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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

  • #2,321
  • Jan 28, 2013 5:18pm Jan 28, 2013 5:18pm
Quoting Mr. Pip
It looks like you are labeling swing highs and lows A, B, C, D, E this is not the way to identify patterns or harmonics. What you are doing is basically trading S/R which is also a safe and profitable way to trade if you have some price action experience. Look at my enty off of using your pair and timeframe from a harmonic point of view.
Mr. Pip I have to ask you about this abcd pattern on eu yen that you provide in a chart below.
Why it is a valid and you took trade on this ? I have two things that I dont see it in our rules below:

1. The C point didnt touch the 61.8% rectracement of AB ?
2. The target profit 2 by the rules is at 61.8% of AB LEG, not CD like you showed in your chart ?

I hope you understood what I meant.

Cheers
Luis
  • #2,322
  • Jan 28, 2013 5:29pm Jan 28, 2013 5:29pm
Sorry Mr. Pip if this has been covered but were you going to make a video on trading the PA within the PRZ or even aggressive C Buy/Sells? I have been away from the forums for a week or so and feel a bit behind
  • #2,323
  • Jan 28, 2013 5:50pm Jan 28, 2013 5:50pm
Quoting Rexz
Sorry Mr. Pip if this has been covered but were you going to make a video on trading the PA within the PRZ or even aggressive C Buy/Sells? I have been away from the forums for a week or so and feel a bit behind
Not yet I plan to do this this week
If you fail to plan, you plan to fail.
  • #2,324
  • Jan 28, 2013 6:05pm Jan 28, 2013 6:05pm
Ok excellent, I will look forward to that! I'm finding a lot of my trades I take end up retracing all the way to B/E before heading back off to my target so maybe some PA lessons would be great!
  • #2,325
  • Jan 28, 2013 6:30pm Jan 28, 2013 6:30pm
Quoting LuisPrinc
Mr. Pip I have to ask you about this abcd pattern on eu yen that you provide in a chart below.
Why it is a valid and you took trade on this ? I have two things that I dont see it in our rules below:

1. The C point didnt touch the 61.8% rectracement of AB ?
2. The target profit 2 by the rules is at 61.8% of AB LEG, not CD like you showed in your chart ?

I hope you understood what I meant.

Cheers
Luis
That is correct this is not an ABCD it is an AB=CB. I took the trade based on ratios and harmonics indicating a possible PRZ since it is not an ABCD and I am against order flow I trade the CD to the 61.8 correction. Does this answer your question? this is a way to identify possible market tops and bottoms.
If you fail to plan, you plan to fail.
  • #2,326
  • Jan 28, 2013 6:46pm Jan 28, 2013 6:46pm
I was wondering when you could know a correction is over, because i didn't trade some aggressive Cs because i didn't know if it was over. I was reading the book 'high probability trading strategies' by Rober C Miner, and i came across the ABC 3 wave correction pattern. The breakage of the B point signals a high probability continuation, thought it could still correct more to produce a more complex correction pattern.

Attached Image (click to enlarge)
Click to Enlarge Name: abc_correction.png Size: 223 KB
  • #2,327
  • Jan 28, 2013 7:14pm Jan 28, 2013 7:14pm
Quoting Starry
I was wondering when you could know a correction is over, because i didn't trade some aggressive Cs because i didn't know if it was over. I was reading the book 'high probability trading strategies' by Rober C Miner, and i came across the ABC 3 wave correction pattern. The breakage of the B point signals a high probability continuation, thought it could still correct more to produce a more complex correction pattern.

Attachment
Look to confluence and smaller harmonics it will be easier and non subjective.
Attached Image (click to enlarge)
Click to Enlarge Name: $EURUSD (233 Tick) 1_28_2013.jpg Size: 90 KB
If you fail to plan, you plan to fail.
  • #2,328
  • Edited 9:04pm Jan 28, 2013 8:38pm | Edited 9:04pm
ONE
what is subjective and non subjective bro ?

