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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

  • #40,861
  • May 25, 2018 7:59am May 25, 2018 7:59am
Quoting PeterT
{quote} Right. So what happened was: - I looked at the larger picture and identified a structure zone - I move SL a few points to below this zone, was hoping to enter a second long in that zone to break even - I was stopped out for -45 points by 1 point, then a rotation candle was produced - I thought price would go in my favor now (like it always does when myou're stopped out by 1 point) - Entered a new long with SL in same place. - SL was taken for -16 points So this little adventure costs me 61 points. {image}
May I ask, why would you want to buy after such a huge sell-off? Try to be ovjective and ask yourself again, does this trade put me in theABAOLUTE BEST possibillity to expect a NSH. After already a push by the bulls before that, they failed and sellers put some serious money into that..
"Luck is when opportunity meets preparation"
  • #40,862
  • May 25, 2018 8:01am May 25, 2018 8:01am
Quoting Sheeep44
{quote} May I ask, why would you want to buy after such a huge sell-off? Try to be ovjective and ask yourself again, does this trade put me in theABAOLUTE BEST possibillity to expect a NSH. After already a push by the bulls before that, they failed and sellers put some serious money into that..
If you are not sure, just let an immediate OF play out and trade the ‘clearer’ (smaller?) swing...
never a faillure, always a lesson!
"Luck is when opportunity meets preparation"
  • #40,863
  • May 25, 2018 8:21am May 25, 2018 8:21am
Quoting evocpr19
{quote} Price tried twice to go higher and failed. The bear response got stronger. There is not sign of bulls in the second leg where you entered. Moreover, if you look the longer term orderflow, it gives also clues where price should go (deep retracement). So the move would be more like your second and third white line (deep retracement and the attack for a NSH. Hope this helps.
Quoting Sheeep44
{quote} May I ask, why would you want to buy after such a huge sell-off? Try to be ovjective and ask yourself again, does this trade put me in theABAOLUTE BEST possibillity to expect a NSH. After already a push by the bulls before that, they failed and sellers put some serious money into that..
This is causing some panic bells to go off in my head.

This is what I see. Not saying I disagree with you, as obviously I was wrong lol
Maybe others can learn from this as well.

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Not looking at the larger OF, I see new NSHs being made. Last NSH was strong (good projection, strong impulse).
Price came back down to 61.8% correction (AB leg), went back up but buyers couldn't take price higher (BC leg).
Then I think: well an ABCD pattern would even increase the probability of success. (if the forming of a CD-leg indicates failure of the bulls, I wonder why we say that an ABCD correction is an ideal setup for entering..)
Price came down and produced the CD leg.
The leg did not look extremely strong to me, with a lot of small candles indicating that there was buying going on in the move.
I thought the buyers would start really coming in in the indicated PRZs.

I expected at least one more NSH because of above reasoning.

I can't believe I am looking at this in completely the wrong way
  • #40,864
  • May 25, 2018 8:35am May 25, 2018 8:35am
Quoting PeterT
{quote} {quote} This is causing some panic bells to go off in my head. This is what I see. Not saying I disagree with you, as obviously I was wrong lol Maybe others can learn from this as well. {image} Not looking at the larger OF, I see new NSHs being made. Last NSH was strong (good projection, strong impulse). Price came back down to 61.8% correction (AB leg), went back up but buyers couldn't take price higher (BC leg). Then I think: well an ABCD pattern would even increase the probability of success. (if the forming of a CD-leg indicates failure...
Hi PeterT,

