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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

  • #50,381
  • Feb 19, 2022 7:51am Feb 19, 2022 7:51am
Quoting Daubert
{quote} Thank you Mr. Pip. I always look for a footprint to determine my area of interest.
Sometimes there isn't much and sometimes its very obvious. The expectation of a lower high is what we aim to capture you can sometime within the short term order flow where they came in and then were handled. In the absence of that foot print, there lies the clue.
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If you fail to plan, you plan to fail.
  • #50,382
  • Feb 19, 2022 8:15am Feb 19, 2022 8:15am
Quoting Daubert
This is what bothers me most and I get this a lot. A great trade that turns out to be a break-even. It is painful to give all those points back to the market. {image}
This is a tough topic because there is usually a lot of emotion behind it. Like mentioned, in time you will develop or adopt rules that can help you capture your goals. I can tell you from my perspective, I never enter a trade with a point goal. The points come from proper if then rules implementation. If I end up with a stop out or a breakeven or 100, 200 points its always next. The goal is the capture the frequency to get to the expectancy. We get a NSH or NSL a lot more than we do not. The market also always needs room as price does not always travels efficiently.

I can tell you this battle will be won with the RR in your favor and it's equally challenging to see that you took 30 point when your rules would have netted you 100+. There is still some emotion in your trade management if a breakeven makes you feel a certain way. If you consistently start to lock in point out of fear to not give them back you will soon find yourself not trading from a position of strength meaning the RR will not be what it should be and that will cause you to have to be more accurate with your trades and maintain a higher win rate as your losing trades will weigh in heavier and slowly also keep your account from growing nicely. In short you will have three things negatively affecting your equity curve and you will feel stuck in the mud. This will also mess with the emotions without a doubt.
If you fail to plan, you plan to fail.
  • #50,383
  • Edited 9:35am Feb 19, 2022 9:20am | Edited 9:35am
Quoting Daubert
{quote} What a legend you are man! Thank you for keeping this thread alive all these years. You helped me grow as a trader without knowing it.
It is the weekend.. So, a little bit more time to breathe.

All I gotta say is .. Wow. You are the first person in my long life to ever say that to me. That makes me happy.
Luck has no place in trading. Leave that for the poker table.
  • #50,384
  • Feb 19, 2022 9:43am Feb 19, 2022 9:43am
Quoting Pair-me-up
{quote} It is the weekend.. So, a little bit more time to breathe. All I gotta say is .. Wow. You are the first person in my long life to ever say that to me. That makes me happy.
But not the last! You are a legend!
If you fail to plan, you plan to fail.
  • #50,385
  • Feb 19, 2022 9:52am Feb 19, 2022 9:52am
Quoting Mr. Pip
{quote} But not the last! You are a legend!
Thanks Damian! I am speechless and happy. In the last couple of weeks, I have started researching two new possible price action behaviors. So, if the behavior is consistent and can become a helpful rule, I will post it. It is based on my V and inverted V that I started researching just over 2 years ago, to fine tune my entries. I did post it here somewhere in this thread. It was so long ago, it has probably become a fossil. lol
Luck has no place in trading. Leave that for the poker table.
  • #50,386
  • Feb 19, 2022 1:36pm Feb 19, 2022 1:36pm
Quoting Mr. Pip
{quote} Sometimes there isn't much and sometimes its very obvious. The expectation of a lower high is what we aim to capture you can sometime within the short term order flow where they came in and then were handled. In the absence of that foot print, there lies the clue. {image}
Ah, that is a very important piece of the puzzle. I see it now.

Thank you Mr. Pip.
  • #50,387
  • Feb 19, 2022 1:43pm Feb 19, 2022 1:43pm
Quoting Mr. Pip
{quote} This is a tough topic because there is usually a lot of emotion behind it. Like mentioned, in time you will develop or adopt rules that can help you capture your goals. I can tell you from my perspective, I never enter a trade with a point goal. The points come from proper if then rules implementation. If I end up with a stop out or a breakeven or 100, 200 points its always next. The goal is the capture the frequency to get to the expectancy. We get a NSH or NSL a lot more than we do not. The market also always needs room as price does not...
Great post!

You're right about the emotions. I have been stringing many losses the last few days and it is not always easy to stay focused on the plan when that happens.

Thank you Damien.
  • #50,388
  • Feb 19, 2022 2:05pm Feb 19, 2022 2:05pm
Quoting Pair-me-up
{quote} Thanks Damian! I am speechless and happy. In the last couple of weeks, I have started researching two new possible price action behaviors. So, if the behavior is consistent and can become a helpful rule, I will post it. It is based on my V and inverted V that I started researching just over 2 years ago, to fine tune my entries. I did post it here somewhere in this thread. It was so long ago, it has probably become a fossil. lol
Looking forward to your insight.
If you fail to plan, you plan to fail.
  • #50,389
  • Feb 19, 2022 2:07pm Feb 19, 2022 2:07pm
Quoting Daubert
{quote} Great post! You're right about the emotions. I have been stringing many losses the last few days and it is not always easy to stay focused on the plan when that happens. Thank you Damien.
Keep that RR as a priority and the losses won't matter! Next!
If you fail to plan, you plan to fail.
  • #50,390
  • Feb 20, 2022 3:39am Feb 20, 2022 3:39am
Quoting Daubert
This is what bothers me most and I get this a lot. A great trade that turns out to be a break-even. It is painful to give all those points back to the market. {image}
Quoting Mr. Pip
{quote} This is a tough topic because there is usually a lot of emotion behind it. Like mentioned, in time you will develop or adopt rules that can help you capture your goals. I can tell you from my perspective, I never enter a trade with a point goal. The points come from proper if then rules implementation. If I end up with a stop out or a breakeven or 100, 200 points its always next. The goal is the capture the frequency to get to the expectancy. We get a NSH or NSL a lot more than we do not. The market also always needs room as price does not...

This is so true. I have gone through the stage of trying to TS captured pips but it has affected my over all performance dramatically.

I am currently running at a 58% win rate. It is low compared to what Mr Pip has demonstrated but I am happy and I am slowly improving and increasing it.

Most of my trades reach almost (but not quite) 2:1 R:R ratio. On my spreadsheet I leave out trades within 5 pips calling them B/E (almost all are winners excepting almost all that have slipped) I think it is about 33% of my trades I need to win to B/E.

I have gone through terrible losing streaks for what ever reasons- the market has changed (so I say), it has become over volatile, or just consolidating, what ever the reasons are that gets you on the back foot and you find yourself losing trade after trade despite keeping to your rules. The great thing about keeping to your rules is suddenly you find some of your trades begin winning again and within a blink of an eye you are making ground again and those turbulent emotions of your plan failing drift into the background. Each time you battle through this uncertainty you become stronger and your plan is easier to follow without mistakes or uncertainty because within time you will become assured things will work out if you stick to your plan.

Hope this helps, Matt.
As the lights go by so too do the shadows move
  • #50,391
  • Feb 20, 2022 4:36am Feb 20, 2022 4:36am
Quoting Matts Micro
{quote} {quote} This is so true. I have gone through the stage of trying to TS captured pips but it has affected my over all performance dramatically. I am currently running at a 58% win rate. It is low compared to what Mr Pip has demonstrated but I am happy and I am slowly improving and increasing it. Most of my trades reach almost (but not quite) 2:1 R:R ratio. On my spreadsheet I leave out trades within 5 pips calling them B/E (almost all are winners excepting almost all that have slipped) I think it is about 33% of my trades I need to win to...
If you fail to plan, you plan to fail.
  • #50,392
  • Feb 20, 2022 6:42am Feb 20, 2022 6:42am
Quoting Matts Micro
{quote} {quote} This is so true. I have gone through the stage of trying to TS captured pips but it has affected my over all performance dramatically. I am currently running at a 58% win rate. It is low compared to what Mr Pip has demonstrated but I am happy and I am slowly improving and increasing it. Most of my trades reach almost (but not quite) 2:1 R:R ratio. On my spreadsheet I leave out trades within 5 pips calling them B/E (almost all are winners excepting almost all that have slipped) I think it is about 33% of my trades I need to win to...
Thank you Matts.

Can't wait for tomorrow to start trading again. I love trading.
  • #50,393
  • Feb 20, 2022 11:37pm Feb 20, 2022 11:37pm
Good morning from South Africa guys.

I would like your opinion on something.

Say on a strong market, price makes a shallow correction to the 38.2% fib level and rotates there. Do you take the trade or do you wait for a slightly deeper correction? The reason I ask this is that the initial risk is quite high because the stop has to go below / above the main swing you are trading.

The second thing I would like your opinion on is that if you are expecting a NSL on the shorter term order flow and that expectation fails to take you deeper into a main leg of the larger order flow, do you switch order flow and take the trade on rotation of the larger swing and order flow?

Thank you.
  • #50,394
  • Feb 21, 2022 2:07am Feb 21, 2022 2:07am
The short-term order flow failed so I switched to the longer-term order flow and took a short.
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  • #50,395
  • Feb 21, 2022 2:32am Feb 21, 2022 2:32am
Quoting Daubert
Good morning from South Africa guys. I would like your opinion on something. Say on a strong market, price makes a shallow correction to the 38.2% fib level and rotates there. Do you take the trade or do you wait for a slightly deeper correction? The reason I ask this is that the initial risk is quite high because the stop has to go below / above the main swing you are trading. The second thing I would like your opinion on is that if you are expecting a NSL on the shorter term order flow and that expectation fails to take you deeper into a main...
Hi Daubert, good questions as per norm.

The first question is an old nemesis of mine. The market conditions I fail most in is the fast moving market where price is falling or rising hard with little correction and small opportunity to enter. I often hesitate in these positions and by the time I make up my mind to enter PA corrects, so I have lost the opportunity for the large market move and then am late and catch the reversal on my trade. Double losing, it's what I am best at heh.

It is difficult especially when you have no history data (ie new LL's, HH's) to compare with. The only solution I can offer is patience with, though it is remarkably uncomfortable to see PA disappear in a direction especially when you can see it coming.

Some things to look for however. The speed / strength / momentum of the move in the direction. If it is overwhelming in the direction of the move then a 38.2% is often a blessing, though high risk if a significant structure doesn't obscure the continuation then it may be worth the risk. Which brings me to the next formula.

Structure, support / resistance. When there is little information you have to take what you can even to the candle entry. Look at the move in the direction PA is going and look at the candles / history (even longer term if necessary). If PA paused in the direction of the OF ask why and perhaps build a plan around it, it may require a break down of short term PA. This is a little contradictory of what Mr Pip teaches in concern with not allowing another Time Frame to dictate the terms of your trade but when there is no past it is difficult to predict the future so you must take every resource available to try to read PA. Otherwise look else where on another instrument or have patience to find a trade you're comfortable trading.

The second question takes me from my most feared trade to my favourite type of trade. The failure of a NSL in the ST is often a great setup for a high probability trade. There is potential for a long here (if it can recognised as a failed NSL), like an old "C" trade in the ABCD sequence but can be a little risky as the over all expectation is for a new LL. The better risk is measuring the AB of the ST and when the failure of the C comes about draw the 1:1 of the AB from the C and enter on the D. This here is my favourite trade and very rarely fails if the ST ABCD occurs within the larger expectation. It may not may be neat but if your patience holds it is often a great trade.
As the lights go by so too do the shadows move
  • #50,396
  • Feb 21, 2022 3:11am Feb 21, 2022 3:11am
Hi Matts,

Thank you for these explanations. It really helps. Maybe in time, I can build enough confidence to take those D entries on ABCD completions.

Thank you once again.
  • #50,397
  • Feb 21, 2022 3:51am Feb 21, 2022 3:51am
Ah man, I feel like a champion.

I got taken out for about 370 points in profit. My first time having such a big winner. It wiped out so many losers. If only this was a real account, but one of these days I will be ready for that. Soon.

Happy trading guys.
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  • #50,398
  • Feb 21, 2022 5:11am Feb 21, 2022 5:11am
Todays chart. Will be looking to short in blue square-AOI if we get there. Small rectangle is just an example of a Rotation Candle Sequence- going to just call RCS from now on.
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As the lights go by so too do the shadows move
  • #50,399
  • Feb 21, 2022 6:04am Feb 21, 2022 6:04am
Quoting Matts Micro
Todays chart. Will be looking to short in blue square-AOI if we get there. Small rectangle is just an example of a Rotation Candle Sequence- going to just call RCS from now on. {image}
Long. Target zone is my AOI for a short.
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As the lights go by so too do the shadows move
  • #50,400
  • Feb 21, 2022 7:05am Feb 21, 2022 7:05am
Currently long.
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