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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

  • #3,581
  • Mar 28, 2013 6:44am Mar 28, 2013 6:44am
Quoting gristar
Took profit with 25 pips profit. Looks like it still going down strong.

Mr Pip and all senior please advice if i did anything wrong in this trade. Thanks
Relabel PRZ. According to Mr Pip, PRZ should be at around 138.2
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  • #3,582
  • Mar 28, 2013 6:47am Mar 28, 2013 6:47am
gristar!! Excellent job no issues here. keep up the good work.
Empower Your Mind
  • #3,583
  • Mar 28, 2013 7:17am Mar 28, 2013 7:17am
I thought PRZ was from at least the 127 extension up to the 161 extension? I mean, the farther down the better but 127 is the minimum. It's in Mr. Pips ROE ABCD document.

Bary, check your PM, please.

Quoting gristar
Relabel PRZ. According to Mr Pip, PRZ should be at around 138.2
  • #3,584
  • Mar 28, 2013 9:11am Mar 28, 2013 9:11am
Quoting gristar
Relabel PRZ. According to Mr Pip, PRZ should be at around 138.2
per Mr Pips rules the BC leg should end anywhere in the purple box and not touch or crosses the 71.8 retracement,, which on your chart it did just that going a bit too deep( crossed the 71.8)
  • #3,585
  • Mar 28, 2013 9:21am Mar 28, 2013 9:21am
Quoting Georji
per Mr Pips rules the BC leg should end anywhere in the purple box and not touch or crosses the 71.8 retracement,, which on your chart it did just that going a bit too deep( crossed the 71.8)
I think you mean the 78.6
Also Mr Pip says price can go past the 78.6 but cannot close above it. On the chart shown it's hard to tell if price closed above.
Now look for some confluence or some good reversal PA in the PRZ for a better entry.
Barry
  • #3,586
  • Mar 28, 2013 9:24am Mar 28, 2013 9:24am
Quoting Georji
per Mr Pips rules the BC leg should end anywhere in the purple box and not touch or crosses the 71.8 retracement,, which on your chart it did just that going a bit too deep( crossed the 71.8)
Georji, not exactly

From Mr. Pip R.O.E:

"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"
So it can crosses the 78.6, but if the candle closes beyond 78.6, then ABCD becomes invalid.
  • #3,587
  • Mar 28, 2013 9:33am Mar 28, 2013 9:33am
Quoting shadodwel
I thought PRZ was from at least the 127 extension up to the 161 extension? I mean, the farther down the better but 127 is the minimum. It's in Mr. Pips ROE ABCD document.

Bary, check your PM, please.
Replied to PM

I thought the PRZ can be drawn from the 127-161. What we try to do is narrow that down(PRZ) with harmonics or confluence. In this case the harmonic didn't help. To find some structure in that area I had to go to an H1 chart. There is structure between 1.0570-1.0560 but it's a long ways back. Don't know if I would have used that, but looking at current price that's exactly where it reversed.
Barry
  • #3,588
  • Mar 28, 2013 9:53am Mar 28, 2013 9:53am
Hi guys.. sorry was away for dinner just now.. Some update here. Missed this trade.
Hope can learn something from it even missed.
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  • #3,589
  • Mar 28, 2013 10:13am Mar 28, 2013 10:13am
Here's my PRZ. 2 harmonics from AB=CD's. I like when the harmonic falls into the 138-161 zone. If price does make it up there I probable will not take this trade (although I will be tempted). I would feel better if I found some past structure in the zone because it's a CT trade. If price continues down it will obviously change things.
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Barry
  • #3,590
  • Mar 28, 2013 10:52am Mar 28, 2013 10:52am
Let me explain my thoughts behind the successful trade that I didn't take (trade 1) and the fail trade (trade 2) I did take. I learned from

In trade 1, at the time I was considering I saw that the trade was going with the trend. However, when I was looking to enter a trade for an aggressive C at the 61.8 retracement, I thought to myself there wasn't any confluence up at point A. Well, not entirely true, there was, but it was in my opinion was too far back to consider. So, I let the trade pass and then I noticed that point C closed beyond the 78.6 level and in my head, I invalidated the C entry and moved on. Taking a closer look, I was wrong because we are back in the zone we were in yesterday. Eh, I have to look more closely next time. The 5 minute time frame makes everything look so far apart when in reality it was only a day ago.

In trade 2, at the time I was considering, trade 1 failed so I turned point B in trade 1, into a point A on the second trade. I figured, ok, point B retraced to point A in trade 1. I waited for it to enter the 78.6 zone, noticing there was confluence there. So, I entered a short to the 127 extension on AB. I figured this was logical because of all the confluence that was there. I figured the up trend was over, and time to resume the down trend. Which, as we can see didn't happen, at the time of this post. I took a loss of 20 pips. I knew it was going to break even, which it eventually did, with BE+3.
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  • #3,591
  • Mar 28, 2013 1:19pm Mar 28, 2013 1:19pm
Quoting shadodwel
Let me explain my thoughts behind the successful trade that I didn't take (trade 1) and the fail trade (trade 2) I did take. I learned from

In trade 1, at the time I was considering I saw that the trade was going with the trend. However, when I was looking to enter a trade for an aggressive C at the 61.8 retracement, I thought to myself there wasn't any confluence up at point A. Well, not entirely true, there was, but it was in my opinion was too far back to consider. So, I let the trade pass and then I noticed that point C closed beyond the 78.6...
Trade 1: What did you mean by "there wasn't any confluence up at point A."? Weren't you considering a aggressive C which means you'd be looking for structure in the 61.8-78.6 zone, which there is none, correct? I didn't see much structure anywhere and it didn't seam to be respecting the 2800 RN.