A uses 1M time frame to trade and draw fib,pattern etc and make profit from that

B uses 1H time frame to trade and draw fib, pattern etc and make profit from that


which one u think that non subjective one ?


confluence : they will have different "confluence"

which the better one......confluence in 1M or 1H ?


TWO

harmonics have several point to focus : A,B,C,D.

what the meaning of A, B , C and D in reality ? skip about the ratio for a while... coz once we talk about ratio..there will be lot of pattern to talk. just focus what the meaning / interpretation of A,B,C and D ?


IMHO
if we already understand what they mean... it will be easier for us to draw everything AND follow them in any time frame........

that's just for me..

d in certain time frame could be B in other time frame... and later next d in certain time frame could be C in other time frame ... and so on ...

by understanding this rithme... we can walk from one time frame to another time frame...... we're living in harmony right ? and there is no 1+1 = 2 in harmonic ...

no right or wrong in harmonics.....all about time



what about yours ?

***
posted for discussion purpose only

Quoting Mr. Pip
Look to confluence and smaller harmonics it will be easier and non subjective.
not euphoria follower
  • #2,329
  • Jan 28, 2013 8:57pm Jan 28, 2013 8:57pm
AUD/JPY possible Gartley with pinbar in PRZ, is that right?

Attached Image (click to enlarge)
Click to Enlarge Name: AJ M15 1-28 Gartley possible.png Size: 38 KB
Soar on my wings, you'll touch the hand of God, he'll make you King.
  • #2,330
  • Jan 28, 2013 9:56pm Jan 28, 2013 9:56pm
Quoting Mr. Pip
Look to confluence and smaller harmonics it will be easier and non subjective.
Thanks, but i still find deciding to use which main and dominant swing (when theyre nested) a little subjective. This simple ideal would've helped me to decide which main swing to use and then use confluence to decide where to enter.

Attached Image (click to enlarge)
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  • #2,331
  • Jan 28, 2013 10:29pm Jan 28, 2013 10:29pm
Did you see bearish AB=CD in EU H4 and D1 guys?

But I see bullish continuation in H1 tf as long as that bulls line doesn't broken
Attached Image (click to enlarge)
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Dangdut is a music of my country
  • #2,332
  • Jan 28, 2013 11:18pm Jan 28, 2013 11:18pm
Quoting Starry
Thanks, but i still find deciding to use which main and dominant swing (when theyre nested) a little subjective. This simple ideal would've helped me to decide which main swing to use and then use confluence to decide where to enter.

Attachment
Starry,
Time to go "Papa Bear" on you

You need to slow down, stop jumping around, and focus. We have seen you move currencies, change charts, bring in other people's strategies, and get confused looking for blank and white answers. You will never succeed doing this.

If you are concerned about losing money, then trade demo, but you need to just pick something and stick with it.

For example, and say this out loud, "I, Starry, am going to only trade ABCD aggressive C trades in the EURUSD using the 100 tick chart" or "I, Starry, am going to only trade Gartley Reversals in the EURJPY using the 1 minute chart" then add "Also, I will not change systems, process, ANYTHING, until I have completed 25 trades.".

As I have said before, that while Mr. Pip has very, very solid rules, he also has market experience and screen time such that he sees these patterns form in real time and can accurately determine based on Price Action and his Historical Knowledge if the trade will work. You will never do this unless you spend the necessary time watching price action without trying to understand the cause and effect. Do not concern yourself WHY a trade failed (yet), for now, draw the pattern, put on the fibs, and trade it. Then, after the 25 trades are up, go back and look at all the trades. See which worked and which did not. Then ask yourself, "why?". But if you do this every time you win (or lose) you will jump ship based on that conclusion, whether it is right or wrong.

By the way, 25 trades is very, very few, especially to determine the validity of your process. 50 would be better, 100 would be great. This takes time and perseverance without jumping around. Focus, dial it in.

Buckle up and do it my friend!
  • #2,333
  • Jan 28, 2013 11:23pm Jan 28, 2013 11:23pm
Quoting iqyu5an
ONE
what is subjective and non subjective bro ?

