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Ratios & Harmonics: a Different Way to Trade

  • #3,381
  • Mar 7, 2013 10:01am Mar 7, 2013 10:01am
EURUSD M5. The orange fib is an ABCD which went to PRZ with a boost from the news. The brown fib is an AB=CD. Agressive "C" trades reached TP in both cases. A "D" short would have been a loser on the orange fib and at BE on the brown fib. I did not short at either "D" due to bullish momentum. Possible aggressive "C" long coming on the pink fib.

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  • #3,382
  • Mar 7, 2013 10:07am Mar 7, 2013 10:07am
Quoting jack h
EURUSD M5. The orange fib is an ABCD which went to PRZ with a boost from the news. The brown fib is an AB=CD. Agressive "C" trades reached TP in both cases. A "D" short would have been a loser on the orange fib and at BE on the brown fib. I did not short at either D due to bullish momentum. Possible aggressive "C" long coming on the pink fib.

Attachment
Uff... I don't know, sometimes aggressive C is bad (see my posts above), sometimes aggressive C is the only winning way to trade.
How can we choose? Do you think is better to trade both (aggressive C and D) because of their R:R > 1:1?

I've taken only aggressive C with order flow in my favour, and resulted in loss...
  • #3,383
  • Mar 7, 2013 11:06am Mar 7, 2013 11:06am
Quoting lucariga
Uff... I don't know, sometimes aggressive C is bad (see my posts above), sometimes aggressive C is the only winning way to trade.
How can we choose? Do you think is better to trade both (aggressive C and D) because of their R:R > 1:1?

I've taken only aggressive C with order flow in my favour, and resulted in loss...
For now I can suggest you to put your stop loss 1-2 Pip above 786 level. Based on statistic, Price have about 85% to reach 100AB if hit 786 level. So you will have a r:r = 3.5 approximately if your take profit is at 0AB level. Also Mr. Pip said that if a candle closes beyond 786 level, then price has a high probability to reach 100AB. Don't give up, Eur/Usd is a bit tricky in this period

Cheers
  • #3,384
  • Mar 7, 2013 11:26am Mar 7, 2013 11:26am
[quote=lucariga;6498737]...And this is the 3rd loss in a row. Now I'm sure I'm missing something.
Hey MR PIP, where are you?
HHHHEEEELLLLLPPPPPP!!!!!

Refine your entries...
Once you get to your PRZ, wait, go to a small time Frame, I go as small as 15 seconds....let the pair react to that prz...see it bounce, wait, see it come back against you (but you are not invested yet...)...usually it does...see where the big Boys would love to hunt stops...try to smell their moves...
I put an order either on a mini fractal, mini trend line...or even at the stop hunting area...it doesn´t always work, but it helps...
  • #3,385
  • Mar 7, 2013 11:29am Mar 7, 2013 11:29am
Quoting dibo90
For now I can suggest you to put your stop loss 1-2 Pip above 786 level. Based on statistic, Price have about 85% to reach 100AB if hit 786 level. So you will have a r:r = 3.5 approximately if your take profit is at 0AB level. Also Mr. Pip said that if a candle closes beyond 786 level, then price has a high probability to reach 100AB. Don't give up, Eur/Usd is a bit tricky in this period

Cheers
I'll not give up untill my account won't...
I hope in a MR Pip intervention to explain me what I'm doing wrong...
  • #3,386
  • Mar 7, 2013 11:46am Mar 7, 2013 11:46am
Quoting lucariga
Uff... I don't know, sometimes aggressive C is bad (see my posts above), sometimes aggressive C is the only winning way to trade.
How can we choose? Do you think is better to trade both (aggressive C and D) because of their R:R > 1:1?

