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Ratios & Harmonics: a Different Way to Trade

  • #3,001
  • Feb 18, 2013 6:39pm Feb 18, 2013 6:39pm
Quoting Starry
sorry, yes it looks like an abcd though i would put the structure above the prz.... looks to me like you did it a ok
Yay!
  • #3,002
  • Feb 18, 2013 6:47pm Feb 18, 2013 6:47pm
I remember a while back when reading through the thread Mr Pip saying something along the lines of - look for price action in the PRZ zone to filter out the bad trades.

But the trade plan says to enter once price reaches the 127.2% extension. So it would be too late to look at price action in the PRZ to filter out bad trades since we are already in the trade once it hits 127.2% extension??

I could be wrong and might have just dreamt that up. But I'm pretty sure that was the idea.

So where and when during the trade are we analyzing price action to filter our trades?
  • #3,003
  • Feb 18, 2013 6:51pm Feb 18, 2013 6:51pm
Quoting nomadic123
I remember a while back when reading through the thread Mr Pip saying something along the lines of - look for price action in the PRZ zone to filter out the bad trades.

But the trade plan says to enter once price reaches the 127.2% extension. So it would be too late to look at price action in the PRZ to filter out bad trades since we are already in the trade once it hits 127.2% extension??

I could be wrong and might have just dreamt that up. But I'm pretty sure that was the idea.

So where and when during the trade are we analyzing price action...
im not sure, haven't really focused on price action in PRZ, I have mostly been practicing drawing general PRZs consisting of various confluences, in which case i would enter when price entered the PRZ.... he mentioned somewhere that he doesnt do that anymore, he waits for price to enter prz and watches price action (so he doesnt do a pending order), but not sure exactly what hes looking for ....
  • #3,004
  • Feb 18, 2013 6:54pm Feb 18, 2013 6:54pm
Also the trade plan for ABCD says:

"The D point remains valid as long as there is at least a 127.2% extension of AB there is not a candle close beyond the 161.8% of AB."

But if we got into the trade at 127.2%, placed our stop 10 pips above 161.8%, and then priced closed above the 161.8% should we close the position? or let it run until stop is hit hoping it would turn back before that happens?

I know I should be adapting this trade plan to my own - but since Mr Pips has proven to work I'd like to fully understand that first before adapting anything.
  • #3,005
  • Feb 18, 2013 6:55pm Feb 18, 2013 6:55pm
Quoting Starry
im not sure, haven't really focused on price action in PRZ, I have mostly been practicing drawing general PRZs consisting of various confluences, in which case i would enter when price entered the PRZ.... he mentioned somewhere that he doesnt do that anymore, he waits for price to enter prz and watches price action (so he doesnt do a pending order), but not sure exactly what hes looking for ....
Oh ok... thanks for clarification.
  • #3,006
  • Edited 7:27pm Feb 18, 2013 7:01pm | Edited 7:27pm
Quoting nomadic123
Also the trade plan for ABCD says:

"The D point remains valid as long as there is at least a 127.2% extension of AB there is not a candle close beyond the 161.8% of AB."

But if we got into the trade at 127.2%, placed our stop 10 pips above 161.8%, and then priced closed above the 161.8% should we close the position? or let it run until stop is hit hoping it would turn back before that happens?

I know I should be adapting this trade plan to my own - but since Mr Pips has proven to work I'd like to fully understand that first before adapting...
in this case, your prz is the 138-161 zone , not the 127-138, so you need to take that into consideration. so, i forgot, your prz is technically an ab = cd, because as you can see the retracement is between 50 and 61. an abcd has a retracement 61.8-78.6, but an ab = cd is still tradeable you just need other harmonic confluences....

lol sorry i forgot that rule, its not an abcd so you wouldnt use those abcd rules ..... as you can see, if it retraces from 50 - 61, the confluence of the impulse and the fib extension lies between the 138 -161 zone.

Attached Image (click to enlarge)
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also, one thing in the chart that hasnt been mentioned is that your prz is very near the 61.8 zone for a large aggressive abc sell, so in this case you may take that trade instead (and your prz would be different thatn the abcd you formed).

In addition, i imagine price will not go up immediately to your prz. it will pause, and may even dip down. if it does, your prz will need to be readjusted, it is no longer an ab=cd, but is rather just a general prz .....

ill just let mr pip explain
  • #3,007
  • Edited 9:56pm Feb 18, 2013 9:43pm | Edited 9:56pm
new prz .... still new at this ...

blah, i dont like audusd i give up..... whatever night

too many fibs... must simplify .... bam.... now i give up

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  • #3,008
  • Feb 18, 2013 11:28pm Feb 18, 2013 11:28pm
Quoting Starry
in this case, your prz is the 138-161 zone , not the 127-138, so you need to take that into consideration. so, i forgot, your prz is technically an ab = cd, because as you can see the retracement is between 50 and 61. an abcd has a retracement 61.8-78.6, but an ab = cd is still tradeable you just need other harmonic confluences....

lol sorry i forgot that rule, its not an abcd so you wouldnt use those abcd rules ..... as you can see, if it retraces from 50 - 61, the confluence of the impulse and the fib extension lies between the 138...

