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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

  • #6,561
  • Dec 24, 2013 8:46am Dec 24, 2013 8:46am
Quoting itinerant
{quote} Hi Amit, I'm practicing my order flow analysis - please can you elaborate on your "increasing depth to the downside"? This is what I see {image}
What is the command line? Here is the answer. (This is his confluence MR.PIP)
http://www.forexfactory.com/showthread.php?p=6322854#post6322854
Trading in the zone
  • #6,562
  • Dec 24, 2013 8:56am Dec 24, 2013 8:56am
Quoting kumaramy
{quote} In this picture, you can clearly see that the height of swing qr & sx are quite same or normal. But compared to previous one i.e. sx you can see the height of swing ab is greater. So, what we can say ? We can say that market is now tried to push price higher. Because height of swing ab is abnormally greater that previous qr and sx swings. So, here we say THE DEPTH TO THE UPSIDE is increased. You can study the projection but more than that I focus and observe momentum and depth. {image}
I want to warn you, the price expectations in video MR PIP, you should remember that it is the "expectation", which means: it has a random percentage. you should focus on the confluence - commercial reasons, it is the deciding factor.
Trading in the zone
  • #6,563
  • Dec 24, 2013 11:47am Dec 24, 2013 11:47am
Merry Christmas Mr.Pip and all the members , wishing you happy holidays
I Have Learned to Take Some Losses to Make Profits
  • #6,564
  • Dec 24, 2013 11:47am Dec 24, 2013 11:47am
Quoting hao
{quote} I want to warn you, the price expectations in video MR PIP, you should remember that it is the "expectation", which means: it has a random percentage. you should focus on the confluence - commercial reasons, it is the deciding factor.
Sorry Hao, but someone already laughed on your views and on your so called super system. We are here to follow Mr. Pip's rule. If you can see, itinerant measured the depth wrong way with brown lines in his post. So, I just told him how to measure depth correctly as per screen shot of Mr. Pip's video. There is no difference with the screen shot and my image. I measured height of op, qr, sx and ab for depth. This is what we call depth.
-milkeyway
  • #6,565
  • Edited 12:41pm Dec 24, 2013 12:17pm | Edited 12:41pm
Correct Fibonacci Extensions for Traders Using Metatrader

Okay, enough has been said about how to configure the Fibonacci Object in MT4 to get the levels we need plus extensions.

Today I am going to clarify a very important matter that is about at what side of the swing structure we want these extensions. You will learn that 1.618 is not the same as -0.618, they both have their validity but depending what we want.

For this particular clarification I will take the Criteria No 2 of the ABCD pattern:

Criteria 2: The market forms the (D) completion point by fulfilling at least a one to one harmonic move of the AB leg coming in at a 127.2% extension of AB. For ratio confluence confirmation a measurement of the BC may be taken and the extension should come in at around a 138.2% to a 161.8%.

We need to read this the correct way. Mr. Pip is saying that the extension of AB will come when we get a one to one harmonic move. That means CD being the harmonic reflection of AB. If the market is trending up, A is going to be the low and B the high. This means D will be above B, correct? It's obvious then, that the AB extension will be above the 0.0% of AB. That's why we need to set up the correct Fibonacci Extensions for AB. They are: -0.272, -0.382 and -0.618.

The second part of the Criteria mentions that for ratio confluence in the D completion point we want an extencion of BC. But CAREFUL! We won't have the same extensions here (-0.272... ) because in this case the extensions will be continuing the line of 100%, so they are: 1.272, 1.382, 1.618.

I want to say that the most used extensions are the ones given by AB, which are, the ones at the opposite side of 0.0%.

I hope this clarifies the correct set up in MT4. In the attached picture notice that I put the AB next to the AB extensions and BC next to BC extensions, but they are measured differently. In AB I have -0.272, -0.382 and -0.618 while in BC I set 1.272, 1.382 an 1.618.

Attached Image (click to enlarge)
Click to Enlarge Name: eurgbp-a.png Size: 46 KB


P.S sorry the picture is not an exact ABCD since price didn't touch the 61.8% of AB but the concept is still valid for the purpose of this post.
Best time to plant a tree was 20 years ago, second best is now
  • #6,566
  • Dec 24, 2013 12:26pm Dec 24, 2013 12:26pm
Quoting kumaramy
{quote} Sorry Hao, but someone already laughed on your views and on your so called super system. We are here to follow Mr. Pip's rule. If you can see, itinerant measured the depth wrong way with brown lines in his post. So, I just told him how to measure depth correctly as per screen shot of Mr. Pip's video. There is no difference with the screen shot and my image. I measured height of op, qr, sx and ab for depth. This is what we call depth.
Hi Amit, I'm not sure how you think I measured depth wrong?
As we are making lower highs/lows, we measure between the swing low to the next swing high (swing points always being subjective... but I still can't get your chart to show an increase in depth).
I use slanted lines for depth rather than vertical arrows as my preference (as this gives me an indication of depth's momentum), which makes no difference as long as we are clear we are measuring height not slant distance. Hence why I paired the bottoms together for clarity.
  • #6,567
  • Dec 24, 2013 12:26pm Dec 24, 2013 12:26pm
Quoting itinerant
{quote} Hi Amit, I'm not sure how you think I measured depth wrong? As we are making lower highs/lows, we measure between the swing low to the next swing high (swing points always being subjective... but I still can't get your chart to show an increase in depth).
This is screen shot of Mr. Pip's video. Zoom this image. There are small yellow arrows going to UPSIDE. It is depth. The height.

