Finally out of the shadows.
Ratios & Harmonics: a Different Way to Trade
- #3,806
- Apr 16, 2013 7:35am Apr 16, 2013 7:35am
Morning Mr. pip,
I’m taking this this trade, I am selling at confluence level with price action confirmed and retest the high again. I want to ask that when the price move down in my direction and form HH, HL, LH, LL and reach 38.2.
after that, it formed NSH, then I choose to close the trade, I wish to know that how would you manage for this trade, do you just move to breakeven or close when form NSH ? thanks ! please help to answer my question, I will appreciate
I’m taking this this trade, I am selling at confluence level with price action confirmed and retest the high again. I want to ask that when the price move down in my direction and form HH, HL, LH, LL and reach 38.2.
after that, it formed NSH, then I choose to close the trade, I wish to know that how would you manage for this trade, do you just move to breakeven or close when form NSH ? thanks ! please help to answer my question, I will appreciate
- #3,807
- Apr 16, 2013 8:57am Apr 16, 2013 8:57am
- | Joined Feb 2011 | Status: Trader | 1,204 Posts
Mr pip and others, I have a question about price action. From my experience, the way multiple price bars form near the PRZ is different each time. So a pin bar might mean something different based on the bars. What do you guys think of the price bars forming here at the 61.8 zone? I didn't trading this because it just doesnt look rigiht because it looks like a breakout formation which could go either way.
Here i have harmonic structure, demand zone, and a possible aggressive 61.8(with modified tp)
Here i have harmonic structure, demand zone, and a possible aggressive 61.8(with modified tp)
- #3,810
- Apr 16, 2013 10:03am Apr 16, 2013 10:03am
- | Joined Feb 2011 | Status: Trader | 1,204 Posts
(1) E/U Main Trend for the Day is Up. (2) You marked a nice Demand Zone and Price Action is within this zone. As long as Price Action is within this Demand Zone is an aggressive entry, and then goes above this zone it is a good sign with a conservative entry. (3) There is a 61.8% retracement down. These are 3 things that lined up nicely to take a Long when you are at the computer and you recognised this ABC-pattern, must Enter( with a SL). Whether it hits SL or TP does not matter, it is a Must Take Long entry. Starry, what other criteria are...
So I had the 61.8 and demand, but for me price action and order flow is a little tricky, so I was trying to incorporate those, specifically price action. Price action is really tricky because the way I seem to be approaching it is based on experience, not rule based.
In this case, I guessed orderflow was changing and the structure near the 61.8 looked like a triangle structure so it could break out either way. I've never seen this before so I decided to pass.
I consider the mini structure and the bars at and approaching the trading zone to be part of price action, or at least this is what im experimenting with.
I suspect this view of price action isnt a very developed or useful skill for me yet, but ill figure it out.
- #3,813
- Apr 16, 2013 10:12am Apr 16, 2013 10:12am
- | Membership Revoked | Joined Jul 2010 | 9,273 Posts
Mr. Pip, thank you for the reply! I forgot to mention that the failed trade was a break even trade, and not a losing trade. As you pointed out on your chart, I moved my stop loss to break even once price breached the 38.20%.
If you fail to plan, you plan to fail.
- #3,814
- Apr 16, 2013 10:20am Apr 16, 2013 10:20am
- | Membership Revoked | Joined Jul 2010 | 9,273 Posts
If you fail to plan, you plan to fail.
- #3,815
- Apr 16, 2013 10:22am Apr 16, 2013 10:22am
- | Membership Revoked | Joined Jul 2010 | 9,273 Posts
If you fail to plan, you plan to fail.
- #3,818
- Apr 16, 2013 11:27am Apr 16, 2013 11:27am
- | Membership Revoked | Joined Jul 2010 | 9,273 Posts
Morning Mr. pip, I’m taking this this trade, I am selling at confluence level with price action confirmed and retest the high again. I want to ask that when the price move down in my direction and form HH, HL, LH, LL and reach 38.2. after that, it formed NSH, then I choose to close the trade, I wish to know that how would you manage for this trade, do you just move to breakeven or close when form NSH ? thanks ! please help to answer my question, I will appreciate
Let's simplify the terminology a bit. Structure is composed of NSH (New Structure High), LH (Lower High), NSL (New Structure Low), and HL (Higher Low). A LL is nothing more than a NSL.
At first you are trading a huge pattern that is more relevant to the larger more extended swings. This is what considering the context is all about. As you can notice the legs of your pattern had many corrective swings within them but you used the main highs and lows to identify them. Your process should have been the same for the management of your trade. It is unreasonable to expect otherwise. Price will not move in a straight line to your profit target but considering the context of the swings and demensions of your pattern could of kept you analyzing the proper points.
Your assestment of the NSH that took you out of the trade was nothing more than smaller corrective swings inside a larger more important swing as far as context is concerned. I am presenting a chart that expains this further. The view is zoomed in so you can see what I mean.
Lets first look at the smaller swings as they were you guide to exiting your trade. These are not in the context of your pattern as your pattern was identified buy the longer term order flow. These swings can be used to help you determine if this correction is short term or longer term or if the expectation of the longer term orderflow will hold which is the one you are interested in. The blue text shows this short term structure identification. The green lines help highlight the weakness setting in in the short term order flow and a break down of buying strength.
Structure analysis helps you identify where the market wants to go and order flow analysis tells you for how long this should continue.
As you can see the yellow arrows are the proper swings you need to analyze that are in context with your pattern. You got to breakeven on a strong correction that produced a deep HL. Technically a higher low indicates an expectation of a NSH but in this case the deep pullback tells you that bullish order flow entering at this level should be weak and it is likely to achieve a LH and relative speaking a shallow correction which you also got. Price also respectect light structure pointed out by the green horizontal line. The smaller swings although showed NSH also showed a rappidly weaking bullish order flow and some confluence of the 61.8 and bearish momentum increasing.
NOTE: A helpful hint, when we see price respecting light structure like this indicates weakness on the driving force.
It is okay to use short term order flow to asses the expectation of the longer term order flow but you should consider the context of your trade to the orderflow. Failing to do this will hurt your trade management and ultimately your pocket.
I hope I answered your question If I didn't please let me know how else I can help.
If you fail to plan, you plan to fail.
- #3,819
- Apr 16, 2013 12:07pm Apr 16, 2013 12:07pm
- | Membership Revoked | Joined Jul 2010 | 9,273 Posts
If you fail to plan, you plan to fail.
- #3,820
- Apr 16, 2013 12:08pm Apr 16, 2013 12:08pm
- | Membership Revoked | Joined Jul 2010 | 9,273 Posts
Starry, The one thing that sticks out to me is the initial AB wave. It looks forced as the A point is not a major high/low, in my humble opinion. There is obviously more to the up wave off the chart on the left. The EUR moved nearly straight from 1.304 to 1.315. Trying to put minor swings within that large move may prove difficult and increase your risk. This is where I went wrong with my ABCD studies as I was doing very much the same. Now, the retracement in progress from the 1.315 high to the 1.311 low could provide opportunity. As I am now including...
If you fail to plan, you plan to fail.