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Ratios & Harmonics: a Different Way to Trade

  • #39,141
  • Mar 31, 2018 9:26am Mar 31, 2018 9:26am
Hi, I have a Question that bothers me:
after a 1:1 completion of the main swing we expect a complex correction right? This means we can now trade the 1st swing of the complex correction with the same expectany (70%) or is it therefore lower because we are actually trading against expectation of the main swing?
Attached Image
  • #39,142
  • Mar 31, 2018 9:40am Mar 31, 2018 9:40am
Quoting ElMariachi
Hi, I have a Question that bothers me: after a 1:1 completion of the main swing we expect a complex correction right? This means we can now trade the 1st swing of the complex correction with the same expectany (70%) or is it therefore lower because we are actually trading against expectation of the main swing? {image}
i guess u wait for the 61.8 retracement and entry again long
  • #39,143
  • Mar 31, 2018 9:49am Mar 31, 2018 9:49am
Hi Mr. Pip, sorry for the confusion, i will give it one more crack to try and explain what i'm trying to say , please understand that your 70% win rate and ability to trade are beyond question, and these issues are to do with 'expectations.

1.) To keep things simple lets use the chart below as an example -

Attached Image (click to enlarge)
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In the chart above, we have a NSH and a starting point at 1, from this leg that we are working off our first expectation is a HL.
If we count the number of expectations that we had that would be 9
The expectations that played out were 6.
Therefore expectations worked out 67% of the time.

Now, how many times after our initial NSH was it followed by another NSH and vice versa.
The number of expectations was 6.
Expectations played out 3 times and failed 3 times.
Therefore, the expectation of a NSH being followed by another NSH and vice versa was 50%.

So, with that example out of the way,

a) over time 'expectations play out 70% of the time' - absolutely. correct.
b.) 'because expectations play out 70% of the time, a NSH will be followed by another NSH and vice versa 70% of the time' - incorrect.
c.) 'Mr. Pip has a 70% win rate, this is due to the fact that 'expectations play out 70% of the time' - Can you see how this is a jump in logic.

The only way to calculate how many times a NSH is followed by another NSH and vice versa, is simply to count how many times a NSH is followed by another NSH and vice versa.

2.) For point 2 lets use the real chart below -

Attached Image (click to enlarge)
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Having just had a NSH our FIRST expectation is for a HL, but what if price were to go on and make a NSL, should we not include our FIRST expectation of a HL as a failure.

Currently expectations are worked out using -

NSH - wins/failures

NSL - wins/failures

HL/LH - wins only

HL/LH - failures not counted.

Using this method, when your calculating expectations, every HL and LH will be a win, giving you a 100% win rate, which will skew the overall results, because your not including the ones that failed. In order to be consistent and give a more accurate result surely we should also count those that failed.


3.) Finally, if i could just ask the question again from yesterday, the chart below is the DOW 5 minute chart, assuming no analysis is done at all, purely from a probability point of view, what are the odds of price going on to making a NSH from this point.

Attached Image (click to enlarge)
Click to Enlarge Name: usa4.png Size: 68 KB


Thank you again for your time.
  • #39,144
  • Mar 31, 2018 1:23pm Mar 31, 2018 1:23pm
Quoting FFpip
Hi Mr. Pip, sorry for the confusion, i will give it one more crack to try and explain what i'm trying to say , please understand that your 70% win rate and ability to trade are beyond question, and these issues are to do with 'expectations. 1.) To keep things simple lets use the chart below as an example - {image} In the chart above, we have a NSH and a starting point at 1, from this leg that we are working off our first expectation is a HL. If we count the number of expectations that we had that would be 9 The expectations that played out were...
Shit man you are really beating this horse beyond death here. I’m not sure where to start. My winning percentage has little to do with the number of expectation that play out. That is not the point. Had I been taken every single expectation but that is realistically not possible either. I guess also to be completely honest and blunt my winning percentage will never be the same as yours not anyone else’s. This is because we are all different and make decisions differently regardless of the rules. Where you think you are looking at it in a more proper way than me or not does not matter. What does matter is that they play out way more then they don’t and I’m trying to show you of a reoccurring phenomenon that we can exploit to make money consistently. I’m not upset but you are splitting hair here what is main point other then we count expectations differently.

