am currently going for the traditional stop at the bottom/top of the bar type senario.

If I use a more agressive SL strategy of say 50% of the bar or prefferably other close bar highs/lows then my risk in pips is reduced (50% in the above example) so therefore in theory I can double my lot size to keep my 2/3/4% or whatever it is acct risk.

but.....

I am...
Hi Tom,

Your trading plan should not be at all influenced by your money management. You work out a trading plan that is within your comfort zone and that you have demoed to ensure you are profitable. If this involved reduced stops, then so be it. You make sure you have experience through demo to know that the lower win rate that this brings is offset by higher profits and that you are comfortable with that.

Then and only then do you make sure that each stoploss is a fixed percentage of your account.

The %R system means that what you risk per trade remains fixed. So one loss is always a fixed percentage of the account. It matters not whether your stop is full bar or at 50%, whether it is a daily or weekly trade, or even whether you are scalping. Percentage R means that you have a fixed amount of loss per trade. What that percentage is will depend on your comfort zone, place in the learning curve, style of your system, frequency of opportunities etc etc.

Lot size is irrelevant. Percentage risk is. So say, for example, that you have been trading consistently and profitably with full bar stops for a few months. You risk 1% a trade. You have a spreadsheet that keeps a column on how far into the bar each trade retraced before hitting your TP. You notice that on all your profitable trades the retrace into the bar after entry was triggered was less than 50%. You therefore demo for a while the idea of the 50% stop. You discover that in demo your hunch is borne out and your win rate does not decline.

Then you have a new system.

So with that new system (pinbar trades on daily, 50% of bar for stop, for example) you use %R to risk 1% per trade again. Lot size should be irrelevant to you. Sure it will be bigger but all you want to pay attention to is the value of each loss to your account. It should be the same. Lot size is a means to an end to achieving this.

To make it clearer, on the 4H my lot size is often larger than the daily because my stops are smaller. But my percentage of account risked per trade remains fixed.

When you say "I am more likely to loose a trade with a tighter stop so is my risk still the same? unlikely I would say..." you are confusing win rate and expectancy with money management. Your win rate will go down with a reduced stop, your winners will be greater in value. Work out through demo and testing whether this is worth it. Then risk the same amount per trade.

You may find that Van Tharp's work on expectancy helps you. When he is calculating the efficiency of a system he is utterly unconcerned with how much he is risking. He just gives it a letter value, R. Then he works out how efficient his system is based on collected data. And then before he trades he uses MM to make sure R is the same no mater what.

I don't feel like I have explained this too clearly. Feel free to ask questions.

As regards large accounts, I do trade a large account but again this a separate issue. 50% bar stop has nothing to do with account size. One needs to know if over 100 trades a 50% bar stop will produce greater profitability than a full bar stop. That's all.

Where account size makes a difference is primarily psychological. When each trade produces 4-5 figure results then a string of losses has a very different effect, one is far more likely to bank small moves because they are large ? value moves etc etc.

To summarise:

The profitability of your system (win rate, average winner etc) which some call expectancy

Your money management so that each trade is a fixed percentage of your account, and one that doesn't spook you into messing with your system.

Your psychological tolerance for your trading style.

These are three separate things and need to be worked on separately. It strikes me that you might be confusing the purpose and effect of the three.

Hope that helps.

Aaron
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  #41306  
Old Aug 18, 2009 9:45am
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Quote:
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The problem with trading dailies is you will never build a small account up just trading them, there are simply not enough trading oppurtunites, for account building you need to get down to 1hr or 15min charts, where you can get trades every day. However to get down to them you need to move down from daily to learn pa and gain experience. So it looks like

Small account - start on daily gradually move down to 15 mins to learn
Build account up to large account then move up to daily.
I disagree with this tac for a couple of reasons. But I am glad you wrote it because it gives the chance to talk about something I've wanted to post about.

People often assume more opportunities to trade means more opportunities to win. It doesn't. It means more opportunities to lose as well. Many who have finally made the journey "down there" just don't trade the lower TFs anymore because they can make more than enough from the higher TFs.

A strategy that involves getting into a good daily/weekly trade and staying there while protecting you from a loss can give you double digit returns a month.

Staying in a move is something I am still working on. But to illustrate the opportunity:

July was a very slow month for many people. I took about 4 daily trades. Between them they are at around 15R-20R and still running. I got out early so didn't make anything near that. But the point remains. That's just 4 daily and weekly trades a month. If someone had taken those, with 1% risk and a defined full bar SL, shut down his computer to go on holiday, and come back today, he would be back to around a 20% gain.

The idea that daily and weekly timeframes cannot build your account is simply a myth.

Those who succeed in this business master their impatience. Looking for more opportunities to trade can be (not always but it can be) a sign of impatience. Usually those who drop down to lower timeframes and make it are the ones who do so with a degree of fear about the increased possibility of losing. That's the respect they deserve.
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  #41311  
Old Aug 18, 2009 9:59am
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As a footnote tac I would add this:

In your trading records spreadsheet, keep a column called "Max Trade Ran". That is, the maximum the trade ran before it hit your stoploss. Build up 6 months of data. That information alone will transform your trading and make you realise that the idea that daily and weekly trading alone cannot build your account is a myth.

And that's before we've even begun to touch on the world of stocks, futures, indices and commodities that you can trade on daily and weekly...

And lest Mike comes along to slap my wrists I should add this. Just focus on the first hurdle, consistent profitability, and then these opportunities will just become as clear as day to you. Trading really is about doing the next right thing. Everything else just falls into place.

I feel obliged to offer my opinion when someone says it takes too long to build an account trading dailies and weeklies because my experience and testing shows that it's simply not true. But in general I would suggest that it's the wrong area to be focussing on. Just focussing on a clear consistent easy strategy and all I can say is you'll be incredibly surprised at what you believe a year from now. In fact you may even look back on the posts you made twelve months back and smile. I know I do.

But as James has said time and again, starting on the lower timeframes without having first proven yourself on the higher ones is a death sentence for most traders. It's not enough to say "look at Ryan". That guy lost consistently for four years before he learned, even with a mentor standing over his shoulder. I've always said that the quickest way down to the lower timeframes is to follow the directions in post one. If you don't, I'd bet on you blowing your account sooner rather than later.
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  #41314  
Old Aug 18, 2009 10:10am
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Quote:
Originally Posted by tac View Post
What use is looking at Max trade ran? its an idealistic figure that you will never achieve. You can build an account on dailies its just going to take much much longer.
I'll tell you the use.

If the max trade ran figure across a hundred trades is 50 or 60 times what you actually made out of it, then you need to look at your profit taking strategy.

It seems you're getting a little aggressive around this now tac so I won't continue this conversation with you. Everything I believe I've already posted.
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  #41318  
Old Aug 18, 2009 10:20am
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Quote:
Originally Posted by tac View Post
I'm not aggressive just debating, I don't see the point in looking at max trade ran as it is very difficult to judge exactly when price stops and reverses. The best you can get is a percentage of the max trade ran.
Okay. Just one last point here.

I am not saying you will always make your "max trade ran". In fact you never ever will.

I am saying that if on average your trades make 4R each before hitting the stoploss and you are taking 0.2R from them then you can review and perhaps set targets that are greater thus allowing you to squeeze more from each trade and allowing you to get greater returns from the daily.

Keeping records allows you to maximise what you make from a trade. Getting in is the easy part, trade management is the tricky one.

We're going to have to agree to disagree on a lot of this tac. I feel it important to lay my opnion out there because people often underestimate the power of the higher timeframes to make money, then go down to the lowers too quick, and blow out. I've seen it happen again and again here and I would hate this conversation to influence it happening to anyone else.

Back to my trading.

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  #41322  
Old Aug 18, 2009 10:28am
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Quote:
Originally Posted by supremeChaos View Post
on the contrary, it IS achievable.
sometimes/often, your max trade ran is your exit profit; that is, example, u had a 50pip profit target(your exit profit), so that's your max trade ran too --- 50pips/50pips or 100%.
or sometimes, your max trade ran is 50pips , but your trail.stop was hit for ,say, 45pips, so that's 45/50 or 90% in percentage terms.

[that's how i see/define 'max trade ran'; not sure if i & TiaForex are doing the same thing with it]
I just mean it as the exact pip value the trade ran to before it turned round and hit your SL. It was an idea suggested to me by Rac and looking at that column transformed the way I look at trading. I'm not mandating it for anyone, just sharing what works for me. Take what you like and leave the rest.
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  #41379  
Old Aug 18, 2009 2:40pm
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Originally Posted by james16 View Post

might be time to start that section in the group back up.
Amen brother. It's where I feel the strongest kinship to you.

I was lucky enough to have adversity very early on in my life that put me onto the path that Jim describes. Without those years of seeking and personal growth I wouldn't even be able to undertake the challenge of learning to trade.

Here's how I view what I am doing with trading:

I am simply taking a year or two off to get good at this so I can have an ease and lack of effort around income. Then I'll be able to throw my energies 100% back to doing what I really love. The journey within. Finding out the truth. Opening my heart. Exploring my true nature.

I encourage you all to think about how your life will look when you have achieved your financial goals. Take a moment to play some nice music, close your eyes, and imagine sunning yourself on your yacht, or looking at your family in the home you've provided for them, or imagining your parents comfortable in your retirement. I revisit my goals often.

Sooner or later you learn that whatever life throws at you it's all part of the curriculum. And the curriculum is compulsory. We will all get to it sooner or later.

Man this stuff fills my heart. It's no coincidence that I found Jim. Truly.

Thanks from the bottom of my heart brother.

Edited to add a couple of quotes:

"As I evolve spiritually (expand consciousness), I have the ability to create more money, but at the same time I am not attached to it."

and one of my favourites:

Let the beauty of what you love be what you do. -Rumi

Last edited by TiaForex, Aug 18, 2009 2:52pm
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  #41407  
Old Aug 18, 2009 4:53pm
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Quote:
Originally Posted by StoragePro View Post
Porn Star?


Gives a whole new meaning to 80% passive.

(that last line will be edited out in a few hours... )
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  #41428  
Old Aug 18, 2009 10:20pm
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Quote:
Originally Posted by joelcf View Post
No, you are right - I guess, technically, it would be some kind of island reversal pin crossbreed.

But, to me at least, it says the exact same thing. Especially on a gappy instrument like soft futures. So I would be comfortable trading it as a pin.

definitions are all well and good, but I dont think they are set in stone.

Good pickup though, thanks - completely missed that one!
That's the kind of chart that gets me really excited. I've dabbled in soft futures, just watching...and this stuff really does work.

It doesn't look like a failure to me, didn't come remotely close to the pinbar nose. Just took a while to take off.

And I too am looking forward to my first pork belly futures trade. And orange juice. So I can feel like the guys from Trading Places.

Ultimately, with indices, futures, forex and a few high volume stocks, the dailies and weeklies can produce a ton of super opportunities a month.