A uses 1M time frame to trade and draw fib,pattern etc and make profit from that

B uses 1H time frame to trade and draw fib, pattern etc and make profit from that


which one u think that non subjective one ?


confluence : they will have different "confluence"

which the better one......confluence in 1M or 1H ?


TWO

harmonics have several point to focus : A,B,C,D.

what the meaning of A, B , C and D in reality ? skip about the ratio for a while... coz once...

There is gold in this post, especially Two. Having decided that ABCD was going to be my pattern, the first thing I asked myself is "What does an ABCD represent?" and "What is the market telling me when it works, and what when it fails".

If it was possible to identify a pattern, place a trade, hit target 80% of the time, etc. someone would already have written a script, and EA, and everyone would be rich on the beach. It is not that easy, but if you can 'listen' to the markets, and trust your process based on historical data and statistics, you may be able to become profitable.

Good luck to you all!
  • #2,334
  • Jan 28, 2013 11:36pm Jan 28, 2013 11:36pm
Quoting Starry
Thanks, but i still find deciding to use which main and dominant swing (when theyre nested) a little subjective. This simple ideal would've helped me to decide which main swing to use and then use confluence to decide where to enter.

Attachment

When you have noise, it becomes harder to determine the main and dominant swing.

When you enlarge the cycle of noise, those noises becomes a wave and a swing, and becomes clearer to determine the main and dominant swing.

Try starting with short-term charts like Mr. Pip's 233-ticks( and more) and a M15 chart, then the swings become much clearer to see the main and dominant swings.
  • #2,335
  • Jan 28, 2013 11:39pm Jan 28, 2013 11:39pm
Quoting BroncoCap
Starry,
Time to go "Papa Bear" on you

You need to slow down, stop jumping around, and focus. We have seen you move currencies, change charts, bring in other people's strategies, and get confused looking for blank and white answers. You will never succeed doing this.

If you are concerned about losing money, then trade demo, but you need to just pick something and stick with it.

For example, and say this out loud, "I, Starry, am going to only trade ABCD aggressive C trades in the EURUSD using the 100 tick chart" or "I, Starry,...
Hey, mr pip never wrote all of his rules down, he filters out aggressive abc and abcds based on considerations that seem subjective to me, because he hasn't written all his rules down. He filters abcds based on offseting impulse legs due to a small harmonic change, thus moving the d point up. Not in his rules. Just yesterday he said it was looking bearish and the bulls were exhausted, so i interpreted that as meaning he was going to create a main leg that was down instead of the previous main leg that clearly contained the current down leg, making the down leg a dominant. And then i see he traded up!

Hes made many areas of confluence that aren't based on his rules, and im slowly bringing the pieces together. first profitable day today, ill know when i get there. I know why i didn't take his trades, and if i make the same mistake again, i will carefully document it and try not to make the same mistake again. there is a method to the madness, that is why im studying his charts to see how he trades. i do believe i have made some nice progress, and i just started live trading on a small account last week so i am also making those trades.

My rule will be to trade any area of general confluence, abcd, abc, i see, and filter them out willy nilly until i 'get' how mr pip does it. I will document all trades, and cross validate them to see what works and what doesnt. If i must bring a tip from someone elses strategy in, i will (and comon it was rather small! and mr pip hasnt written down all his rules anyways) I will succeed
  • #2,336
  • Jan 28, 2013 11:41pm Jan 28, 2013 11:41pm
Quoting foxybunny
When you have noise, it becomes harder to determine the main and dominant swing.

When you enlarge the cycle of noise, those noises becomes a wave and a swing, and becomes clearer to determine the main and dominant swing.

