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Harmonic trading-harmonic patterns

  • #441
  • Oct 15, 2019 11:35am Oct 15, 2019 11:35am
Quoting Amir_Forex
{image}
Kindly check for patterns on H1 chart.

The cumulative net volume is currently at 6451 while the average H1 volume is 3788

Average H4 volume is 16,933

All patterns, support/resistance, channels etc ought to be on the H1 time frame.

Average daily volume for my broker is 99,574
  • #442
  • Oct 18, 2019 6:59am Oct 18, 2019 6:59am
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Patterns have an underlying mathematical structure.
  • #443
  • Oct 24, 2019 9:39am Oct 24, 2019 9:39am
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Patterns have an underlying mathematical structure.
  • #444
  • Oct 25, 2019 4:43am Oct 25, 2019 4:43am
In Harmonic Patterns, better we trade complete patterns or Incomplete Patterns?
Complete patterns: Wait for price touches D level and start reversing
Incomplete patterns: trade C to D level

Complete Patterns reversal strategy and Incomplete patterns are trend followers.
https://t.me/FxMathAI
  • #445
  • Oct 25, 2019 4:53am Oct 25, 2019 4:53am
Quoting FxMathAI
In Harmonic Patterns, better we trade complete patterns or Incomplete Patterns? Complete patterns: Wait for price touches D level and start reversing Incomplete patterns: trade C to D level Complete Patterns reversal strategy and Incomplete patterns are trend followers.
Incomplete patterns do not exist.

You can only trade patterns.
  • #446
  • Oct 25, 2019 5:04am Oct 25, 2019 5:04am
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Do you think we cant trade like this?
I tested both Complete and incomplete, the accuracy of incomplete is higher than complete.
For Harmonic, finding reversal is a bit harder.
https://t.me/FxMathAI
  • #447
  • Oct 25, 2019 5:16am Oct 25, 2019 5:16am
Quoting FxMathAI
{image} Do you think we cant trade like this? I tested both Complete and incomplete, the accuracy of incomplete is higher than complete. For Harmonic, finding reversal is a bit harder.
You think that is an incomplete pattern and you are wrong.

The pattern does not exists until it is completed. Meanwhile the pattern does not exist no matter if you can project it on a chart with your mind.

What you are seeing is an inverted big M that has produced an upward move.

Now price is forming a flag. If the flag is confirmed, chances of breakout are about 85% up to the next resistance level.

But until it is confirmed, you have nothing.

But the harmonic pattern does not exist on that market, it is only in your mind.
  • #448
  • Oct 25, 2019 5:27am Oct 25, 2019 5:27am
Quoting scherzi
{quote} You think that is an incomplete pattern and you are wrong. The pattern does not exists until it is completed. Meanwhile the pattern does not exist no matter if you can project it on a chart with your mind. What you are seeing is an inverted big M that has produced an upward move. Now price is forming a flag. If the flag is confirmed, chances of breakout are about 85% up to the next resistance level. But until it is confirmed, you have nothing. But the harmonic pattern does not exist on that market, it is only in your mind.
You said Harmonic is in mind not on Market, but you said breakout chance is up to 85%(in S/R). So patterns are not in mind, it happened in the market before and repeated several times.
If we find 3 legs(XA,AB,BC) according to our patterns ratios, and price retrace more than 50% of BC(CD>=50% BC), we have two confirmations:
1- confirmation from an upcoming pattern
2- confirmation from the market trend

So I believe the accuracy of incomplete is more than complete and makes trading complete patterns easier too because we know all harmonic patterns scenarios.
https://t.me/FxMathAI
  • #449
  • Oct 25, 2019 6:16am Oct 25, 2019 6:16am
Quoting FxMathAI
{quote} You said Harmonic is in mind not on Market, but you said breakout chance is up to 85%(in S/R). So patterns are not in mind, it happened in the market before and repeated several times. If we find 3 legs(XA,AB,BC) according to our patterns ratios, and price retrace more than 50% of BC(CD>=50% BC), we have two confirmations: 1- confirmation from an upcoming pattern 2- confirmation from the market trend So I believe the accuracy of incomplete is more than complete and makes trading complete patterns easier too because we know all harmonic patterns...
Hi. I did not say that it is in the mind.

And I do not want to argue with you. Do as you want and try not to ask for something if you already have the answer and do not want to hear what others may answer to your question.

Cheers.
  • #450
  • Edited 6:43am Oct 25, 2019 6:19am | Edited 6:43am
Quoting scherzi
{quote} Hi. I did not say that it is in the mind. And I do not want to argue with you. Do as you want and try not to ask for something if you already have the answer and do not want to hear what others may answer to your question. Cheers.
Thanks for your answer. I like to improve this trading method.