I think your short term analysis was spot on and you had an expectation failure. I think what others are saying is that there were signs that showed this. The answer I was given before in a similar situation was 'situational awareness'. I hated that answer at the time but it does make sense. Take a look at the chart and see if you think it makes sense to go long where you did 'in the grand scheme'. There was a NSL followed by a NSH - Should be a deep (and complex) correction after that. Hope that helps.
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  • #40,865
  • May 25, 2018 8:40am May 25, 2018 8:40am
Quoting PeterT
{quote} {quote} This is causing some panic bells to go off in my head. This is what I see. Not saying I disagree with you, as obviously I was wrong lol Maybe others can learn from this as well. {image} Not looking at the larger OF, I see new NSHs being made. Last NSH was strong (good projection, strong impulse). Price came back down to 61.8% correction (AB leg), went back up but buyers couldn't take price higher (BC leg). Then I think: well an ABCD pattern would even increase the probability of success. (if the forming of a CD-leg indicates failure...
I think that you are tooooo focused on why it didn't work out.. you can analyse pretty good from what I've seen so you need to focus on consistency. I've been following Damian for 2 years now and I've seen a lot of price action. THE MOST IMPORTANT THING IS THE EXPECTATION...which today failed for you. I've seen many NSHs made even when the bearish correction was with a lot of momentum and vice versa. I've seen many expectations fail even though all the stars were aligned.. that's why Damian stresses so much on the fact that you have to be consistent with your approach and not skipping entries. If you just follow the expectation you are going to be profitable with the proper money management. Depth, projection and momentum are just accessories to refine your trading but the expectation is what matters.
  • #40,866
  • May 25, 2018 8:42am May 25, 2018 8:42am
Quoting PeterT
{quote} {quote} This is causing some panic bells to go off in my head. This is what I see. Not saying I disagree with you, as obviously I was wrong lol Maybe others can learn from this as well. {image} Not looking at the larger OF, I see new NSHs being made. Last NSH was strong (good projection, strong impulse). Price icame back down to 61.8% correction (AB leg), went back up but buyers couldn't take price higher (BC leg). Then I think: well an ABCD pattern would even increase the probability of success. (if the forming of a CD-leg indicates failure...
I believe that is were the subjectively of the trading system comes in. Most of the time, more than not. After price generates a pretty significant move, you are better off trading the IOf, at least that is what I expected. Hope it helps! Upward and onward!
"Luck is when opportunity meets preparation"
  • #40,867
  • May 25, 2018 8:43am May 25, 2018 8:43am
Quoting bmdenton23
{quote} Mark Douglas answer - When there's not a single person in the entire world willing to hit the bid at that price. The logical answer here would go along the lines of diminishing projection, deeper pullbacks, etc.... I often times find the bottom marked by the opposite, aggressive selling and further than expected projections. Pulls in the suckers like me and provides plenty of liquidity at fantastic ask prices to meet the bids of larger money ready to take price higher.
That's one of the condition that we often see when price could be considered OB/OS Usually, you'll see more volume at the end of a move in the OB/OS territories. TO be considered OB/OS i need to see price move with conviction in one direction pulling away from a moving average (I use 50 EMA on a 5 min. TF) and breaking clear structure (resistance/support) forming a spring or uptrust bar. Here are a few areas where i considered price OB/OS:

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  • #40,868
  • May 25, 2018 8:47am May 25, 2018 8:47am
Quoting PeterT
{quote} {quote} This is causing some panic bells to go off in my head. This is what I see. Not saying I disagree with you, as obviously I was wrong lol Maybe others can learn from this as well. {image} Not looking at the larger OF, I see new NSHs being made. Last NSH was strong (good projection, strong impulse). Price came back down to 61.8% correction (AB leg), went back up but buyers couldn't take price higher (BC leg). Then I think: well an ABCD pattern would even increase the probability of success. (if the forming of a CD-leg indicates failure...
Sorry Peter for confusion here is a clarification of the patterns.... When the market drops to PRZ you need to decide what trigger to use. Your maximum loss is one tick under the PRZ or whatever your risk tolerance is. If the trade is too costly you pass on it. Good luck with your trading.
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Always trade your own plan...I don't provide trading signals.
  • #40,869
  • May 25, 2018 9:28am May 25, 2018 9:28am
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Always trade your own plan...I don't provide trading signals.
  • #40,870
  • May 25, 2018 9:43am May 25, 2018 9:43am
Quoting PeterT
{quote} {quote} This is causing some panic bells to go off in my head. This is what I see. Not saying I disagree with you, as obviously I was wrong lol Maybe others can learn from this as well. {image} Not looking at the larger OF, I see new NSHs being made. Last NSH was strong (good projection, strong impulse). Price came back down to 61.8% correction (AB leg), went back up but buyers couldn't take price higher (BC leg). Then I think: well an ABCD pattern would even increase the probability of success. (if the forming of a CD-leg indicates failure...
Hope you could recover your loss.

Wish all a nice WE.
  • #40,871
  • May 25, 2018 9:51am May 25, 2018 9:51am
Hello Traders,

I posted the question yesterday about detecting over bought and oversold conditions. As I expected I got a mix of answers and for the most part your answers all had merit and fit a certain mind set that tell me your thinking is in the right place. A couple of you hit it out of the park by saying there is no such thing as over bought or over sold.

The fact is the over bough or over sold conditions however present in the markets are taken completely out of context by the majority. You all are enlightened Traders and as such I want you to use terminology that puts you emotionally neutral. What does this mean to use terminology that puts us in an emotionally neutral state? Let me explain.

When we believe the market is over bought or oversold on an emotional level we feel the market can't climb or drop further. This feeling manifests as fear and anxiety and we become hyper sensitive to sometimes seeing more weakness then there is and neglect the expectation, the order flow or everything else we know. This intensifies into abandoning our trade plan trying to catch a top or a bottom.

So I'm sure I am identifying with some or many of you. It is normal to feel this way after the market has been going in a direction for an extended period of time. So how do we address this problem and how and to work on being emotionally neutral? I'm glad you asked, we have to change our terminology.

