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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

  • #4,341
  • Jun 7, 2013 7:35am Jun 7, 2013 7:35am
Quoting CNTrader
Hey traders here is another chart I'm watching closely {image} Enjoy, have fun, make a great day, do your Due diligence, trade your plan, and may we all make bank (http://www.forexfactory.com/#)

GM traders Target 1 attained stops rolled to BE

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Enjoy, have fun, make a great day, do your Due diligence, trade your plan, and may we all make bank (http://www.forexfactory.com/#)
Don't follow me! You can and most likely will LOSE all your money!!!!
  • #4,342
  • Jun 7, 2013 12:22pm Jun 7, 2013 12:22pm
Hello there, and thank everyone for the great job you are doing here.
I posted a bullish butterfly on NZDUSD H1, this one could be interesting for Auckland opening.

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2 Questions for the group:
- Where do i have to put stop here (maybe it was said before on the thread, apologize me but please reply)?
- what if we have a gap at sunday opening?

Greetings from italy
Paolo
  • #4,343
  • Jun 7, 2013 12:27pm Jun 7, 2013 12:27pm
Quoting CNTrader
{quote} GM traders Target 1 attained stops rolled to BE {image} Enjoy, have fun, make a great day, do your Due diligence, trade your plan, and may we all make bank (http://www.forexfactory.com/#)
CNTrader,
Just wondering, do you always use three take profits, for partial profits at each price?
  • #4,344
  • Jun 7, 2013 1:31pm Jun 7, 2013 1:31pm
Quoting Starry
{quote} CNTrader, Just wondering, do you always use three take profits, for partial profits at each price?

No but often. so i get these kind of runners. Just banked remaining on this. Remember this one?....


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By the way I have officially started the new thread hope to see your contributions there as well. This will be my last post on this thread. Thanks to Mr Pip and everyone for allowing me to contribute.

Enjoy, have fun, make a great day, do your Due diligence, trade your plan, and may we all make bank (http://www.forexfactory.com/#)
Don't follow me! You can and most likely will LOSE all your money!!!!
  • #4,345
  • Jun 8, 2013 10:19am Jun 8, 2013 10:19am
Order Flow Introduction

Hey traders. One of the things I always wondered about was order flow. When looking at mr pips example charts, each trade has an intuitive beauty in it. It 'seemed' (intuitively) that the price action he was trading somehow always indicated a change in order flow. Not just the candles at the PRZ, but the entire main and dominant swing formation seemed to indicate a change/weakness in order flow, but it was never explained how. "Experience?"

Trend/Flow lines

Anyways, I think I have found an easy way to explain it. During any market session, price can effectively be described by two trend lines: an upward slope trend line ('up trend line') and a downward slope trend line ('down trend line'). These trend lines can be determined by previous price action because these trend lines explain the market in a certain way.

I will sometimes call these trend lines 'flow lines.' Flow lines connect transition points in the market. Transition points include stalling price, changes in swing segment characteristics, and some other formations. Any and all highs and lows during a market session will have a flow line associated with it, in 99% cases with the same slope (up or down).

Clearly, by moving a trend line up and down a line segment's transition areas, we can predict potential highs and lows. Therefore, a market swing (i call them market sections because it doesnt have to look like aswing) can be described by the alternate placement of trend lines (either the up or down). When you cant place the market swing any more (it has reached a 'barrier'), u switch to the other trend lines (up trend line if u were using the down trend line), and then the market continues.

In this way, the market flows down the path of least resistance (in a way lol). Thats my (simplified) description. Of course u would have to learn how to place the trend lines and when it would get blocked, and im still working on that

Order Flow Definition
So what is order flow then? Order flow is when you transition to use the opposite slope trend line. Seems intuitive, right, because u want to make higher highs, not lower lows. How big is the order flow change? Well, place the trend line at its 'blocked' point, and thats how far price will go, according to this current trend line. Now, associate that with harmonic confluence, make sure they converge, if you are trading something like an abcd, ab = cd, etc...

Im still working on this, and I am going to start verifying my harmonic trades with this method. Ill let u guys know how it goes in a week or so. But I think I've built up the necessary skill set in order to apply it live....

An example:
edit: so i said in the chart that the down trend line couldn't describe the high @ the green circle. Technically it could, but then it would be in the vicinity of a previous trend line which already connected two transition areas in the previous market section. In general, a flow line cant be used to connect three tops which are in the same market section together (unless a green flow line cant describe it) . A market section is simply the area between a green and red circle. may seem a little complicated, but its being put together very very nicely.

