James16 Forex Trading Strategies

Posted by Mangi Madang on December 1st, 2013

Ok, lets get serious, shall we?

Theres  a guy somewhere over at forexfactory who has come up with some amazing forex trading strategies based largely on price action trading by the name of James16 .

James16 got a large following there regarding the type of strategies or the combination of forex trading strategies he uses there.

I believe, he is no longer supporting the thread he started some years ago at the moment as he has got his own site where traders subscribe for a monthly fee to learn the  james16 forex trading strategies and  methods .

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WHY ITS SO FRUSTRATING TO READ THE JAMES16 THREAD AT FOREXFACTORY

You know the greatest frustration I have is trying to read through the  6453 pages of thread (to be exact as of 1st Dec 2013) and cant figure out what the heck is james16 trying to say. For example, he just:

• posts a chart of a trade setup hed take and 
• put very few words on the charts
• with some few lines and circles
• does not really tell you how he managed his trade
• and  he does not really explain to you how he exits a trade (if he has, I have not seen a post of it yet, as I am quite impatient to search for it)

And guess what this does to you?

You getting stuck there staring at the charts and trying to figure out whats going onreading through thousands of pages of threads trying to understand the James16 forex trading methods.

Maybe, he has in some detailed trading rules in his posts, I dont knowbut if you find it, Id be glad if you can use the contact form of this website down below and post me that link to that post and I can update this post.

But for now, this is my interpretation of James16 Forex Trading Strategies and Methods

He appears to be a person who does not really have a knack of explaining his trading strategies in a clear-easy-to-understand manner for newbie forex traders.

Even Advanced forex traders will take some time to understand the forex trading strategies in james16 posts.

The way to understand a trading strategy properly is to write it in a structure similar to the forex trading strategies that are on this site :

• explain and give an overview of what the trading strategy is all about. 
• state what timeframes that you can use it on.
• start what types of forex indicators are required (if any)
• give the entry and exit rules.
• explain how to manage a trade in profit.
• explain with charts
• Keep it short and simple.

I mean, thats the way Id prefer to explain a forex system ( I dont know you).

IF YOU WANT TO READ MORE THAN 6400 PAGES OF THREAD, HEAD OVER TO FOREXFACTORYBE MY GUEST

However, if you are lazy and just want to get to the meat of the forex trading strategies that james16 uses then keep reading.

In short, I am going to simplify the forex trading strategies james16 uses.

If you are a new forex trader, you will find this a bit too much, you have to read a handful of times to fully absorb all the information.

Note:  these are my interpretation  so it may not be exactly as james16 was talking about (You cant crucify me for that can you?)

WHO IS JAMES16?

Dont know who or where Jame16  is from but he is probably  is a full time trader who has been trading for 30 years.

James started the thread because of all the pleas for help from many retail newbie traders and he was tired of seeing all the crap written about trading, so he thought he would teach what he knows.

WHAT TIMEFRAMES DOES JAMES16 USE?

James16 tends to prefer trading the daily and the weekly charts. James16 says that larger timeframes have more probability of success compared to trading in smaller timeframes. I would agree with him on this.

What this means for you reading this is this: you will have less, it may mean one or 2 trades a week. If you are forex trader that like frequent trading, this will really test your patience (seriously!)

For forex scalpers, or intraday traders, these forex strategies are not for you.

JAMES16 TRADE ENTRIES  SUMMARIZED

1. James16 focuses on buying the dips in an uptrend and selling the rallies in a downtrend.
2. He does this buy using Price Action Around Areas of Support, Resistance, Fibonacci Levels etc
3. His trade entries are based on a 2-4 bars reversal candlestick patterns clustered near points of confluence.

THE 6 MAIN PRICE ACTION PATTERNS JAMES16 USES

1. DBLHC- Double Bar Low Higher Close
2. DBHLC -Double Bar High Lower Close
3. Two Or More Matching Highs Or Lows. Must be within 2 pips of each other. If the high or low is broken, it means the resumption of the current trend.
4. BEOVD -Bearish Outside Vertical Bar(This is Simply Bearish Engulfing Pattern)
5. BUOVB -Bullish Outside Vertical Bar (This is Simply Bullish Engulfing Pattern)
6. Pin Bars

Now Lets Go Through Each One Of The 6 Price Patterns James16 Uses

JAMES16 FOREX PATTERN #1: DBLHC

• The DBLHC stands for Double Bar Low Higher Close.
• How to spot this pattern: Look for two bars that have lows that are almost on the same price level or  within 2 pips of each other
• but the second bar must have a close that is higher than that of first bar. See chart below.
• this is a bullish forex chart pattern and therefore you should be looking for this chart pattern when a market is in an uptrend.
• Trading this pattern is pretty straight forward: you can buy at market order as soon as 2nd bar closes or place a pending buy stop order just 2-5 pips above the high of the 2nd candlestick.
• Place you stop loss 2-5 pips below the low of the 2nd candlestick in the pattern.

