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Ratios & Harmonics: a Different Way to Trade

  • #3,701
  • Apr 6, 2013 2:55pm Apr 6, 2013 2:55pm
Thank you both Good2Cu and Mr.Pip very much for you taking the time to analyse my trades, I really apreciate it.

i took the B long cos it was a HL from X and there was a mini trend breakout from A to B

i took the C short cos it was a LH and a flat breakout

and the D long just for completing the pattern.

I would like to learn much more about direction of order flow, LH/ LL/ HH/ HL, structure and confluence and hope I don't disapoint you with my reasons of taking the trades I am eager for your chart Mr.Pip so that I can learn as much as I can from it

Thank you so much again

P.S. welcome back CNTrader
  • #3,702
  • Apr 6, 2013 3:28pm Apr 6, 2013 3:28pm
Hey,
maybe some of you, while you were new to harmonics also had a hard time of identifying patterns could share some tips how to make them more "visible"?
(Apart from the obvious one- "you need more screen time", that's what i'm already focusing on)
I'm asking this, because when I try to find patterns, I draw a lot of swings with fib. retracements until i find something. And it starts to feel like I'm forcing a pattern where one might not exist
  • #3,703
  • Apr 6, 2013 3:58pm Apr 6, 2013 3:58pm
Quoting prekeivis
Hey, maybe some of you, while you were new to harmonics also had a hard time of identifying patterns could share some tips how to make them more "visible"? (Apart from the obvious one- "you need more screen time", that's what i'm already focusing on) I'm asking this, because when I try to find patterns, I draw a lot of swings with fib. retracements until i find something. And it starts to feel like I'm forcing a pattern where one might not exist
This is common in the beginning. The more you practice the easier it becomes. One tip I will give you is the same as I stated in the beginning. Find the main swing and go from there. You may ask how can you better identify the main swing. Find an obvious high and low to draw your fibs. Practice this and post a chart so we can guide you.
If you fail to plan, you plan to fail.
  • #3,704
  • Apr 6, 2013 4:13pm Apr 6, 2013 4:13pm
Quoting prekeivis
Hey, maybe some of you, while you were new to harmonics also had a hard time of identifying patterns could share some tips how to make them more "visible"? (Apart from the obvious one- "you need more screen time", that's what i'm already focusing on) I'm asking this, because when I try to find patterns, I draw a lot of swings with fib. retracements until i find something. And it starts to feel like I'm forcing a pattern where one might not exist
Initially, when I started on my harmonic/ratio trading journey I was really eager trying to learn about all these cool patterns (Bat/butterfly/Crab/etccc). I opened up my chart and kept trying to identify some of these advanced patterns, most of the time disregarding more important aspects such as price action/order flow and confluence. When I finally found a tradable pattern I became really happy, thinking I was mastering harmonic trading quite well (although this was not really the case). But over time, I have come to realize that harmonic/ratio trading is a lot more than just identifying/trading advanced patterns. I am sure you will discover the same thing once you have been through countless of screen hours and your thought process changes. The last couple of weeks I went back to the basics and almost exclusively trade ABCD/AB=CD and aggressive c trades, and I can tell you my trading results have been phenomenal to say the least. I will leave you with this suggestion, don’t worry about all the other cool/advanced patterns, just stick to ABCD and AB=CD and once you master these you will be making more than enough pips. Good luck!
"The only thing I’m addicted to right now is winning."
  • #3,705
  • Apr 6, 2013 4:21pm Apr 6, 2013 4:21pm
Quoting Good2Cu
Initially, when I started on my harmonic/ratio trading journey I was really eager trying to learn about all these cool patterns (Bat/butterfly/Crab/etccc). I opened up my chart and kept trying to identify some of these advanced patterns, most of the time disregarding more important aspects such as price action/order flow and confluence. When I finally found a tradable pattern I became really happy, thinking I was mastering harmonic trading quite well (although this was not really the case). But over time, I have come to realize that harmonic/ratio...
Great advice. I hardly trade any other pattern. There is really no need the the reason I cover the ABCD first and Gartley. No real need for anything else like you say. Master those two and your results will be amazing. As mention I myself hardly ever trade anything other than an ABCD.
If you fail to plan, you plan to fail.
  • #3,706
  • Apr 6, 2013 4:31pm Apr 6, 2013 4:31pm
Thank you both Good2Cu and Mr.Pip very much for you taking the time to analyse my trades, I really apreciate it.

i took the B long cos it was a HL from X and there was a mini trend breakout from A to B

i took the C short cos it was a LH and a flat breakout

and the D long just for completing the pattern.