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  • #4,346
  • Jun 11, 2013 11:05am Jun 11, 2013 11:05am
Quoting Starry
{image}
Well, what do you know they call them gann angles/fans and they are almost equivalent lol......
  • #4,347
  • Jun 14, 2013 7:44pm Jun 14, 2013 7:44pm
Quoting Starry
{quote} Well, what do you know they call them gann angles/fans and they are almost equivalent lol......
Hey Starry,

Charts look good but maybe you are adding more complication to the process? I don't use trend lines (I'm well versed in them from my time studying Al Brooks) or gann stuff anymore as I love the simplicity of what Mr. Pip has shown in this thread. We have PA, structure, Depth, Projection, S/R, Fibs, extensions, and finally the abcd and more complex patterns.

This gives you your fish in a barrel as you have an expectation to what price should do when you enter a trade. You know how price should act when it produces an agro C or completes an abcd. If it completes anything else expectations change i.e. ab=cd has different ratio expectations and can be trickier. The more lines you throw on and more legs in a pattern the more things you have to think about and the more chance for error or emotion to creep in.

Don't get me wrong I love trading all the animal patterns and I've thought about adding the drunken ostrich and burned out fish but in general I just keep it stupid simple and it has been working for me.

I only use abcd and agro C's along with ratio and s/r trades like Mr. Pip does. I've tried adding to it but I end up missing more trades than the new stuff provides. I'm not trying to rain on your parade or stop you from exploring, I just noticed that when I stopped trying to add to what was here and really looked at why I was not getting the results that I saw Mr. Pip getting I realized that my losses came from trading other things that were close to an abcd or agro C. I expected the market to act in the same way as those patterns when the PA was in fact different. An ab=cd has more strength in general and will often test further. Lack of S/R will also make the patterns behave different etc. I'm by no means an expert but the thread has it all. Master the elements above and you'll remain profitable most days like Mr. Pip. Cheers.
Finally out of the shadows.
  • #4,348
  • Jun 15, 2013 6:22am Jun 15, 2013 6:22am
Quoting gaf
{quote} Hey Starry, Charts look good but maybe you are adding more complication to the process? I don't use trend lines (I'm well versed in them from my time studying Al Brooks) or gann stuff anymore as I love the simplicity of what Mr. Pip has shown in this thread. We have PA, structure, Depth, Projection, S/R, Fibs, extensions, and finally the abcd and more complex patterns. This gives you your fish in a barrel as you have an expectation to what price should do when you enter a trade. You know how price should act when it produces an agro C or...
Hey gaf! Nice to hear from you! I hope you're doing well. This thread is dead, so I moved to CNtraders thread

I also absolutely love the simplicity of Mr pip's charts and his concepts too! However, I found some lacking for me, in terms of how to use them, like order flow weakness, so I set about creating my own method which clarifies order flow for me. Basically, I'm also still using harmonics as the patterns to trade, but I'm actually trading a whole new system which is basically based 100% on order flow. Its much different than what I shown, its gone through many drafts, but is now settling down. I've divided it into 3 skills with sub-skills, so that it can become very very consistent (so im actually creating rules of engagements i guess for each skill!). Its quite simple actually, I just need to practice , practice live and with past charts. Eventually, everything will go right back to mr pips concept of order flow! I will just be using some well placed trend lines used in a unique way to highlight the order flow.

Cheers every1 and may we all Bank that $$!
  • #4,349
  • Jun 15, 2013 6:24am Jun 15, 2013 6:24am
Quoting gaf
{quote} Hey Starry, Charts look good but maybe you are adding more complication to the process? I don't use trend lines (I'm well versed in them from my time studying Al Brooks) or gann stuff anymore as I love the simplicity of what Mr. Pip has shown in this thread. We have PA, structure, Depth, Projection, S/R, Fibs, extensions, and finally the abcd and more complex patterns. This gives you your fish in a barrel as you have an expectation to what price should do when you enter a trade. You know how price should act when it produces an agro C or...
Oh yeah. What the heck is a drunken fish pattern? lol sounds interesting, just jking?
  • #4,350
  • Jun 15, 2013 7:59am Jun 15, 2013 7:59am
Hi,

Can any harmonic trader confirm if this is a rejection of a bearish gartley on the daily GBPUSD chart? That last candle is Fridays weekly close indicating major bullishness in my opinion.
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Find your Favourite Pattern
  • #4,351
  • Jun 15, 2013 8:08am Jun 15, 2013 8:08am
Quoting Pipanator
Hi, Can any harmonic trader confirm if this is a rejection of a bearish gartley on the daily GBPUSD chart? That last candle is Fridays weekly close indicating major bullishness in my opinion. {image}