Try starting with short-term charts like Mr. Pip's 233-ticks( and more) and a M15 chart, then the swings become much clearer to see the main and dominant swings.
the problem isnt identifying them, the problem is which one to trade. i was slightly confused by mr pips comment yesterday that it looked like the bulls were exhausting, and i swear he drew a main leg that was down. I would have identified the main leg as up, and the dominant as down, because the down leg was still contained in the main leg.
  • #2,337
  • Jan 28, 2013 11:42pm Jan 28, 2013 11:42pm
Good night all and thanks for all the tips this is a really good thread with people who are very helpful
  • #2,338
  • Jan 28, 2013 11:54pm Jan 28, 2013 11:54pm
Quoting dibo90
Hi everyone!
First of all I want to thank Mr. Pip for opening this thread. I really appreciate your kindness to share your methodology. I'm also an harmonic trader (novice) and your posts were/are very useful. I have almost finished reading the entire thread and I have a few questions about your smooth MM that I'm not sure I've understand, since english is not my first language:

1) What do you think about this kind of Money Management:

A) Decide how much you're willing to loss for each Pattern and this value must be constant,...

When you set a constant of $10 as a stop loss, this would mean you have changed your lot size more often like nano-lot, micro-lot.
Changing to different lot-size may be a hassle unless you start at the lowest lot-size currently.

Stop Loss is preferable set based on the timeframe of the chart you are trading, and the pattern, so this mean a CONSTANT $10 SL will not be adequate.

The way you are talking sounds more like you are thinking of programming trading than just discretionary trading.

Preferable is you set a SL range like $5-$35 as example and then see if the pattern SL allow that range of $5-$35.
If SL becomes much more than $35, then don't trade that pattern, just wait for next pattern.

Whether you can hit the target of 0.382 or 0.618 depends on your entry timing of whether you can really enter at 0%.
Sometimes when you enter a position, it may be late already and may already be at 0.382.
Is that possible to always enter at 0%??

It is preferred that you have at least 2 positions, one to exit with a little bit of profit, and second one (set at Break Even) with a little more profit.

Sounds like you have not started trading yet, so for you perhaps better to start with 1-position only at exit at 0.382.
After you done a few hundreds of those profitable transactions or your trading capital has build up, then you can consider at least 2-positions or more positions.

Overall, just note that Stop Loss is not just related to the patterns, it is also related to the trading capital you are willing to risk.
Once your trading capital is more and you are willing to risk more, the SL will no longer be that CONSTANT dollar value.
Stop Loss will more likely to be a percentage of the trading capital.
  • #2,339
  • Jan 28, 2013 11:57pm Jan 28, 2013 11:57pm
Quoting Starry
the problem isnt identifying them, the problem is which one to trade. i was slightly confused by mr pips comment yesterday that it looked like the bulls were exhausting, and i swear he drew a main leg that was down. I would have identified the main leg as up, and the dominant as down, because the down leg was still contained in the main leg.

Just remember that Mr Pip has an easier way to identify the Main swing, it is the swing with the Highest High and Lowest Low, and I would add an extra hint where the Main Swing is that your eyes can easily see.
  • #2,340
  • Jan 29, 2013 12:00am Jan 29, 2013 12:00am
this is example how indentifying pattern/harmonic/ whatever we call ( not mine but belongs to specific site that decribing : identification,trade, scaling the trade in prz and trade manegement. optimum target...price character in prz.. what happened when price come to the prz etc etc is also described briefly there.
http://a.yfrog.com/img738/2608/wfd.gif

we can trade in two way direction..

one that i can share ( cos it's happening in euro usd at the moment ). once we're in prz.. ( assuming we got bearish harmonic ) she will go to B point of current pattern. why B... B is old resistance. does the price go to B point directly ? No ! they love 23.6 and 38.2 fib ratio of CD leg... most of the time once they hit this ratio.. they will test and retest the PRZ again before going to B.

B point is optimum target... most of them use it as their first target. but if we love scalping : 23.6 - 50 fib ratio of cd leg should be considered as target . there will be another harmonic ( in other tf ) to hit B point

happy trading to u all.


Quoting Starry
the problem isnt identifying them, the problem is which one to trade. i was slightly confused by mr pips comment yesterday that it looked like the bulls were exhausting, and i swear he drew a main leg that was down. I would have identified the main leg as up, and the dominant as down, because the down leg was still contained in the main leg.
not euphoria follower
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