Height O to P is depth
Height Q to R is depth
Height S to X is depth

and height A to B is abnormally increased depth compared to others.
Attached Image (click to enlarge)
Click to Enlarge Name: Order Flow - YouTube.mp4_000382200.jpg Size: 38 KB
-milkeyway
  • #6,568
  • Dec 24, 2013 12:31pm Dec 24, 2013 12:31pm
Quoting kumaramy
{quote} This is screen shot of Mr. Pip's video. Zoom this image. There are small yellow arrows going to UPSIDE. It is depth. The height. Height O to P is depth Height Q to R is depth Height S to X is depth and height A to B is abnormally increased depth compared to others. {image}
Hi Amit, I think perhaps my depictions are confusing you: I use slanted lines for depth rather than vertical arrows as my preference (as this gives me an indication of depth's momentum - not something Mr Pip has mentioned but I'm observing nevertheless), which makes no difference as long as we are clear we are measuring height not slant distance. Hence why I paired the bottoms together for clarity.
  • #6,569
  • Dec 24, 2013 12:34pm Dec 24, 2013 12:34pm
Quoting kumaramy
{quote} Sorry Hao, but someone already laughed on your views and on your so called super system. We are here to follow Mr. Pip's rule. If you can see, itinerant measured the depth wrong way with brown lines in his post. So, I just told him how to measure depth correctly as per screen shot of Mr. Pip's video. There is no difference with the screen shot and my image. I measured height of op, qr, sx and ab for depth. This is what we call depth.
hao is a good trader , he is one of the few that kept this thread alive, I came when there were only few and started reading this thread which is pure gold, there's nothing to laugh on anybody that is trying to teach something, anybody that try to teach me something I would bow for him and at least respect him
I Have Learned to Take Some Losses to Make Profits
  • #6,570
  • Dec 24, 2013 12:35pm Dec 24, 2013 12:35pm
@Amit
I think we're off on a tangent here... I remain fairly confident I understand depth as per Mr. Pip, but my confusion remains: where are you seeing the increase in depth on this chart you posted? I really can't see it - perhaps you can mark it up for me?
http://www.forexfactory.com/attachment.php?attachmentid=1335229&stc=1&thumb=1&d=1387859277
  • #6,571
  • Edited 12:48pm Dec 24, 2013 12:37pm | Edited 12:48pm
Quoting itinerant
{quote} Hi Amit, I think perhaps my depictions are confusing you: I use slanted lines for depth rather than vertical arrows as my preference (as this gives me an indication of depth's momentum - not something Mr Pip has mentioned but I'm observing nevertheless), which makes no difference as long as we are clear we are measuring height not slant distance. Hence why I paired the bottoms together for clarity.
Look I flipped the words.
I hope you can now understand this.

I did this in your words

I flipped it because we are at the top of the main uptrend. And when we are are in uptrend, we always have to look for increasing depth to the downside (you green lines) and decreasing momentum to the upside (your slanted lines). And first of all this is not the way we measure depth with green or slanted lines. We measure this way momentum only.
Attached Image (click to enlarge)
Click to Enlarge Name: gbpjpy.png Size: 78 KB
-milkeyway
  • #6,572
  • Dec 24, 2013 12:39pm Dec 24, 2013 12:39pm
Quoting TheScorpS
{quote} hao is a good trader , he is one of the few that kept this thread alive, I came when there were only few and started reading this thread which is pure gold, there's nothing to laugh on anybody that is trying to teach something, anybody that try to teach me something I would bow for him and at least respect him
You can look is respect for me in Laughing smiley.
-milkeyway
  • #6,573
  • Dec 24, 2013 12:48pm Dec 24, 2013 12:48pm
Quoting kumaramy
{quote} Look I flipped the words. I hope you can now understand this. I did this in your words I flipped it because we are at the top of the main uptrend. And when we are are in uptrend, we always have to look for increasing depth to the downside (you green lines) and decreasing momentum to the upside (your slanted lines). And first of all this is wrong way to measure depth with green or slanted lines. {image}
Interesting, thank you for your thoughts. That is not an interpretation I would have taken because you are depicting bullish momentum while making lower highs and lower lows.
Nevertheless, I hope the trade played out for you
  • #6,574
  • Dec 24, 2013 12:49pm Dec 24, 2013 12:49pm
Quoting itinerant
{quote} Interesting, thank you for your thoughts. That is not an interpretation I would have taken because you are depicting bullish momentum while making lower highs and lower lows. Nevertheless, I hope the trade played out for you
Nobody is perfect.
-milkeyway
  • #6,575
  • Dec 24, 2013 12:51pm Dec 24, 2013 12:51pm
horuxito (http://www.forexfactory.com/horuxito)

to add more confluence into the D completion zone, a BC ext can be measured or at least if the market is falling to create a stronger projections with a shorter CD leg, then pa might respect a shorter BC leg ext rather than the longer AB leg ext, at least have seen this happens