We have already been working on this believe it or not. I have been telling you that there are no such things as reversals that everything is a correction. By changing our terminology into more proper terms we control some of those emotions as well. Over bought or over sold are called areas of exhaustion. and areas of exhaustion lead into corrections not reversals while always respecting the trade plan and the expectation. By doing this and working on this you will improve those tendencies that we get to go against the current and shit on our trade plan.

Some of you mentioned Momentum, Projection and Depth. This is great and we do use this information to asses strength and weakness. Assessing strength and weakness is an important skill to master because it helps understand what kinds of corrections we are likely to have, corrections being the operative word. We DO NOT predetermine and expectation failures and should never trade against one.

We can never know when the buyer or the sellers are going to run out of money but we can see when they are tired and need to take a break. The expectation failure confirms someone ran out of money. This can be temporary or longer term. The order flow analysis helps us understand this better.

I will let this sink in over the weekend and then I will show all next week how these things look like on a chart. Post and comment on this if you would please.
If you fail to plan, you plan to fail.
  • #40,872
  • May 25, 2018 9:53am May 25, 2018 9:53am
Hey guys. Here is a perfect example of my question from the other day: Point B corrected less than the 38.2 of swing XA, then moved higher to point C. At this point, IF we consider AB a correction, then we have ourselves an expectation failure but if we do not consider it a correction, and instead call XC the main swing, we have not had an expectation failure. Yes, I know how to read a trend, but as x3m-pippin stated, the most important aspect of the analysis is our expectation and that makes this an important question. I understand each of us might have our way of dealing with this situation, but I would love to hear your input Mr. Pip. Thanks.
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  • #40,873
  • May 25, 2018 9:55am May 25, 2018 9:55am
EURJPY M15
Took +50.2
i wanted to cry ,I break the rules took profit on 127.913 I thought the structure was going to hold and Push the price higher,I saw the bulls coming strong I got scared ...then the price Completed 1:1 and the 127 ext
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  • #40,874
  • May 25, 2018 9:57am May 25, 2018 9:57am
Quoting Lundies10
Hey guys. Here is a perfect example of my question from the other day: Point B corrected less than the 38.2 of swing XA, then moved higher to point C. At this point, IF we consider AB a correction, then we have ourselves an expectation failure but if we do not consider it a correction, and instead call XC the main swing, we have not had an expectation failure. Yes, I know how to read a trend, but as x3m-pippin stated, the most important aspect of the analysis is our expectation and that makes this an important question. I understand each of us might...
hahaha ...i was just thinking if I should be looking for longs or shorts... the immediate is pointing short the longer term is pointing to a long... so an immediate short for an ABCD correction on the long term ?
  • #40,875
  • May 25, 2018 9:59am May 25, 2018 9:59am
Quoting Mr. Pip
Hello Traders, I posted the question yesterday about detecting over bought and oversold conditions. As I expected I got a mix of answers and for the most part your answers all had merit and fit a certain mind set that tell me your thinking is in the right place. A couple of you hit it out of the park by saying there is no such thing as over bought or over sold. The fact is the over bough or over sold conditions however present in the markets are taken completely out of context by the majority. You all are enlightened Traders and as such I want you...

This caught me eye ..:The expectation failure confirms someone ran out of money. This can be temporary or longer term. The order flow analysis helps us understand this better."
Luck has no place in trading. Leave that for the poker table.
  • #40,876
  • May 25, 2018 10:03am May 25, 2018 10:03am
Quoting x3m-PippiN
{quote} hahaha ...i was just thinking if I should be looking for longs or shorts... the immediate is pointing short the longer term is pointing to a long... so an immediate short for an ABCD correction on the long term ?
See im still looking for longs thats why this is troubling me
  • #40,877
  • May 25, 2018 10:04am May 25, 2018 10:04am
Quoting Lundies10
Hey guys. Here is a perfect example of my question from the other day: Point B corrected less than the 38.2 of swing XA, then moved higher to point C. At this point, IF we consider AB a correction, then we have ourselves an expectation failure but if we do not consider it a correction, and instead call XC the main swing, we have not had an expectation failure. Yes, I know how to read a trend, but as x3m-pippin stated, the most important aspect of the analysis is our expectation and that makes this an important question. I understand each of us might...
I counted it as one swing. Long at 762
  • #40,878
  • May 25, 2018 10:07am May 25, 2018 10:07am
Quoting csternfx
{quote} I counted it as one swing. Long at 762
Can you post a chart? I don't see a rotation on mine so I didn't enter on this long.
  • #40,879
  • May 25, 2018 10:07am May 25, 2018 10:07am
Quoting csternfx
{quote} I counted it as one swing. Long at 762
Too much risk for me good luck!
  • #40,880
  • May 25, 2018 10:08am May 25, 2018 10:08am
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Always trade your own plan...I don't provide trading signals.
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