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Ratios & Harmonics: a Different Way to Trade

  • #6,641
  • Dec 26, 2013 9:43am Dec 26, 2013 9:43am
Quoting dpaulinla
Mr. Pip, First let me say I hope you and your family had a very Merry Christmas and you enjoyed your much needed time off with them. I stumbled upon your tread a little over a month ago and have read every single post. I did not feel that commenting about anything in here was appropriate until I did so. You have no idea how much respect and admiration I have for you. Earlier this yr. I purchased a training course that is similar to your teachings in which I paid several thousand and to be honest I have learned a great deal more simply by going through...
Welcome and thank you for your kind words. I look forward to your posts and comments. Posts charts at will with questions and I will do my best to help. God bless you and your family!
If you fail to plan, you plan to fail.
  • #6,642
  • Dec 26, 2013 9:46am Dec 26, 2013 9:46am
Quoting kumaramy
Hello Mr. Pip. When there are gaps can we measure fib like this ? Can we measure the ratio of the gap swing ? {image}
Yes, that would be the correct way but keep in mind that there is data that is missing there so you do not have enough information to make a good decision so it's a low probability situation.
If you fail to plan, you plan to fail.
  • #6,643
  • Dec 26, 2013 9:51am Dec 26, 2013 9:51am
Quoting Mr. Pip
{quote} Yes, that would be the correct way but keep in mind that there is data that is missing there so you do not have enough information to make a good decision so it's a low probability situation.
So, we should not measure it right ?
-milkeyway
  • #6,644
  • Dec 26, 2013 10:00am Dec 26, 2013 10:00am
Well Traders, it's been one year to this day that I decided to introduce this way of trading. I hope you have found value in the content as I have tried to keep thing as easy to understand as possible. I look forward to continuing our journey to consistent profitability.

I would like to thank all the contributors for their knowledge and willingness to help. I am glad to be hare and hope this thread continue to enlighten many traders or all skill levels. I ask that we stay true to the rules of the thread. We must respect each other and our opinions. There is no need to insult or belittle anyone.

I am glad to see how much improvement I have seen so far and I would like to single out Amit and congratulate him on how far he has come in such a short time.

God bless all of you and there is still much much more, this is our home and we are all brothers and sisters here so feel comfortable in posting you will not be abused like in some other threads. You will always be pointed in the appropriate direction. Tomorrow I will talk about timing your entries.
If you fail to plan, you plan to fail.
  • #6,645
  • Dec 26, 2013 10:01am Dec 26, 2013 10:01am
Quoting kumaramy
{quote} So, we should not measure it right ?
I don't
If you fail to plan, you plan to fail.
  • #6,646
  • Dec 26, 2013 10:21am Dec 26, 2013 10:21am
Could someone here please tell me how to post a chart in the tread? What must I do to save a pic of chart to upload into tread. Thanks in advance for your help.
  • #6,647
  • Dec 26, 2013 10:28am Dec 26, 2013 10:28am
Quoting Mr. Pip
Well Traders, it's been one year to this day that I decided to introduce this way of trading. I hope you have found value in the content as I have tried to keep thing as easy to understand as possible. I look forward to continuing our journey to consistent profitability. I would like to thank all the contributors for their knowledge and willingness to help. I am glad to be hare and hope this thread continue to enlighten many traders or all skill levels. I ask that we stay true to the rules of the thread. We must respect each other and our opinions....
Thanks many many for providing the knowledge and the information us in trade methodology which is developed by you. It is our one of the best opportunities kept before us in our life !
-milkeyway
  • #6,648
  • Dec 26, 2013 11:38am Dec 26, 2013 11:38am
Good long entry oppurtunity on USDJPY when emerging Cypher in h4 will complete ..
----------
* usdjpy H4
* bullish [email protected]
*Price on upper trendline of an ascendant canal
*Price on upper daily BB
*MAcd bearish divergence
*Gap to fulfill
---------
Expection correction before uptrend resume
Strategie :1. entry : short 103.70 TP=103.30
2. entry : long 103.3 TP = 107 ?

