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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

  • #641
  • Edited 11:40am Jan 5, 2013 11:22am | Edited 11:40am
Mr Pip
Let me try if I understand difference of XABCD VS AB=CD
X major swing AB C retrace ideally .618 but invalid if closes above .786 if this happens we might be looking double top or double down.D is ideally at 127.2 (measured from BC)but can extend longer even 1.618 at which point becomes PRZ
CD should be at least 127.2 shorter then this invalidates the pattern.

AB=CD
AS the formula suggest AB should be equal to CD and if CD is longer then AB then invalidates the pattern could become XABCD
B to C ideally should be .618 but no more then .786 but can be short 38.2 as well.

What I have been reading by Larry Pesavento if BC is shorter then .618 say 38.2 then most often CD leg is longer.Stronger the move less the retrace.

Did I miss anything?Thanks Mr Pip
In trading, you have to be defensive and aggressive at the same time
  • #642
  • Jan 5, 2013 11:27am Jan 5, 2013 11:27am
Quoting Starry
For the first chart, isnt this an aggressive ABCD buy pattern? The AB leg only retraces to 50%, letting it be a potential bat, but the BC leg doesnt retrace far enough to be a bat (it only goes between 50 and 38.2, it should be beween 61.8 and 78.6).

For an ABCD, it barely closes below the 78.6, so maybe instead its an AB = CD.


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Yes, I did said it was aggressive Long on M15 as the low have not really bottom out.

You may be correct in saying it could be a Bat if you are following Mr. Pip rules.

Do note that my entries are based on M15-chart, whereas H1-chart just give me an overall picture but I would not take entries on H1.

In terms of specific ratio, I am not following Mr. Pip exact rules on those specific percentages if that is what you are asking.

If you are new to trading and you don't have your own trading rules, it is better you follow specific rules at the start like what Mr. Pip mentioned in his Word documents.
Those documents are very helpful.

Another thing to note is that I may not use the correct term for the patterns, as I almost used the term "Gartley" to describe almost everything.
Generally, I usually just mentioned "Gartley" or "Butterfly" patterns.

Main key to note is focus on where there is a potential reversal zone(PRZ) and so I don't become concern as much on the specific percentages of the ABCD.

I am trading following mostly on price action, Supply & Demand, volume, and I see price moving with potential harmonic patterns as an added guideline.
  • #643
  • Jan 5, 2013 11:28am Jan 5, 2013 11:28am
zola320 pls is it possible i get your indicator or how do i get it.pls let me know

First of all Im sorry for posting pictures of my indicator and I agree with you using indicators to identify harmonic pattern is not the best way.
But it can give you hints on patterns that you would normally not see with your naked eye (my untrained eye ).
Maybe when I get enough experience in spotting patterns I will choose to stop using indicators but until then its a nice way to get some hints.

From now on I will post only pictures of patterns that I draw.
Im currently following a AB=CD pattern on the daily EURUSD.

http://img849.imageshack.us/img849/7717/40310556.png

I have few questions about the PRZ:

1. How do you calculate the PRZ

I found out that there are two important points for the AB=CD pattern PRZ
- one point is the completion point D=C+(B-A)
-and the reciprocal of the C retracement

2. Do you use both of the calculated points ?[/quote]
  • #644
  • Jan 5, 2013 11:33am Jan 5, 2013 11:33am
Mr pip,
What does trail stop to structure +- 10 pips mean in the ABCD pattern? I thought we just took profit at 61.8 instead of a trailing stop.
  • #645
  • Jan 5, 2013 12:21pm Jan 5, 2013 12:21pm
Quoting Starry
For the first chart, isnt this an aggressive ABCD buy pattern? The AB leg only retraces to 50%, letting it be a potential bat, but the BC leg doesnt retrace far enough to be a bat (it only goes between 50 and 38.2, it should be beween 61.8 and 78.6).

For an ABCD, it barely closes below the 78.6, so maybe instead its an AB = CD.


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I think you answered your own question. First chart is not a C buy according to Mr Pips rules. To buy at C you need a close in the 61.8-78 zone. (post 628)If it does anything else between 38 and 78 then we are looking for a AB=CD.
Also please label your swings so we can see what you have as ABCD
Barry
  • #646
  • Jan 5, 2013 12:28pm Jan 5, 2013 12:28pm
Quoting Davit
Mr Pip
Let me try if I understand difference of XABCD VS AB=CD
X major swing AB C retrace ideally .618 but invalid if closes above .786 if this happens we might be looking double top or double down.D is ideally at 127.2 (measured from BC)but can extend longer even 1.618 at which point becomes PRZ
CD should be at least 127.2 shorter then this invalidates the pattern.

AB=CD
AS the formula suggest AB should be equal to CD and if CD is longer then AB then invalidates the pattern could become XABCD
B to C ideally should be .618 but no more then .786...
There really is no XABCD. If there's an X leg then it has the potential of becoming one of the other patterns.
AB=CD? read post 628 again but sounds like you have it. To be a valid ABCD swing C has to reach the fib 61.8 of AB. Otherwise you are looking for AB=CD
Barry
  • #647
  • Jan 5, 2013 12:33pm Jan 5, 2013 12:33pm
Quoting Starry
Mr pip,
What does trail stop to structure +- 10 pips mean in the ABCD pattern? I thought we just took profit at 61.8 instead of a trailing stop.
Yes your tp is the 61.8 of AD. I think Mr Pip means that if you want to stay in the trade longer because you think it will go further, then that's the way to trail your stop to the next structure (S/R level).
Barry
  • #648
  • Jan 5, 2013 1:04pm Jan 5, 2013 1:04pm
Quoting Bary
There really is no XABCD. If there's an X leg then it has the potential of becoming one of the other patterns.
AB=CD? read post 628 again but sounds like you have it. To be a valid ABCD swing C has to reach the fib 61.8 of AB. Otherwise you are looking for AB=CD
I disagree with you. C ideally to reach 618 but can't be higher then 786 however Mr. Pip said
Quote from his manual
Note: The BC move remains valid as long as there is at least a 61.8% retracement of AB and there is not a candle close beyond the 78.6% retracement of AB.

Note At least not less is invalid. This is confirmed by Larry P. 38.2 makes it an aggressive pattern.
In trading, you have to be defensive and aggressive at the same time
  • #649
  • Jan 5, 2013 1:06pm Jan 5, 2013 1:06pm
Did I saw well?
Any thoughts?
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  • #650
  • Jan 5, 2013 1:19pm Jan 5, 2013 1:19pm
Sometimes someone would ask me how I did, the answer was crystal ball. Did not mean any harm, but did not know it was already discovered, so do not know what name to give


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  • #651
  • Jan 5, 2013 1:30pm Jan 5, 2013 1:30pm
My problem is that it has not yet set a standard scale of BC but wants it seems to me that has to do with market sentiment. But if anyone has an opinion please share!
  • #652
  • Jan 5, 2013 1:46pm Jan 5, 2013 1:46pm
The difference in feeling is in the range of BC
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  • #653
  • Jan 5, 2013 1:47pm Jan 5, 2013 1:47pm
Quoting Davit
I disagree with you. C ideally to reach 618 but can't be higher then 786 however Mr. Pip said
Quote from his manual
Note: The BC move remains valid as long as there is at least a 61.8% retracement of AB and there is not a candle close beyond the 78.6% retracement of AB.

Note At least not less is invalid. This is confirmed...
Are we not saying the same thing? Maybe I miss understood your original question.
Barry
  • #654
  • Jan 5, 2013 2:00pm Jan 5, 2013 2:00pm
Quoting IberoForex
The difference in feeling is in the range of BC
What time frame what pair?
Barry
  • #655
  • Jan 5, 2013 2:09pm Jan 5, 2013 2:09pm
For me, it usually goes for anyone!
But, in the case EUR / GBP 1H.
  • #656
  • Jan 5, 2013 2:49pm Jan 5, 2013 2:49pm
Quoting IberoForex
For me, it usually goes for anyone!
But, in the case EUR / GBP 1H.
It helps if we know so we can duplicate your chart and take a closer look. Also label your swings.
Yes we can probable figure it out but the more detail the better.
Look like a valid AB=CD pattern. Looking at Mr Pips rules it doesn't seem to match up to any other pattern. Either way the PRZ should be the same as long as price doesn't make a new high. IMHO
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Barry
  • #657
  • Jan 5, 2013 3:28pm Jan 5, 2013 3:28pm
That's why I'm following!
I saw it alone!
If I can improve, much better for me!
This is why I take long positions, what I lack is knowing when to exit and enter!
  • #658
  • Jan 5, 2013 4:00pm Jan 5, 2013 4:00pm
But it does not work at 100%!

For me, it Usually goes for anyone!
But, in the case EUR / USD 1H.
  • #659
  • Jan 5, 2013 7:30pm Jan 5, 2013 7:30pm
ratio is just a ratio ...
history is just a history
timing is just a time

let's combine them and having fun on it
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not euphoria follower
  • #660
  • Jan 5, 2013 7:46pm Jan 5, 2013 7:46pm
depends on ourown bias IMHO

if we're bearish bias... just go ahead for short

if we're bullish bias ... let them retrace a bit to confirm there is real support in A. and Long ( if there is confirmation )

as along as they fit with our money management.......get it hehehehe


Quoting NuNix
Do you short in this zone?
not euphoria follower
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