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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

  • #6,041
  • Dec 14, 2013 4:17pm Dec 14, 2013 4:17pm
This is the point where I got to the chart. I see price created a higher low off of a 38.2 correction which is uncharacteristic with the kind of momentum that was driving price downward. I also see price make another attempt at the 38.2 with an increase in momentum also uncharacteristic considering the bearish bias and strong order flow.

The second is way deeper then expected and with greater momentum indicates bulls are gaining strength and the bears are weakening my expectation is a possible retest of the lows but not a NSL as the bears are weakening fast.

After this assessment to consider a short position, I am now on the sidelines considering a possible order flow rotation and assessing a possibility of long position off of the ABCD that completed.
Attached Image (click to enlarge)
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If you fail to plan, you plan to fail.
  • #6,042
  • Dec 14, 2013 4:30pm Dec 14, 2013 4:30pm
I am mow seeing weakness by the bears in my area of interest and am no longer on the sidelines I an looking for a long position as now I have a potential second higher low. I am now waiting hoe a Bar by Bar confirmation of buyers entering the market.
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If you fail to plan, you plan to fail.
  • #6,043
  • Dec 14, 2013 4:48pm Dec 14, 2013 4:48pm
I finally understood the word MOMENTUM!

That first picture worth Gold.

I went to my charts and tried to locate that ABCD, and after taking the high to the previous and then the previous I finally could see something, but it was a little forced. HOWEVER, when you incorporate the term "momentum" to the equation it all makes sense.

Every new magenta line occupies less horizontal space. This means that the bears are taking price with a lot of strenght. And maybe if you would had expected a "by the book" 127% abcd of the very last 2 swings you would had fallen flat in your face. There is a lot of strength of the bears and that's why the 161.8% explains the case better here. Very nice!

I also noticed that there was this big line in the sand around 1.3739 acting as support. Finally it got broken with that momentum building up.

It's nice all the afterwards analysis to build the long case. You needed to see the dust being removed.

A question.. are those dotted magenta horizontal lines daily support?
Best time to plant a tree was 20 years ago, second best is now
  • #6,044
  • Dec 14, 2013 5:04pm Dec 14, 2013 5:04pm
Bar by Bar Analysis:

Candle A shows initial signs of weakness as 2/3 of it's volume was rejected by the bulls.

Candle B shows buyers starting to aggressively buy at this price level. The candle is able to hold 100% of it's total volume which is a further testament of how weak the bears are at this point.

Candle C shows The bears desperately trying to hold on to the level however even though they achieved to hold on to 100% of the low, they were still unable to push price below the open of candle B or the close of candle A. The bears still show weakness.

Candle D show a will to push price lower but an inability to hold onto any of it and the candles closes neutral and at the same level of the previous three candles. This further confirms my assessment of major weakness and a possible nail in the coffin for the bears as this appears to be the low of this swing.

Candle E shows a candle that never traded below it's open which is a sign of strength and hold 2/3 of it overall trading volume. This confirms a very likely higher low and a rotation of the short term order flow.

Conclusion:

This is my second higher low and now have an expectation of a NSH. This is also an aggressive C buy of an ABCD to the high side. My entry is on the next bar open at market. There was a very quick surge in buying which caused a bad fill, it does happen everything is not bubblegum and rainbows.

Got filled at 1.3727. I hope you can see how I build my case for entry and my considerations for going against longer term order flow.