And I want to be there to capitalise on them....
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  #41520  
Old Aug 19, 2009 7:05am
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Quote:
Originally Posted by Eclipse View Post
How much time do you spend a day monitoring the charts? And how many crosses do you look at? Do you even trade the 1 min. timeframe with the same method?
But most importantly: why aren't you able to trade higher timeframes with the same profitability?
Your answers could help me to understand some things. Thanks.
Hey Eclipse,

One thing I'd suggest if you're interested in Ryan, and for anyone who's interested in any poster, is to click his profile and read his post history. Almost all your answers are in there. And it's a cracking good read. I read all of Ryan's posts through twice and found them incredibly useful.

Aaron
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  #41587  
Old Aug 20, 2009 5:15am
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Quote:
Originally Posted by Ryanmcd View Post
I will say after being a loser for 5+ years I am going to take all that I can out of this market ...
I love your stuff Ryan. Always have. Good to see you here again.

You mentioned spending years not understanding why you were losing. I quote that often to people as an example of the level of perseverance it takes to get profitable. When you finally got profitable and looked up, what were the reasons you were losing over those five years? And what changed?

I've read your post history twice and I don't think it's something you've ever written about. It'd be a great insight into a winner's psychology.
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  #41590  
Old Aug 20, 2009 5:35am
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Combining price bars is something that comes up from time to time on here.

It's not voodoo, and as someone pointed out, a weekly pinbar is simply 5 daily bars combined. A daily pin bar is 6 four hour bars combined. Price is price, our broker simply aggregates it into a visual form that we can read. It's the same price movements whether we look at them on a 4H chart or a daily chart, and really, combining bars is no different than looking to dailies, 4H and 1H for signals.

There are a couple of caveats though.

Firstly, you have the potential to drive yourself nuts. You think "well I look at 20 pairs on the daily and 4H, so I had better get my period converter charts up so I can look at 2H,3H, 5H, 8H, 2D, 3D and all the others! Great! More opportunities!" This will drive you mad. You won't be able to see clearly what's going on with a pair if you have 30 different timeframes open for that one single pair.

IMO you can just see it visually. Don't consider adding all these extra charts to your watch list but keep an eye out for obvious 2 day pins. They are pretty clear. One bar poking up from price and another bar poking down. In fact looking for combined PA that shows up clearly on a chart without using periodcon can be a good filter to avoid overload.

The second point is that it is sometimes easy to forget that if you are taking a 2 day bar, you want the previous bars to be 2 day bars as well so you can see what SR levels you're coming off. This is where periodcon is handy. Sometimes people see a 2 day outside bar and forget that because it is a 2 day bar it needs to be outside the range of the previous two bars, not just one. Just something to be aware of. I personally take combined bars when they are really obvious without periodcon but I can see them visually now after all this time, and I can visually see what the combined chart would produce in terms of SR levels. And if I take a 2 day pin I manage it on the daily, but I am aware that I am effectively dropping down a timeframe to manage it. Like managing a weekly trade on the daily.

It's a perfectly valid and feasible way to do things. The danger is that it blows the whole concept of "keep it simple" out of the water. It can lead directly to the biggest area of quicksand for new traders which is the thought "how do I get more opportunities to trade". The real question in my opinion is "how do I maximise the profits from the opportunities I am getting"
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  #41597  
Old Aug 20, 2009 7:38am
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Quote:
Originally Posted by StoragePro View Post
Oopsy - me and my weird need to sleep.

Just the kind of PA I like in a tight range. Price sticks it's nose way up and out, and rushes back in forming a nice PB/BEOB in rejecting the foray out. News in about 80 minutes, but it seems the market has yet again tipped it's hand. Nothing is ever sure, but this one is in BE + territory.

And I missed my entry... No chasing. Chasing is bad.

Darn Sleep. When will it ever end...

Yep...
.
You need to speak to Mike. I swear that guy has only had 14 hours of sleep so far this year.

And the little *&^%*^ still looks young and fresh.

If I don't get my 8 hours I look like something out of Dawn Of The Dead
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  #41604  
Old Aug 20, 2009 8:27am
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Quote:
Originally Posted by Radsson View Post
Hope (Can't wait ) it will close like that.
H1
Careful Radsson this one is trading into a ton of resistance. We like ideally to see bullish pinbars at swing lows and not so close to the highs, especially on these very low timeframes.

It also looks like you put your buy order in before the pin breached (that is if it wasn't an order based on another strategy, and if it was, I'd be mightily wary of the strategy) and didn't put your stop beyond the nose. We wait for the breach of the pin before entering, and also usually put our stops beyond the pin's nose.

This is an example of seeing a pin and trading it without looking around to see what might hold it up, where our confluences are and whether we have room for it run.

In my opinion this will get you killed in the long run, even if this trade does work out. It's also not the way PA is taught here.

As someone who has been down this road and put on plenty of trades just like this in the past, save yourself the nerves and anxiety and look for slam dunk trades on the higher timeframes which will build your account and your confidence nicely.

Hope you don't mind me pointing all this out. Believe me there isn't anyone here who hasn't done exactly what you're doing to begin with. But from what I can see on your chart, trading this way may well bring you a lot of anxiety and dent your confidence.

Hope that helps.

Aaron

Edited to add: Take a look at the pinbar on your chart from 19th August. Off a PPZ (if you zoom out), price shooting down before it so that it has a little space to go back up. That's more the kind of thing we look for. Seemed to do pretty well too...
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  #41608  
Old Aug 20, 2009 9:03am
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Quote:
Originally Posted by StoragePro View Post
Trouble Maker mode: ON
Wouldn't it just chap your a$$ if it went anyway


Trouble Maker mode: OFF
lol.....quiet in the back there.

Seriously though, it's a good point. We can't judge the viability of a trade setup by whether it worked out or not. Sounds mad doesn't it? But think of it this way. When we enter the market it can only go one of two ways. Up or down. So sometimes we'll make bonehead moves and be right.

Those are very dangerous times.

We want an edge that can be measured across a hundred trades. I always ask myself "if I took this setup a hundred times would I end up profitable". Getting to a place where you don't judge the success of your trades by whether they are profitable is trading maturity.

For example, I've been guilty of seeing a setup posted on a forum by a guy I look up to and entering on it. Sometimes they go to the moon. Are they within my rules? Not even close. Those are failed trades to me. Once when I did that, the trade made 5R. Still a failed trade. Why? Because I broke my rules and was led around by my nose by a forum post.

My view of what's a moronic trade has changed. And it has very little to do with whether they win or lose.

Last edited by TiaForex, Aug 20, 2009 9:25am
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  #41632  
Old Aug 20, 2009 12:22pm
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Originally Posted by Ryanmcd View Post
It goes back to the 1st 2 people I had as montors, they got a nice run up 1997 - 2000, the other one could trade great just not his own money

Mentor #1 took 64k and made over 8 million, Derick Lenord watch a wade cook video he's on it making 145k in one day off dell options, well he was in the right place at the right time and now is broke and in jail. I posted the deal before.

Mentor #2 Showed me a lot of price action such as Wave's Fib's and a setup called the Gartley 222 butterfly that was very nice. He is still great at TA just can...
Thanks man, that was great reading.
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  #41659  
Old Aug 20, 2009 8:52pm
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Originally Posted by joelcf View Post
Forex dead? No trades? The answer could be closer than you think

Attachment 293000

*edit* 6 cents per lb might not sound like much... but take into account that each contract is for 37,500lbs

I've made about $9k demobux off the last two pins. And that is with *missing* the big bullish outside enveloping awesomebar in the middle.

As of next week, softs are going live
Awesome stuff Joel. What platform do you use for charting futures?

I think tradestation my well end up being my Christmas present....
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  #41687  
Old Aug 21, 2009 3:54am
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Hi Ryan,

Another question while you're here. And thanks again for taking the time to contribute.

When you trade a fast market like the 5M and 3M what were your contingencies? You must have had backup laptops with wireless connections and a generator. After all, one power spike and you could lose big with that stuff.

Also, I've always wondered, do you have time enough to enter a stop loss and take profit on those 5M/3M markets. Or do you just buy/sell to market and edit once the order is in (which always sounds dangerous).

When I thought of you trading I could never imagine you filling out a ticket, entering a stop loss and take profit, calculating position size based on how many pips the pinbar is.... I mean, when you're looking for a handful of pips that kind of stuff just kills time.

I suppose the way I always imagined it was that with some platforms there's be a way of doing it super numbly, with a preset 10 pip SL and 20 pip TP, and that you'd just know how many lots 2% of your account would be for 6 pip, 7 pip, 8 pip, 9 pip SLs etc.

The more I trade the more it's the other stuff that interests me. Systems I can pick up in 5 minutes. It's psychology, implementation, all that stuff where the real fascination lies.
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  #41751  
Old Aug 21, 2009 4:53pm
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I just have my broker on a cell phone, also I always put in stops the same time I place my trade I have been burned before on that years ago and it was easy to fix. The only risk I have now is when I adjust my stops but over the years the GOOD brokers don't go down, In 1997-1999 Interactive Brokers had some growing pains Also you had to use math then too like 16 3/4 not 16.75 lol


Also about doing all that work, I am smart and lazy. I have a print out of what account balance = what risk and leave it on my desk, I have pre set stops and...
Just what I was looking for. Thanks for the detailed replies this week Ryan. Have a great weekend.
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  #41765  
Old Aug 22, 2009 1:14pm
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Man, it is good to hear from you again....
This is my favourite from the dailies and weeklies as well. The weekly pinbar on my feed adds a nice bit of confluence. I would have liked to see a further pullback to the trendline connecting those last few lows. But the 150EMA and 50fib show some nice confluence.

Personally it's a little too shallow a retrace for me to hold it beyond the 365 and the highs, because my instinct is that the bounce from there will put me in a drawdown that I would not be comfortable with.

Trade management allows a god bar to be played so many ways. Full bar stop and break even at the highs looking for a move beyond, full bar stop and not moving to break even hoping that the stop won't get taken out by the bounce from the highs and then move back and beyond (as per FXV's chart). Perhaps a reduced 50% stop looking for the hard break a la Jarroo, a riskier play because of a tighter stop so you'd want to protect yourself quick on that one. And so on and so on.

Joel mentioned last week that there might be lurkers who use this thread as a signal service. I hope the above paragraph illustrates how precarious that is. You can be told where to get in but there are literally a hundred ways to manage it beyond that. And that's not even considering the reason most followers of signal services lose money; when the decision to enter the market is not yours, you are unlikely to have confidence in it if it goes into drawdown and are more likely to mess with it.

No substitute for trusting your own analysis. And I'm as guilt of this as anyone else. One of the main areas I try and work on in my trading is to avoid "forum confluence"
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  #41784  
Old Aug 22, 2009 7:39pm
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Originally Posted by james16 View Post
geez if this continues were going to have to hire barney and bone him up on pa and pivot zones.

Hi Jim,

Are you still planning on posting those pictures of the thing you do that gives you six figures a year and is 80% passive? I've been wondering about that all week.

Pretty please?
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  #41786  
Old Aug 22, 2009 8:48pm
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well lets say a good five this year anyway.

i wont know for sure until they have all hatched.

stay tuned.

lol.

jim
You big tease

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  #41789  
Old Aug 22, 2009 9:08pm
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Originally Posted by Im4age View Post
Check post 18415 Tia
Page 1228
Wow. That cat is out the bag (and at risk of being eaten too by the looks of things).
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  #41885  
Old Aug 24, 2009 8:30am
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Originally Posted by StoragePro View Post

Mike would also be looking for an eclipse on Jupiter... Confluence.
And a Yankees win...