Attached Image (click to enlarge)
Click to Enlarge Name: usdjpyh4.png Size: 69 KB
  • #6,649
  • Dec 26, 2013 11:46am Dec 26, 2013 11:46am
Quoting Mr. Pip
{quote} Well Fib extension should be drawn from main swings (an obvious high and low). Most trend reversals or longer term corrections occur between the 138.2 and the 161.8. These markets are severely over bought or sold at these levels. There doesn't necessarily have to be a pattern. Remember patterns just add to the confluence and your case building. Watch the order flow breakdown and build your case for entry. These trades provide tremendous opportunities but also carry lower probabilities as well so I manage them more aggressively. If you need...
Excellent reply, a lot of points to consider. A chart would be highly appreciated. But I wanted to exercise myself with an actual trade I took with one of these cases.

Picture 1:

EURUSD 6 pips range bars. The first thing that made me look for signs of exhaustion whas the strong momentum/stong projection bearish move. It had gone 140 pips to the downside while the average range for the EURUSD was only 80 pips per day. I thought: "this thing has to provide a retracement somewhere to relax!". But I didn't want to jump in immediately. So I drew some extensions and the first I got gave me some nice levels around the 138.2%. Then price started to produce weaker projections and a decrease in momentum. At that time I was able to draw some harmonics and a second extension for confluence and I built a case to go long in the blue box with the stop just 20 pips below taking the 161.8% as reference.

Attached Image (click to enlarge)
Click to Enlarge Name: eurusd-a.png Size: 42 KB


Picture 2:

Just as you mentioned, these setups have to be traded more aggressively and 61.8% target for the whole move might be a little over optimistic, that's why 38.2% was the number here, around 70 pips. Considering the risk was only 20 pips it worth the try!

Attached Image (click to enlarge)
Click to Enlarge Name: eurusd-b.png Size: 47 KB


Picture 3:

The H4 chart showed an intermediate area of demand to add confluence to the trade. The only way price could overcome that area was with a strong momentum and it wasn't the case when price stalled in the fibo exhaustion levels.

Attached Image (click to enlarge)
Click to Enlarge Name: eurusd-c.png Size: 47 KB
Best time to plant a tree was 20 years ago, second best is now
  • #6,650
  • Dec 26, 2013 12:54pm Dec 26, 2013 12:54pm
Quoting Mr. Pip
{quote} I don't
Mr Pip: happy birthday, and for our sake are many more.
Thanks for everything and hope to take advantage of your generosity, and knowledge.
  • #6,651
  • Dec 26, 2013 1:57pm Dec 26, 2013 1:57pm
Just the one entry today for me, and only for 13 pips. But a good opportunity to put into practice some Christmas reading

Whether through chance or otherwise, price did exactly what my bias expected once I actually sat down and did a bar-by-bar analysis for the entry... thus confirming it is time I gave more commitment to this aspect of my trading.

The hardest thing was waiting 21 bars for the entry
Attached Image (click to enlarge)
Click to Enlarge Name: barbybar.png Size: 82 KB
  • #6,652
  • Dec 26, 2013 2:27pm Dec 26, 2013 2:27pm
Quoting itinerant
Just the one entry today for me, and only for 13 pips. But a good opportunity to put into practice some Christmas reading Whether through chance or otherwise, price did exactly what my bias expected once I actually sat down and did a bar-by-bar analysis for the entry... thus confirming it is time I gave more commitment to this aspect of my trading. The hardest thing was waiting 21 bars for the entry {image}
Nope not chance. I was practicing today also using the 2 min for entry and I saw this one as well. On the 2 min you had some structure arguments and exhaustion to make you more confident. It was harder off the 233 tick but you caught the move as all the bears stops were going to be triggered adding to the orderflow up. Good work!
Finally out of the shadows.
  • #6,653
  • Dec 26, 2013 3:36pm Dec 26, 2013 3:36pm
Quoting itinerant
Just the one entry today for me, and only for 13 pips. But a good opportunity to put into practice some Christmas reading Whether through chance or otherwise, price did exactly what my bias expected once I actually sat down and did a bar-by-bar analysis for the entry... thus confirming it is time I gave more commitment to this aspect of my trading. The hardest thing was waiting 21 bars for the entry {image}
Great job! Thanks for teaching, this type of analysis where you got it?
  • #6,654
  • Dec 26, 2013 4:03pm Dec 26, 2013 4:03pm
Quoting paulselvan
Good long entry oppurtunity on USDJPY when emerging Cypher in h4 will complete .. ---------- * usdjpy H4 * bullish [email protected] *Price on upper trendline of an ascendant canal *Price on upper daily BB *MAcd bearish divergence *Gap to fulfill --------- Expection correction before uptrend resume Strategie :1. entry : short 103.70 TP=103.30 2. entry : long 103.3 TP = 107 ? {image}
We don't use indicators here, and we don't trade gaps. Look around there are other trade opportunities in other chair don't get attached to a chart
Thanks
  • #6,655
  • Dec 26, 2013 4:11pm Dec 26, 2013 4:11pm
Quoting Mr. Pip
{quote} This is very powerful! finding patterns in the short term order flow is a great way to add confluence and help you build a stronger case for entry.
It's not only powerful but I believe they are the core of harmonics trading. Mr. Pip. If it isn't too much to ask, I would like you to make a video on this topic one to one harmonic move, projecting a trendline until it reach a prz... I mean pure harmonic moves!