May case was built on facts that are present on the chart nothing is subjective and all of these facts provided me with a very high probability trade to the high side.
Attached Image (click to enlarge)
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If you fail to plan, you plan to fail.
  • #6,045
  • Dec 14, 2013 5:08pm Dec 14, 2013 5:08pm
Quoting horuxito
I finally understood the word MOMENTUM! That first picture worth Gold. I went to my charts and tried to locate that ABCD, and after taking the high to the previous and then the previous I finally could see something, but it was a little forced. HOWEVER, when you incorporate the term "momentum" to the equation it all makes sense. Every new magenta line occupies less horizontal space. This means that the bears are taking price with a lot of strenght. And maybe if you would had expected a "by the book" 127% abcd of the very last 2 swings you would...
No they are round numbers, I like to view where price is in relation to them as the psyches like to trade those LOL. They also add confluence at times.
If you fail to plan, you plan to fail.
  • #6,046
  • Dec 14, 2013 5:18pm Dec 14, 2013 5:18pm
Quoting Mr. Pip
{quote} No they are round numbers, I like to view where price is in relation to them as the psyches like to trade those LOL. They also add confluence at times.
Oh yes I see

Hey, great series of posts, thanks a lot, we all are very appreciated. I think our mate kumaramy is going to enjoy the candle by candle one
Best time to plant a tree was 20 years ago, second best is now
  • #6,047
  • Dec 14, 2013 5:24pm Dec 14, 2013 5:24pm
Quoting horuxito
{quote} Oh yes I see Hey, great series of posts, thanks a lot, we all are very appreciated. I think our mate kumaramy is going to enjoy the candle by candle one
That is Bar by Bar analysis Ninja Style by Mr. PIP. I hope he does too!
If you fail to plan, you plan to fail.
  • #6,048
  • Dec 14, 2013 5:26pm Dec 14, 2013 5:26pm
Quoting Mr. Pip
{quote} That is Bar by Bar analysis Ninja Style by Mr. PIP. I hope he does too!

Best time to plant a tree was 20 years ago, second best is now
  • #6,049
  • Dec 14, 2013 5:44pm Dec 14, 2013 5:44pm
Hey Traders,

I'm sorry I was going to get into the trade management and also the short positions but in order to be as detailed as possible this has taken a lot of time. Family duties call and they have been extremely patient today waiting for me to finish. We will have to pick this up some other time.

I am also going away for a few days so I will not be answering questions or posting I will be back on Friday to catch up. Fine Forex will be active though and so will some of the other veterans to help out. Good luck and good trading. I will still check in and see what's going on. Please continue to work hard and post your charts and questions. Thanks!!!
If you fail to plan, you plan to fail.
  • #6,050
  • Dec 14, 2013 5:49pm Dec 14, 2013 5:49pm
Thanks Mr. Pip - I've just got around to watching your latest video which was a huge help, and so were your recent posts explaining the long entry.

