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

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Attachments: Ratios & Harmonics: a Different Way to Trade
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Ratios & Harmonics: a Different Way to Trade

1 trade for me today +42, took profit on the bounce right off the daily open
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Demo trading YM. Rough start but got back to BE. Have a good afternoon!

-39, -5, +49 = +5
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Decided to go long on the YM in an AOI since price made a weak NSH in the immediate order flow (red). Now in-line with the longer term order flow (pink).

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Long eurusd , 1 to 1 completion
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Quoting Kayjay2011
Decided to go long on the YM in an AOI since price made a weak NSH in the immediate order flow (red). Now in-line with the longer term order flow (pink). {image}
Long as well. I waited for the orange and pink 1:1 completion and placed a limit order there.
Move S/L to B/E on the 1st grey box and start locking in profits on the 2nd grey box.

Edit: Moved S/L to B/E.
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  • Post #42,446
  • Quote
  • Edited Aug 10, 2018 4:23am Aug 9, 2018 12:22pm | Edited Aug 10, 2018 4:23am
Quoting Bruin813
{quote} Long as well. I waited for the orange and pink 1:1 completion and placed a limit order there. Move S/L to B/E on the 1st grey box and lock in profits on the 2nd grey box. {image}
Went to BE. Have to run. Good luck with your trade!

Edit: Luckily I had the chance to close my trade before the bears took over. Ended up with 33 points.
Long USDJPY
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EURUSD t144 Long

Entry: 1.1555
Target: 1.1647
Stop: 1.1527

Long Term trade.

Stopped out: -28
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Quoting PeteH
EURUSD t144 Long Entry: 1.1555 Target: 1.1647 Stop: 1.1527 Long Term trade. Stopped out: -28 {image} {image}
Hey PeteH,

why did you decide to choose the high at 1.1610 to project the swing inside your main swing and not the high at 1.1620?
Quoting Kayjay2011
Decided to go long on the YM in an AOI since price made a weak NSH in the immediate order flow (red). Now in-line with the longer term order flow (pink). {image}
After seeing the bears crush the bulls like this it feels like my decision to go long wasn't justified. I got lucky to get out with 33 points but to be honest I did not take the strong selling (blue boxes) into consideration and simply trusted the expectation for a NSH and my AOI. Maybe a bit naive. What do you guys think?

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Quoting Kayjay2011
{quote} Hey PeteH, why did you decide to choose the high at 1.1610 to project the swing inside your main swing and not the high at 1.1620?
As mentioned previously I am fairly new to Harmonic trading so sometimes I make mistakes. This trade hit the stop loss but I have taken similar set ups earlier in the year with success.

Perhaps I should have noted that the projected the swing from 1.162 where the first swing fell short of the high and that the second swing pushed past the structure as a bad sign.

It's easy in hindsight to pick faults in the entries. The way I saw the trade at the time was....

1. I saw that the top of the main swing at 1.162 fell by around 50%-60% and the upward momentum did not create a NSH. I felt this may have been a bad sign but with longer term trades this happens quite a bit.
2. The next swing also rebounded from the structure at 1.1575 and again did not make a NSH. Perhaps this should have been a warning to me however.
3. I saw that the price retraced further past the 61 fib down to the structure at the 78.6 fib and that this was exactly a 1:1 completion of the first swing downwards.
4. Entry was at structure with good Risk:Reward so I thought it was a potential good long term trade with minimal risk.

I like to look at risk:reward as a number (i.e. what could I lose compared to what the potential win will be so in this case a win would be 1.1647 from the entry of 1.1555 (so a difference of 92) and the loss would be 1.1528 (a difference of 27). In short a ratio of 27:92

In this case the trade failed and hit the stop as price continued south but on to the next trade. Perhaps I will look at failed NSH's (or NSLs) as warning signs and be more cautious even where R:R is good.
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Quoting Kayjay2011
{quote} After seeing the bears crush the bulls like this it feels like my decision to go long wasn't justified. I got lucky to get out with 33 points but to be honest I did not take the strong selling (blue boxes) into consideration and simply trusted the expectation for a NSH and my AOI. Maybe a bit naive. What do you guys think? {image}
I try not to overthink my trades and try to keep things simple. This results in more trades and perhaps more losing trades but I have been mindful that if I get in at a good R:R then although my percentage of winners to losers can sometimes be lower than 60% and trades may fail from time to time I can lose 2 or 3 for every win when the R:R is good. I do think you got the expectation right which is the main thing.

In Mr Pips video's he repeats a number of times 'the expectation is the expectation'. Perhaps with the strength of the sellers you may have been wise to reconsider the trade but in these scenarios perhaps simply moving the break even a little quicker would suffice. I would expect this trade to have been a break even trade if you did not take the profit at +33.

I made a mistake with looking at the main swing yesterday and placed a long trade which made me 39 pips at the first swing when I should have been looking for shorts but I guess it depends upon what swings you treat as 'main swings'. My view of your trade is that even if there was weakness the expectation was a NSH so a valid trade and your R:R was very good as the rotation was at the 78.6% fib. I suspect the target and stop looked like the chart attached but let me know if it was different.
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Quoting PeteH
{quote} As mentioned previously I am fairly new to Harmonic trading so sometimes I make mistakes. This trade hit the stop loss but I have taken similar set ups earlier in the year with success. Perhaps I should have noted that the projected the swing from 1.162 where the first swing fell short of the high and that the second swing pushed past the structure as a bad sign. It's easy in hindsight to pick faults in the entries. The way I saw the trade at the time was.... 1. I saw that the top of the main swing at 1.162 fell by around 50%-60% and the...
I didn't mean to highlight a "mistake", I was just curious if I was missing something. Thanks for the explanation.
Quoting Kayjay2011
{quote} I didn't mean to highlight a "mistake", I was just curious if I was missing something. Thanks for the explanation.
No problem, we learn from mistakes! I am happy to admit my failings. I think yesterday I missed the obvious main swing and chose shorter term swings to trade before realising that the high had not been breached. It is this reason I like to post some of my trades and thoughts here.

I guess the signs of weakness in my EURUSD trade yesterday are similar to the signs of weakness in your +33 pip trade.
Quoting PeteH
{quote} I try not to overthink my trades and try to keep things simple. This results in more trades and perhaps more losing trades but I have been mindful that if I get in at a good R:R then although my percentage of winners to losers can sometimes be lower than 60% and trades may fail from time to time I can lose 2 or 3 for every win when the R:R is good. I do think you got the expectation right which is the main thing. In Mr Pips video's he repeats a number of times 'the expectation is the expectation'. Perhaps with the strength of the sellers...
The attached chart is basically how I saw it.

Unfortunately (or fortunately, considering how things went) I had to run so I decided to go to a BE early. When I had the chance to look into my chart again I decided to close the trade because I wouldn't have been able to manage it any further.

Had I not broken my rules and moved to a BE early the trade would have been a loser.
Quoting Kayjay2011
{quote} The attached chart is basically how I saw it. Unfortunately (or fortunately, considering how things went) I had to run so I decided to go to a BE early. When I had the chance to look into my chart again I decided to close the trade because I wouldn't have been able to manage it any further. Had I not broken my rules and moved to a BE early the trade would have been a loser.
The same thing happened to me yesterday. I went away from the charts and went to BE early - Broke my rules. If I had not locked in BE, my trade would have been a loser. Taken out for a few points then going to my TP.

As PeteH already mentioned, moving to BE earlier in some scenarios would suffice. But I think this should be stated in ones trade plan by rules. The decision to move to BE earlier is easily taken by emotions, but it should be an objective decision based on rules.

I am going to manifest this somehow in my trade plan to prevent a loss in given scenarios like yesterday. (Went short while seeing the bulls accumulate.)
Quoting Hansl
The decision to move to BE earlier is easily taken by emotions, but it should be an objective decision based on rules.
Usually yes. But I don't consider it "braking my rules", when I go to BE earlier. It depends on the trade. If I take a trade that has very little room to protect or a trade that is going to hit a possible reversal point, I go to BE earlier. But that decision is made before I enter the trade. So maybe not one of my typical rules, but not an emotional decision also. I'd rather take the BS vs the loser. Or I pass on that trade entirely.
Good morning.

Demo YM today.

So far +40 on first trade and in the black on second one so far. Hope everyone is doing well!
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Quoting AzizLight
Good morning. Demo YM today. So far +40 on first trade and in the black on second one so far. Hope everyone is doing well! {image}
i missed the move as i saw breakdown in the bears and stronger bulls in the move upwards. stood in the sidelines thinking we might have a expectation failure in our hands.
Quoting Eyesonthepip
{quote} i missed the move as i saw breakdown in the bears and stronger bulls in the move upwards. stood in the sidelines thinking we might have a expectation failure in our hands.
Bulls are throwing a lot of money at it, that's for sure.
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