Only then will he pull the trigger.
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  #41891  
Old Aug 24, 2009 10:32am
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I wanted to add something to the discussion on trend/counter trend trading based on my experience.

When I first started demo trading it wasn't a particularly useful thought to me. Why? Because I had misinterpreted the principles. I was simply lazier with my entries on trend trades because I thought the trend would bail me out if I was wrong. I can't tell you how many times price reversed, took out my stop, then continued floating downstream leaving me scratching my head. "The trend was supposed to save me" I thought.

These days I pay attention to trend, but I must admit I pay more attention, when considering entries, to horizontal SR levels and PPZs, especially in regards to where the price action bar tells me my stop loss is going to be.

The stop loss is the point at which I will admit I was wrong and get out of the trade. Plenty of trend trades can take out this stop loss and then move on down.

The bottom line is that there is no substitute for solid PA at key PPZ levels with confluence. Don't make the mistake I did and use the excuse that it's with trend to take lazy trades. Price moves in waves and your stops are vulnerable even in a strong trend.

Where I absolutely pay attention to trend is in target setting. The key decisions for me are where I am going to break even and where I am looking to take profit. With on trend trades there is scope for letting it run and I manage my trade accordingly. Trying to let a counter trend trade run is incredibly risky. You'd better be dead sure you've caught the bottom and are trading the pinbar of the year.

I'm not disagreeing with anyone here, in fact I was nodding reading SP and Joel's posts. I'm just throwing in my view as someone who has been burnt by trend trading in the past. But then there was a time when I was (to quote SP) an idiot with an account and an internet connection and I thought that if price was trending I could just slam on an on-trend trend not caring about my entry point and that it would make me rich. Took me a while to learn that lesson.

Edited to add: I should also say, that when this market does start trending properly again, there is simple easy money to be made from price action at pullbacks to trendlines and 50% retraces. Jacko style. That's the kind of big picture trend trading I like.
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  #41999  
Old Aug 25, 2009 5:40am
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Originally Posted by ghous View Post
You need to be extremely careful with these pull back entries...

A limit order towards the left eye is barely ever sufficient.

What's the point in trying to force yourself to 1:1 when you're compensating the MM risk with being overly aggressive?

I don't attempt these pull back entries anymore but I guess the safest way to play them is to wait for the break up first

I know that wasn't the main point of your post, but still felt I had to get this across Cyrus.

Happy trading,

G
Just as Ghous said, pullback entries are a dangerous game. The breach is all important in price action trading as it is the final compnenet that actually makes it a pinbar (or whatever). Without a break it isn't a pin.

Rac is the master of retrace entries but he often uses price action on lower timeframes at levels he has plotted out. These levels are heavily confluenced, with strong PPZs, trendlines and fibs all lining up.

The danger is that you enter a retrace without any sign of it actually reversing and then it's an utterly avoidable loss.

Personally I will only enter on a retrace when all bells are ringing and often after the bar has already breached. For example the 4H pinbar on the EJ that printed today was at a strong area of 4h consolidation that would have made it a valid setup on its own, but it is a retrace not only of the daily BUOB (50% ret) but also of the weekly pin. That's the kind of odds I like.

For those looking to squeeze more pips from your dailies (and it's a dangerous game) why not do some testing around reduced stops when the bar breaches. That way you can still play the break and enter the same time as a conservative price action setup, but can have your stop at perhaps 50% of the bar, or even have a 50 pip target and 50 pip stop based around the break. You have to be much nimbler about break even and take profit with this, but the advantage is that you are in and out with your profit relatively quickly. It's what Jarroo does. His stop levels are marked on his charts.

Whatever your ideas, in your spreadsheet (and I highly recommend keeping a spreadsheet record of all your trades) add an extra column for whatever style you are considering. I have one for "50 pip stop" and one for "reduced stop based on SR". Then after a few months I see what the results of my trades would have been had I tried the alternative style. Gives me confidence if I intend to switch.

Confidence is everything. Helps you stick to your guns through those losing streaks, especially if they come at the beginning of you implementing your new strategy. That's when a loser is hardest to take psychologically.
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  #42027  
Old Aug 25, 2009 10:03am
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I've been meaning to ask, what is the significance of the 365 ema on a H4 chart? I can understand the daily because its a simple way of averaging a years worth of price data (even though there's actually only 5 or 6 bars per week), but what's important about three hundred and sixty five 4 hour bars?
I used to scratch my head about this as well but I think the best evidence is to put a 150 and a 365 on your 4h chart and scroll back. See how many times a 4h pinbar appears off the 365 for example.

The thing is, using the 'days in a year' logic, even a 365 EMA is meaningless on a daily because we only get bars 5 days a week on the charts so a true average of the last year's price would be a 260EMA. And even if it was an average of the last year's price, that in itself doesn't mean anything unless it's respected.

Jim introduced the 365 and 150 to the group saying that across the years he had found these two to be the most meaningful.

What helps me is to think of the EMAs as "equilibrium points". The average of a certain number of bars creates a sort of median line around which price bounces and comes back to. And my guess about the 365 and the 150 is that the reason they work so well is that they are adaptable to any timeframe. It's almost as if 365 4H bars and 365 daily bars and 365 1H bars all produce an interesting "median point". You could probably do some divisions and work out what the exact periods were but you should always be asking yourself the question "so what". If a 24EMA on the 1H produces the average of price over the last day, so what? The only evidence is whether it has been respected or not over time.

It's a little difficult to describe what's in my head around all this, but I think the 365 and 150 on each time frame actually reflect a lot of different EMAs that traders are watching. I haven't done the math but I bet on a bored weekend someone could come up with a very interesting study of how the 365EMA on the 4h is in exactly the same place as the daily 100 or something like that. My feeling is that these EMAs line up very nicely with a ton of others on different timeframes because of their multiples.

My feelings of course matter not a whit. Any cursory glance at the 365 on the 4H for example will show how useful it is. It's one of my favourite pinbar confluences.

It's the same as asking what causes a pinbar. There are so many different reasons, and if it helps to give you comfort trading, then by all means look into it. But ultimately, they work because they work. And when you watch them work time and again, you gain a confidence that no amount of theory ever gave me.

I hope some of that helps. It's really only idle musings on my part but I have found my trust of EMAs has really grown when I think of them as "equilibrium points".

Aaron
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  #42037  
Old Aug 25, 2009 10:46am
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Thanks Aaron, Joel and SP. So its kind of a 'everyone else uses them' thing.

P.S. Aaron, liking your H4 journal in the PF.
Thanks Paul. Glad to know people are watching...
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  #42053  
Old Aug 25, 2009 2:50pm
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Originally Posted by mbqb11 View Post
No need to frown, one trade has taught you something for a lifetime of trades. Seems pretty good deal to me
That's the way I look at it. I always get something, either money or education.

Dmc,

The reason we need to be aware of spread as you mentioned is those ugly times when we get taken out even though our stop wasn't hit.

I always have a mantra in my head "Buy at the ask, sell at the bid, bid price shown". Which means my charts are based on bid price. So I am fine when selling (or taking profit on a buy order which is also a sell order). But any time I am buying, I will be buying at a price not reflected on my charts. So I need to factor that in.

So what I do is, say I have a stoploss for my sell order set at 145.90. Well I based that stoploss on the charts which are based on the bid price. But because it is effectively a buy order it will be triggered when the ask price hits 145.90. So I just allow for spread. If the spread is 5 pips, I put my stoploss at 145.95. That way when the charts hit 145.90 the stoploss will be triggered.

Which is a very long and convoluted way of saying... add the spread to your entries on buy orders (and SLs and TPs for your sell orders).

Pm me if you need any more help.
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  #42060  
Old Aug 25, 2009 4:00pm
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Quote:

Who is rac? is there any thread or something I can get the info of how he trades?
Raczekfx is a very very accomplished trader who posts in this thread. Look at his post history.

He doesn't spell it out but there's a lot of information in his charts and posts.

Last edited by TiaForex, Aug 25, 2009 5:30pm
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  #42117  
Old Aug 26, 2009 4:22am
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Originally Posted by joelcf View Post
Erm, I meant... something about a second elliot wave retracement to an astropivot EMA on the RSI divergence cross!
Can you post astropivot EMA indicator with settings please. Thanks.
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  #42380  
Old Aug 27, 2009 3:56pm
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Originally Posted by artov View Post
Haven't been in a while in here, thanks to all for learning me Price Action in this thread! It's helping me in all markets and timeframes I watch.


Thanks to: Jim (J16), Jarroo, Mike, TiaForex, Ghous, Ryanmcd, Jduester and Rustyjeff.
Thanks for the kind post. Means a lot to me.

First time I've been mentioned in the same sentence as my trading heroes. Not entirely sure that i deserve that yet, but as I always I strive to reach the heights those guys are at. Both in trading and in the decency of their character. The kindness and decency those guys display is IMO the real learning here. Follow that and the riches aren't far behind.
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  #42381  
Old Aug 27, 2009 4:00pm
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Originally Posted by joelcf View Post
(sorry for the dodgy web charts, forgot to post NT charts last night)

Aaron, you should appreciate this one.

Original entry was @ 100 (although I got screwed by slippage), and doubled up on the break of the daily pin. Sept.

Attachment 296325

Attachment 296326

All my dreams of transforming in to a completely degen, Livermore-style 1930s futures trader are finally coming to fruition*.


*Poor pun intended.




I enter on the break. Some people wait for a break...
That is fine art Joel. Santa's bringing me tradestation and a futures account this year and looking at stuff like that I can't wait
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  #42382  
Old Aug 27, 2009 4:06pm
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Originally Posted by joelcf View Post
Nah. You cant be Livermore without occasionally wearing a sack/barrel.

Not that I actually want to be. Livermore, while clearly a brilliant mind, was also a degen gambler. And there is nothing cool about that.

There is just something about the reaction you get when you tell people you just shorted orange juice/pork bellies/etc..



And damn you are a harsh critic
Shorting orange juice futures just makes me think of the movie Trading Places...

And regarding Livermore... nothing wrong with wanting to copy the guy's trading skills. But I don't want to be like him in any other respect.

But then almost every one of my idols (Livermore isn't one btw) has feet of clay, areas of human weakness where they couldn't replicate the genius they showed in their areas of greatest strengths. It's all part of being human to me.

So I'll learn everything I can from Reminisces of A Stock Operator regarding trading and an approach to the markets. And I'll look to Gandhi, Buddha, Martin Luther King etc. for the rest.
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  #42384  
Old Aug 27, 2009 4:30pm
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Originally Posted by joelcf View Post
Eclipse makes a really, really good point.

I think another thing people miss is that many of the transactions we are talking arent one way. And so round numbers arent always obvious...

I'll tell it in story form, since Sto was a jerk about my art skills

I'm an aussie selling my pale ale to americans, cause yall make rubbish beer (except Kona Breweries!). All my costs are in AUD, so I clearly dont want your silly paper money, I want aussie dollars. I call the bank, say I want the nearby exchange rate of, say, 85 US cents on the dollar,...
Never thought of this Joel. Great stuff. Thanks
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  #42454  
Old Aug 28, 2009 9:17am
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Originally Posted by speedtrip View Post
I everyone off my hols so and looking for some good trading books to read while i am away.

