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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

  • #4,601
  • Aug 17, 2013 3:37pm Aug 17, 2013 3:37pm
Quoting Axlz
{quote} What you've said is very profound, no doubt, but I'm not sure how this relates to trading.
To elaborate is not an easy task, and most of the times is worthless. If you don't say black or white then it doesn't have any value to some and I respect that.

If you saw a monthly candle with these values:

O: 1.2000
H:1.3150
L: 1.1850
C: 1.3000

At first sight you would have a bullish candle with tiny upper and lower wicks and a big body (A range of 1300 pips and a body of 1000 pips).

But that single candle could be telling many stories at the same time:

A: Right after the open it had a bullish rally for two weeks, then retraced heavily to the bottom and resume up again
B: It retraced down 150 pips after the Open, then started to build an ABCD pattern right to the top, where it finally retraced
C:etc, etc

For those trading monthly candles, the supply and demand - order flow - inside that candle would had been irrelevant. They only care how that candle is relative to the overall structure they have.

So, there is a structure of the market...
Best time to plant a tree was 20 years ago, second best is now
  • #4,602
  • Aug 17, 2013 3:46pm Aug 17, 2013 3:46pm
its fractal structure. thats why what happens inside the bar doesn't matter
  • #4,603
  • Aug 17, 2013 3:48pm Aug 17, 2013 3:48pm
Quoting horuxito
{quote} To elaborate is not an easy task, and most of the times is worthless. If you don't say black or white then it doesn't have any value to some and I respect that. If you saw a monthly candle with these values: O: 1.2000 H:1.3150 L: 1.1850 C: 1.3000 At first sight you would have a bullish candle with tiny upper and lower wicks and a big body (A range of 1300 pips and a body of 1000 pips). But that single candle could be telling many stories at the same time: A: Right after the open it had a bullish rally for two weeks, then retraced heavily...
I see what you mean. I have no disputes over what you've said.
  • #4,604
  • Aug 17, 2013 3:49pm Aug 17, 2013 3:49pm
Quoting Starry
its fractal structure. thats why what happens inside the bar doesn't matter
Starry, check out the supply and demand thread by Alfonso that was linked by Davit.


I'm definitely going to start applying this to my harmonic trading. I believe this is the missing piece of the puzzle.
  • #4,605
  • Aug 17, 2013 3:50pm Aug 17, 2013 3:50pm
Quoting Starry
its fractal structure. thats why what happens inside the bar doesn't matter
Best time to plant a tree was 20 years ago, second best is now
  • #4,606
  • Aug 17, 2013 3:59pm Aug 17, 2013 3:59pm
That is a nice reading recommendation Axlz.

If I can suggest find this member PeterCrowns and read ALL his posts, they are only 41 posts but everyone is a golden pebble.

Weekend. Time to check how the market is doing. This is the GU Daily. Price is getting close to a PA Resistance at 1.575 which has served as S/R for many many weeks. Nice AB=CD for adding confluence. Price way above the monthly red pivot and a breakout of the first monthly resistance level as well a few days back (not seen in the picture).

Attached Image (click to enlarge)
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Best time to plant a tree was 20 years ago, second best is now
  • #4,607
  • Aug 17, 2013 4:08pm Aug 17, 2013 4:08pm
Quoting horuxito
That is a nice reading recommendation Axlz. If I can suggest find this member PeterCrowns and read ALL his posts, they are only 41 posts but everyone is a golden pebble. Weekend. Time to check how the market is doing. This is the GU Daily. Price is getting close to a PA Resistance at 1.575 which has served as S/R for many many weeks. Nice AB=CD for adding confluence. Price way above the monthly red pivot and a breakout of the first monthly resistance level as well a few days back (not seen in the picture). {image}
Yes. Nice supply zone at 1.575. Will probably go short upon seeing PA stall/show signs of reversal in the PRZ. Might even just put in a limit order.
  • #4,608
  • Aug 17, 2013 4:12pm Aug 17, 2013 4:12pm
Quoting Axlz
{quote} Yes. Nice supply zone at 1.575. Will probably go short upon seeing PA stall/show signs of reversal in the PRZ.
That's right.

This is only a possibility but it can happen: Being a so strong area of interest, if price finally gets there, there is going to be a strong interest of big boys wanting to go short. What are they going to do? Create liquidity by entering a lot of long trades near that area. Price will break for a while but we are going to be very interested where the COB finally are. If they are bellow the line, we can be safe to look for shorts.
Best time to plant a tree was 20 years ago, second best is now
  • #4,609
  • Aug 17, 2013 4:15pm Aug 17, 2013 4:15pm
Quoting horuxito
{quote} That's right. This is only a possibility but it can happen: Being a so strong area of interest, if price finally gets there, there is going to be a strong interest of big boys wanting to go short. What are they going to do? Create liquidity by entering a lot of long trades near that area. Price will break for a while but we are going to be very interested where the COB finally are. If they are bellow the line, we can be safe to look for shorts.
I would have thought it being such a strong area of supply (both fresh and original), that price would rapidly shoot down from there, so a limit order would be a good idea.