I would like to learn much more about direction of order flow, LH/ LL/ HH/ HL, structure and confluence and hope I don't disapoint you with my reasons of taking the trades I am eager for your chart Mr.Pip so that I can learn as much as I can from it

Thank you so much again

P.S. welcome back CNTrader


P.S. i forgot to post the chart sorry still eager for Mr.Pip's chart
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  • #3,707
  • Apr 6, 2013 4:32pm Apr 6, 2013 4:32pm
Thank you, will be sticking to your advices
  • #3,708
  • Apr 6, 2013 8:53pm Apr 6, 2013 8:53pm
[quote=DurduSM;6581125]Thank you both Good2Cu and Mr.Pip very much for you taking the time to analyse my trades, I really apreciate it. i took the B long cos it was a HL from X and there was a mini trend breakout from A to B i took the C short cos it was a LH and a flat breakout and the D long just for completing the pattern. I would like to learn much more about direction of order flow, LH/ LL/ HH/ HL, structure and confluence and hope I don't disapoint you with my reasons of taking the trades I am eager for your chart Mr.Pip so that I can learn as much as I can from it Thank you so much again P.S. welcome back CNTrader P.S. i forgot to post the chart sorry still eager for Mr.Pip's chart {image}[/quote

I present two charts the first shows the supply and demand zones and also support and resistance. As I mentioned before it is our job to find the confluence and build out case. We need to gather the facts that are present to validate our entries. Study the charts and let me know if you have any questions.
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If you fail to plan, you plan to fail.
  • #3,709
  • Apr 7, 2013 12:23am Apr 7, 2013 12:23am
hi Mr Pip, how do you find these supply and demand levels? for me they would be structure, we had impulse leg down and are expecting to brake that impuls to the downside or to the upside and get new structure. am i thinking wrong?
  • #3,710
  • Apr 7, 2013 5:29am Apr 7, 2013 5:29am
[quote=Mr. Pip;6581261]
Quoting DurduSM
Thank you both Good2Cu and Mr.Pip very much for you taking the time to analyse my trades, I really apreciate it. i took the B long cos it was a HL from X and there was a mini trend breakout from A to B i took the C short cos it was a LH and a flat breakout and the D long just for completing the pattern. I would like to learn much more about direction of order flow, LH/ LL/ HH/ HL, structure and confluence and hope I don't disapoint you with my reasons of taking the trades I am eager for your chart Mr.Pip so that I can learn...

Thank you Mr. Pip for taking the time to explain that ratios and harmonics work best combined with sup/dem and sup/rez and that they play a very important role in this king of trading or any kind of trading for that matter.

I'll study more about this and hope that I can make you proud . Thank you again Sir
  • #3,711
  • Apr 7, 2013 6:51am Apr 7, 2013 6:51am
Quoting prekeivis
Hey, maybe some of you, while you were new to harmonics also had a hard time of identifying patterns could share some tips how to make them more "visible"? (Apart from the obvious one- "you need more screen time", that's what i'm already focusing on) I'm asking this, because when I try to find patterns, I draw a lot of swings with fib. retracements until i find something. And it starts to feel like I'm forcing a pattern where one might not exist
what i found helps and very effective in analysing any chart for what ever reason ie;( patterns, structure S/R, areas of supply/demand, etc,,)is having a "birds eye view", i mean shrink your chart so that you have loads of data ( candles) viewing, and soon with practise your eye will be trained to spot all the above.
  • #3,712
  • Apr 7, 2013 7:15am Apr 7, 2013 7:15am
Quoting Georji
what i found helps and very effective in analysing any chart for what ever reason ie;( patterns, structure S/R, areas of supply/demand, etc,,)is having a "birds eye view", i mean shrink your chart so that you have loads of data ( candles) viewing, and soon with practise your eye will be trained to spot all the above.
Great tip that's how I always start me session.
If you fail to plan, you plan to fail.
  • #3,713
  • Apr 7, 2013 12:37pm Apr 7, 2013 12:37pm
Nice pattern there. If we were trading this live I would agree with you 100% that this COULD be traded as a potential Gartley pattern. However, having 20/20 hindsight, this is a butterfly pattern simply because point D exceeded point X.

Quoting buyorsell
Hello traders, done a bit of market harmonic analysis for the recent EURUSD move on 60 min chart, any thoughts? its easy to analyse market after-all but i think if we do more analysis and back testing it would be much much easier to spot right setups on a live chart. Good weekend all {image}
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  • #3,714
  • Apr 7, 2013 12:41pm Apr 7, 2013 12:41pm
Exactly right. AB=CD are more than enough. Just got to figure out order flow.