I have it as a potential bat.
The world you desire can be won. It exists.. it is real.. it is possible..
  • #4,352
  • Jun 15, 2013 11:53am Jun 15, 2013 11:53am
Quoting Starry
{quote} Hey gaf! Nice to hear from you! I hope you're doing well. This thread is dead, so I moved to CNtraders thread I also absolutely love the simplicity of Mr pip's charts and his concepts too! However, I found some lacking for me, in terms of how to use them, like order flow weakness, so I set about creating my own method which clarifies order flow for me. Basically, I'm also still using harmonics as the patterns to trade, but I'm actually trading a whole new system which is basically based 100% on order flow. Its much different than what...
Hey Starry,

You have order flow given to you by structure, projection and depth. Study those elements and you will not need to add anything else. I can't go into any more details about it but you can dig it out of the thread if you ask yourself "what does this mean" when you see something on a chart. i.e. price has made a deep pullback after great projection what does this mean? There are a few posts where he touches on these elements but if you are happy with your new system you have to do what you feel comfortable with or you can't make bank.

Yes the drunken fish is a joke , patterns are great but I make more trades based on PA Ratios, structure, etc than I do with patterns. Glad to hear you're still progressing. Whatever pulls money out of the market for you keep at it. Cheers!
Finally out of the shadows.
  • #4,353
  • Jun 15, 2013 3:49pm Jun 15, 2013 3:49pm
Quoting gaf
{quote} Hey Starry, You have order flow given to you by structure, projection and depth. Study those elements and you will not need to add anything else. I can't go into any more details about it but you can dig it out of the thread if you ask yourself "what does this mean" when you see something on a chart. i.e. price has made a deep pullback after great projection what does this mean? There are a few posts where he touches on these elements but if you are happy with your new system you have to do what you feel comfortable with or you can't make...

Hey gaf,
The problem I have with mr pip's order flow, at least the way he taught it, is that it is after-the-fact. The deep projection has to occur first before you use that information, and then what if it is a mere stop before it goes down again? How do you know it will have a deep pullback after a deep projection. I want to know beforehand that the deep projection will occur, and exactly where it will end, even if it is not harmonic. My method allows that. Harmonics and the concept of order flow emerges from it (a lot actually).

Im starting to become comfortable with the ideal of my new system and am writing down rules of engagement. Mr pip has definitely affected my thinking a lot and i am eternally grateful to him!

Yes, I think i have hit the goldmine so to speak! I hope you're making the bank you deserve also!

GLHF!
  • #4,354
  • Jun 15, 2013 4:47pm Jun 15, 2013 4:47pm
Quoting Starry
{quote} Hey gaf, The problem I have with mr pip's order flow, at least the way he taught it, is that it is after-the-fact. The deep projection has to occur first before you use that information, and then what if it is a mere stop before it goes down again? How do you know it will have a deep pullback after a deep projection. I want to know beforehand that the deep projection will occur, and exactly where it will end, even if it is not harmonic. My method allows that. Harmonics and the concept of order flow emerges from it (a lot actually). Im starting...
I can guarantee 100% that it is not after the fact . Having a deep pullback after a great projection is just one example. Its not a rule, I just asked you to ask yourself "what does this mean?". If you can answer those questions you have no need for trendlines etc.. I'm not trying to sound cryptic but since there are paying students we have to be grateful and study what is given to us. Trust me its in here just not handed up on a silver platter.

Just keep on with whatever makes you comfortable if you are unsure. If you have a way that makes sense to you then follow it. Thank you for your kind words. I'm in the process of increasing my bank so I guess you could say I'm making it . All the best. Cheers.
Finally out of the shadows.
  • #4,355
  • Jun 15, 2013 5:32pm Jun 15, 2013 5:32pm
Quoting gaf
{quote} I can guarantee 100% that it is not after the fact . Having a deep pullback after a great projection is just one example. Its not a rule, I just asked you to ask yourself "what does this mean?". If you can answer those questions you have no need for trendlines etc.. I'm not trying to sound cryptic but since there are paying students we have to be grateful and study what is given to us. Trust me its in here just not handed up on a silver platter. Just keep on with whatever makes you comfortable if you are unsure. If you have a way that...
you sound like a secret agent lol all those secrets But seriously, they are definitely not trend lines in any sense of the word, rather they are lines which flow with the market and highlight the path of least resistance that I wouldn't see otherwise. Together it forms a solid foundation for an intuitive (though rule based) understanding of the market, i just need to learn it thoroughly and follow my rules. As i like to say: "The flow must continue [through the path of least resistance]. There is no exception!" In addition to obtaining a PRZ, i obtain simple time information, though I suppose it is right now less reliable than the path. Admitedlly ive been wrong in the past, but i wasnt following my rules .

