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"Ratios & Harmonics: a Different Way to Trade." Summary 37 replies

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Ratios & Harmonics: a Different Way to Trade

  • #39,441
  • Apr 13, 2018 9:56am Apr 13, 2018 9:56am
Quoting pradlal
{quote} Really glad to hear that. Regarding the equity build, I'm doing the same. Life's alright. Getting some lemons here and there, but I'm making lemonade What TF are you trading now? I stick to 233T, that seems to be the best for my style and the instrument I'm trading (FDAX)
Good to hear!

Currently got a lot of things going, and trading the daily TF, which is going pretty well, I am 4-5% a month. I work a lot so building my equity that way and it is very easy for me, because I only trade late evenings and can't monitor the charts otherwise. Taking trades on your mobile just isn;t for me, CBA to take trades while at work and or in the train or whatever, you just can't properly focus on the charts. The return is pretty decent, but as long as you can trade AROUND your life and still get a manageable life, with these kind of results, 40-50% a year. That is really mind whopping if you think about it. Almost zero to no costs (commissions / spread is no more than 1% a trade on average), with daytrading that is almost more than 10%, most of the brokers getting prett rich. ANd you don't have to worry about news and such and it is so stress free, never had such low stress levels, while still being able to do everything I need and WANT to do during the day, in stead of giving up A LOT of my free time, to trade, I would rather work and build my equity and 'invest' on the daily charts, with a lot more capital than I used to daytrade with, so the results are kind of the same, money wise.

Hope this clears your question what and why I trade such high timeframe.
But once again, everyone is different and is in different places in their life.

How is the 233 Tick chart going for you?
"Luck is when opportunity meets preparation"
  • #39,442
  • Apr 13, 2018 9:59am Apr 13, 2018 9:59am
Quoting bmdenton23
We completed the 1:1 on the long term, bounced off the 38% retracement of the A to D, and it's doing that expanding wedge thingy on the short term... {image}
My game plan today was watching for a failure at the high since most breakouts fail specially that the last two days volume was declining:
Attached Image (click to enlarge)
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  • #39,443
  • Apr 13, 2018 10:01am Apr 13, 2018 10:01am
Quoting Sheeep44
{quote} Good to hear! Currently got a lot of things going, and trading the daily TF, which is going pretty well, I am 4-5% a month. I work a lot so building my equity that way and it is very easy for me, because I only trade late evenings and can't monitor the charts otherwise. Taking trades on your mobile just isn;t for me, CBA to take trades while at work and or in the train or whatever, you just can't properly focus on the charts. The return is pretty decent, but as long as you can trade AROUND your life and still get a manageable life, with...
If you are interested, drop a follow on my tradingview.

https://www.tradingview.com/u/xMatty44/#published-charts
"Luck is when opportunity meets preparation"
  • #39,444
  • Edited Apr 14, 2018 4:43am Apr 13, 2018 10:09am | Edited Apr 14, 2018 4:43am
Hi all, Hope trading has been a success for most today. I've just placed a long trade on longer term.

YM1597 Long

Chart attached is a bit messy as I have intraday trades on it however...

Entry: 24328
Target: 24777
Stop: 24134

61.80 Fib plus structure.

Moved to Break Even +10 (24338)
Price 24428 (+100).

BE trade +10 pips.
Attached Image (click to enlarge)
Click to Enlarge Name: YM1597.png Size: 143 KB
  • #39,445
  • Apr 13, 2018 10:45am Apr 13, 2018 10:45am
Quoting Sheeep44
{quote} If you are interested, drop a follow on my tradingview. https://www.tradingview.com/u/xMatty44/#published-charts
nice setups
  • #39,446
  • Apr 13, 2018 11:15am Apr 13, 2018 11:15am
Done for the day and capping off a great week, best week I've ever had in terms of accuracy.