How is is this affecting your performance and how can I help you move forward to better chart reading?
If you fail to plan, you plan to fail.
  • #39,145
  • Mar 31, 2018 1:51pm Mar 31, 2018 1:51pm
Quoting Mr. Pip
{quote} Shit man you are really beating this horse beyond death here. I’m not sure where to start. My winning percentage has little to do with the number of expectation that play out. That is not the point. Had I been taken every single expectation but that is realistically not possible either. I guess also to be completely honest and blunt my winning percentage will never be the same as yours not anyone else’s. This is because we are all different and make decisions differently regardless of the rules. Where you think you are looking at it in a...
hy mr Pip do u have any advice on when NOT to trade?
  • #39,146
  • Edited 2:37pm Mar 31, 2018 2:12pm | Edited 2:37pm
Quoting FFpip
Hi Mr. Pip, sorry for the confusion, i will give it one more crack to try and explain what i'm trying to say , please understand that your 70% win rate and ability to trade are beyond question, and these issues are to do with 'expectations. 1.) To keep things simple lets use the chart below as an example - {image} In the chart above, we have a NSH and a starting point at 1, from this leg that we are working off our first expectation is a HL. If we count the number of expectations that we had that would be 9 The expectations that played out were...
I agree with you.
When we count how many time the expectation play out we should only count when NSH follow by another NSH (and NSL follow by NSL)
because we don't know where HL or LH are until it already make new structure.

This information is great for me. Thank you.
  • #39,147
  • Mar 31, 2018 3:01pm Mar 31, 2018 3:01pm
Quoting vladutz112
{quote} hy mr Pip do u have any advice on when NOT to trade?
Yes, I personally don’t trade during holidays and on off hours. I know depending on what part of the world one live on that may be hard. Also and this is the most important thing. Never trade unless you are clear on that the main swing is and on what is the expectation. Learn to recognize range bound markets and always trade in the direction of the expectation. I hope this helps.
If you fail to plan, you plan to fail.
  • #39,148
  • Mar 31, 2018 4:20pm Mar 31, 2018 4:20pm
Quoting FFpip
Hi Mr. Pip, sorry for the confusion, i will give it one more crack to try and explain what i'm trying to say , please understand that your 70% win rate and ability to trade are beyond question, and these issues are to do with 'expectations. 1.) To keep things simple lets use the chart below as an example - {image} In the chart above, we have a NSH and a starting point at 1, from this leg that we are working off our first expectation is a HL. If we count the number of expectations that we had that would be 9 The expectations that played out were...

I'm not really sure what all this % means, you seem to have a clear understanding of how Mr.Pip trades. My advice would be to put this free knowledge that Mr.Pip has kindly dedicated his time to- too use. Start trading expectations on a demo account. Even if the expectation fails, you usually have enough room to get at a BE (if you've gotten in at the right place). What I love about expectation failures is when it does fail you know now you have to change the direction your trading in.. if you have your swings correctly marked you will always know where the market is heading and that's powerful.

I have pulled up that chart but on the 144 tick chart. The expectation is still a NSH, its in a great place you can see theres a perfect rotation candle at the 78 fib along with structure to the left. This trade also gives a great R:R. Now I'm only thinking about buys until my expectation fails and at that point the market would have to cross 24020. If it does then I know my expectation is now to look for sells. So basically even when an expectation fails you usually can get to a BE or you need to implement a rescue mission for your trade.

Attached Image (click to enlarge)
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  • #39,149
  • Mar 31, 2018 6:29pm Mar 31, 2018 6:29pm
Quoting Bonobo
{quote} I agree with you. When we count how many time the expectation play out we should only count when NSH follow by another NSH (and NSL follow by NSL) because we don't know where HL or LH are until it already make new structure. This information is great for me. Thank you.
Being that there are 4 expectations one could have based on my method I don’t see how counting only NSH or NSL helps or hurt you. You may not know if you have a LH or a HL because you haven’t developed your skill set. I do know within very close proximity where my entries are based on my area of interests which comes form the expected LH or HL.

