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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

  • #3,821
  • Apr 16, 2013 12:09pm Apr 16, 2013 12:09pm
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I should watch the reaction of the prize when it get closer on PRZ

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The prize get rejected when it goes on the PRZ in 5minTF

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HARMONIC in 4hr

FOR educational purpose only
  • #3,822
  • Apr 16, 2013 12:36pm Apr 16, 2013 12:36pm
Quoting Mr. Pip
Why did you choose that point to start your Fib from? What criteria are you using?
Change in price structure.

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  • #3,823
  • Apr 16, 2013 12:36pm Apr 16, 2013 12:36pm
Quoting Starry
Hmm, well im trying to develop my skills separately and combine them for entry. 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...
Order flow and structure gave you good case for entry. you can see the breakdown in short orders and buyers entering the market. I wouls not have used that 61.8 as this is not the clear retracment of the distance measured but you had an ABCD completion with structure and a demmand zone. I don't look at pin bars as pin bars or any other formation. I look at price action from the perspective of strength and weakness. Price action also gave you a very nice entry which only moved against you about 3 pips.

Price acceleration after that should have kept you in this for quite some time.
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If you fail to plan, you plan to fail.
  • #3,824
  • Apr 16, 2013 12:59pm Apr 16, 2013 12:59pm
Quoting Starry
Change in price structure. {image}
I don't quite understand what you mean "Change in price structure."? Maybe you could expand on this concept further? How did structure change and how did that dictate where you drew your fib from?
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If you fail to plan, you plan to fail.
  • #3,825
  • Apr 16, 2013 1:06pm Apr 16, 2013 1:06pm
This is a shark pattern with a butterfly embedded at the end of it. Pretty amazing stuff, if you were to trade the shark, it would be like taking an aggressive C entry on an AB=CD pattern.

I removed the fib levels because having 5 fib series is very hard to read.
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  • #3,826
  • Apr 16, 2013 1:50pm Apr 16, 2013 1:50pm
Quoting Mr. Pip
I don't quite understand what you mean "Change in price structure."? Maybe you could expand on this concept further? How did structure change and how did that dictate where you drew your fib from? {image}
There were two different swings, the first one had a steeper slope, and the second one had a shallower slope. The fib was drawn from the start of the second swing which had the shallower slope. I try to find my start fib from a low which either has confluence or is the start of aswing (a large one, not a small one) which has a change in swing characteristics, even if it doesnt retrace to the 38.2 fib zone.

But actually one of the reasons i didnt take it was probably because of the shallower slope of the swing i drew the fib from, because i thought that indicated a breakdown in order flow.

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  • #3,827
  • Apr 16, 2013 2:01pm Apr 16, 2013 2:01pm
Quoting Starry
There were two different swings, the first one had a steeper slope, and the second one had a shallower slope. The fib was drawn from the start of the second swing which had the shallower slope. I try to find my start fib from a low which either has confluence or is the start of aswing (a large one, not a small one) which has a change in swing characteristics, even if it doesnt retrace to the 38.2 fib zone. But actually one of the reasons i didnt take it was probably because of the shallower slope of the swing i drew the fib from, because i thought...
Thank you for expanding on your thought process. What you call structure I call momentum, many ways to skin a cat. LOL
If you fail to plan, you plan to fail.
  • #3,828
  • Apr 16, 2013 2:02pm Apr 16, 2013 2:02pm
Quoting Mr. Pip
Order flow and structure gave you good case for entry. you can see the breakdown in short orders and buyers entering the market. I wouls not have used that 61.8 as this is not the clear retracment of the distance measured but you had an ABCD completion with structure and a demmand zone. I don't look at pin bars as pin bars or any other formation. I look at price action from the perspective of strength and weakness. Price action also gave you a very nice entry which only moved against you about 3 pips. Price acceleration after that should have kept...
Could you describe what price action would have triggered the entry. Is it just the candle with the long up wick? Thats what i was confused about, during screen time I had one pin bar, long down wick, but I didnt like the mini triangle formation....
  • #3,829
  • Edited 2:38pm Apr 16, 2013 2:16pm | Edited 2:38pm
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example how to enter when you go closer on the PRZ zone
which is the red box!! in my humble opinion


FOR EDUCATIONAL PURPOSED ONLY
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  • #3,830
  • Apr 16, 2013 2:26pm Apr 16, 2013 2:26pm
Quoting Starry
Could you describe what price action would have triggered the entry. Is it just the candle with the long up wick? Thats what i was confused about, during screen time I had one pin bar, long down wick, but I didnt like the mini triangle formation....
A couple thoughts and observations Starry.