Any suggestions

Regards

ST
I think there are a couple of threads for this on forexfactory but I would suggest

Reminisces of a Stock Operator.
Both 'Market Wizards' books
Pring on Price Patterns
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  #42473  
Old Aug 28, 2009 2:45pm
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Originally Posted by benji533 View Post
ok I have received several PMs yesterday with questions about how do I draw my breakout patterns...after I posted the breakout patterns of the EURGBP and GBPJPY.

I thought maybe I'll just post here a few charts from my watch list.

Please take note that usually I play breakouts only with the direction of the trend. On messy and choppier markets with no clear trend, two directions are veiled for me...if at all (trending pairs work better).

The upper trend line needs to be pointing from horizontal and down with it's angel. The lower trend...
Benji my man you're an inspiration. You've mastered Mike's breakout style and expressed it concisely and simply. This post will be quoted and referred to many times in the course of this thread.

There's a real lesson here to anybody new. Look how simple Benji keeps it. Ease simplicity, not forcing anything, and only working off trendlines that my blind grandmother could see.

The methods are simple. We are the ones that complicate them. Great work Benji, and a terrific way to end the week on the chart thread.
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  #42542  
Old Aug 30, 2009 10:49am
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Originally Posted by Jduester View Post
I was recently asked this question by a fellow trader....
Awesome post Josh.

The emotions around trading are things very few people admit to themselves. But the more I do this the more I realise that trading is 80% psychological. When I see a great trade posted by someone I never think "wow what a great mind to crunch all those numbers and work that out". I always think "man that was so simple and easy"
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  #42544  
Old Aug 30, 2009 11:18am
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Originally Posted by benji533 View Post
Hey folks,

Just discovered another very interesting fact during my back testing of price action setups.

I have found that most of the failed PA bars haven't triggered by the next bar. I mean, if I have a pin bar, and it doesn't break by the next bar after it - that is a sign of weakness, and many times you can identify failed PA bars by this occurring.

So basically I think it is lack of momentum, or in other words - price is in indecision status.

So all the idea behind using round numbers, breakout, or just any PA bar, is to have momentum...
It really is amazing how quickly you are assimilating the advanced material benji. You're going to be a James16 senior member and teacher before long...

Let me answer some of your questions from my experience.

Cancelling the order if it doesn't trigger next bar

I know that mbqb11 cancels his order if the next bar doesn't trigger his entry 99% of the time. I am slightly different. Of course we all love to see price shoot down and never look back. But I look at it this way. If the next bar neither invalidates the pinbar (for example) nor triggers it, then it's an inside bar. Which in itself is a PA signal. And the pinbar plus inside bar combination can be deadly (also outside bar plus inside bar). So I look at the inside bar to see the story of price unfold. Was it a hugely bullish/bearish bar away from the direction of my trade? Or did it have a pinbar shape with price darting up towards the nose of the trigger bar and ending back near the breach point? Everything gives me clues. Certainly cancelling our order if it doesn't trigger next bar is a very valid way to do things and will keep you out of a ton of bad trades. But there are also other ways to use that information on the next bar.

Also I think the "cancel if it doesn't trigger next bar" approach works much better on dailies than on 4H. On 4H there are a lot of dead bars, particularly after NY close and that doesn't reflect a lack of momentum but rather the natural ebb and flow of market activity. I am prepared to wait much longer with a 4H setup to see it trigger. Sometimes up to 4 or 5 bars. Again, this is just from my testing and research.

DBHLC

I rarely play them, mainly because they rarely show up, but if I did I would look for them at the obvious swing points. The thing I always try and remember about these bars so as not to spook myself about them being a rare and exotic PA setup, is that a DBHLC is really only a pip away from being a good outside bar with a strong close, and is usually a 2 bar pin anyway. It's just another way of looking at rejections on price.

Which brings me onto my next point...

Retrace Entries

DBHLC and Outside Bars often retrace at least 50% in my experience. If I see a good outside bar on the daily I will set my order for the breach as normal, but will also be watching 4H like a hawk at the 50% level for god price action. Then, rather than it being a retrace entry per se, it become a good 4H trade with strong daily bar confluence. In fact Rac likes looking for PA between the 50 and 61.8 ret of any swing.

I personally have never seen good results from setting blind entries at 50% retraces because often just ploughs through. Better to wait for good PA.

But you are absolutely on the right lines with your research when looking for retraces entries. Just look for PA at good confluenced locations. Big round numbers, big fib levels, SR/PPZ points. All these will give clues as to where in the daily bar price is likely to turn around and retrace and can give you chance to get in with a bigger position size/smaller stop. By the time price gets to bar breach you could already be 1R up.

How about also keep a column in your trading record spreadsheet for the percentage that price retraced into the bar. Then after a good long chunk of trading you would be able to see, for example, that 85% of your outside bars retraced between 50% and 61.8% and you could formulate trade plan accordingly.

Another way to look at things

Now that you're armed with the information about retraces within bars, another way to use it is to not look for early entries but to look for reduced stops. For example, you still enter your trade on bar breach, but you set your stop at 50% of the bar, or at a key SR level, or at the second eye of a pinbar. Jarroo does this a lot. I've even been testing having a standard 50 pip stop and shooting for a 50 pip target from an A+ bar breach (only testing this on daily). A simple in and out for 1R. I'm also testing taking half off at 1R with this method and moving the other half to break even. That way I allow for the big runs when they come.

The advantage of this is that I am not playing a bar until it breaches but still getting a good position size. I have found that any of these advanced finesse entries re really not worth messing with on intraday timeframes. Well, one or two of them are, but you've worked out which ones already....

Caveat

This post is specifically directed at Benji because he's reached a stage where he knows what he's doing and can cope with this stuff. But if you haven't mastered playing price action the classic way, and you think this is a way to squeeze more profits, then this information will kill you. It will destroy your account and your confidence and give you next to no chance in this business. Get the basics right and the rest will follow.

I had someone trade my money once using price action principles. He fancied himself a bit of a retrace master. He ended up tying himself in all kinds of knots, losing A+ slam dunk trades where everyone else made money just because he got cute with entries, and constantly trying advanced setups that he had not fully grasped. What it did was shatter his confidence, his trading got worse, and he had a major meltdown on his last day of trading for me and lost me a small fortune. When I looked back on his trades, if he hadn't always tried to get the best position by taking retraces, then he would have been profitable. The damage to his confidence was huge, and although I am no longer in touch with him, I imagine that it is a tough burden.

Confidence is everything in this game. Allow yourself to build it the classic way before getting too fancy. Although I am interested in these kinds of entries, the vast majority of my trades are played the "classic" way simply because that is where I am most comfortable.

Last edited by TiaForex, Aug 30, 2009 12:01pm
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  #42560  
Old Aug 30, 2009 7:03pm
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This is really interesting, but also confusing. A pin bar is a sign of fast and sharp rejection, and an inside bar is a sign of indecision. So basically that indecision is canceling the "push" of momentum the pin is showing". I will need to check the inside bars deeper before I can say something about them. But basically I also think that we need to use common sense and not be robots. Meaning that if I see a pin bar followed with another pin bar that didn't break to the opposite side, this is still a sign of rejection.
I think I can make these...
Hi Ben,

You speak English immaculately. I would never have guessed it wasn't your first language.

You're going down very similar avenues that I went down a few months ago and I wanted to offer just a gentle warning based on my experience.

Keep it simple.

All your thoughts are good thoughts, and wanting to understand the reason why PA appears is a very valid line of thought. But when you start looking into it you'll realise that there are many many reasons why a particular PA setup can appear. Joelcf has a great post on this. And then you start asking whether this pinbar formed in the "right" way. And you can really tie yourself in knots.

Mbqb11 will play a mammoth outside bar intraday in the right location, even if it was formed by an NFP news spike. There are so many reasons why PA appears, and in my experience, the more I researched it, the more I ended up second guessing the charts.

You're a bright guy and so I can see you going down these avenues to get a better understanding of the markets. I can also see sometime in the future you reducing your trading to simple core concepts and rinsing and repeating.

When I started looking at the reasons behind PA I would constantly second guess the bars as they appeared on the chart. Did price shoot up the right way? Did it spike up? Was the pinbar created essentially in a 5 minute period? Did it create the "right" way? And so on and so on. There was way way too much discretion involved. And as I did research into round numbers I started discovering all kinds of logic behind it. Option protection etc. I even started looking at round numbers in other currencies and how they translated into SR levels on my chart. What 1.300 on the eurusd would look like on another eur chart for example. Joel talked about this recently.

It drove me a little crazy.

The purpose of technical analysis, especially the way we do it here, is following footprints. That's why we ignore the news. Half an hour before news announcements there is usually a price action setup that appears that gives the tip off as to where price is going. Footprints. There's a lot of complex information priced into those charts, complex information that we have no hope of accessing, but nonetheless information which leaves footprints that we can follow.

To simplify, my gold standard became backtesting and demoing. If I had a concept that I felt was valid, I'd take it to forextester and then onto demo charts just to see if it worked over time. If it did I'd test it live, and if that worked, it rolled out as a viable strategy.

The danger with too much theorising is that we grasp only a small amount of the knowledge available. To use your example, yes a pinbar is a sign of a hard and fast rejection, but a cursory glance of the charts will show that many times after triggering the price lingers around before the big move. It doesn't plummet at that same rate that it came off the nose. And an inside bar isn't necessarily a sign of indecision (that's a neutral bar), it's more a sign of the market winding tighter and tighter before an imminent breakout.

There are many many ways to look at the whys and wherefores of why these bars appear. I'm just offering up a friendly warning based on experience to not delve too deeply into things, or at least if you do, to keep things simple when deploying your knowledge.

Of course, all this comes with the caveat that trading is based around your personality, and you may be someone who likes to have an overview and to understand everything no matter how complex. I know SeekingLight has a similar personality and his stuff is well worth reading. I think you'd like it. He does well with complex analysis because it's who he is, and a simpler reading of the charts wouldn't suit him. Trading really is personality based.

Anyway, I've waffled on a bit. Sunday nights are always the time when I ease myself back into this and so am always a little rusty from the weekend. Hope it made sense.

Good luck this week and I look forward to reading your posts.
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  #42603  
Old Aug 30, 2009 11:24pm
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Originally Posted by raczekfx View Post
3 people in favor 97 against.... I like these odds...
They seem to repeat over and over again
Me too Mark, me too.

I saw a pinbar on the 4H AU at a triple top with divergence. And a clear rising trendline as a target.

Beyond that, I don't think too much. Just pull the trigger. Will it work? Who knows. But this is the kind of setup I look for again and again.

And of course, both camps could be right. A push down to my TP, followed by a break upwards beyond 0.8500 maybe. I tend to think in terms of "will it hit my target before it hits my stop". What it does after that is of no concern to me.

One thing I'm really learning from watching Mark and Mike is to keep it simple and let the odds play out over a series of trades. After all, that's why we risk 1% and not 25% a trade.
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  #42636  
Old Aug 31, 2009 6:46am
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Originally Posted by benji533 View Post
Hey Aaron,

Thanks again for this useful post.

