The focus of my trades will be Fibonacci Ratios and Harmonics, and for that reason I highly recommend to read this thread:
Ratios & Harmonics: a Different Way to Trade
Is the best thread on the subject. My good friend Mr. Pip has made of this strategy his own. We are not concerned about finding crabs, bats, butterflies or whatever but instead be awared of price action, order flow, harmonic projections, structure and confluence.
I am familiar with literally every possible indicator: MACD, CCI, RSI, Moving Averages, LSMA, Bollingers, Envelopes, Ichimoku, Stochs, Volumes, ZigZag, Fractals, just to name a few, with their different usages: trend, countertrend, crosses, momentum, OBOS, regular and hidden divergence, etc, etc, etc. In fact, I consider myself pretty good recognizing entries, exhaustions, etc.
However, one of these days after struggling with counter trend entries and using stupid martingale strategies, while reading Mr. Pip's thread I read one of his posts that opened my eyes:
"Ok, what the hell" I said. "Let's remove the indis". And one by one I started to take them out of my charts: 100 EMA gone, envelopes gone, CCI gone, RSI gone (this was my clean version of my charts LOL).
I currently use only 1 indicator: daily pivots, just to know at what S/R area price is currently trading and check if I have confluence with my entries. It also helps me to get an instant idea of order flow: if price has been trading below the pivots during the last couple of days I know the market is bearish, just to give an example. I don't use regular pivots. Since I trade ratios I also want to have Fibonacci Pivots. (The Pivot Point is the same but the S/R levels play with the fibo ratios).
This is not an indicator per se but I also like to know the Average Daily Range of the last 10 days. If the ADR(10) is 90 pips and today's range is 95, then I can activate my counter trend strategies with more confidence.
The rest is just pure objects: fibonacci retracements and extensions, rectangles and trendlines. Nothing more. Sometimes I'll also use the triangle tool but just to make my patterns look evident.
I'm also a coder so I have coded most of the things I use. I like the way things look in Mr. Pip's Ninjatrader platform, so I made my MT4 rectangles had borders as well, and get colored fibonacci levels.
My edge
I don't trade regular time frames. I prefer to eliminate time from the equation as much as I can. There are 2 choices:
Volatility charts. These will focus in price alone. If price goes up or down n pips then I'll get a new bar.
Volume charts. These will focus on busy trading activity. If there is a lot of activity going on then I'll get many bars.
In both cases, time is not a factor. I can get only 1 range bar in 2 hours if price is not moving, or get 20 in just 1 hours if there is high volatility. The same with volume tick charts.
I use a combination of both. IMO range bars help to identify swings more easily while tick charts help to identify price action once price has arrived to the areas of interest.
You all are welcome to participate in this thread.
Best regards
Ratios & Harmonics: a Different Way to Trade
Is the best thread on the subject. My good friend Mr. Pip has made of this strategy his own. We are not concerned about finding crabs, bats, butterflies or whatever but instead be awared of price action, order flow, harmonic projections, structure and confluence.
I am familiar with literally every possible indicator: MACD, CCI, RSI, Moving Averages, LSMA, Bollingers, Envelopes, Ichimoku, Stochs, Volumes, ZigZag, Fractals, just to name a few, with their different usages: trend, countertrend, crosses, momentum, OBOS, regular and hidden divergence, etc, etc, etc. In fact, I consider myself pretty good recognizing entries, exhaustions, etc.
However, one of these days after struggling with counter trend entries and using stupid martingale strategies, while reading Mr. Pip's thread I read one of his posts that opened my eyes:
Disliked{quote}Before harmonics and ratios I was a mess. I was in the indicator trap and was not profitable. I felt lost and confused it was really a frustrating situation. I kept asking myself why am I consistently losing when all my indicator gave the green light. To be honest I turned the corner when out of frustration I got rid of all the indicators. Then something magical happened, I was able to see something I had not seen before, Price. Then I learn to read price. Yes, I am a price action trader I have been trading for about 10 years or so haven't really kept track but that does not matter it just means I have made more mistakes then you.Ignored
I currently use only 1 indicator: daily pivots, just to know at what S/R area price is currently trading and check if I have confluence with my entries. It also helps me to get an instant idea of order flow: if price has been trading below the pivots during the last couple of days I know the market is bearish, just to give an example. I don't use regular pivots. Since I trade ratios I also want to have Fibonacci Pivots. (The Pivot Point is the same but the S/R levels play with the fibo ratios).
This is not an indicator per se but I also like to know the Average Daily Range of the last 10 days. If the ADR(10) is 90 pips and today's range is 95, then I can activate my counter trend strategies with more confidence.
The rest is just pure objects: fibonacci retracements and extensions, rectangles and trendlines. Nothing more. Sometimes I'll also use the triangle tool but just to make my patterns look evident.
I'm also a coder so I have coded most of the things I use. I like the way things look in Mr. Pip's Ninjatrader platform, so I made my MT4 rectangles had borders as well, and get colored fibonacci levels.
My edge
I don't trade regular time frames. I prefer to eliminate time from the equation as much as I can. There are 2 choices:
Volatility charts. These will focus in price alone. If price goes up or down n pips then I'll get a new bar.
Volume charts. These will focus on busy trading activity. If there is a lot of activity going on then I'll get many bars.
In both cases, time is not a factor. I can get only 1 range bar in 2 hours if price is not moving, or get 20 in just 1 hours if there is high volatility. The same with volume tick charts.
I use a combination of both. IMO range bars help to identify swings more easily while tick charts help to identify price action once price has arrived to the areas of interest.
You all are welcome to participate in this thread.
Best regards
Best time to plant a tree was 20 years ago, second best is now