In Larry Passavento book Trade what You See he explains about ABCD formations is that 40% of the time they are exact measure in length and time, and 60% of the time they are not, so the CD leg might get shorter or extended
I Have Learned to Take Some Losses to Make Profits
  • #6,576
  • Dec 24, 2013 12:53pm Dec 24, 2013 12:53pm
Quoting kumaramy
{quote} And first of all this is not the way we measure depth with green or slanted lines. We measure this way momentum only. {image}
I think that provided we are all following the same concept, the choice of colours, arrows, rectangles, ellipses shouldn't really be of any concern. But I shall note for future chart postings that you don't like the slanted lines
  • #6,577
  • Dec 24, 2013 12:57pm Dec 24, 2013 12:57pm
Quoting itinerant
{quote} Interesting, thank you for your thoughts. That is not an interpretation I would have taken because you are depicting bullish momentum while making lower highs and lower lows. Nevertheless, I hope the trade played out for you
You can consider your green lines as momentum. But it has to be.
-milkeyway
  • #6,578
  • Edited 1:09pm Dec 24, 2013 12:59pm | Edited 1:09pm
Quoting itinerant
{quote} I think that provided we are all following the same concept, the choice of colours, arrows, rectangles, ellipses shouldn't really be of any concern. But I shall note for future chart postings that you don't like the slanted lines
Yes you measured the depth different way. but look for increasing momentum to the upside, decreasing momentum to downside and increasing depth to the upside when we are in downtrend.
And look for increasing momentum to the downside, decreasing momentum to the upside, and increasing depth to downside when we are in downtrend.

Remember : your trend is friend is about to born. It is not born yet. Look for his birth by looking above things.
-milkeyway
  • #6,579
  • Dec 24, 2013 1:08pm Dec 24, 2013 1:08pm
Quoting TheScorpS
horuxito (http://www.forexfactory.com/horuxito) to add more confluence into the D completion zone, a BC ext can be measured or at least if the market is falling to create a stronger projections with a shorter CD leg, then pa might respect a shorter BC leg ext rather than the longer AB leg ext, at least have seen this happens In Larry Passavento book Trade what You See he explains about ABCD formations is that 40% of the time they are exact measure in length and time, and 60% of the time they are not, so the CD leg might get shorter or extended...
Yes, those are interesting points Scorp, thanks for sharing. I prefer CD being longer than AB since I freaking love exhaustion and if I can visualize an AB=CD inside the bigger CD, even better!

My post was oriented at how to measure extensions depending at what side of the structure they will be.
Best time to plant a tree was 20 years ago, second best is now
  • #6,580
  • Dec 24, 2013 1:10pm Dec 24, 2013 1:10pm
Well, it has almost been a year since I first saw this thread appear in the forums.

At that point, I would probably be best described as a break-even trader who sporadically returned to dedicate some time to forex, and in doing so I jumped from one system to the next .

The balance sheet for the preceding 3 years showed that forex owed me nothing (except a rather large investment of time) but neither had it given me anything in return... not a particularly appealing result, but I'm well aware it could have been far worse!

The combination of Mr. Pip's teaching style and the appeal of a simpler, cleaner approach got me hooked.

However, I left the thread for most of the middle of the year when the "day job" got in the way. I didn't have enough time to trade, so I set myself a project to build an EA. I took a small amount of knowledge (basically pattern recognition, with no concept of price action and order flow) and thought I had enough to be profitable. In the short term, the EA gave good results. But deeper back-testing never yielded good results. So what did I do? I jumped between time frames and pairs, I added more "filters" (indicators) and that didn't work either.

Eventually, I came to the conclusion that I only had half the pieces to the jigsaw. An understanding of price was the key... something I knew very little about and so had no chance of coding into an EA.

So, I came right back around to square one.

The EA and indicators have gone (well, mostly... RSI still makes an appearance ).

I only trade one pair (EURUSD) on 144 and 233 tick charts.

I really only look for AB=CD variants with confluence.

It is early days, but this gives me 1-2 entries a day which I'm happy with, and the hit rate is far higher than I have ever managed before.

All of which is pretty much what Mr. Pip told us at the start. Which goes to show: you can lead a horse to water but you can't make it drink!

Thank you Mr. Pip, and wishing everybody a prosperous New Year.
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