Ratios & Harmonics: a Different Way to Trade

Stop to break-even + 5

Break-even trade.

Re-entered.

The market is very slow and going against me for now. Let's see what happens.

Just an update. PA has become a complex correction. I have decreased my risk by a little but it is getting late so may BE shortly if it is available.

For my price action homies.. This is one of my favorite setups.. if it can be found. As you can see... I marked my main swing in green. As price started to retrace down, you can see that it went to the 50%. So, I drew my projection lines, not from the 50% but from the top of the wick that had just past the 50% by a pinch(in blue). Why? because the markets love symmetry. As price was building my second leg down... this is where I want to see greater weakness to give me some degree of confidence. As you can see, on my second leg down in blue, price retraced to the 61.80%.. anything that retraces beyond 50% gets me excited. Why? because there could be a higher probability of the trade working out.
So, I marked my symmetry in yellow. Now.. before price got there, I did have an expectation, that the price of my second yellow leg would extend past symmetry. This is something that I have observed for a very long time and have taken advantage of it. If you look to the left of the chart, the second yellow leg down enters the green bull candle to the left. Just so you know.. all candles are actually price ranges. (for example.. the daily candle is one price range that day traders trade within.) From my observation, I expect price to follow the green bull candle to the the bottom of its range to test its support. Next, I will look for any price action that may be a road block that prevents price from achieving its goal of testing the bottom of the range of that bull candle on the left. The closest thing that I see to the left of that green bull candle is a wick that became resistance on a lower order flow. So, I mark the top of it with my blue dashed line. If I want to be super accurate, I will use the data box to see what the exact high of that wick was. I then but my buy limit order at the blue dashed line. Price came down and moved against me like.. maybe 4 ticks. So, if you ever wanted to know why an AB=CD extends, it is because it is entering the nearest price range candle to its left. If that candle is long.. price will extend more. So, that is the reason why we get price extensions on the AB=CD. This is not in any book that I know of. But I love to study price behavior. Why, because I want better entries. So, occasionally, you can get those.

Got taken out.

I'm done for the day guys.

Happy trading.

Got taken at BE. Read it wrong, thought it had more to give and I ended up giving pips back but I stuck to my rules so am happy.

Hello Damien,

When you did your back-testing many years ago, did you only focus on your C entries of the ABCD / AB=CD patterns in line with the expectation or did you also include D entries and patterns in your criteria?

The reason I ask this question is that I did my back-testing in January and the results were negative. I followed your rules on the expectations and I had much more losses than winners. Not sure if I did anything wrong.

Thank you

Todays chart. I am looking to long my AOI -yellow rectangle. It is a difficult read at this level but I will follow my plan. It is possible there maybe a lot of consolidation and perhaps uncertainty as the longer term order flow maybe in contention.

Hi Matts,

It looks like a good trading opportunity.

Hey Daubert, yah I hope so.

It is complex ABCD correction for a further push higher. There is a risk that the HH has been reached on the correction of the larger TF for a further push down but I am just trading to my plan on the current TF.

Short in short term order flow. I didn't get an entry to go long as of yet.

out at BE

The markets have been very strong. The D on complex corrections witch are also aggressive C buys or sells depending on the expectation of course.

I have been watching price on MYM, marked my chart and it played out exactly the way @Pair-Me-Up post yesterday. Thank you so much. It is such an amazing setup

some confluence with target set at area of interest of higher order flow (down trend)

BE+5 now. I'm seeing some absorption / weakness of the bears. Trade still looking good at the moment.

i shifted my SL aggressively because of bull's weakness at the retest of the structure high. now I'm short..

Target reached. with strong immediate resistance. I'm expecting a deep retrace because of shallow projection on the immediate orderflow.

Edit: i was wrong. the bears are in full force now.

This is an entry that I took on my 14 tick chart. It was based on price action behavior that I have been studying recently. I am trying to find consistent behavior for it. This trade went against me 2 ticks. It lasted for a few minutes tops, before being stopped out. I did set a sell limit order for it. I was reading some news, when out of the corner of my eye, I noticed that price sped up to it, hit it and dropped. I love a good limit order.

You are doing great, Ken. Thanks for the compliment. Now you know that you can get some very precise entries based on price action. Not only that.. you know why price is likely to reverse with out have to use those rotation candles. Sure candles can turn the opposite way, but they need a price action reason for their movements. As price action traders, we want to forecast these moves in advanced. Great job.