I certainly appreciate all the time and effort you and others put into this thread
  • #6,051
  • Dec 14, 2013 6:20pm Dec 14, 2013 6:20pm
Quoting Mr. Pip
Hey Traders, I'm sorry I was going to get into the trade management and also the short positions but in order to be as detailed as possible this has taken a lot of time. Family duties call and they have been extremely patient today waiting for me to finish. We will have to pick this up some other time. I am also going away for a few days so I will not be answering questions or posting I will be back on Friday to catch up. Fine Forex will be active though and so will some of the other veterans to help out. Good luck and good trading. I will still...
Happy family means happy Mr. Pip. Enjoy these days with them!
Best time to plant a tree was 20 years ago, second best is now
  • #6,052
  • Dec 14, 2013 8:39pm Dec 14, 2013 8:39pm
Quoting Mr. Pip
Hey Traders, I'm sorry I was going to get into the trade management and also the short positions but in order to be as detailed as possible this has taken a lot of time. Family duties call and they have been extremely patient today waiting for me to finish. We will have to pick this up some other time. I am also going away for a few days so I will not be answering questions or posting I will be back on Friday to catch up. Fine Forex will be active though and so will some of the other veterans to help out. Good luck and good trading. I will still...
Yes Mr. Pip enjoy your family time and Merry Christmas to you sir, many thanks for the video and for all the explanations and charts
I Have Learned to Take Some Losses to Make Profits
  • #6,053
  • Dec 14, 2013 10:41pm Dec 14, 2013 10:41pm
Quoting Mr. Pip
{quote} No worries my friend I just want you to understand that to be in the top 10% of any business take a great deal of everything and in a business like this that has a 90% failure rate it takes even more!!! Lets shake it off and get back to work. I said what I needed to say and hope you can put on your armor and we can step on to the battle field together. Don't take it too personal just needed to pull your ear a bit. Only the dedicated have a slight chance here. Let's see what you got????
Thank very much Mr. Pip. I will do more hard work and I will notify about my study. Merry Christmas!
-milkeyway
  • #6,054
  • Dec 14, 2013 11:24pm Dec 14, 2013 11:24pm
Quoting Mr. Pip
Bar by Bar Analysis: Candle A shows initial signs of weakness as 2/3 of it's volume was rejected by the bulls. Candle B shows buyers starting to aggressively buy at this price level. The candle is able to hold 100% of it's total volume which is a further testament of how weak the bears are at this point. Candle C ...{image}
Thank you so much Mr. Pip. This is very helpful and I really appreciate your post. Thank you and wish you have a wonderful holiday!!!
  • #6,055
  • Dec 15, 2013 12:13am Dec 15, 2013 12:13am
Quoting Mr. Pip
This is the EURUSD trade setup and the reasons why I entered long. The first chart shows my initial assessment of order flow and bias. The look for harmonic completions. This process identified an ABCD pattern that completed slightly past harmonic expectations. This is reasonable as price really accelerated into the PRZ. Asses order flow to identify market strength and weakness. This analysis shows momentum building for the bears as price has accelerated to the down side. This can be appreciated by the magenta linens on the chart below. Identify...
Ok. What I understand from you posts No. 6040, 6141, 6042 & 6044 is :

As per image 1 :
1] 1st we have to look for valid completion of capital ABCD pattern. (And if it is bullish ABCD pattern then)
2] At capital point D (ABCD PRZ) we have to observe higher lows as well as small developing abcd pattern as per higher lows.


Then as per image 2 :
We have to look for price action behavior at c point of small abcd developing pattern for aggressive c buy.

Please verify for my above understanding is correct.
Attached Image(s) (click to enlarge)
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-milkeyway
  • #6,056
  • Dec 15, 2013 12:43am Dec 15, 2013 12:43am
Just the one trade for me this week unfortunately +43 but it was a nice winner nailed the bottom and top of the wave and a wins a win.. Hope you guys ended the week positive too!!!

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Never said I was Batman,all I'm saying is you'll never see us together.
  • #6,057
  • Dec 15, 2013 3:22am Dec 15, 2013 3:22am
And What I didn't understand from post 6042 is : Why we bought it even point no 4 was lower than point no. 2.
Because point 4 is lower than point 2, it looks there is weakness in bulls too. point 4 failed to break point 2.
And In this example after point 4 price returned to point 5 so we could buy it. But what if price goes straight up? Means what if price doesn't make swing 2 - 3 . or 4-5 ?

Thanks.
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-milkeyway
  • #6,058
  • Dec 15, 2013 4:18am Dec 15, 2013 4:18am
Both charts M5 and same question: Is this Cypher and what will be if price move upside above X? Or i missing something about ratios?
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My question because of:
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  • #6,059
  • Dec 15, 2013 5:13am Dec 15, 2013 5:13am
Quoting CoreNYa
Both charts M5 and same question: Is this Cypher and what will be if price move upside above X? Or i missing something about ratios? {image} {image} My question because of: {image}

There is patterns rules of engagement pdf file in this thread, look for this. This is not Cypher, BC leg invalidates it.
Let's forget patterns for now, and study PA, that is more important.
  • #6,060
  • Dec 15, 2013 5:26am Dec 15, 2013 5:26am
In this image I have taken aggressive c buy at small abcd pattern.
Reasons :
1] Capital AB=CD pattern is complete (Yellow lines).
2] Small c point has demand zone.
3] The target is represents the completion of small ab=cd pattern (Magenta lines)
Attached Image (click to enlarge)
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-milkeyway
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