From what I read, you are placing too much weight on exact patterns, exact entries, and wins v loses. A key component of successful trading is to decide on a reason for entry and just take it. Hold your nose, puke a little, but make the trade, time and time again and again. If you have tested the entry, you are comfortable with the entry in all market conditions, then just do it.

You could have taken the entry because it hit your, personally drawn, 61.8% and would have won.

Mr. Pip may have taken the entry because of a completed ABCD and would have won.

I would have taken the entry as the down leg broke above a decending trendline/channel and would have won.

3 different reasons, three different hypotheses, all would have been winners. But it only works if you do the same thing over and over.

As they say--"You always miss the shots you do not take"

Just my humble two pips as always.
  • #3,831
  • Apr 16, 2013 3:04pm Apr 16, 2013 3:04pm
Quoting gaf
Awesome Itinerant! Great trade and good read. You had angry bears on the previous big leg so more down to be expected or at least a correction. You had price stalling in the 61-78 zone with rejection off of the resistance area 3 times showing sellers were interested. The PA confirmed this after failing to close higher. You recognized where price may have trouble and took profit there. Price confirmed that there were buyers at the level on the next bar although not super aggressive compared to the selling on the previous bar (we are ranging so price...
Thanks for the comments; it's very helpful to see what somebody else sees when looking at the same chart.

The R:R is a valid point... it was low, but thankfully it paid off.

With the benefit of hindsight, I could have ridden it all the way down to 61.8 without taking out the SL. Which goes to show that sticking to the rules probably does prove more profitable in the long run.
  • #3,832
  • Apr 16, 2013 3:13pm Apr 16, 2013 3:13pm
Quoting BroncoCap
A couple thoughts and observations Starry. From what I read, you are placing too much weight on exact patterns, exact entries, and wins v loses. A key component of successful trading is to decide on a reason for entry and just take it. Hold your nose, puke a little, but make the trade, time and time again and again. If you have tested the entry, you are comfortable with the entry in all market conditions, then just do it. You could have taken the entry because it hit your, personally drawn, 61.8% and would have won. Mr. Pip may have taken the...
Definitely! This is what I have also noticed (i dont take the darn tradess), but i have interpreted it a little differently. Anyways, as long as you don't ignore improving the separate skills also. Ive divided my reasons for entry into a couple of skill sets

structure (supply/demand and harmonics)
price action (pin bars, mini structure approaching trading zone )
order flow (im coming up with my own ideals based on what i observe)
take profit

I had the structure down, but PA has been emphasized alot and i just didnt see it. Ive actually relaxed my stance on exact patterns and structure , alot of times im simply content with copying and pasting those swing legs, but in addition ive also learned from experience where to paste them. I imagine my stance on price action will take a similar turn, just like you mentioned.

Im just doing 61.8 abcds right now, so it will be easier as i just focus on taking those trades. I backtested last week with just the 61.8, looks good. Now I will forward test it, back test this week at the end of the week, and compare. Rinse and repeat. I suspect everything will converge! Sort of like in reinforcement learning lol.

One of my stances is that backtesting should produce the same results as forward testing, even with the 'its based on experience' part in it. Well, the skills are based on experience, but if I look anywhere on any chart, i should still be able to determine what trade I would've taken even though the chart is historical and i see future price action. Doesnt matter if it wins or loses. My intuition will also work in backtesting, and wont be based on future price, because intuition will simply be the highly developed skill set ('based on experience').
  • #3,833
  • Apr 16, 2013 3:17pm Apr 16, 2013 3:17pm
Quoting BroncoCap
A couple thoughts and observations Starry. From what I read, you are placing too much weight on exact patterns, exact entries, and wins v loses. A key component of successful trading is to decide on a reason for entry and just take it. Hold your nose, puke a little, but make the trade, time and time again and again. If you have tested the entry, you are comfortable with the entry in all market conditions, then just do it. You could have taken the entry because it hit your, personally drawn, 61.8% and would have won. Mr. Pip may have taken the...
If you fail to plan, you plan to fail.
  • #3,834
  • Apr 16, 2013 3:25pm Apr 16, 2013 3:25pm
Quoting Starry
Could you describe what price action would have triggered the entry. Is it just the candle with the long up wick? Thats what i was confused about, during screen time I had one pin bar, long down wick, but I didnt like the mini triangle formation....
Price action means different things to different traders. Find a reversal signal that is easy for you to identify and works ofter learn to read the candles from candle to candle comparison. This is the most accurate way to read price action.
If you fail to plan, you plan to fail.
  • #3,835
  • Apr 16, 2013 3:27pm Apr 16, 2013 3:27pm
Quoting BroncoCap
A couple thoughts and observations Starry. From what I read, you are placing too much weight on exact patterns, exact entries, and wins v loses. A key component of successful trading is to decide on a reason for entry and just take it. Hold your nose, puke a little, but make the trade, time and time again and again. If you have tested the entry, you are comfortable with the entry in all market conditions, then just do it. You could have taken the entry because it hit your, personally drawn, 61.8% and would have won. Mr. Pip may have taken the...
Also I want trading to be fun and not stressful ....... so i interpret it differently that suits my personality ... and yes i do think I can be very successful and still not stressful.
  • #3,836
  • Apr 16, 2013 3:34pm Apr 16, 2013 3:34pm
Quoting Starry
Also I want trading to be fun and not stressful ....... so i interpret it differently that suits my personality ... and yes i do think I can be very successful and still not stressful.
Actually, along the same lines, I just had an idea that I wrote in my trading journal. What if I screen-recorded with audio my trading session? Would it make me a better trader or worse? Would bad habits be gone knowing the 'world' would see them? Plus, with audio, the running commentary may help pin-point strengths and weaknesses in my trading.