I've taken only aggressive C with order flow in my favour, and resulted in loss...
Based on some primitive statistics, the prob of winning is about 60% on Agg. C's (with human error closer to 50%) the probability of 3 losses is: .50 x .50 x .50= 12.5% chance of 3 losses in a row. Rare but normal statistical drawdowns. Stick in there if your wins are 1.5 times your losses you'll make it up in only 2 wins.
  • #3,387
  • Mar 7, 2013 1:58pm Mar 7, 2013 1:58pm
Hi Mr. Pip.

i would be delighted if you could share your thoughts. since, my thinking are and based on my eu chart from earlier today. currently latest price is about to test top trend line. if we get hh and candle opens and closes above then i hope PA will continue up. 38% still is R. i will short if price action is weak. if strong then i will wait for 78% and short.

i am also thinking about taking advantage of the quicker moves on 5 - 15 minute charts including the bigger 4 hour move.

what strategy would you implement here?

kind regards,
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  • #3,388
  • Mar 7, 2013 2:40pm Mar 7, 2013 2:40pm
Quoting lucariga
...And this is the 3rd loss in a row. Now I'm sure I'm missing something.
Hey MR PIP, where are you?
HHHHEEEELLLLLPPPPPP!!!!!

USDJPY 1HR

Attachment
I don't think you did anything wrong on this trade. There's even an AB=CD completion in the C sell zone for confluence. I know this is in hinesight but I would have moved to BE or got out when PA told me to do so, when price failed to make a new LL and then made a new structure high.
So money management and reading PA might make your losing trades small or even BE. Keep trying your efforts will be rewarded.
Barry
  • #3,389
  • Mar 7, 2013 2:59pm Mar 7, 2013 2:59pm
Quoting Bary
I don't think you did anything wrong on this trade. There's even an AB=CD completion in the C sell zone for confluence. I know this is in hinesight but I would have moved to BE or got out when PA told me to do so, when price failed to make a new LL and then made a new structure high.
So money management and reading PA might make your losing trades small or even BE. Keep trying your efforts will be rewarded.
Unfortunately I can't be in front of computer all day long due to my job. So I decided to choose the H1 time frame because it requires not so much screen time.
Anyway I'd have mooved my SL to BE, according to Mr Pip's rules, as soon as price would have reached the 38% .... but it never did.
I'm trying to follow Mr Pip's rules LITTERALLY because I think that his rules are based upon years of experience.
Let's see if I'll be profitable too. I'm just frightfully cause of the presence of Mr Pip became discontinued. I hope he'll come back in no time.
  • #3,390
  • Mar 7, 2013 3:18pm Mar 7, 2013 3:18pm
I will continue with;
It seams some traders are just entering trades blindly in the zones identified by ratios and harmonics.
This only identifies the areas where price may stall or reverse. It doesn't tell us that it will or that price will even make it to that zone.

We don't just enter a trade that makes it into a zone that you've identified, you have to qualify the entry.

When I'm considering to get into a trade, whether it be a aggressive C or ABCD completion(PRZ), I have to have strong confluence. Strong S/R (structure), ratios, harmonics and ......of course PA telling you price may reverse.
Also, some of the highest probability trades come from a retest of the level I'm looking to trade. (See my chart from yesterday)
The hard part about trading is not the basic system, I can identify zones all day long, but being able to pick the high probability entries takes alot of practice and live screen time. Be patient, not every zone is tradable. You know the old saying: Don't swing at every pitch, wait for the perfect one.
Barry
  • #3,391
  • Mar 7, 2013 4:07pm Mar 7, 2013 4:07pm
Quoting lucariga
Unfortunately I can't be in front of computer all day long due to my job. So I decided to choose the H1 time frame because it requires not so much screen time.
Anyway I'd have mooved my SL to BE, according to Mr Pip's rules, as soon as price would have reached the 38% .... but it never did.
I'm trying to follow Mr Pip's rules LITTERALLY because I think that his rules are based upon years of experience.
Let's see if I'll be profitable too. I'm just frightfully cause of the presence of Mr Pip became discontinued. I hope he'll come back in no time....
Mr Pip is very busy, I'm sure he'll drop in when he can.
I know he would tell you that he gave us all basic rules that he has fine tuned over the years. Start your trading following these rules. As us traders gain more experience with these rules we can fine tune/modify them to fit our own style. As you can see a few traders have already. He would also say and actually has said that PA is king and PA will help you in and out of trades.
So moving your SL early is part of trade management, and will be different for each trader. If you stick with Mr Pip's rules you will be fine in the long run. You will eventually learn PA and may change the way you look at trades.

Also I can tell you that reading PA helps Mr Pip pick the best trades and is a large part of Mr Pip's success.

Being able to only look at market once in a while makes trading more difficult and will take longer to master PA but keep at it!
I hope this helps. If anyone has a specific questions I'll be glad to try to answer.
Barry
  • #3,392
  • Mar 8, 2013 1:07am Mar 8, 2013 1:07am
And this is the fourth...
Here I've had strong confluence of Price Action (double top) + Big market structure + Round Number + Fibonacci Ratios + Aggressive C with the trend in my favour.

If you advice to pick just the BEST setups, I can't immagine a trade better then this. Anyway LOST.
I have no more words to say... I'm feeling a little bit defeated.

GBPJPY 1H

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  • #3,393
  • Mar 8, 2013 1:44am Mar 8, 2013 1:44am
Quoting jaksasquatch
Based on some primitive statistics, the prob of winning is about 60% on Agg. C's (with human error closer to 50%) the probability of 3 losses is: .50 x .50 x .50= 12.5% chance of 3 losses in a row. Rare but normal statistical drawdowns. Stick in there if your wins are 1.5 times your losses you'll make it up in only 2 wins.


Carefull with "primitive statistics".
I have seen some people trade AUDUSD, EURUSD, USDCHF, etc...there´s positive and negative correlations, and it varies on different time frames..

SO, you could end up going long on EURUSD and short on USDCHF on the same signal, and get stopped on both in one shot...cause those are almost exactly opposite..(most of the time)...it wouls amount to opening 2 trades on the same pair at the same time!!

Also, trading times have different results...
Guess one should run statistics on only one pair, at the same trading session, same time frame...otherwise you are just trowing chips into the roulette..
  • #3,394
  • Mar 8, 2013 1:58am Mar 8, 2013 1:58am
Quoting lucariga
And this is the fourth...
Here I've had strong confluence of Price Action (double top) + Big market structure + Round Number + Fibonacci Ratios + Aggressive C with the trend in my favour.

If you advice to pick just the BEST setups, I can't immagine a trade better then this. Anyway LOST.
I have no more words to say... I'm feeling a little bit defeated.

GBPJPY 1H

Attachment
Hi Lacuriga,

today will be non farm pay roll USA, yesterday was a moajor news release for UK. i will not be entering a trade until the data is released. Japan had 2 major news releases today. what i am trying to say is that their are times when PA/harmonics give a 50/50 situation, i try to practise discipline and avoid these trades. i want at least 60/40 situation.

ummm....i find jumping from one currency to the next is quite complicated. so i am trying to trade only eu since these take up more than 50% of the liquidity in forex. however, i still keep an eye for opportunities that jump of the chart...so i look for what is obvious.

it may be in our interest to support each other and to trade the same market, thats just a thought on my part.
choose a job you love and you will never have to work a day in your life
  • #3,395
  • Mar 8, 2013 2:46am Mar 8, 2013 2:46am
EU updated 4h chart. upside 38%. my postion is same as yesterday. though i will wait for US non farm pay roll news and jump in until 38% if news is positive. other than that alternative trade will be revealed on the lower time frames for a short. nothing is concrete here. PA and structure reveals a 50/50 here.

umm..these are my thoughts. does anyone have other probabilities?

thanks,
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choose a job you love and you will never have to work a day in your life
  • #3,396
  • Mar 8, 2013 4:00am Mar 8, 2013 4:00am
Quoting ewgcorp
Hi Lacuriga,

today will be non farm pay roll USA, yesterday was a moajor news release for UK. i will not be entering a trade until the data is released. Japan had 2 major news releases today. what i am trying to say is that their are times when PA/harmonics give a 50/50 situation, i try to practise discipline and avoid these trades. i want at least 60/40 situation.

ummm....i find jumping from one currency to the next is quite complicated. so i am trying to trade only eu since these take up more than 50% of the liquidity in forex. however,...
Thanks for your reply.