Trade 2: It's against order flow and blew thru the sell zone. I don't see any confluence there either.
Barry
  • #3,592
  • Mar 28, 2013 8:00pm Mar 28, 2013 8:00pm
I should have reread what I wrote. I meant there wasn't any confluence up at point B. I was thinking that the probability would be greater if I were to take a counter trend trade...

Back to reread the thread and hope that confluence sinks in this time. I bought Larry Pasevento's book. Hopefully I will learn from there too. I truly believe this is the best way to trade and I really need to learn more and become a better trader.

Quoting Bary
Trade 1: What did you mean by "there wasn't any confluence up at point A."? Weren't you considering a aggressive C which means you'd be looking for structure in the 61.8-78.6 zone, which there is none, correct? I didn't see much structure anywhere and it didn't seam to be respecting the 2800 RN.

Trade 2: It's against order flow and blew thru the sell zone. I don't see any confluence there either.
  • #3,593
  • Mar 29, 2013 7:28am Mar 29, 2013 7:28am
Market seems pretty quiet today.

Just out of curiosity, are there any patterns that have a higher probability of success over others? For example, gartley > bat > abcd? Or, do they have equal probabilities?
  • #3,594
  • Mar 29, 2013 7:35am Mar 29, 2013 7:35am
Hello Traders.
I have problem with Price Action - I understand Harmonics and Ratios, but this is only area where price can move in other direction.
I saw movie created by Mr.Pip : http://www.youtube.com/watch?v=9nMXyhMgj-A but I still do not understand PA. My English is not perfect, sometimes I have problems to understand all importance. Do you know videos or books where I can learn more about PA ? or maybe Mr.Pip or someone else can create next movie with PA ? I will be very grateful.

Thank you for help
  • #3,595
  • Mar 29, 2013 8:21am Mar 29, 2013 8:21am
Quoting shadodwel
Market seems pretty quiet today.

Just out of curiosity, are there any patterns that have a higher probability of success over others? For example, gartley > bat > abcd? Or, do they have equal probabilities?
Markets are quiet today due to USA and UK banks holiday.

For the patterns, I think they have approximately the same win rate. However Mr. Pip said that the ABCD is the most common, then follow Gartley and Bat patterns. The others, which he hasn't explain yet, are less common.

Nevertheless there are more variables involved here, like structure, order flow, PA, so it would be difficult to say what is the pattern with the highest win rate, because the type of pattern is only one of the 4 variables to consider. If you have noticed, Mr. Pip rules for these patterns are more specific compared to a general harmonic pattern, because he has already pick out the gartley/bat/... that gives the highest probability of success upon all the others general gartley/bat/...
  • #3,596
  • Mar 29, 2013 8:25am Mar 29, 2013 8:25am
Quoting shadodwel
Market seems pretty quiet today.

Just out of curiosity, are there any patterns that have a higher probability of success over others? For example, gartley > bat > abcd? Or, do they have equal probabilities?
I think mr pip mentioned that he didnt view them in terms of pattern probabilities, but rather looks at it on a case by case basis. Basically, price action is what matters.
  • #3,597
  • Mar 29, 2013 8:31am Mar 29, 2013 8:31am
Quoting Sakujun
Hello Traders.
I have problem with Price Action - I understand Harmonics and Ratios, but this is only area where price can move in other direction.
I saw movie created by Mr.Pip : http://www.youtube.com/watch?v=9nMXyhMgj-A but I still do not understand PA. My English is not perfect, sometimes I have problems to understand all importance. Do you know videos or books where I can learn more about PA ? or maybe Mr.Pip or someone else can create next movie with PA ? I will be very grateful.

Thank you for help
Hi Sakujun,
Mr. Pip's PA is quiet different from the general definition of Price Action. I can tell you what I understand. He gives importance to the candle: he look at the High, at the low and at the close. Then he relates these 3 variables with the candles before, for example if a candle closes beyond the last 3 candle closes, then this would be a strong sign that bears are wining.

I can suggest you to watch the video more and more , and to make the exercise he propounded: 30 minutes a day to forecast the next candle, based only on the last candles.

Cheers!
  • #3,598
  • Mar 30, 2013 2:25am Mar 30, 2013 2:25am
Thank you Mr. Pip, this post is wonderful. I want to share a harmonic analysis of the eurusd I've done from 2003 to 2006, it's amazing how it works.
The big picture weekly chart
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The harmonic analysis in daily chart (first wave of the uptrend)
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Sorry for my english and thanks a lot.
  • #3,599
  • Mar 30, 2013 6:26am Mar 30, 2013 6:26am
Quoting dibo90
Hi Sakujun,
Mr. Pip's PA is quiet different from the general definition of Price Action. I can tell you what I understand. He gives importance to the candle: he look at the High, at the low and at the close. Then he relates these 3 variables with the candles before, for example if a candle closes beyond the last 3 candle closes, then this would be a strong sign that bears are wining.

I can suggest you to watch the video more and more , and to make the exercise he propounded: 30 minutes a day to forecast the next candle, based only on the last...
thanks dibo
  • #3,600
  • Mar 30, 2013 8:58am Mar 30, 2013 8:58am
Quoting Bary
I think you mean the 78.6
Also Mr Pip says price can go past the 78.6 but cannot close above it. On the chart shown it's hard to tell if price closed above.
Now look for some confluence or some good reversal PA in the PRZ for a better entry.
sorry,, yes i did mean 78.6
but as for the rule of ABCD pattern as it shows on that picture, i am only pointing out the rule as by the "purple box zone" drawing. so i suppose there is a conflicting message between the " writen part of the ABCD RoE and the drawing part". if one is to analyse the drawing part alone, ( supplied on the Advanced Patterns sheet by Mr Pip), then it would be right to think that the Zone is the Purple Box and anything out of that zone is invalid
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