JAMES16 FOREX PATTERN #2: DBHLC

• The DBHLC stands for Double Bar High Lower Close.
• How to spot this pattern: Look for two bars that have highs that are almost on the same price level or  within 2 pips of each other
• but the second bar must have a close that is lower than that of first bar. See chart below.
• this is a bearish forex chart pattern and therefore you should be looking for this chart pattern when a market is in a downtrend.
• Trading this pattern is pretty straight forward: you can sell at market order as soon as 2nd bar closes or place a pending sell stop order just 2-5 pips below the low of the 2nd candlestick.
• Place you stop loss 2-5 pips above the high of the 2nd candlestick in the pattern.

JAMES16 FOREX PATTERN #3:TWO OR MORE MATCHING HIGHS/TWO OR MORE MATCHING LOWS

#3a: Two Matching Highs Forex Chart Pattern:

• How to spot two Matching Highs: Look for two bars that have highs that are almost on the same price level or  within 2 pips of each other
• this is considered a bullish forex chart pattern  therefore you should be looking for this chart pattern when a market is an uptrend.
• Trading this pattern is pretty straight forward: you can buy at market order as soon as 2nd bar closes or place a pending buy stop order just 2-5 pips above the high of the 2nd candlestick.
• Place you stop loss 2-5 pips below the low of the 2nd candlestick in the pattern.

Heres what Two Matching Highs Forex Chart Pattern Looks Like:

#3b: Two Matching Lows Forex Chart Pattern

• How to spot two Matching Lows Forex Chart Pattern: Look for two bars that have lows that are almost on the same price level or  within 2 pips of each other
• this is considered a bearish forex chart pattern  therefore you should be looking for this chart pattern when a market is a downtrend.
• Trading this pattern is pretty straight forward: you can sell at market order as soon as 2nd bar closes or place a pending sell stop order just 2-5 pips below the low of the 2nd candlestick.
• Place you stop loss 2-5 pips above the high of the 2nd candlestick in the pattern.

Heres what two consecutive matching lows forex chart pattern looks like:

JAMES16 FOREX CHART PATTERN #4: BEOVB

• The BEOVB stands for Bearish Outside Vertical Bar.
• How to spot this pattern: This is a two bar forex chart pattern and  the first bar must be a bullish bar (green) and the 2nd bar must be bearish which overshadows the 1st bar because its high may be a few pips more higher than that of the 1st bar and its low may be a few pips or more lower than the 1st bar.
• this is a bearish forex chart pattern and therefore you should be looking for this chart pattern when a market is in a downtrend.
• Trading this pattern is pretty straight forward: you can sell at market order as soon as 2nd bar closes or place a pending sell stop order just 2-5 pips below the low of the 2nd candlestick.
• Place you stop loss 2-5 pips above the high of the 2nd candlestick in the pattern.

Heres what BEOVB forex chart pattern looks like:

JAMES16 FOREX CHART PATTERN #5: BUOVB

• The BUOVB stands for Bullish Outside Vertical Bar.
• How to spot this pattern: This is a two bar forex chart pattern and  the first bar must be a bearish bar (red) and the 2nd bar must be bullish (green bar) which overshadows the 1st bar because its high may be a few pips more higher than that of the 1st bar and its low may be a few pips or more lower than the 1st bar.
• this is a bullish  forex chart pattern and therefore you should be looking for this chart pattern when a market is in an uptrend.
• Trading this pattern is pretty straight forward: you can buy at market order as soon as 2nd bar closes or place a pending buy stop order just 2-5 pips above the high of the 2nd candlestick.
• Place you stop loss 2-5 pips below the low of the 2nd candlestick in the pattern.

Heres what BUOVB forex chart pattern looks like: