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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

  • #2,181
  • Jan 27, 2013 8:13am Jan 27, 2013 8:13am
Quoting Damien1881
Mr Pip ,
This AB=CD only just touches the 38.2, would you see this as a valid set up, Is it a trade you would consider, does the retracement level indicate more bearish strength and less likely to reverse, I like the confluence , the only thing I don't see is structure and question that if price action shows an entry at this PRZ where to put my stop?

Attachment
This is one of options that could play out but again we will see what price does. None of us know what price will do next remember it's about price reaction to the identified areas not the ratios and harmonics.

Think of it as harmonics and ratios as a map and price being a car. The map identifies the roads but the car still have to navigate and make the turns.
Attached Image (click to enlarge)
Click to Enlarge Name: $EURJPY (5 Min) 1_25_2013.jpg Size: 87 KB
If you fail to plan, you plan to fail.
  • #2,182
  • Jan 27, 2013 8:14am Jan 27, 2013 8:14am
Thank you Mr. Pip
  • #2,183
  • Jan 27, 2013 8:18am Jan 27, 2013 8:18am
Quoting forextrader9
Hello Mr. Pip, pardon me if this is already covered. In this video, at about 13:07, you say it is a ABCD pattern. How can it be one when price went all the way up above A before it crossed B in it's retracement? It bounced off below 76.8, came down and again went all the way up before crossing the B. So technically, it closed above 76.8 on it's retracement. Thank you.
Please repost this link it's incomplete so I can address your concern. Thanks.
If you fail to plan, you plan to fail.
  • #2,184
  • Jan 27, 2013 8:39am Jan 27, 2013 8:39am
Hi Mr Pip, could you please explain how to draw the first PRZ ?
Attached Image (click to enlarge)
Click to Enlarge Name: 130127_$EURJPY (5 Min) 1_25_2013_.jpg Size: 151 KB
Entry is a science, exit is an art.
  • #2,185
  • Edited 9:13am Jan 27, 2013 8:40am | Edited 9:13am
that's not prz ( red ellipse...using tf on that chart )


Quoting 4xf
Hi Mr Pip, could you please explain how to draw the first PRZ ?
not euphoria follower
  • #2,186
  • Jan 27, 2013 9:15am Jan 27, 2013 9:15am
Question for Mr Pip and all.
E/U M1
When you enter a aggressive C of a smaller swing and the SL is right inside the golden zone(61.8-78.6) of a larger swing.
What do you do?
1) enter another position
2) move 1st SL beyond A of larger swing.
3) leave stop in place and take loss.
Attached Image (click to enlarge)
Click to Enlarge Name: eu dbl c#2.gif Size: 34 KB
Barry
  • #2,187
  • Jan 27, 2013 9:20am Jan 27, 2013 9:20am
Quoting Blackeagle
Hi Mr. Pip,

I just wonder when you will cover Price Action.

Regards,
Blackeagle
Plan to cover this topic this week sometime.
If you fail to plan, you plan to fail.
  • #2,188
  • Jan 27, 2013 9:22am Jan 27, 2013 9:22am
Quoting cuchuflito
[font=Times New Roman][size=3]
Some Weekend thoughts.

I warn everyone, itmight complicate things!


Mr. Pip has, besides amastered pattern recognition, a mastered Price Action capability.

The latter is not easy toachieve...Patterns are simpler.

PriceAction "reading" is a bit of an art.



Having said that , there´s ways of improving without the luck of being so gifted: Ionce read a book from an old , legendary Master of the pits... he...mademillions.

He had 2 Basic rules.

Rule 1: trading is aloosing game .

Rule 2:...

Great post. Thank you
If you fail to plan, you plan to fail.
  • #2,189
  • Jan 27, 2013 9:22am Jan 27, 2013 9:22am
Quoting Mr. Pip
Well there are some things going on here which will bee interesting to see how price responds to them.

These are the facts of the case. We has a mainswing and a dominant swing. Price at present appears and I use this term very carefully because of market is closed and there is very little pullback by the bears on the daily candle but, there is an area of significant confluence around 1.3485 -91.

This confluence is a 127ext of the main swinga 161 ext of the dominant swing you also have structuct from back in March 2012 and a big round numbe...
Mr pip,
have you foundn that when price stalls right before a prz, it will usually pierce the PRZ (as if its building up momentum to break the prz?).
  • #2,190
  • Jan 27, 2013 9:27am Jan 27, 2013 9:27am
Quoting 4xf
Hi Mr Pip, could you please explain how to draw the first PRZ ?
Your 1st rectangle indentifies where a possible aggressive C trade opportunity will be if price makes it there. It is not a PRZ.
The 2nd rectangle identifies a PRZ of a ABCD if price makes it to your 1st rectangle. Your PRZ will change depending on where price reverse in the golden zone (61.6-78.6)
You are getting way ahead of PA. You have to wait for the BC leg to develop and price to turn down before you drawing the PRZ.
Barry
  • #2,191
  • Jan 27, 2013 9:31am Jan 27, 2013 9:31am
Quoting 4xf
Hi Mr Pip, could you please explain how to draw the first PRZ ?
My apoligies it's not a real strong PRZ but an area price can have a reaction to its a small area of potential resistence from some structure and the 50-61 fib of the swing. If price found support where it is a present the. It could find resistence in this area we are discussing.
If you fail to plan, you plan to fail.
  • #2,192
  • Jan 27, 2013 9:55am Jan 27, 2013 9:55am
Quoting Bary
Question for Mr Pip and all.
E/U M1
When you enter a aggressive C of a smaller swing and the SL is right inside the golden zone(61.8-78.6) of a larger swing.
What do you do?
1) enter another position
2) move 1st SL beyond A of larger swing.
3) leave stop in place and take loss.
Good question Barry, this will happen from time to time and can be a bit tricky but at the same time it presents an great opportunity to capitalize on both patterns. I'm of the opinion that the larger patterns trump the smaller ones but this of course depends on the timeframe you trade. What I mean is there could be patterns within pattern that may be tradable and why miss the opportunity. Here you have that example. The larger ABCD may be more evident on a larger timeframe and the smaller one may not be visible on the larger. They both compliment each other put post some challenges as far as entry and stop considerations.

You would have to address this in your trade plan and what action you would take. I can tell you that if you want to take advantage of both you could scale into both trades. Open half of a position at the at the first aggressive C and another half at the bigger aggressive C. This is difficult to accomplish most of the time because in real time you have no idea that this will happen unless you have some structure that could lend you some potential clues that price might follow this potential path. You could also determine that this will happen and want to have a choice to trade this and therefore pre plan this into you position sizing to have the funds avail if the setup occurs.
If you fail to plan, you plan to fail.
  • #2,193
  • Jan 27, 2013 9:56am Jan 27, 2013 9:56am
Quoting Starry
Mr pip,
have you foundn that when price stalls right before a prz, it will usually pierce the PRZ (as if its building up momentum to break the prz?).
Sometimes the longer price hangs out in a PRZ the weaker it becomes.
If you fail to plan, you plan to fail.
  • #2,194
  • Jan 27, 2013 10:28am Jan 27, 2013 10:28am
Quoting 4xf
Hi Mr Pip, could you please explain how to draw the first PRZ ?
Thank you Mr. Pip, basically, this question was from your video covering the AUD/USD ABCD trade. The below post:

http://www.youtube.com/watch?v=aMupwIOLRgk&feature=player_embedded (around 13:03 into your video) - you say it is an ABCD and not AB=CD

Post# 541 Jan 3, 2013 5:09pm (18 hr ago)

We trade what we see so news is not an issue. Taking aggressive entries at point C is fine but should be in tune with order flow. Also, take the time to step back from the pattern to see if other harmonic elements confirm your analysis with confluence. I made a video as it makes it easier and let me know if I need to touch any points further.

Entering below the 50% might help you confirm some bearish action as you are trading below the pivot of the swing but also decreases your risk reward and places you in a retail trading category. This is why we consider it and agressive C buy or sell. I will get more into this.

My deepest apologies in the video I said foxylady and it's foxybunny. My bad! also the quality is not the best. go straight to youtube and search dcastfx see if its any better.
  • #2,195
  • Jan 27, 2013 11:46am Jan 27, 2013 11:46am
Quoting forextrader9
Thank you Mr. Pip, basically, this question was from your video covering the AUD/USD ABCD trade. The below post:

http://www.youtube.com/watch?v=aMupwIOLRgk&feature=player_embedded (around 13:03 into your video) - you say it is an ABCD and not AB=CD

Post# 541 Jan 3, 2013 5:09pm (18 hr ago)

We trade what we see so news is not an issue. Taking aggressive entries at point C is fine but should be in tune with order flow. Also, take the time to step back from the pattern to see if other harmonic elements confirm your analysis with...
I just watched that video again. I believe Mr Pip was talking about a valid ABCD pattern at trade entry. He wanted to show how one might have been able to stay in the trade if someone wanted to. It looks to me that it should of been a BE trade if managed by the rules, (move SL to BE after 38% retrace),
IMHO when PA closes above the 78 or goes beyond A it puts in doubt ABCD completion and the D trade in the PRZ.
Barry
  • #2,196
  • Jan 27, 2013 11:55am Jan 27, 2013 11:55am
Mr Pip and Barry

i continue to find the patterns within patterns so fascinating. On a small time frame....the main swing at 7AM may retrace to 61 but this may only be the retracement of 50 percent on the main swing that started at 3AM or a 38 percent retracement of main swing from a few hours before that. I have been entering on the most recent main swing at 61 but cautious knowing it can turn around after small profit....so i exit after smaller profit and re-enter again after it further retraces and hits resistance. On small time frame....it helps me to know the relation of most recent main swing to the main swing a few hours earlier. This has been such an amazing learning process. Thanks again

Ed
  • #2,197
  • Jan 27, 2013 12:15pm Jan 27, 2013 12:15pm
[quote=Ed777;6396961]Mr Pip and Barry

i continue to find the patterns within patterns so fascinating.


Master those, and youré on your way to having lunch with M´r Pip and Warren... (Buffett)...just joking...

Iv´e seen some traders that make it to enter in tiny time Frames and stay in for weeks...the RR goes into the 1/50 area and better....

Forex opens opportunities of different coulours...
Having said that, I tried that and couldn´t really make it...
  • #2,198
  • Jan 27, 2013 12:45pm Jan 27, 2013 12:45pm
Hello Mr. Pip,

In your ABCD ROE:
Quote
Target 2: 61.8% retracement of AD move. When attained, trail stop to structure +/- 10 pips

Contrasting this with the Gartley ROE:
Quote
Target 2: 61.8% retracement of AD leg

Why when dealing with a Gartley do you not favour trailing the stop to structure (like with ABCD)?
  • #2,199
  • Edited 1:22pm Jan 27, 2013 1:10pm | Edited 1:22pm
Mr pip,
What happens when you get stopped out @ break even and then when you get stopped out it triggers another aggressive buy (second abc in this example)? I know you entered later on this example, so you wouldn't have gotten stopped out if you followed your rules.

Have you found that when you enter an aggressive buy you get stopped out only for it to continue in your direction (like the first abc in this example).

edit: i guess the first one isnt a dominant/main swing though.
Attached Image (click to enlarge)
Click to Enlarge Name: eurusd_stopped_out.png Size: 208 KB
  • #2,200
  • Jan 27, 2013 2:19pm Jan 27, 2013 2:19pm
Quoting cuchuflito
[font=Times New Roman][size=3]
Some Weekend thoughts.

I warn everyone, itmight complicate things!


Mr. Pip has, besides amastered pattern recognition, a mastered Price Action capability.

The latter is not easy toachieve...Patterns are simpler.

PriceAction "reading" is a bit of an art.



Having said that , there´s ways of improving without the luck of being so gifted: Ionce read a book from an old , legendary Master of the pits... he...mademillions.

He had 2 Basic rules.

Rule 1: trading is aloosing game .

Rule 2: master yourSystem,and...
Good idea! i guess we could do this by
(a) identifying a large harmonic structure that hasn't completed.
(b) identify possible turning points in the large harmonic structure (what if harmonic structure doesnt complete?)
(c) Trade in the direction of the large harmonic structure, using smaller harmonics.

Thats what someone did witih a bat on a larger timeframe, and then took profit at potential reversal zones, and i think added some along the way.
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