Starry, looks like you are getting confused.
Better to go back to the basic structure of harmonics.
Print out the "Advance Pattern Reference Guide", and look at it each day in the morning and night time and refer to it before and after you put in your fib.
I do this as well be referring to the "Advance Pattern Reference Guide" as an easy reference.

When you draw too many fibs, it does get confusing, and I also done the same when I have too many fib lines, best is to delete them.
Focus on the Main Swing still as a starting point.
If a fib line you drawn does not look like a Main Swing or Dominant Swing, then delete that fib.
And in your case, as mentioned before, you may want to go to a higher time frame or more ticks to see a clearer picture.

It is good to see you are really giving this fib thing a go with all your charts. Do try to keep it simple still with the fib lines.
  • #3,009
  • Feb 19, 2013 12:06am Feb 19, 2013 12:06am
Quoting nomadic123
So I THINK this is a valid ABCD reversal pattern.

AUD/USD. 1 hr.

Am I correct?

Mr Pip I would love some feedback so I know if I'm looking at this all wrong. Trying to get the ABCD patterns down first, then will work on identifying the Gartley.


Nomadic, my A/U H1 chart showing the potential ABCD based on my understanding of the"Advance Pattern Reference Guide" and the "Rules Of Engagement".
Hope you also refer to those documents before and after you put on your fib lines.


PRZ is between 127% and 138%, and anywhere within this PRZ is good Entry point for a Short in this example.

SL is 162% +/- 10-pips depending on your time frame.

If you are watching the screen when the price is near 127%, then you may want to watch Price Action while you are at the computer before you decide whether you want to enter or not at 127% or 138%.

If you are NOT watching the screen, and you are confident of your price levels of 127%, you may want to place an automatic entry order as you are away from your computer.


If price is beyond 162% and less than the Stop Loss, and you are watching it at that time, it is up to you if you want to exit the position manually, or let price play out to see what happen.

If price goes beyond 162% on H1 timeframe price may still close below 162% meaning your entry is still OK if it did not hit the Stop Loss first, and may end up in profit later on.

Also 10-pips on a H1 timeframe is not much, so if it goes beyond 162% and you are not watching it, just let it hit the SL if that what happens.

Note that I am not saying whether this is a good or bad ABCD example, I am just using it to show the PRZ and the Stop Loss if that was what you see as an ABCD.

Hope this clarify and explains your A/U H1 example.


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  • #3,010
  • Feb 19, 2013 12:30am Feb 19, 2013 12:30am
For A/U H1, this is how I would see it for an Aggressive ABC-Short.

I will not be trading in A/U, this is just an example to show how I may see it as a different pattern using just ABC with the Main Swing, instead of ABCD.

Attached Image (click to enlarge)
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  • #3,011
  • Feb 19, 2013 12:38am Feb 19, 2013 12:38am
Quoting foxybunny
For A/U H1, this is how I would see it for an Aggressive ABC-Short.

I will not be trading in A/U, this is just an example to show how I may see it as a different pattern using just ABC with the Main Swing, instead of ABCD.

Attachment

Good job and explanation. Was going to post and you beat me to it. I think Starry is on the right track.
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The world you desire can be won. It exists.. it is real.. it is possible..
  • #3,012
  • Feb 19, 2013 2:33am Feb 19, 2013 2:33am
Hi,
I'm not sure if this has been covered, if you decide to do an aggresive c sell/buy, where would the stop loss be ? Would I be right in saying it may be 10 pips from 78.6 or would it still go 10 pips from A. (pending time frame). I hope what im asking makes sense.

Thanks,

Has anyone been practicing the exercise that Mr. PIP gave us with Price action ?. (from the video of price action). Sort of finding it hard but will still keep trying to do it.

Quoting foxybunny
For A/U H1, this is how I would see it for an Aggressive ABC-Short.

I will not be trading in A/U, this is just an example to show how I may see it as a different pattern using just ABC with the Main Swing, instead of ABCD.

Attachment
It's not about how much you make, it's about how much you don't lose
  • #3,013
  • Feb 19, 2013 3:02am Feb 19, 2013 3:02am
Quoting martyhype
Hi,
I'm not sure if this has been covered, if you decide to do an aggresive c sell/buy, where would the stop loss be ? Would I be right in saying it may be 10 pips from 78.6 or would it still go 10 pips from A. (pending time frame). I hope what im asking makes sense.