Actually, yea my nature is to search search for logic and understanding behind every tiny thing I do. In this case I have got so deep in what I THINK is causing the outside bars, just to try to explain why I prefer them instead of DBHLCDBLHC bars.

But basically, whatever the reason will be...if the bottom line is that I can read price through this bar, and understand from it that bulls have more power, it enough for me.

When I trade, I do not think about all these things - I keep it simple.
Once...
Benji my man, you are going to be just fine. In fact, more than just fine...
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  #42645  
Old Aug 31, 2009 7:25am
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Anyways, I will address divergence in another post, because I think it needs to be talked about
Now that I am looking forward to.

Whenever Jim mentions divergence in his webinars he says the same thing. Divergence will kill you in a trending market. Rac also says that divergence is the account killer because it can simply go on and on and on as price rises higher.

It's most useful for me as a confluence at double and triple tops. But if I use it to take less than stellar PA then what happens is that I get stopped out, a few days later a pitbull pinbar appears and I wonder why I didn't wait.

Confluence really is magic. Taking a few simple things that individually have people scratching their heads and wondering why they don't work, and just looking for the places where they all line up..... this alone saved my ass trading. Now I am beginning to have an instinct for when a trade isn't "confluenced enough"

I used to just look at how sweet the pinbar was. It was my primary focus. Then I went through a phase of focussing on location location location. I guess now these things are beginning to bed within my DNA I can see them quicker and don't throw my focus on them. Now, for me, it's all about "where is the first area of trouble?"

Seriously, if you can identify that first area of trouble where price might turn around, your win rate can go through the roof. Because that is where you go to break even, no matter what. If you get taken out and price continue to become a killer trade you end up standing and applauding. Because it wasn't a loss. Eventually, and I do mean eventually, you can start to see which price action bars are likely to smash through PPZs and which aren't. That also depends on the kind of market we're in.

My focus these days is to never post chart to a senior and have him say "you missed that PPZ. that's what turned price around".

The real beauty of this stuff and why it beats anything else out there is that it is a method that can be adapted into any number of amazing systems, or even used to enhance your existing systems. There isn't a system out there that wouldn't benefit from a little PA confirmation IMO.

(Riffing on your post Joel, not a reply to you as such. If anyone knows all this it's you... )
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  #42652  
Old Aug 31, 2009 7:58am
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Regarding the "aqua line" that Joel is referring to ie: first target area;

It's another reason why the seniors here recommend cutting your teeth on stellar PA on higher timeframes at god locations. This kind of PA is more likely to bust through the first areas if you haven't noticed them and will build your confidence. It's the kind of PA that is much harder to lose on.

The more iffy PA can still work but it just needs a little finessing. And at the beginning of anyone's journey on this, we need to build confidence with winners. Shattered confidence can take a while to build up. And in the early days of trading habits will be imprinted. Give yourself the best chance by only taking the very best PA at the very best locations.

You'll learn patience too which is probably the most valuable wuality you can have in this business.
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  #42655  
Old Aug 31, 2009 8:04am
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Originally Posted by tradertt View Post

So can I assume that if I see higher highs and higher lows ie trending esp a strong trending market, divergences should not be included as a confluence factor?

Of course we can take that into account but its importances is greatly reduced as we do not know when market will start turning.
I think Jim just means don't take trades solely off divergence. It's greatest use is as a confluence factor, alongside fibs MAs and all the other confluences that we look for to line up alongside good PA at PPZs

I think it's a great confluence factor and one of my favourites. Just make sure that the PA signal is there too. A strong one. Don't ever let divergence talk you into taking lower grade PA.

What Jim means I think is simply that divergence has no defined end point (unlike solid price action). It can signal an imminent turnaround but it can just go on and on and on.

In a ranging market it's much handier. I prefer divergence at double/triple tops. In the kind of market conditions you described it can keep going, and that market can often splutter out weak pinbars that fail before the big one that signals the turn around.

I don't fully understand they whys and wherefores of divergence. Never felt I needed to. But I am looking forward to Joel's explanation because everyone one of his posts leaves me feeling more knowledgeable about the market.
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  #42667  
Old Aug 31, 2009 10:26am
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Originally Posted by supremeChaos View Post
A PF member told me that the PF has tons of videos, so much so that he aint finished viewing all of them yet.
There's no way you can get through them quickly. The archived webinars alone are around 50 hours. I'd estimate 100-200 hours of video. But it's well organised so the important stuff is short, easily accessible and watchable again and again.

I still haven't got through all the content. But I have watched some videos over 20 times (seriously)
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  #42669  
Old Aug 31, 2009 10:44am
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Originally Posted by joelcf View Post
This is alot longer than I planned. So, here is the short version.

Behold, the power of the sports analogy:
I kick a football at a window. It doesnt break, and comes back to me.

Next, I kick it at the window again, but from a bit further back. The ball goes to the same point (ie, to the window) but by the time it gets there, it is already decelerating, because I kick like a girl....
Nope they haven't. Nothing like that.

Superb stuff Joel. I always learn so much from your posts. A great explanation and totally in keeping with the "keep it simple" ethos.

I've had someone say to me that he avoids moving averages like the plague and that they are useless and only show where price used to be.

At the same time he sang the praises of divergence on MACD.

By the way, just like Joel says, divergence works just as well on any oscillator. RSI, stochastics, Trix with the futures, whatever you like.

I must admit my make up is slightly different from the "I don't want to trade it like a robot" approach that ben talks about. Neither is wrong it's just a personal psych thing. I used to be the kind of guy that would take Joel's post and then make it my project to try and work out where CCI worked better than MACD and where stochastics and TRIX trumped them all and with what setting.

I am an overthinker by nature and want to keep my trading so simple that I could do it drunk. In fact, I really do want to trade like a robot. See the same setup I've seen a hundred times before and pull the trigger. I don't want too much thinking to cloud the picture. Otherwise I'll start wondering if it's the "right kind" of divergence or pinbar.

I'm fascinated by this stuff and love hearing about it, but given that my personal psych struggle with trading is to keep it simple, I know to not go down the rabbit hole with it.

I have an British Ivy League style education that I was very proud of until I realised that it was getting in the way of my learning in so many areas. Rac once told me a story of how in his trading circle the doctors and lawyers and accountants were far from the best group. Who were the best group? Farmers.

That one story told me more about where I wanted and needed to take my trading than anything else. Thanks Rac.

As ever this is all about the individual personality. This stuff is so simple that once we assimilate the basics it really just comes down to what's between our ears.

So while all this stuff, is interesting and I love it, I just want to throw in for anyone new.... you really don't need to know any of this to trade. It's a simple simple package of good bars at good locations with supporting confluences from fibs, divergence, the 150 or 365 EMA and perhaps trendlines. That's it. That can get you to an astonishing return in and of itself. Trading is simple. We are what make it complicated.

Last edited by TiaForex, Aug 31, 2009 11:01am
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  #42675  
Old Aug 31, 2009 11:14am
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Originally Posted by benji533 View Post
supremeChaos - Thanks for the links. By the way, all the things I say are thoughts..I need to stress it lol.



I am the kind of person you have mentioned - wants to know any thing he can. It is just interesting.

But so far I am managing to do the separation between the desire to know...
We really are similar Ben. That's exactly the road I went down and I couldn't have expressed it better myself.
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  #42676  
Old Aug 31, 2009 11:15am
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Originally Posted by raczekfx View Post
.
All I can do to that Mark is applaud.

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  #42721  
Old Aug 31, 2009 7:36pm
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Originally Posted by mbqb11 View Post
I would be all over that bad boy.

Best
Mike
Been a while since we've heard that one....

I remember when every second Mikey post had that phrase in it.
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  #42853  
Old Sep 2, 2009 6:58am
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Originally Posted by StoragePro View Post
AUDCAD 4Hr
Saw that. Good spot. Close was a little weak for me giving it that half OB/half neutral bar look. But can't argue with the location.

Also trading that pair intraday gives me the willies.
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  #42953  
Old Sep 3, 2009 7:07am
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Originally Posted by StoragePro View Post
See the chart - it is a working trade I am in from a couple 'o days a go.

See the "x"? That was the point I suspected price to hesitate at and have some pause. It did. Check a lower TF for confirmation.

Look what happened - old resistance became support....
Killer trade SP
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  #42954  
Old Sep 3, 2009 7:16am
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Originally Posted by StoragePro View Post
I'd suggest no more than 1% max until you *know* what you are doing and have proved it with a nicely accelerating equity curve. This will not happen real fast.

It is the psychological aspect that will get ya....
There are guys in the market wizards books who suggest risking so little it doesn't feel like it maters if you win or lose. Then let your win rate and compounding work for you.

I think any amount that freaks you out over a loss is too much. And the larger your account size the quicker that's going to happen. It also depends how much that money means to you.

If you have a six figure account size ready to go then stay on 0.5% for a while (even 0.5% of a reduced version of that account). And take the increase up slowly. Say 0.1% a month on the first of every month so long as you're profitable. Stick with a defined plan to add in.

Adding in to the account, increasing risk, all this stuff can be a psychological killer. Meaning you mess around with your plan because the risk freaks you out. I speak as someone who knows.

Personally I wouldn't go near 2% risk until I had at least a year to two years of solid success behind me. Remember, compounding and a %R MM system will give you an increased position size without you (or your fearful greedy mind) realizing it. That's a good thing.

I am trading with 25% of what I will eventually trade with at the moment. I risk 1% on dailies/weeklies. And I recently moved my 4H from 0.5% to 1%. That's good enough for me. I think starting with a losing streak on live dailies, even after a good long successful period on demo, made me cautious. I am happy it did though.

And once my MM is in place, I have a mantra in my head that I try and live by. Especially when I am thinking of yachts and islands and financial freedom (and I dream big with this stuff). I say to myself "Focus on making the next trade a slam dunk winner"

We're building something amazing for our lives. One trade at a time.
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  #43002  
Old Sep 3, 2009 1:08pm
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Originally Posted by benji533 View Post
Me sharing info? What can I share? I need to be shared. It is all over the place here. I didn't mention anything new. Read all James and Mike's posts. You are welcome by the way.



I don't need any indicator for this. Just look at the chart - it is obvious



Great post.
Not sure...but I have the feeling it is a bit referring to me also (even if you didn't thought about me).

I just want to make this clear now.
I am no senior. I am maybe the newest here to forex. I am not the one that will teach you (new guys to this thread).

I...
Nothing C grade about any of your setups Benji.

I noticed the same thing as Joel, and it had nothing to do with you. Yours are clean and obvious and you're an example in keeping it simple.
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  #43134  
Old Sep 4, 2009 12:51pm
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Hey Benji,

Quick one on news:

James avoids it like the plague. Mike too.

The only thing I pay attention to is the fact that the first Friday of the month is NFP day. NFP tends to trigger big moves so I just stay clear of too much intraday action around that time. Dailies/weeklies I just trade as normal.

I used to ignore bars created by NFP because they weren't "real". Mike put me straight on that. He cares not how the bar was created. He just trades his charts as he sees them. He traded the big bars after last month's NFP and made bank.

The only other thing to consider is that during the ten minutes after NFP you might have trouble getting a good fill on your order. It's when slippage is most likely.