Friday
5 Trades
5 Winners +33, +21, +26, +60, +20
--------------------------------------------
Total +160

Week
34 Trades
31 Winners/BE
91% w/l
+566 Points

+1345 over the last 11 days with 87% accuracy
  • #39,447
  • Apr 13, 2018 11:16am Apr 13, 2018 11:16am
YM144 Intraday

Three trades +36, +59, + trade in progress.
Attached Image (click to enlarge)
Click to Enlarge Name: YM144.png Size: 109 KB
  • #39,448
  • Apr 13, 2018 11:17am Apr 13, 2018 11:17am
Quoting bmdenton23
Done for the day and capping off a great week, best week I've ever had in terms of accuracy. Friday 5 Trades 5 Winners +33, +21, +26, +60, +20 -------------------------------------------- Total +160 Week 34 Trades 31 Winners/BE 91% w/l +566 Points +1345 over the last 11 days with 87% accuracy
Well done bmdenton.. bravo. really cool stuff.
It's in fear when people show what they truly value.
  • #39,449
  • Apr 13, 2018 11:17am Apr 13, 2018 11:17am
Quoting bmdenton23
Done for the day and capping off a great week, best week I've ever had in terms of accuracy. Friday 5 Trades 5 Winners +33, +21, +26, +60, +20 -------------------------------------------- Total +160 Week 34 Trades 31 Winners/BE 91% w/l +566 Points +1345 over the last 11 days with 87% accuracy
Fantastic Results. Glad to see you are on such a good winning streak.
  • #39,450
  • Apr 13, 2018 2:34pm Apr 13, 2018 2:34pm
After my 5 for 5 today I didn't want to screw it up into the lunch hour. PeteH was taking longs on the 1597T and I felt like he was correct on the long term direction. At this point the short term expectation was still for NSL but I didn't feel very confident in that so I decided to take a demo trade on my demo account. I wanted to share that chart and welcome any comments. I mean what else do we have to do over the weekend right?

I scaled into the trade in thirds.
Short #1 - We had pulled back to the 61%, had a good rotation, IOF trendline break, followed by second rotation.
Short #2 - Pulled back about 80%, completed IOF 1:1, broke trend, 2nd rotation
Short #3 - Price retraced 101%, completed the IOF 1:1, but broke the previous LH by 4 points. I don't want to get stopped out here, we're almost certain to pullback against the IOF and give me a chance to take some profit or get out BE, so I entered my final third for a full position on the trend break and good rotation.

So my trade plan at this point says I have to make a decision about whether or not the 4 point expectation failure was a decisive victory for the bulls, or just a retest that the bears successfully defended. I decided it was a retest so I'm not necessarily looking to get out, I'm still looking to achieve the 1:1, more or less
The bears made up good ground, got me back into the green, but the bulls came in with a good rotation and the IOF against my position was still in tact. Now the problem here was that I had already seen 3 successful swings on the IOF by the bulls and a 4th swing was going to put me well beyond the 100% retracement and I would need to bail, so I closed 1/3rd of my position, moved the final 2/3rds to BE and gave the final 2/3rds at least the opportunity to achieve the 1:1, which it did not and I got taken out for +4 total.

Had I put my hard stop loss 2 or 3 points above the previous LH, I would've taken a loss of around 60 points.
Now before you say this is great, let me try this I have to point out....
1. There's a fine line between adding to losers and averaging in a better price with expectations.
2. Had the trade behaved and achieved the 1:1 or 127 extension after my first entry, I would've only taken profit on 1/3 position.
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  • #39,451
  • Apr 13, 2018 6:48pm Apr 13, 2018 6:48pm
Quoting bmdenton23
After my 5 for 5 today I didn't want to screw it up into the lunch hour. PeteH was taking longs on the 1597T and I felt like he was correct on the long term direction. At this point the short term expectation was still for NSL but I didn't feel very confident in that so I decided to take a demo trade on my demo account. I wanted to share that chart and welcome any comments....
Before posting my opinion, what % of your trades that needed to be rescued are closed near to break even since you began to use this money management strategy?
  • #39,452
  • Apr 13, 2018 11:10pm Apr 13, 2018 11:10pm
Quoting Sheeep44
{quote} Good to hear! Currently got a lot of things going, and trading the daily TF, which is going pretty well, I am 4-5% a month. I work a lot so building my equity that way and it is very easy for me, because I only trade late evenings and can't monitor the charts otherwise. Taking trades on your mobile just isn;t for me, CBA to take trades while at
233T is going good. Its a frame that I have traded for the past few months now, and the FDAX movements within that TF have become familiar. The time you spent in front of an instrument really is a game changer. It's something I learned after discovering this thread and moving myself from Forex to Futures.