I think I am going to give it a shot through the end of the week. I previously recorded my trading days but never used the recordings. I should review them on the weekends, if not later that day, just to journal and critique. Also, having the recordings is also a nice backup if issues occur (fills, slippage, etc.).

I have not committed myself to posting the videos, yet. An on-line journal is one thing, a video is another. Plus there are issues with account #'s etc that would need to be blocked out or what not.

Still, the idea is very intriguing and I will post any videos, if I ultimately decide to do so, to my journal.

As you say, it could be FUN!
  • #3,837
  • Apr 16, 2013 4:34pm Apr 16, 2013 4:34pm
Quoting Mr. Pip
Tell me your case for entry. Seems to me like price was accelerating into your PRZ?
Morning Mr Pip,

thanks for commenting.....

yes price was accelerating into the prz and i was wary of it but i decided to pull the trigger when pa began to stall once it entered the zone.
Within 5 mins just below my entry had become immediate support.
I was going to exit when the 3 white candles printed (-5 or 6) but as i was making the decision the next candle was quicker than i was so out for -11.5.
I knew there was risk but 11.5p is less than .20% so it was a lightly weighted trade

cheers
Gary
  • #3,838
  • Apr 16, 2013 4:46pm Apr 16, 2013 4:46pm
Quoting mm3934
Morning Mr Pip, thanks for commenting..... yes price was accelerating into the prz and i was wary of it but i decided to pull the trigger when pa began to stall once it entered the zone. Within 5 mins just below my entry had become immediate support. I was going to exit when the 3 white candles printed (-5 or 6) but as i was making the decision the next candle was quicker than i was so out for -11.5. I knew there was risk but 11.5p is less than .20% so it was a lightly weighted trade cheers Gary
That is fine Gary so long as you manage your risk. Listen to price it will almost always tell you what's up. Cut losses as short as possible. live to fight another day. This war is won on many battles.
If you fail to plan, you plan to fail.
  • #3,839
  • Apr 16, 2013 8:56pm Apr 16, 2013 8:56pm
Quoting BroncoCap
Actually, along the same lines, I just had an idea that I wrote in my trading journal. What if I screen-recorded with audio my trading session? Would it make me a better trader or worse? Would bad habits be gone knowing the 'world' would see them? Plus, with audio, the running commentary may help pin-point strengths and weaknesses in my trading. I think I am going to give it a shot through the end of the week. I previously recorded my trading days but never used the recordings. I should review them on the weekends, if not later that day, just to...
This is actually quite brilliant Bronco!

I try to write what I'm thinking on the chart before it happens. It helps me assess where my weaknesses are. I find I'm not trading at all. I can read price like a book but I seem to have trouble convincing myself to trade. I seem to be missing one important component on each great trade which is frustrating. I think I'll start using my voice recorder so that I can see what I'm thinking when I miss these great moves. I am strong at anticipating short/medium term price but have big problems anticipating trades. Which is really weird.

Does anyone else have this problem and if so how did you fix it? Cheers.
Finally out of the shadows.
  • #3,840
  • Apr 16, 2013 9:26pm Apr 16, 2013 9:26pm
Hi,
my M5 AUD chart for this session

Happy trading to all...
cheers
Gary
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