I don't care about any other piece of news. Sure they move the market, but I like to keep things very very simple.

Great work Ben. Round numbers, breakout trading...are you sure you haven't been looking over Mike's shoulder while he trades?

Aaron

PS As Bundy said, once you start paying attention to NFP you see that price action tips its hand before the news hits. It is possible to be correctly positioned using simple PA and that's what I think you did today. Personally that level of unpredictable volatility scares me so I stay out.
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  #43169  
Old Sep 5, 2009 9:34am
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Originally Posted by benji533 View Post
Hey seniors,

I would like to hear what do you think about this.
Sorry for the 30min chart. I have noticed it only after I boxed the areas, but it happens on all time frames.
This can allow me to get a nice trade based on a very small pip stop.

Ben
Benji you are going to laugh when you get to PF because there are a lot of ideas in there that you are coming up with all on your own. Well done.

Boxes are a part of my trading, and it's just a nice visual variant of Jim's teaching that old support becomes resistance and vice versa. I've found they work especially well with price action on the 4H chart when we get stuck in those daily ranges.

Nothing wrong with blind entries if you are extremely picky, looking for crucial areas with lots of supporting confluences like divergence, round numbers etc.

But it's not just a blind choice between 4H pinbars and blind entries. Why not look for price action at extremely low timeframes instead of your blind entries. 1H-5M pinbars for example, after you have identified your crucial area. You're doing great.

I will also add that playing blind entries will get anyone who is new to this material slaughtered. Seriously. It'll kill you. Personally I don't go near them. Don't need to. There's too much high grade PA out there very day or so for me to bother with much finessing.

If you're new (this isn't directed at you Benji) stick to identifying good PA at good locations on the daily and weekly. And if you haven't seen any for a while, don't worry, there hasn't been much in this rangebound mess. Rather than shotgun a ton of trades at all timeframes looking for double digit returns, concentrate on building a base of a small handful of well executed trades a month for 3% or so. Let that become your comfortable baseline. When you're confident you can do that (and it ain't as easy as it looks), then you can start adding in things that you have put through the demo process (as outlines in Jim's minimum requirements).

And if you're bored while waiting for those daily and weekly trades, get forextester or a demo account and try your strategies. If you're convinced you can grow an account using the hourlies, well try it for three months on demo. Whatever your ideas, develop a sort of boot camp that they need to be put through before they make it to the live floor. This'll be a discipline that'll serve you so well in the future. Jim still runs his new ideas through a rigorous testing process.

I speak as someone who's been overeager and paid the price. The way that Jim suggests is the shortcut.

I realised this hadn't been said in a while so i thought I'd drop it in. Benji's going about things the right way IMO as someone not much further down the line than him. He's demoing demoing demoing and trying out his styles and theories.
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  #43184  
Old Sep 5, 2009 5:42pm
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Quote:
Originally Posted by benji533 View Post

Do you mean that you are playing raging boxes, meaning sell on the top and buy at the bottom? or breakouts between boxes?
I'm no senior Ben. I've only been doing it a little longer than you....

I play both with boxes. There's no magic to them. They are just SR levels. A second hit at the top of a box with PA is basically just PA at a double top. A retest after breaking out of a box is also just a breakout and pullback trade. It's all just different ways of looking at it.

Calling it a box is a way of defining the range so that you can play good PA at either end of the "box" and also take advantage of breakouts and pullbacks. But essentially it's just another way of looking at PPZs.

By the way, a word of gentle advice from someone who has been there. Go easy when you go live with all this stuff. Incorporate a little at a time and save the much lower TFs for when you've banked 3-6 months of good results. I don't doubt your skill but we all underestimate the role of psychology in trading. And when we go live our psych is at its most vulnerable.

But on demo, feel free to knock yerself out....

All the best,

Aaron
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  #43229  
Old Sep 7, 2009 8:10am
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Originally Posted by benji533 View Post
Yea I have thought to my self something similar yesterday.
I already have things that work for me good enough...

In addition, I barely have time these days to think about trading. Next week I won't even be at home (going out with school for a one week camp).
So my thought process isn't focused and clear.

I also feel like these boxes are giving me an illusion feeling, because it is just S&R like you have said.

For now I'll just stick to the daily and weekly. When I'm at home and have time to think about charts, I'll open the 1H-4H.

Routine...
Ben,

Just don't mark the boxes off on the charts or view it as anything different or separate. It's simply where old support turned into resistance and vice versa. And a way of range trading using PPZs. It's no different to the classic PA at SR levels we teach here. I think where you might come unstuck is if you view "box trading" as a completely different style.

Think of it this way. Price approaches your double/triple top level. It's a clear PPZ. You're either going to get good price action for a reversal at this key level ("a box trade") or you're going to see price shoot through and retest before going on ("a breakout trade"). Simple, simple, simple.

That's why so many of those mbqb11 charts showing what he's looking for at key levels are clean and clear with only two sets of arrows on them. Either a bounce off the level, or a breakthrough and pullback before continuing on. Either way, the PA needs to be clear and good.

That's all there is. Now the real magic comes from doing it again and again and again. Then let compounding take care of the rest.
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  #43238  
Old Sep 7, 2009 11:08am
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Originally Posted by ghous View Post
Looks good if it can break hard, for some reason markets have been drowsy all day today.


g.
Labor Day in the US which means New York traders are off. That also means that after the end of the London session in an hour or so there will be very little activity and so probably no hard break.

I'm turning off the charts and heading out until the liquidity returns to the market tomorrow.
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  #43262  
Old Sep 7, 2009 6:49pm
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Originally Posted by Jigsaw View Post
Aaron,

Do you know of somewhere where I can get data for the individual stocks of the FTSE 350 (I understand I will have to pay for this feed).

The only place I know of so far is prorealtime.com and their charting I find not to be the greatest.

Regards,
Jig
I don't play stocks Jig so I can't help you I'm afraid. I even thought it was the FTSE 100 so it shows how much I know.

When I do play stocks I plan to get tradestation and just pay for the feed through them.
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  #43313  
Old Sep 8, 2009 10:31am
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Originally Posted by rikrok View Post
Hi All,
First to say thanks for all the posts I get to read here, this thread has really taken me a long way in my trading. I don't get to post...
I feel for you Rick. Every trader is vulnerable to these moments of going 'on tilt', no matter how experienced they are. Moments where they are tempted to break their rules because dammit they are just super sure, certain in fact, that price is going a certain way.

But it could have been much worse. How could it have been worse you ask?

You could have won.

Imagine that. All your instincts vindicated. 35-40% up! You'd feel like a king. And in the back of your mind the circuitry would have been wired to say, if your back is against the wall, just break the rules and come out with a huge gain. And that would stay there until a day were you did it and lost came by. Actually more likely several days where you did it and lost.

Being punished for breaking our rules is a good thing. We learn. You can bet more people have done what you did than will let on here (I have). Some are in such deep denial they will shake their head at your folly forgetting that they did it themselves once. The worst thought you can have in the back of your head is that if things go bad, then one day you can stick 40% on an A+++ setup and make bank. So consider it a great lesson learnt. And it didn't cost you a cent. Good on you for posting it too. Honesty and accountability will take you far.

In my opinion, by far the single worst thing that can happen to a trader, is being rewarded for breaking their rules. On Friday you could have been rewarded extravagantly for breaking your rules extravagantly. That would have been a disaster.

Last edited by TiaForex, Sep 8, 2009 11:19am
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  #43355  
Old Sep 8, 2009 8:00pm
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Originally Posted by rikrok View Post
Hi SP,
Hyde Park is where I walked today!!!
Sun is still shining here and I am making the most of it in the garden now, it could be the last sunshine of the year.
Thanks for the advice. In particular about writing the rules in stone and chanting them until they are embedded. Thats my next step.
August was the end of my three consecutive months of profit. Remember, I actually actively decided to break the rules for a day....to see what would happen. (Disaster)
I'm going to give it another month of demo and if it is a fourth successful will make...
I was in Hyde Park myself today. Weather is just too darn good to not walk around town at the moment. I love London in the summer.
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  #43358  
Old Sep 8, 2009 8:13pm
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Originally Posted by StoragePro View Post
Hey - on one of the boundaries of the park, there is a covered bench - covered over with a very nice wood and stone thing - like a miniature bowl that a concert might be played in.

What is that called? It is near to a pond where Swans float about.

Across the street there is a "Super Store" I took a pic of it - it is as big as a closet. Cracked me up.

All this London talk has me wishing for a nice Curry...
It's not called anything in particular but it's near Lancaster Gate. Nice area.

Get to London and the curry is on me SP.

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  #43364  
Old Sep 8, 2009 11:25pm
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Originally Posted by mbqb11 View Post
Hey Judith

I took this aud/jpy trade before, but will not take a big loss on it should it decide to come back to much

Also first trouble on usd/cad since it is in some decent traffic, marked up in blue boxes.

Best
Mike

PS AARON GO TO BED MAN!
I forgot you can see me down there.

I tell ya, when even 24 hour Mike tells you it's time to sleep, then it's time to sleep...

G'night.
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  #43468  
Old Sep 10, 2009 3:19pm
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Quote:
Originally Posted by StoragePro View Post
Tlindle - see what I mean?

Some of the people around here have more depth and experience and it shows with their lazy-ass methods. I hope to be a lazy-ass someday. I really do.

(I hope Mike does not get mad at me... probably to lazy to... )
Yeah, don't be fooled. Lazy ass Mike put in months of 20 hour days testing everything up the wazoo.

Who could begrudge the guy some lazy days playing video games in his underwear?

Mind you, have you seen his workrate here and on PF? I think this lazy thing is a hustle....
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  #43592  
Old Sep 11, 2009 5:44pm
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Quote:
Originally Posted by benji533 View Post
Thanks for your responses.

I just look at this chart and I see so much reasons why not going short, and no reason why yes going short lol.

I rather not get into it too much...everyone is free to trade as he wish

Ben
One of Rac's trading styles is after a clear swing to wait for a pullback between the 50 and 61.8 and then look for clear price action there.

But you can't just blindly do that on every swing. Rather add the 50/61.8 fib area to our confluence kit along with EMAs, PPZs, trendlines etc. And trade smart, look if your trade has room to run

So there's no reason to go short yet. And remember even if PA does appear on the 4H to go short at that level, it doesn't mean it's a long term play.

So you're right Benji, as yet there's no reason to go short on that chart. The big battle line is that mammoth resistance area you clearly marked.

I think we're starting to loosen on a lot of these tight ranges, thank God. Summer trading may finally be over.

Personally I've been waiting for the bullish UCAD move for a while. And after oil's breakdown tonight, I think I might get it next week.
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  #43691  
Old Sep 14, 2009 8:14am
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Quote:
Originally Posted by raczekfx View Post
eu and uc hit their first targets for now..
and so on and so forth and so on and.....
.
I swear, I don't know how he does it....so many times....to the exact pip.



(and I'm holding my UCAD looking for just shy of 1.1 If we go down from here I'm blaming you Rac man... )
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  #43705  
Old Sep 14, 2009 10:12am
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Quote:
Originally Posted by bundyraider View Post
.
If you want my thoughts on how much room? ...Enough room to get into profit and start moving stops. Where the stop is likely to be nicely protected. ...That's just me though.
I haven't heard it put better.