Another question:
For Harmonic patterns, should we consider Fibo Time or only Fibo Price ratios are enough?

For example below Fibo Time ratios:
BD/XB
AC/XA

Our Harmonic according to Fibo Price ratios are 100% Technically, but Market effects by Fundamentals too, so maybe Fibo time ratios help us to find valid patterns.
https://t.me/FxMathAI
  • #451
  • Oct 25, 2019 8:46am Oct 25, 2019 8:46am
Quoting FxMathAI
{quote} Thanks for your answer. I like to improve this trading method. Another question: For Harmonic patterns, should we consider Fibo Time or only Fibo Price ratios are enough? For example below Fibo Time ratios: BD/XB AC/XA Our Harmonic according to Fibo Price ratios are 100% Technically, but Market effects by Fundamentals too, so maybe Fibo time ratios help us to find valid patterns.
There must be a symmetry in time too, yes.

More than a Fibo ratio, a more or less equivalent time between ABC and CDE for instance. In other words, if you see a bat, the wings should have a similar width.

I think you will find interesting the book "the harmonic trader" and "harmonic trading" vol I.

If you want to analyze the timming a good idea is to draw trendlines. You will discover that when a trendline crosses another trendline or a support or resistance horizontal line, usually things happen. Also when candles close beyond these.

When I talk about confirmation I mean the completion of a pattern. A pattern is more than a geometric entity, it requires certain conditions and price action. For instance, a double bottom is not confirmed if after the last leg a bar does not close above the highest high of the central peak. Chances that it will fail if it is not confirmed are about 45%, and since you may have to put your SL below the bottoms, the risk is too high to enter if it is not confirmed.

This happens with any setup, the signal or completion must happen to trade a pattern. Otherwise it is like driving a car without two wheels. Do you can? Maybe.

Cheers.
  • #452
  • Oct 25, 2019 8:58am Oct 25, 2019 8:58am
Quoting scherzi
{quote} There must be a symmetry in time too, yes. More than a Fibo ratio, a more or less equivalent time between ABC and CDE for instance. In other words, if you see a bat, the wings should have a similar width. I think you will find interesting the book "the harmonic trader" and "harmonic trading" vol I. If you want to analyze the timming a good idea is to draw trendlines. You will discover that when a trendline crosses another trendline or a support or resistance horizontal line, usually things happen. Also when candles close beyond these. When...
So we cant say a range of ratios for our Fibo time?
For example if:
2.618>BD/XB>1.618
Pattern is valid?
https://t.me/FxMathAI
  • #453
  • Oct 25, 2019 9:02am Oct 25, 2019 9:02am
I have no statistics on that particular.

What I do have are all the books by Scott M. Carney.

He says correspondence should be more like 1:1
  • #454
  • Oct 25, 2019 9:21am Oct 25, 2019 9:21am
Quoting FxMathAI
{quote} So we cant say a range of ratios for our Fibo time? For example if: 2.618>BD/XB>1.618 Pattern is valid?

Regarding Fibonacci ratios and levels.

I make extensive use of these sometimes in hindsight. When you study price action around each Fibonacci retracement or expansion level, it is easy to spot support and resistance areas and use that information for future trades or to establish stop loss or take profit targets.

But for timing purposes, I find other tools more useful as the ones mentioned above. Generally speaking, you do not need to use Fibos because if half of a pattern took 1 week to complete, you will expect that the other half will require a similar amount of time.

The exact moment will be when it is confirmed.

For instance, a support breakout will be confirmed when price retests it and the support becomes new resistance. But until that moment, the breakout is not confirmed no matter if price closed beyond it and it is just a potential breakout or a candidate, it could just be a teaser and then get price moving above it to a higher resistance level. Or you would like to wait until the handle is formed after a rounded bottom and the breakout closes above the prior resistance of the rounded bottom. Things like that.

In trading, as per my experience, we need to study which price action validates and confirms our setups beyond ratios and geometry.
  • #455
  • Edited 6:27pm Oct 26, 2019 6:15pm | Edited 6:27pm
FxMathAI,

Nothing wrong with anticipating a pattern and in this case being long anticipating a top at D. What pattern are you trying to emulate?? Where is there any symmetry in what you have drawn? Not a lot of patterns where AB is 90% of XA.

Putting some Fib extensions may help with D point identification.

what is the tradeable you are watching.... time period? Is there other supporting TA which supports you D point? etc.