At at the end of the day you are free to look at it any why you feel helps you the best since it is you who has to make money trading. I’ve been looking at this for many years this way a I don’t think there is any real benefit. The benefit comes from knowing where the market is going next and since I can do that efficiently that is what matters and that is what you need to focus on. How we get there is not important. For some the road is never ending because the focus is put on insignificant things like this. Are you guys here to learn how to read a chart or to tell me that I don’t know how to count
If you fail to plan, you plan to fail.
  • #39,150
  • Edited Apr 1, 2018 8:18am Mar 31, 2018 11:21pm | Edited Apr 1, 2018 8:18am
Quoting FFpip
Hi Mr. Pip, sorry for the confusion, i will give it one more crack to try and explain what i'm trying to say , please understand that your 70% win rate and ability to trade are beyond question, and these issues are to do with 'expectations. 1.) To keep things simple lets use the chart below as an example - {image} In the chart above, we have a NSH and a starting point at 1, from this leg that we are working off our first expectation is a HL. If we count the number of expectations that we had that would be 9 The expectations that played out were...
Hi:
Let me try to explain it in other words:
1) Whenever you enter a trade, you have an expectation in mind, and you are doing it according to that, this is the reason that Damian is suggesting expectation count, and its failure rate .

2) If you want to count the percentage of NSL or NSH, then just you may divide it by 2, and you see 1 failure for every 3 to 4 right guesses. which is around same 66 to 75%. Don't forget to have reliable average probability percentage, you have to count it in at least 50 to 100 trending swing not a single one or two.

3) The number 3, is the magic number in trading, you see this number repeat itself in many forms , e.g. :three motive wave of Elliot, Three harmonic drive wave, three time touch before breaking a trend line, in channel trading ,etc... , in all of these situation again you see 1 out of three or four will fail, when trading with the trend and around 50% failure rate when trading against the trend.

4) If for example ,the price is trending upward, according to this rule,you may expect 3 NSH followed by 2 NSL , before price continue to go up again.

5)
Quote
3.) Finally, if i could just ask the question again from yesterday, the chart below is the DOW 5 minute chart, assuming no analysis is done at all, purely from a probability point of view, what are the odds of price going on to making a NSH from this point.
So, if i want to give you a rough percentage at this point , according to the magic 3 number rule , i would say 33.3% ,(forming the 3rd motive wave). is the probability of having NSH for the point that you are asking.(If you ask me about the previous LH point, i would have given you 66.6% chance for having 2nd motive wave and your last NSH point on the chart)

i hope this would help in some way.
  • #39,151
  • Edited 12:23am Apr 1, 2018 12:12am | Edited 12:23am
Quoting Mr. Pip
{quote} Being that there are 4 expectations one could have based on my method I don’t see how counting only NSH or NSL helps or hurt you. You may not know if you have a LH or a HL because you haven’t developed your skill set. I do know within very close proximity where my entries are based on my area of interests which comes form the expected LH or HL. At at the end of the day you are free to look at it any why you feel helps you the best since it is you who has to make money trading. I’ve been looking at this for many years this way a I don’t think...

hehe. I'm just a newbie.This insignificant thing may help me in psychology part.
I don't have trade history so I don't know what winrate I expect to have .
by having some roughly winrate I may know how many consecutive lose I expected to have.

I mean when I thought I had 70% winrate and got 5-6 lose it really made me discourage.

BTW I'm sorry to misunderstand the % of expectation. I just realize it not same with % winrate.
Hope you don't mind.
  • #39,152
  • Apr 1, 2018 7:44am Apr 1, 2018 7:44am
Quoting Mr. Pip
{quote} Shit man you are really beating this horse beyond death here. I’m not sure where to start. My winning percentage has little to do with the number of expectation that play out. That is not the point. Had I been taken every single expectation but that is realistically not possible either. I guess also to be completely honest and blunt my winning percentage will never be the same as yours not anyone else’s. This is because we are all different and make decisions differently regardless of the rules. Where you think you are looking at it in a...
Hi Mr Pip, sorry, but i was just trying to point out that there was an issue with the stats, no offence meant, this is purely just a technical issue.

When we look to find the probability of something we can't just pick and choose which stats we choose to include, all the data needs to be included in order to find the actual probability. expectations play out way more than they don't because of the way you choose to count them which is fair enough, but that number has no statistical validity.

I understand that this isn't the most important thing, but there were clearly a few traders here who were trading under the impression that they somehow had a '70% edge', or that price would make a NSH "more than 70% of the time" etc, etc, and felt it only fair to point this out as it surely can't be good, especially for new traders, to be trading under a false impression.

However, i hear you loud and clear and there will be no more talk of stats or percentages from me. I agree that the most important thing here is learning how to read a price chart and relying on our own skills and abilities and this is clearly an area where you excel and there is much to learn from a trader such as yourself.