Well, have a good weekend!
  • #39,453
  • Apr 13, 2018 11:18pm Apr 13, 2018 11:18pm
Quoting crixus
{quote} Before posting my opinion, what % of your trades that needed to be rescued are closed near to break even since you began to use this money management strategy?
Great question. I took my first trade using this strategy on March 27th and posted about it here: https://www.forexfactory.com/showthread.php?p=10912977#post10912977

Also posted about it here: https://www.forexfactory.com/showthread.php?p=10931519#post10931519

Before attempting this strategy live I backtested 334 trades from Sep 1st through March 26th.
Out of the 334 trades I took 3 positions 70 times. 41 out of the 70 were successfully rescued, with the remaining 29 losing.
My w/l% was 86%. Of course that's backtesting, grain of salt and all that...

Since March 27th in live trading I've attempted to rescue 8 trades, 6 successfully and 2 failures.
My live w/l% for that period has been 87%. This week I was at 91%.

The problem of course is that the avg.win/avg.loss ratio drops since most of my losers are at full position size and some of my winners are at a 1/3 position size. My Ratio avg. win / avg. loss for this time period is 1.18 according to NinjaTrader which separates every trade out.
  • #39,454
  • Apr 14, 2018 5:05am Apr 14, 2018 5:05am
Quoting bmdenton23
After my 5 for 5 today I didn't want to screw it up into the lunch hour. PeteH was taking longs on the 1597T and I felt like he was correct on the long term direction. At this point the short term expectation was still for NSL but I didn't feel very confident in that so I decided to take a demo trade on my demo account. I wanted to share that chart and welcome any comments. I mean what else do we have to do over the weekend right? I scaled into the trade in thirds. Short #1 - We had pulled back to the 61%, had a good rotation, IOF trendline break,...
Thanks for the analysis. I think it is great to see how others view the market. I thought I would share my thoughts too. After my break even trade on the longer term yesterday I have been looking at possible entries next Monday on the YM1597. I like to use the ruler tool and horizontal lines of take profit and stop loss to analyse how a trade may play out.

I missed the rotation at 24246 however if price falls and there is a rotation at this area I am looking to go long again. On the longer term time frame the potential Stop loss is larger but so is the profit. Price may not reach my Area of Interest (green area on chart) with a rotation candle but if it does...

Potential 500+ pips profit, Potential -177 pips loss. If 70% of expectations play out I am happy with the trade win or lose. I suspect that the actual expectation is lower than 70:30 when price retraces more than 61.8% but despite this I think the risk reward is good in my opinion.
Attached Image (click to enlarge)
Click to Enlarge Name: YM1597 set up.png Size: 131 KB
  • #39,455
  • Apr 14, 2018 4:24pm Apr 14, 2018 4:24pm
Quoting bmdenton23
{quote}...Before attempting this strategy live I backtested 334 trades from Sep 1st through March 26th. Out of the 334 trades I took 3 positions 70 times. 41 out of the 70 were successfully rescued, with the remaining 29 losing...
A) 41/70 were rescued
B) 29 were lost with 3 contracts

What was your maximum drawdown in terms of ticks in scenario B? Or the trade that lost the most? Then if you compare it to your average winner overall, what does it give?

In your chart example, you had the possibility to close 1 unit at BE (short 2) and still have one unit running. This would have reduced your risk. Have you considered it?

All in all, i like this money management tactic because it allows you to enter sooner or at least not try to overly filter your entries (sometimes the fear of losing will make us look for reasons not to take a trade). However, when we are in a trade we do not process the information the same way as when we are flat so you may not want to recognise that the opposite side is gaining control or that price is printing a change of behavior and you keep adding hoping your extreme line in the sand will hold. That is why it is important to keep your stats in check and monitor your worse lost in relation to your average winner at least to know how long does it take to recover that one lost.