Do you think It would be wiser to wait to see what PA says?
  • #4,610
  • Aug 17, 2013 4:19pm Aug 17, 2013 4:19pm
Quoting Axlz
{quote} I would have thought it being such a strong area of supply (both fresh and original), that price would rapidly shoot down from there, so a limit order would be a good idea. Do you think It would be wiser to wait to see what PA says?
I like the idea of limit orders but PA is always the safe play. Smaller TFs can also start to tell the story if you know how to read your MAs.
Best time to plant a tree was 20 years ago, second best is now
  • #4,611
  • Aug 17, 2013 4:26pm Aug 17, 2013 4:26pm
Quoting horuxito
{quote} I like the idea of limit orders but PA is always the safe play. Smaller TFs can also start to tell the story if you know how to read your MAs.
On a second look, that area of supply is actually not original. Still fresh, but there is a chance it could be broken.
  • #4,612
  • Aug 17, 2013 4:33pm Aug 17, 2013 4:33pm
Quoting Axlz
{quote} On a second look, that area of supply is actually not original. Still fresh, but there is a chance it could be broken.
That's the great thing about those levels, that is PA what finally will tell you if a resistance becomes support or not. Either way, the fact of being there is great, you can go up or down, wait for a pullback, etc.

NZDUSD is also showing a very strong resistance level just now in the daily, and if you zoom in the H4 you see a pin bar with a retracement to the 786.
Best time to plant a tree was 20 years ago, second best is now
  • #4,613
  • Aug 17, 2013 4:40pm Aug 17, 2013 4:40pm
Quoting horuxito
{quote} That's the great thing about those levels, that is PA what finally will tell you if a resistance becomes support or not. Either way, the fact of being there is great, you can go up or down, wait for a pullback, etc. NZDUSD is also showing a very strong resistance level just now in the daily, and if you zoom in the H4 you see a pin bar with a retracement to the 786.
Last month's high is acting as resistance it seems.

Not sure if I should be trading it or not though, as there is a supply level at 0.82 just above it that it may retest after this retracement. That would probably be the area to watch and go short at.
  • #4,614
  • Edited 4:33pm Aug 18, 2013 3:16pm | Edited 4:33pm
Today I've done some back-testing and caught these 2 patterns off the 1H chart

Can you guys let me know if I draw ratios correctly and the patterns are valid
Attached Image(s) (click to enlarge)
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  • #4,615
  • Aug 19, 2013 5:58am Aug 19, 2013 5:58am
Quoting TheScorpS
Today I've done some back-testing and caught these 2 patterns off the 1H chart Can you guys let me know if I draw ratios correctly and the patterns are valid {image} {image}
picture 1 ABCD = ok
Picture 2, not model.
Trading in the zone
  • #4,616
  • Aug 19, 2013 10:37am Aug 19, 2013 10:37am
Quoting hao
{quote} picture 1 ABCD = ok Picture 2, not model.
Thanks a lot , much appreciated
I Have Learned to Take Some Losses to Make Profits
  • #4,617
  • Aug 19, 2013 11:34am Aug 19, 2013 11:34am
Does anyone here have already tried using this AMP Monitor?
http://en.ampmonitor.com/amp

A great help on verifying the patterns..
  • #4,618
  • Aug 19, 2013 6:37pm Aug 19, 2013 6:37pm
Quoting iamsynapse
Does anyone here have already tried using this AMP Monitor? http://en.ampmonitor.com/amp A great help on verifying the patterns..
traders do not use this indicator, we trade what we see.
Trading in the zone
  • #4,619
  • Aug 19, 2013 11:16pm Aug 19, 2013 11:16pm
Quoting hao
{quote} you do not believe in the model. That's butterfly pattern.
Please give some explanation on this NU H4 pattern now about how the pattern is working or what to expect next.

Thank you
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  • #4,620
  • Edited Aug 20, 2013 12:11am Aug 19, 2013 11:44pm | Edited Aug 20, 2013 12:11am
Quoting darksorrow
{quote} Please give some explanation on this NU H4 pattern now about how the pattern is working or what to expect next. Thank you {image}
Prices will continue to go down, you should skip and find a new folder. With luck it may sound model is BAT with main Swing is AD of model butterfly.

While many models are not complete. With my butterfly models often ignore, reason: adjustment shallow butterfly BC model can not be business potential in C and shallow correction model butterfly formation difficult point D.

not all models are my butterfly skip. Trade my butterfly business model in C, C Business butterfly potential model, I consider many problems and circumspect.

I posted an earlier article: post#4488 and post#4508
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