Those first levels almost always see a bounce of some kind. The question is always is it just a temporary bounce or a full on stop-killing reversal.

If that first level is far enough away from my entry then I have some breathing room to work out which one it is. My stop gets to break even and the trade still has room to move.

If that first level is 15 pips away, well it's going to put me in drawdown even if it's only a small bounce. And I find that hard to handle.

I've had too much time in a cold room with Mister Drawdown to relish the prospect much. So now I tend to ask, can I get my stop to break even or take profit safely before the first area it's likely to reverse. And in rare cases, is this bar so strong that it's very likely to trump that first area.

As Mike always says, if we see that first area and decide to hold through it, then that's a trading decision. But we can't be surprised if it turns around on us from that point. Price hardly ever turns around for no reason. If you're scratching your head thinking "why did that turn round on me?" then the chances are that you've missed a bar high or some area of S/R on the chart.

Last edited by TiaForex, Sep 14, 2009 10:46am
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  #43708  
Old Sep 14, 2009 10:50am
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Quote:
Originally Posted by raczekfx View Post
the gap has been closed. What now.....?
10k or 9k....
I always get the impression that when Rac asks these questions he's already pretty sure of the answer....
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  #43713  
Old Sep 14, 2009 1:21pm
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Quote:
Originally Posted by Mpondondo View Post
I don't really understand BEOB and BUOB, and would like to ask the following question, please see attachment.

Attachment 314049
A bullish outside bar completely engulfs the previous bar, with a higher higher than the previous high and the low lower than the previous low. To qualify the bar also needs to close in the upper third of the body (lower third for bearish outside bars)

So yes, this is a bullish outside bar and you identified it correctly. Well done...

We prefer to see bullish outside bars at swing low points signalling a reversal. This bullish outside bar is at a swing high and so is best ignored when starting out.

Bar identification is only a small part of the method. The key is finding good bars in good locations. A good location has some confluence of a price pivot zone, EMAs, fibs or whatever you like to use to stack the odds in your favour. Keeping the chart as zoomed in as you have it makes it harder to see these good locations because you can't tell what is going on around price. So I'd suggest zooming out.

I hope that helps.

Aaron
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  #43714  
Old Sep 14, 2009 1:21pm
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Quote:
Originally Posted by mbqb11 View Post
yep that is correct Mp,

here are a few more examples of outside bars from Jim

http://www.forexfactory.com/showpost...ostcount=11011

Best
Mike
One day Mike, I'll beat you to the punch. One day...
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  #43737  
Old Sep 14, 2009 4:45pm
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Tradertt and Mpondondo,

Mike got to those questions first and answered them better than I could have done. So I won't add anything except to say that this stuff can seem a little frustrating at first but all it takes is a little time and practice and it gets clearer. I'm still on the learning curve but it's nice to look back and see how far I've come.
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  #43744  
Old Sep 14, 2009 5:16pm
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Quote:
Originally Posted by Mpondondo View Post
I'm read about, but never tried trading, "almost pin bars".... is an "almost BEOB" relavant in any circumstances? (yellow arrow)
This is once again the gbp/usd daily chart...(I really like this pair)....

Attachment 314288
I'd stay well clear of almost bars. I don't touch them myself. I've been burnt too many times by less than stellar bars at locations I where have been watching and waiting for price action.

It gets into a mindset where we start to curve fit and see things that aren't there. The best thing to learn IMO is how to keep passing on these less than perfect setups and wait for the ones that sit up and scream 'trade me'. Only a handful of those a month and we are growing our account nicely.
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  #43746  
Old Sep 14, 2009 5:29pm
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Quote:
Originally Posted by Mpondondo View Post
Attachment 314290

sorry, I meant the bar next to it..... the beginning of the change in direction...

Okay, I'll stay away from almost (disaster) setups...

Dave
The best thing you can do at the start Dave is nail some slam dunk winners for your confidence. Our mindset is so vulnerable at the outset that a few losers can do damage to our confidence for a while (I speak from experience). So just let the god ones come to you and bag a few in a row. It's a great feeling.
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  #43795  
Old Sep 15, 2009 1:18pm
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Quote:
Originally Posted by mike w View Post
4 hour g/u chart looks solid IMO. On the 50% from the last move up as well.
I was sorely tempted by that one but I see 1.65 as a key battlearea and this pin doesn't give me enough room to get my stop to BE before 1.65.

If it was anywhere else, I'd see a big PPZ, hanging cherry pin bar, fib retrace....I'd be all over it.

I think it'll probably work out nicely for those that do take it as well. It never hurts to have mike_w onside as well...
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  #43797  
Old Sep 15, 2009 2:06pm
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Quote:
Originally Posted by squeezy View Post
quick question if u dnt mind, i see the pin off 50 fib + ppz on my charts ....
are you not concerned about the big bearish bar immediately to the left, if it does work out 1.6580 shld be my 1st trouble area
im on the sidelines watching
Always great to be on the sidelines squeezy. Me too on this one.

And yes, you're right, the bar also isn't quite big enough to warrant a reversal especially trading into the round number. There's also a ton of bar lows at 1.65 on the chart so that's where I'd be watching carefully if I was in it.

As I said this is only my point of view. It's going to give me sleepless nights if anyone starts thinking of me as a senior here. I'm in the same boat as most of you guys, learning learning learning.

Looks like GU has made it to 1.65. Let's see where it goes from here. I enjoy watching trades I've passed on. I can see whether my analysis was correct without getting too emotionally wound up.
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  #43802  
Old Sep 15, 2009 2:40pm
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Quote:
Originally Posted by mike w View Post
1.6525-30 is an area to look out for IMO. What do you think Aaron? I'm out once we reach those bar lows for 50 points. I also agree with you that this isn't enough to warrant a reversal. I only look to the daily for those on a break. I can't wait for these dailies after yesterday's gbp/cad and cad/jpy working it.
Those bar lows at 1.6520 stick out like a sore thumb, you're right. If I was in this at the very least I'd probably be break even by the time we hit 1.65 I've been so influenced by mbqb11's emphasis on the big rounds so I try not to trade into them if at all possible.

I took the big BEOB and got out at break even on that one.

I passed on the CADJPY and am a little annoyed that out of the two gbp BEOBs that I chewed over, I took the GU and passed the GCAD. Still, tomorrow's another day.

Dailies have not really excited me for a while because of all this consolidation. When the markets loosen up a bit and create some space I'll be more excited about the PA.

But what do I know? I was expecting big UCAD bullish and EU bearish moves today. And look how that panned out....
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  #43806  
Old Sep 15, 2009 4:01pm
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Quote:
Originally Posted by mike w View Post
I'm definitely on the same page with the consolidating dailies....
I was indeed talking about the 4H lows on GU. I'm still a little antsy on that pair. Not quite sideways, not yet trending. I can't go into full range trading mode because I think something is about to happen, and I'm not sure which way price has decided to go so I am not in trend trading mode either. Looks like we are about to get some action too.

EU surprised me too. UCAD has also surprised me with its move down although we still have that trendline acting as support. The squeeze is definitely on with UCAD and I've been looking for a long move there for a while. Bias is such a double edged sword. It can definitely help to have market overview, but then if you get married to it you end up taking less than stellar PA and we all know where that leads.

Overall the markets have an "almost, almost, but no quite yet" feel about them and I have difficult reading them. My "just for fun" account which has a tiny balance for aggressive plays (and to satisfy my itchy trigger finger) is being decimated which shows how right my intincts are at the moment.

I am really curious about the I4B style and will head over to your journal to talk about it there.

All the best,

Aaron

Edited to add: I agree with you about the rounds so my philosophy is always this. Smaller rounds I use for trade management, entry levels, hiding stops, that kind of thing. Big rounds (1.65, 1.7 1.75 etc) are areas of big orderflow that I pay attention to for intraday trading. On the dailies almost every bar of quality goes through a big round so I only use it for sensible placement of entries and exits.
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  #43812  
Old Sep 15, 2009 4:47pm
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Quote:
Originally Posted by StoragePro View Post
Of course this is demo money, so I am not that concerned. You might ratchet it down to 1% as well. When you go live, 2% will likely be too much.

hey - anyone answer - losses make me sweat and feel hot. I think I might be mental. How about you all?
I know all that "game of probabilities", "losses are part of trading" yada yada. And I accept it. Never going to have a 100% win rate.

But...

I hate losses. Hate them, hate them, hate them. I hate drawdown and I hate losing. It's actually a psych weakness, puts me in mind to do crazy things.

My last loss gave me a bad stomach ache. And I only risk 1%. Imagine what 2% would do to me.

I guess that's why I am here. Jim's method when operated properly, gives the possibility of a very high win rate.
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  #43819  
Old Sep 15, 2009 5:17pm
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Originally Posted by tradertt View Post
I think I understand....
It's a god question and one that comes up a lot.

Basically you can have either a high win rate or a high RR. We'd all love to be trading a 90% win rate with 2R winners but it just doesn't happen like that. So you find the style that suits you. Trader discretion. And certain things go with certain styles. If you have a high win rate and low RR for your average trade then yes you need to guard against full bar losses. You need to find a way to cut your losses whether it be by killing the trade if it goes against you, or bring your stop up every day based on the next bar low, or getting to break even super quick. Whatever your method, you need to guard against taking too many full bar losses.

Personally I don't like the 7 winners wiped out by one loss vibe so I don't try and finesse my trades for 0.1R. It's also why i don't take partial profits.

If you are a low win rate/high RR style trader you need to find a way to keep yourself in the runners so that your winnes pay for your losers. This means not going to break even too soon, and not strangling a trade by bringing your stops up too tight when it runs. And you need to be prepared to give a portion back when it finally does move against you.

There is a place for setting reduced stops but it's not for someone just starting out IMO. Why not keep a spreadsheet with a column for what the result would have been if your stop was at 50% of the bar? Then after 6 months you'll know if you would have been more profitable or not.

A final word on RR:

RR in the traditional sense is more applicable to those who trade mechanically. People say that without a good RR you will lose in the long run. I think that's flawed (ask James or Mike). Usually people who think like this envision a scenario where you place your order and then let the stop or the TP get hit first. That makes it easy to calculate. But the minute you start moving stops up, going to break even, trailing a trade out etc etc, then RR becomes too difficult to calculate. Because you may only have had your full risk out there for a few hours, and the trade may have gone on for days. So in my opinion the RR calculation is not useful for discretionary traders like us.

Like everything else, just use common sense. Don't risk 400 pips to get 10.

Mike has posted something about all this fairly recently. (Actually I could say that after every single one of my posts.... )

Hope that helps. it's absolutely the right question to ask.
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  #43821  
Old Sep 15, 2009 5:24pm
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Quote:
Originally Posted by StoragePro View Post
Confession time.

I took a fairly dumb trade today. (I am being kind) and of course I got zapped....
I hear you brother. I had a couple last week and they just messed with my head. I still take train wreck trades that just make me utterly ashamed. And the worst part is when I get married to them. Just draw a line in the side and move on Aaron. Don't look to average down, don't try and finesse it to "make it all back".