Thank you to those who commented, whether it was found useful or irritating and i wish you all the best of luck with your trading next week.
Now i'm off on holiday
  • #39,153
  • Apr 1, 2018 7:49am Apr 1, 2018 7:49am
Quoting parviz1953
{quote} Hi:
Hi parviz, have send a message to you
Have a nice day
  • #39,154
  • Apr 1, 2018 7:53am Apr 1, 2018 7:53am
C'mon guys the percentage is not so important .
Important is that this method shows you with high probability where price would like to go.Whether price really goes there is not sure and therefore Damian has also given a very good method of money management rules.
Besides this expectancy you also have to understand and see the structure of the market and how price moves into structure.
In all I think that for someone new to trading , to really grasp all ins and outs of this method can take some time
however at the end of the tunnel you hopefully will see the light
  • #39,155
  • Apr 1, 2018 8:11am Apr 1, 2018 8:11am
Quoting doerpn
{quote} Hi parviz, have send a message to you
check your message , already replied you in detail.
  • #39,156
  • Apr 1, 2018 9:28am Apr 1, 2018 9:28am
Quoting parviz1953
{quote} check your message , already replied you in detail.
did so...
Attached Image (click to enlarge)
Click to Enlarge Name: diff.tick.png Size: 82 KB
Have a nice day
  • #39,157
  • Apr 1, 2018 9:52am Apr 1, 2018 9:52am
Quoting doerpn
{quote} did so... {image}
The tick chart program , draw its bar on the online time based bar chart , to see them without disturbance of the background bar change them to "line chart" and in properties menu ,choose the color of the line chart the same as your background chart , and be patient , when you start the program for the first time there is no history data for the past , the program start to form it as it run, and you will start to see the past bar then after. I have included picture of the tick chart and its time based counterpart for comparison in my previous posts.(e.g.:# 34813 ,#35707).

But at the end ,let me advise you that, you don't need any indicator on your chart to trade Mr. pips method , and i insist you go to the video lessons of him and his live trading stream , if you want to learn his technique.
  • #39,158
  • Apr 1, 2018 10:07am Apr 1, 2018 10:07am
Quoting FFpip
{quote} Hi Mr Pip, sorry, but i was just trying to point out that there was an issue with the stats, no offence meant, this is purely just a technical issue. When we look to find the probability of something we can't just pick and choose which stats we choose to include, all the data needs to be included in order to find the actual probability. expectations play out way more than they don't because of the way you choose to count them which is fair enough, but that number has no statistical validity. I understand that this isn't the most important...
Holy crap and yet you continue on your path of self destruction. I don’t pic and choose and my number does have validity. And you are correct we do not trade with a 70% edge it is actually higher. But it looks like you would not understand this fact because you are too busy investing senseless time on insignificant things. I will not argue this point with you nor will I entertain this pointless difference of opinion any further because it does not contribute to your or anyone’s growth as a trader. The expectation is the expectation there are four that we could have.

You are choosing to ignore half of them because you and your lack of experience and study can’t understand where the LH or HL are likely to take place. Perhaps if you invested the same time you are taking to try to disprove me into studying and reviewing the videos I have made for your benefit would would progress into the light.

I don’t mean to be bashing but you continue to talk without have but half a clue. Please place your focus on gaining your edge whatever it is. I have been doing this for a very long time and whether the expectations play out 80, 90, or 66% of the time if you can’t capture it your win rate will be who knows.
If you fail to plan, you plan to fail.
  • #39,159
  • Apr 1, 2018 10:21am Apr 1, 2018 10:21am
Ok guys I guess we will start looking at how to proceed with the way we conduct our math like this
Attached Image
If you fail to plan, you plan to fail.
  • #39,160
  • Apr 1, 2018 11:19am Apr 1, 2018 11:19am
Quoting Mr. Pip
{quote} Holy crap and yet you continue on your path of self destruction. I don’t pic and choose and my number does have validity. And you are correct we do not trade with a 70% edge it is actually higher. But it looks like you would not understand this fact because you are too busy investing senseless time on insignificant things. I will not argue this point with you nor will I entertain this pointless difference of opinion any further because it does not contribute to your or anyone’s growth as a trader. The expectation is the expectation there...
Damn, MR. PIP it is 1 april

You didnt know?? But offcourse if it is over in your timezone - I would also be upset...

All the best to you!!
Are you profitable? I am not... yet...
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