Thanks,

Has anyone been practicing the exercise that Mr. PIP gave us with Price action ?. (from the video of price action). Sort of finding it hard but will still keep trying to do it.

Do refer to the "Rules of Engagement" under "Aggressive C Buys/Sells".

If you choose to follow it, it shows "Simple Rules" for Aggressive-C where Stop Placement is +/-10pips from point-A.


To put 10-pips from 78.6 as a SL, I believe that would be too tight for Stop Loss.

For me to set such SL, I prefer to put X-pips away from 88.6% OR X-pips away from point-A.
  • #3,014
  • Feb 19, 2013 3:33am Feb 19, 2013 3:33am
Quoting foxybunny
Nomadic, my A/U H1 chart showing the potential ABCD based on my understanding of the"Advance Pattern Reference Guide" and the "Rules Of Engagement".
Hope you also refer to those documents before and after you put on your fib lines.


PRZ is between 127% and 138%, and anywhere within this PRZ is good Entry point for a Short in this example.

SL is 162% +/- 10-pips depending on your time frame.

If you are watching the screen when the price is near 127%, then you may want to watch Price Action while you are at the computer before you decide...
Great explanation foxybunny. Thanks for clearing that up.

I have been referring to the rules of engagement constantly so I'm pretty sure I'll have them committed to memory soon. Its now just a matter of training my eye to watch for the patterns emerging.

Also I thought the PRZ was between the 127.2 and 161.8 - not the 127.2 and 138.2. Was just looking for something to back that up in the ROE but no luck. If anyone could confirm that would be great
  • #3,015
  • Feb 19, 2013 4:00am Feb 19, 2013 4:00am
Ok how about this setup?

USD/JPY. 5 min.

Agressive c cell short.
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  • #3,016
  • Feb 19, 2013 4:11am Feb 19, 2013 4:11am
Thanks for your help.


Quoting foxybunny
Do refer to the "Rules of Engagement" under "Aggressive C Buys/Sells".

If you choose to follow it, it shows "Simple Rules" for Aggressive-C where Stop Placement is +/-10pips from point-A.


To put 10-pips from 78.6 as a SL, I believe that would be too tight for Stop Loss.

For me to set such SL, I prefer to put X-pips away from 88.6% OR X-pips away from point-A.
It's not about how much you make, it's about how much you don't lose
  • #3,017
  • Feb 19, 2013 4:34am Feb 19, 2013 4:34am
To further what foxybunny has stated, when placing the SL I believe consideration must also be given to the size of the swing you are dealing with.
  • #3,018
  • Feb 19, 2013 5:00am Feb 19, 2013 5:00am
Quoting Mr. Pip
Price action isn't only about the candles it's also about structure. This market is screaming bearish strength and bullish weakness. We need to pay attention to these visual clues so that we don't trade into weakness. This is how setups are filtered. Nothing about this market says you should be looking for any long positions. I had to use a 5 min chart as it was the closest thing I could find to your data.
I sort of see what you are saying but don't really get it. I referred back to your aggressive C sell you explained in the video, between the B and C leg you can see PA moving in waves creating HH and HL. Not sure what is so different with my chart making it an invalid buy.
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  • #3,019
  • Feb 19, 2013 5:07am Feb 19, 2013 5:07am
Quoting nomadic123
Great explanation foxybunny. Thanks for clearing that up.

I have been referring to the rules of engagement constantly so I'm pretty sure I'll have them committed to memory soon. Its now just a matter of training my eye to watch for the patterns emerging.

Also I thought the PRZ was between the 127.2 and 161.8 - not the 127.2 and 138.2. Was just looking for something to back that up in the ROE but no luck. If anyone could confirm that would be great

Also I thought the PRZ was between the 127.2 and 161.8 - not the 127.2 and 138.2. Was just looking for something to back that up in the ROE but no luck. If anyone could confirm that would be great.


Print out the 2 documents so it is easier to read.

Already confirmed.

Refer to "Advance Pattern Reference Guide", and just look only at the ABCD Pattern, you will see the shaded box(PRZ) is around 127% - 138%.
There is no mention of 162% here in the PRZ.

Refer to "Rules of Engagement", ABCD Pattern, specifically "Criteria 2", re-read this many times and draw fib lines, then you will understand.
There are 2 main parts here, one is around 127% of AB, second part is around 138% to 162% of BC for extra confluence.

Basically, Mr. Pip done excellent job with the documentation of the basic main patterns, people just need to re-read more times before they may understand it fully.
  • #3,020
  • Feb 19, 2013 6:05am Feb 19, 2013 6:05am
Ok I'm going to keep posting these until I nail it.

Feel free to critique.

EUR/GBP. 5 min. Aggressive C Cell.
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