I imagine a lot of people go through this, and very few admit to it. And yeah, there is a difference in the feelings I have with drawdowns and losses when I have taken a trade perfectly according to rules and plan, versus drawdowns and losses when I've acted on a hunch, been silly, or followed someone else.

The second one makes me want to gnaw my own hand off.
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  #43831  
Old Sep 15, 2009 7:35pm
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Quote:
Originally Posted by StoragePro View Post
Yeah - I've learn to ignore the herd. The USDCAD is a great example - lots of interest in seeing it go North - and a bunch in it till it died a hot steaming death.
It's. Still. Going. North.

Still

*radio goes dead*
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  #43866  
Old Sep 16, 2009 7:45am
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Quote:
Originally Posted by tradertt View Post
Errr QUESTION (Hands up)

What is the Break and What is the trigger?
Thought the trigger point was the break?

Or after typing this sentence a thought came to my mind,

Trigger = 5 - 10 pips below the break for a sell

Is it?
I'm not Jarroo (but I play him on tv)

I assume he means that the trigger is the low/high of the actual bar that triggered the trade, whereas the break is the entry point of the trade. Meaning that depending on your buffer when price turns around to retest, it is retesting the low/high of the trigger bar. Price doesn't care about where your entry is, but the high/low of the trigger can act as an SR level. Which is why it can be a good idea to nestle your stop a little behind break even.

Hope that helps,

Aaron
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  #43950  
Old Sep 16, 2009 10:25pm
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Quote:
Originally Posted by joelcf View Post
Not really.

Bank and institutional traders are there to put orders into the market for their clients and offload the bank's risk into the market (basically). They arent there to net pips. They get risk limits to trade within, so they can massage their orders to make a little, but their main job is to buy/sell what the bank has and doesnt want, or what the bank needs and doesnt have.

Chances are that one making 30% would end up getting fired for breaking his/her risk limits.

If you mean a hedge fund trader, on the other hand, then...
Another winning post Joel.

I have a few friends who are partners in some of the biggest hedge funds here in the UK. It's a completely different ballgame to what we do.

That said, I rarely talk about what I do anymore and if I do, I underplay it. Because amongst the "professionals" trading technical analysis is discredited voodoo akin to trading astrological charts and lunar calendars (come to think of I did know one guy who based his trading on the chinese calendar, but that's another story).

But you'd be surprised at who looks into our little corner of the world here. And there is more than one big player who is aware of James16. In fact one of my hedge fund friends was berating me for amateur trading. Then I told him I followed James16. He said "in that case, you're going to be fine". Cool eh?

We have so many more ways to be nimble in the market and make money than these big guys do. And don't get me started on the millions of dollars they spend on computers and algorithms trying to arb one pip. It's enough to give me a headache.

As an utterly unrelated footnote, I always quote the example of Madoff as someone who had the world at his feet with 10% annual returns. I was talking to one of my hedge fund friends recently and he said that Madoff made all his money from private investors because the big investment banks thought something was fishy and wouldn't go near him. Goldmans and the others didn't have a penny with him. The rumour that he's a big fake has been doing the rounds for years.
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  #43998  
Old Sep 17, 2009 6:57am
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Quote:
Originally Posted by joelcf View Post
If you ever figure out the answer to this one, please feel free to share it. I'm still stuck in the gravitational pull of the B/C trade, and escaping isnt as easy as 'just say no' (even though it should be).
I believe more than ever that passing on mediocre setups is the holy grail.

And it takes a long time to achieve. I'll let you know when I get close. I've got a way to go yet.

The losers I hate are the ones where I look back and think "what the hell was I doing in that?" Ie: Most if not all of them.

Work on the psych, visit fijitrader's section in pf, eliminate those trades and boom...nothing can stop you.

On my monitor I have two post it notes. One is a list of the 4H bar close times on the three charting platforms I use. The other says simply "opening charts, passing, and closing them again.... IS the holy grail"
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  #44132  
Old Sep 18, 2009 2:35pm
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Quote:
Originally Posted by james16 View Post
is anyone with the group having any problems with incoming communication from the group forum?

are you still recieving forum generated messages to your email like post notifications, pm,s etc etc
Yes , got a pm notification this afternoon. Two in fact.
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  #44136  
Old Sep 18, 2009 2:56pm
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Quote:
Originally Posted by mbqb11 View Post
popular actors pfft
I'm not even going to ask you how many PMs you got today.
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  #44138  
Old Sep 18, 2009 2:58pm
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Quote:
Originally Posted by james16 View Post
was one of them a test message with no reply needed?

jim
I got two of those from you (7:16pm and 7:52pm my time. It's now 7:59pm). But I also had PM notification from another member twice.
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  #44150  
Old Sep 18, 2009 3:17pm
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Quote:
Originally Posted by mbqb11 View Post
aaron can you do me a favor just post soemthing in my intraday thread. Want to see if I get notified
Done. Btw I should mention that I don't get thread or post notifications because I don't have my account set up that way. Just PMs. So I have no idea if thread notifications are working for me.
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  #44154  
Old Sep 18, 2009 3:25pm
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Quote:
"divergence is a killer on trends" (which I have never heard the reason for this sentence anyway).
Divergence starts to appear on charts. People go short based on it. Price carries on going up. People get slaughtered.

That's it.

Divergence shows the potential for a reversal but it's not a signal that the reversal is going to happen now. Therefore it adds confluence to reversal PA, but that reversal PA better be strong or you'll get killed.

Look at your charts and see how long price continued to diverge from the oscillator before that divergence was respected and price corrected itself.

Case in point, the NU and AU at the moment. Look how long it's gone on for. If a killer pitbull pinbar appears at a PPZ pointing south, the divergence will be great confluence.

In short, divergence says that sooner or later price will correct itself to respect the divergence. But sooner or later doesn't necessarily mean tomorrow and that's where people get killed.

That's the way I look at it anyway.

Aaron
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  #44158  
Old Sep 18, 2009 3:38pm
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Quote:
Originally Posted by StoragePro View Post
That AU - it spins off small PB's fairly frequently.
This is something I've noticed you doing SP. You know the quirks of a few pairs through observation. I've not got that in my blood yet. But you've observed the EURUSD moving towards the nearest 50 pip level after bar close. Little things like that. Rac talked about the UCAD sometimes reversing off a pinbar without consolidating etc etc.

I think it just comes with time. And of course it's not necessary to trade.

On another note:

The recent discussions on the thread bring to mind the old maxim, do what you need to do to be profitable. If you're profitable, great. If you're not, review what you're doing. Look at SeekingLight and mbqb11. Almost polar opposites in their approach, both profitable.

Find what works. Rinse. Repeat. Your bottom line does not lie.
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  #44159  
Old Sep 18, 2009 3:42pm
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Quote:
Originally Posted by benji533 View Post
Hey man,

I know that when you have confluence of factors, the odds are with you.

I want to know why divergence on trends, alone, is "showing the potential for a reversal". That's all.
What divergence on a trending price actually tells you?

Ben
I'm not your man for that benji, but check joelcf's post history where he has an awesome post on divergence.

I'd also suggest buying Murphy's Technical Analysis of The Financial Markets if this stuff interests you. Everything is explained there in great detail and it's a good reference bible.

The key is, you may not need to know all this stuff. But you want to. Fair enough. If it helps with your comfort zone, then go for it. Each to his own. And only we know what our individual comfort zone is like and what it takes to reinforce it.

Aaron
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  #44186  
Old Sep 18, 2009 6:43pm
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Quote:
Originally Posted by james16 View Post
is forex factory screwed up right now or is it just me.

everything is solid white.
Don't go into the light Jim. It's not your time....



FF is fine here. Must be a problem on your end.
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  #44654  
Old Sep 26, 2009 2:13pm
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Quote:
Originally Posted by benji533 View Post
I have noticed that most of the people post only their winners. I do that as well, lol. But why?

I will start posting also loser trades when I have. IMO, many times it is more important focusing on them than on the winners. Nothing to be afraid of.
If I am fanatical about anything when it comes to trading it is this.

I have two journals on PF (intraday and daily) where I post every trade winner or loser. Even the two humbling revenge trades I took this month. Everything goes in those journals without exception.

I never post trades on here because for me it is meaningless to post a winner if I am not going to post every trade. It's different if you're a senior looking to teach, or a new person looking to learn. I am grateful for the charts that Jim, Mike, Rac, Jarroo etc post. Wouldn't have learnt a thing without them. But I'm not at their stage so I wouldn't be posting a winning chart to teach, but rather to crow. "Woohoo, I nailed it"

That's my ego talking. Pure and simple.

It's crucially important to me to lay all my dirty laundry out at least somewhere. I know Mike reads every post on PF so he sees every stoopid trade I make. Sometimes that makes me cringe. But it's a vitally important part of the honesty and accountability that I think I need to make it as a successful trader.

Notice I am putting all this in the first person. I really don't in any way claim that this is how it must be for everyone. But I know that, for now, it's how it must be for me.

Last edited by TiaForex, Sep 26, 2009 4:09pm
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  #44666  
Old Sep 26, 2009 9:14pm
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Quote:
Originally Posted by atton View Post
This PB was not an A setup because of the lows right ?
Hey Atton,

That isn't a pin bar it's an outside bar. An outside bar completely engulfs the previous bar with a close in the top third (bullish) or bottom third (bearish) of the bar.

A pin will have a nose sticking out one side but it won't have any part of it sticking out the other side (in relation to the previous bar).

This bar is after a nice run down creating a swing low, and that's where we look for outside bars. You identified the lows correctly as the first area of trouble and this is where IMO you'd have to go to BE or take profit. I'd also take into consideration where the bar is in the bigger scheme of things. Is it at a daily/weekly PPZ? Is it at a 50-61.8 fib retracement of a clear swing? Is it hitting the 150 or 365 EMA? The more of these factors that line up for us the better. Because bars are only the triggers. What we are really trading is location.

And by the way, you're dead right about the pin on GU. It wasn't a perfect setup by any means for exactly the reason you listed. Small bar, PPZ nearby. We simply can't judge a setup by its results, because plenty of mediocre bars take off, and some A+ setups fail. I wouldn't call GU a slam dunk by any means, but a less than A+ setup which, when played tight (stop quickly to break even) yielded rewards. Don't think of it as an A+ setup because of how far it ran. Not taking it was a very sensible play.

Last edited by TiaForex, Sep 26, 2009 10:33pm
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  #44856  
Old Sep 29, 2009 11:42am (35 hr ago)
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Originally Posted by bundyraider View Post
I've got a reason on my order screen. I'll be waiting a Loooooooong time for GBPCHF to break down through .9180 anyway.

("Don't know", ...before anyone asks how I managed that. lol)
I thought I was the only person who had done that.



When I did it I zoomed out and saw exactly where my order line was. That was fun.
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  #44905  
Old Sep 29, 2009 8:22pm (26 hr ago)
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Originally Posted by bundyraider View Post
I was looking at both EURGBP and GBPCHF before i placed the trade for E/G. It's obvious now that I was on the wrong chart when I placed the order. lol
Yep, that's how I did it when I did a few months ago.

It could be worse. The nightmare error is when you place the trade, it gets triggered, and then you wonder why the dollar value is moving so quickly.

And then you realise you've put on a position size ten times too big.

Luckily it only happened to me on demo.
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