S.

edit... upon reflection that AB pullback might be the first stage of a Deep Crab pattern but D would have to be considerably higher and later IMHO.
  • #456
  • Oct 27, 2019 1:27am Oct 27, 2019 1:27am
Quoting Steve666
FxMathAI, Nothing wrong with anticipating a pattern and in this case being long anticipating a top at D. What pattern are you trying to emulate?? Where is there any symmetry in what you have drawn? Not a lot of patterns where AB is 90% of XA. Putting some Fib extensions may help with D point identification. what is the tradeable you are watching.... time period? Is there other supporting TA which supports you D point? etc. S. edit... upon reflection that AB pullback might be the first stage of a Deep Crab pattern but D would have to be considerably...
It was questioning. I mean, only Fibo Price is enough for trading Harmonics or need consider Fibo time ratios too?
I am working on some concepts and I will share results here very soon.
https://t.me/FxMathAI
  • #457
  • Oct 27, 2019 3:29am Oct 27, 2019 3:29am
Quoting FxMathAI
{quote} It was questioning. I mean, only Fibo Price is enough for trading Harmonics or need consider Fibo time ratios too? I am working on some concepts and I will share results here very soon.
I read a book that treated that topic, "Fibonacci Trading" by Carolyn Boroden. It was like 4 or 5 years ago and I must confess I do not remember what she said. The book covers both symmetry and time axis. The topic is worth to analyze because if you find convergence among Fibonacci time series and any kind of pattern resolution, your signal will be stronger.

I use trendlines to monitor timing and other price action, because price does not move horizontally, but diagonally. On the other side, if you only take into account an external tool, you will remain with too many degrees of freedom left. I think it is also relevant to include the current price action in your analysis.

Look, this is a relatively complex setup. I can identify at least two patterns forming:
1) A top horizontal channel.
2) A descending triangle.

Both shapes help to determine the support and resistance areas (support and resistance are not only horizontal, but they also are diagonal).

The number of times price touches the horizontal channel confirm timing and the pattern once one line has been touched at least two times and the other three times.

The crossing of both trendlines that are forming the triangle confirms the conclusion of the pattern.

I know that ~57% of the times a triangle will break out upwards before the third bar that precedes the crossing, no matter the type of triangle it is.
I know that about 60% of the times a channel will break upwards, no matter if it is a bottom or top channel.

Then, you can add Fibonacci there. If you observe the pole of the flag, the run-up before the channel/flag was formed. There is a retracement. More than 50% of the price retracements will reverse and continue the trend between 62% and the 100% retracement level. For levels lower than 62% chances are lower.

But you can add up to that measure any existing overhead resistance. If your retracement finds a strong historical resistance level, the chances that it reverses are highly increased.

When you are trading a harmonic setup, you cannot take into account just timing or a partial resolution, because a harmonic pattern includes an immense quantity of details inside. You must study the pattern as a whole, not as a divisible object. If you want to trade a projection of what it could be, you have to study the technical structure of price, not the harmonic pattern that does not exist yet.

You could work with ABCD extensions, with support and resistance or with a few chart patterns as in my example here. But harmonic patterns have certain rules, and one is that the pattern does not exist until it is completed.

Then, for timing, it is the same. If you want to apply Fibonacci timing, you must apply it over a certain structure. But the problem is that price does not move horizontally, at least for me, but diagonally. In any case, you have to study the structures that price forms and research on how to count time for each type of price pattern you find.

I don't know nor I am not interested in knowing your experience that may be high in trading. With the harmonic trading vol I book, a couple of candlesticks books, Murphi's technical book and a few more you chave all you need to develop a working strategy in any case.
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  • #458
  • Oct 30, 2019 2:56pm Oct 30, 2019 2:56pm
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Patterns have an underlying mathematical structure.
  • #459
  • Oct 30, 2019 2:59pm Oct 30, 2019 2:59pm
Quoting Amir_Forex
{image}
Wow. What an evening star.

As per your experience, Amir, do you think that huge pinbar is significative for the bearish setup?

What I see there is a double top broken by some kind of unexpected event, but the setup remains the same, since after the event, price has returned to the previous position. Meaning that I would see reasonable chances for price to go down up to 108.55 area.

Regards
  • #460
  • Oct 30, 2019 3:03pm Oct 30, 2019 3:03pm
Quoting scherzi
{quote} Wow. What an evening star. As per your experience, Amir, do you think that huge pinbar is significative for the bearish setup? Regards




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Patterns have an underlying mathematical structure.
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