it makes sense to me, so as long as we get bank, we're good right?
I start trading my rules demo next week, so ill see. In the meantime, Im going to take a bite out of SLW, it is going to DROP,, probly a bit slowly! If it follows my prediction that it will go up to 25 or so by monday or tuesday....

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I will know soon enough if the rules work, I have just been backtesting them on eurusd 100 tick and slw.. I seem to be resistant to how simple it can be lol! Thats why i try to follow my rules now that i have seen backtesting working...
  • #4,356
  • Jun 15, 2013 6:12pm Jun 15, 2013 6:12pm
Quoting gaf
{quote} I can guarantee 100% that it is not after the fact . Having a deep pullback after a great projection is just one example. Its not a rule, I just asked you to ask yourself "what does this mean?". If you can answer those questions you have no need for trendlines etc.. I'm not trying to sound cryptic but since there are paying students we have to be grateful and study what is given to us. Trust me its in here just not handed up on a silver platter. Just keep on with whatever makes you comfortable if you are unsure. If you have a way that...
by the way. i accept the challenge
  • #4,357
  • Jun 15, 2013 6:25pm Jun 15, 2013 6:25pm
Quoting gaf
{quote} Hey Starry, You have order flow given to you by structure, projection and depth. Study those elements and you will not need to add anything else. I can't go into any more details about it but you can dig it out of the thread if you ask yourself "what does this mean" when you see something on a chart. i.e. price has made a deep pullback after great projection what does this mean? There are a few posts where he touches on these elements but if you are happy with your new system you have to do what you feel comfortable with or you can't make...
gaf youre totally right.. the reading of order flow simply gets clearer with time.. its mostly as simple as higher and lower highs and higher and lower lows, where they are relative to structure and the bigger picture and your expectations.. patterns are just icing on the cake

starry we see you have the dedication to becoming good we believe it would be a shame if you didn't master this skill before moving on to other things
  • #4,358
  • Jun 15, 2013 8:23pm Jun 15, 2013 8:23pm
Quoting FineForex
{quote} gaf youre totally right.. the reading of order flow simply gets clearer with time.. its mostly as simple as higher and lower highs and higher and lower lows, where they are relative to structure and the bigger picture and your expectations.. patterns are just icing on the cake starry we see you have the dedication to becoming good we believe it would be a shame if you didn't master this skill before moving on to other things

+1000
Finally out of the shadows.
  • #4,359
  • Jun 16, 2013 5:42am Jun 16, 2013 5:42am
Quoting FineForex
{quote} gaf youre totally right.. the reading of order flow simply gets clearer with time.. its mostly as simple as higher and lower highs and higher and lower lows, where they are relative to structure and the bigger picture and your expectations.. patterns are just icing on the cake starry we see you have the dedication to becoming good we believe it would be a shame if you didn't master this skill before moving on to other things

i will master it, good suggestion gaf and FineForex no worries, my method implicitly includes it anyways so it wont be hard at all
  • #4,360
  • Jun 18, 2013 4:16pm Jun 18, 2013 4:16pm
Quoting gaf
{quote} Hey Starry, Charts look good but maybe you are adding more complication to the process? I don't use trend lines (I'm well versed in them from my time studying Al Brooks) or gann stuff anymore as I love the simplicity of what Mr. Pip has shown in this thread. We have PA, structure, Depth, Projection, S/R, Fibs, extensions, and finally the abcd and more complex patterns. This gives you your fish in a barrel as you have an expectation to what price should do when you enter a trade. You know how price should act when it produces an agro C or...

Hi Gaf and Mr, Pip whom I wish is well.

Gaf, your comments are so pertinent. could not agree more. the ABCD/AB=CD are the back bone "spine". it is like a lighting bolt that appears. so, I have been wondering if order flow and PA of the "spine" flows from one pattern into another..ie: P1 - abcd or ab=cd flowing into P2 - gartley flowing into P3-Bat flowing into Butterfly etc...

umm...I am trying to find a way for our internal thought process to have a logical approach for easy memory retention. your comments will be greatly appreciated.

tnxs
ew
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