1) As for the news: Mr Pip teach to not care about it at all, and this is what I'm doing... (other than that, just to say the truth, I'm not a fundamental expert, and have traded 100% tecnichal for 2 years)
2) As I trade just the H1 time frame, I need to watch more than 1 pair to have a minimum of trades to choose.

I've tryed to pick the best ones for confluence of PA, ratios, market structure and trend.
  • #3,397
  • Edited 5:58am Mar 8, 2013 4:52am | Edited 5:58am
ewgcorp, my take on the EURUSD H4 chart:

The purple fib indicates we are at a possible C. An aggressive "C" short here would be with order flow on this timeframe. SL about 70 pips if placed above "A".

If price does fall, a long could be considered if price reaches the 61 retracement of the green fib. An aggressive "C" long there would be against order flow on this timeframe.

Attached Image (click to enlarge)
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**EDIT** price has moved above the 78 on the purple fib, If it closes above the 78 then the "C" is invalid.
  • #3,398
  • Edited 7:08am Mar 8, 2013 5:06am | Edited 7:08am
Quoting lucariga
And this is the fourth...
Here I've had strong confluence of Price Action (double top) + Big market structure + Round Number + Fibonacci Ratios + Aggressive C with the trend in my favour.

If you advice to pick just the BEST setups, I can't immagine a trade better then this. Anyway LOST.
I have no more words to say... I'm feeling a little bit defeated.

GBPJPY 1H

Attachment
Sorry you keep losing your trades. I've been there done that.
It can be difficult to choose what swing to use. The swing you picked is tradable but the larger one trumps the smaller. You can trade the smaller but you have to be aware of the larger. When I trade the smaller swing I'm watching PA closely for signs my trade will not work. IMHO the smaller swings are riskier than the larger for those reasons.
The only confluence was the structure from that last swing low. If you look even further to the left price didn't respect that RN so no help there. The double top is strong but it made a new structure high and never made a new structure low after that which would have alerted me price may not continue down. The smaller ABCD marked on my chart could also tell you price may want to go higher.

In hindsight it easy to pick apart your trade, but this is PA telling us the trade might be in trouble and to get out early.

PS: On my chart I mean which point A to use?
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Barry
  • #3,399
  • Mar 8, 2013 6:18am Mar 8, 2013 6:18am
Quoting Bary
Sorry you keep losing your trades. I've been there done that.
It can be difficult to choose what swing to use. The swing you picked is tradable but the larger one trumps the smaller. You can trade the smaller but you have to be aware of the larger. When I trade the smaller swing I'm watching PA closely for signs my trade will not work. IMHO the smaller swings are riskier than the larger for those reasons.
The only confluence was the structure from that last swing low. If you look even further to the left price didn't respect that RN so no help...
For me the 3 swings you marked are all main swings and very very very good A points, ok, they are part of a bigger swing but I think 100 people would agree (as Mr Pip said many times...lol) that they are A points.
Second than that, as you know, in this thread we must keep out subjectivity, and I think that early exit or early BE is too much subjective and couldn't be replicated for tests. for this pourpose, Mr Pip teach very rigid rules about fibo's ratios and the SL has to be moved to BE not before the 38%, otherwise the system wouldn't be replicable.
As for your little AB=CD (orABCD, I can't mesure on my ipad), I think it confirms my down trend bias, in fact at D point, prices are supposed to turn downside, but it never happened.

Cheers
  • #3,400
  • Mar 8, 2013 6:23am Mar 8, 2013 6:23am
Quoting Bary
Sorry you keep losing your trades. I've been there done that.
It can be difficult to choose what swing to use. The swing you picked is tradable but the larger one trumps the smaller. You can trade the smaller but you have to be aware of the larger. When I trade the smaller swing I'm watching PA closely for signs my trade will not work. IMHO the smaller swings are riskier than the larger for those reasons.
The only confluence was the structure from that last swing low. If you look even further to the left price didn't respect that RN so no help...
Agree with you Bary,
I trade only Aggressive C for now on Eur/Usd, taking a journal, and choosing the right swing is the hardest thing for me now. Personally I take the first swing and, if fail, the larger one, but in these cases Structure and PA are the queens.
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