Great job.
  • #39,456
  • Apr 14, 2018 11:37pm Apr 14, 2018 11:37pm
Quoting PeteH
{quote} Thanks for the analysis. I think it is great to see how others view the market. I thought I would share my thoughts too. After my break even trade on the longer term yesterday I have been looking at possible entries next Monday on the YM1597. I like to use the ruler tool and horizontal lines of take profit and stop loss to analyse how a trade may play out. I missed the rotation at 24246 however if price falls and there is a rotation at this area I am looking to go long again. On the longer term time frame the potential Stop loss is larger...

Hi PeteH , can you explain , how you would trade this chart for the short term? since we were trading the short term like the chart you post on 39448.

i found i been into these " complexity " often on short term. Someone please guide thanks
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  • #39,457
  • Apr 15, 2018 3:33am Apr 15, 2018 3:33am
Quoting 6288monkey
{quote} Hi PeteH , can you explain , how you would trade this chart for the short term? since we were trading the short term like the chart you post on 39448. i found i been into these " complexity " often on short term. Someone please guide thanks {image}
Hi
My answer to your question would be, Never trade short term without being aware of what the longer term trend is dictating.
1) if i want to trade short term here i would take long position, with the longer term trend direction and put my SL at the beginning of the long term swing which this short term complex correction belongs to.
2) Whenever you see price forms NSH followed by NSL, then you should be aware that market is at the area of range( complex correction).
3) Area of complex correction has 2 characteristics, instability of price and indecision of traders.
4) This pattern of price e.g. from F to M , is exactly what i mentioned in at least 2 of my previous posts, it is called expanding triangle and is one of the several patterns forming in ranging market. (it is evidence of indecision of traders).
  • #39,458
  • Apr 15, 2018 3:41am Apr 15, 2018 3:41am
Quoting bmdenton23
After my 5 for 5 today I didn't want to screw it up into the lunch hour. PeteH was taking longs on the 1597T and I felt like he was correct on the long term direction. At this point the short term expectation was still for NSL but I didn't feel very confident in that so I decided to take a demo trade on my demo account. I wanted to share that chart and welcome any comments. I mean what else do we have to do over the weekend right? I scaled into the trade in thirds. Short #1 - We had pulled back to the 61%, had a good rotation, IOF trendline break,...

Hi bmdenton23 , thanks for your posting of results , can you add in your initial SL on your chart , so that we can know which swing you are looking at .
  • #39,459
  • Apr 15, 2018 3:47am Apr 15, 2018 3:47am
Quoting parviz1953
{quote} Hi My answer to your question would be, Never trade short term without being aware of what the longer term trend is dictating. 1) if i want to trade short term here i would take long position, with the longer term trend direction and put my SL at the beginning of the long term swing which this short term complex correction belongs to. 2) Whenever you see price forms NSH followed by NSL, then you should be aware that market is at the area of range( complex correction). 3) Area of complex correction has 2 characteristics, instability of price...
Thanks Parviz1953, that was a great answer.

1 . on which swing you would start to take entry. ( you mean your SL at beginning of long term swing = A ? )
2 . , and 3. , that was a great insight for me .
4. how i know when i can start to trade again.
  • #39,460
  • Apr 15, 2018 5:51am Apr 15, 2018 5:51am
Quoting 6288monkey
{quote} Hi PeteH , can you explain , how you would trade this chart for the short term? since we were trading the short term like the chart you post on 39448. i found i been into these " complexity " often on short term. Someone please guide thanks {image}
I am fairly new to Harmonic trading and try to keep my rules simple. For long trend trades I look at the main NSH/NSL and not the intermediate order flow or short-term order flow.

I noted point A and E and the upswing to the high at F. As A has not been breached in the longer term I am looking for longs (i.e. 1:1 harmonic of either E to F or A to F). As price has retraced to the 78% of E to F (point Q) and this is also at an area of structure I am looking to see if price returns to this area on Monday for a Long trade. My stop is therefore at the red line 177 pips below the entry point with a target profit at my green line (500+ pips). This means that even if price reaches 100% fib (i.e. point A or E) it is a good risk v reward in the longer term. For short term trades I would be more interested in the shorter term order flow and may even trade against my longer term expectation. Listening to the various live market videos Mr Pips trades opposite directions at times which can be hard to get your head around but of course the TP and SL are at different levels.

I hope this helps answer your question.
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