Quoting Good2Cu
Initially, when I started on my harmonic/ratio trading journey I was really eager trying to learn about all these cool patterns (Bat/butterfly/Crab/etccc). I opened up my chart and kept trying to identify some of these advanced patterns, most of the time disregarding more important aspects such as price action/order flow and confluence. When I finally found a tradable pattern I became really happy, thinking I was mastering harmonic trading quite well (although this was not really the case). But over time, I have come to realize that harmonic/ratio...
  • #3,715
  • Apr 7, 2013 2:13pm Apr 7, 2013 2:13pm
Quoting Good2Cu
Initially, when I started on my harmonic/ratio trading journey I was really eager trying to learn about all these cool patterns (Bat/butterfly/Crab/etccc). I opened up my chart and kept trying to identify some of these advanced patterns, most of the time disregarding more important aspects such as price action/order flow and confluence. When I finally found a tradable pattern I became really happy, thinking I was mastering harmonic trading quite well (although this was not really the case). But over time, I have come to realize that harmonic/ratio...
Do you follow the rules of engagement for ABCD? The reason i ask is because you said you trade AB = CD, but there have not yet been any rules of engagement for the AB = CD . Are rules of engagement necessary or is it more necessary to learn how to trade AB = CD/any other pattern combined with order flow and structure?
  • #3,716
  • Apr 7, 2013 3:10pm Apr 7, 2013 3:10pm
Quoting Starry
Do you follow the rules of engagement for ABCD? The reason i ask is because you said you trade AB = CD, but there have not yet been any rules of engagement for the AB = CD . Are rules of engagement necessary or is it more necessary to learn how to trade AB = CD/any other pattern combined with order flow and structure?
I think that the rules of engagement are a good stepping stone to a potentially good trade. However, only taking a trade based on the rules of engagement does not provide me with enough evidence (confluence) to enter a given trade. When determining whether to take an AB=CD completion I always look at the order flow/structure/price action/ ratios/ support and resistance/etc. Only when I see that I have enough confluence, I take the trade.
So to answer your question, it is more important to learn how to trade the rules of engagement in combination with order flow/structure/price action /etc…

In addition, one cannot really make a simple set of rules of engagement for AB=CD trades, mainly because the retracements do not have to close between certain fib ratios to be valid. When looking at the rules of engagement for Gartley patterns, there are clear cut rules to where price action has to have been in order to consider it a valid Gartley pattern.
"The only thing I’m addicted to right now is winning."
  • #3,717
  • Apr 7, 2013 3:18pm Apr 7, 2013 3:18pm
Quoting Starry
Do you follow the rules of engagement for ABCD? The reason i ask is because you said you trade AB = CD, but there have not yet been any rules of engagement for the AB = CD . Are rules of engagement necessary or is it more necessary to learn how to trade AB = CD/any other pattern combined with order flow and structure?
AB=CD can be challenging to trade and on the aggressive side difficult as you would no have a clear correction point but once you become more familiar with structure, order flow, and price action this become fairly easy. The D point of these formations become easier as you have a harmonic expectation of where it could terminate. Then find the confluence and manage the trade just like a regular ABCD.
If you fail to plan, you plan to fail.
  • #3,718
  • Apr 7, 2013 3:22pm Apr 7, 2013 3:22pm
Quoting Good2Cu
I think that the rules of engagement are a good stepping stone to a potentially good trade. However, only taking a trade based on the rules of engagement does not provide me with enough evidence (confluence) to enter a given trade. When determining whether to take an AB=CD completion I always look at the order flow/structure/price action/ ratios/ support and resistance/etc. Only when I see that I have enough confluence, I take the trade. So to answer your question, it is more important to learn how to trade the rules of engagement in combination...
Excellent post it's always about order flow, structure, and price action. The ROE are guidelines. Taking trades on complete ion points alone adds risk to the trade. Listen carefully the market does speak to you.
If you fail to plan, you plan to fail.
  • #3,719
  • Apr 7, 2013 4:16pm Apr 7, 2013 4:16pm
hi, found this while learning market harmonics. we have double top, brake of structure to the downside, resistance 1.0480 aggressive C zone, Pattern completion at 78.6 so if the price gets to that zone will be looking to short the market.i am not trading yet i am just learning to build the case for entry. any comments and critisizm welcome
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  • #3,720
  • Apr 7, 2013 6:50pm Apr 7, 2013 6:50pm
Quoting Good2Cu
I think that the rules of engagement are a good stepping stone to a potentially good trade. However, only taking a trade based on the rules of engagement does not provide me with enough evidence (confluence) to enter a given trade. When determining whether to take an AB=CD completion I always look at the order flow/structure/price action/ ratios/ support and resistance/etc. Only when I see that I have enough confluence, I take the trade. So to answer your question, it is more important to learn how to trade the rules of engagement in combination...
thx! It seems that when I try to do the price action exercise, 30 minutes a day, it never seems to translate to actual trading. Im like, how long till I actually see this making some difference in my trading? My mind seems to be remembering various cases of price action and just trying to cut/paste into live trading, and its definitely not working out. Break even at best.

Any suggestions how to efficiently practice the price action 30 minutes a day? Do you guys try to think about how price correlates to structure during the exercise (I dont usually do this)? Ive been doing this.

1) Say whatever comes to mind (up or down) when you look at chart
2) Scroll to next bar
3) See if action is correct
4) Loop from 1)

Thanks mr pip and good2cu, ill gradually get there..... much harder than it looks on the surface, unfortunately
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