A year ago I thought the term "harmonics" made reference to patterns: bat, crab, gartley, butterfly, shark, dragon, cypher, etc. It took my a while to realize what they really were.

We all know "ratios" are the fibonacci retracements and extensions, but harmonics... what are they?

Put in simple words harmonics are lines drawn from a low to a high (or the other way around) using the trendline tool, then copy and paste it in a new low or high and repeat that process until they reach an area of confluence given by ratios and areas of supply/demand. It's very simple process.
Best time to plant a tree was 20 years ago, second best is now
  • #6,656
  • Edited 7:20pm Dec 26, 2013 7:06pm | Edited 7:20pm
Quoting paulselvan
Good long entry oppurtunity on USDJPY when emerging Cypher in h4 will complete .. ---------- * usdjpy H4 * bullish [email protected] *Price on upper trendline of an ascendant canal *Price on upper daily BB *MAcd bearish divergence *Gap to fulfill --------- Expection correction before uptrend resume Strategie :1. entry : short 103.70 TP=103.30 2. entry : long 103.3 TP = 107 ? {image}
If you are going to use trend lines as part of your analysis that is fine but you have to draw them correctly. Why did you skip the previous high and why did you choose that particular starting point? I want to also point out just how unreliable your indicator is. Look at how many time it showed you divergence and price kept going up. It is a handicap free yourself.
If you fail to plan, you plan to fail.
  • #6,657
  • Dec 26, 2013 7:15pm Dec 26, 2013 7:15pm
Quoting horuxito
{quote} Excellent reply, a lot of points to consider. A chart would be highly appreciated. But I wanted to exercise myself with an actual trade I took with one of these cases. Picture 1: EURUSD 6 pips range bars. The first thing that made me look for signs of exhaustion whas the strong momentum/stong projection bearish move. It had gone 140 pips to the downside while the average range for the EURUSD was only 80 pips per day. I thought: "this thing has to provide a retracement somewhere to relax!". But I didn't want to jump in immediately. So I drew...
Nice work but referring to a H4 chart is completely a waste of time you are talking about two different worlds. This is a mistake that many traders make. If you are trading a 6 pips range bar you don't need to look so far out. This is an intraday period with shorter swings focus on a clear target in line with a realistic expectation based on that order flow and don't over analyze your trade.
If you fail to plan, you plan to fail.
  • #6,658
  • Dec 26, 2013 7:17pm Dec 26, 2013 7:17pm
Quoting itinerant
Just the one entry today for me, and only for 13 pips. But a good opportunity to put into practice some Christmas reading Whether through chance or otherwise, price did exactly what my bias expected once I actually sat down and did a bar-by-bar analysis for the entry... thus confirming it is time I gave more commitment to this aspect of my trading. The hardest thing was waiting 21 bars for the entry {image}
Very nice work! Patience pays big time. Great reading.
If you fail to plan, you plan to fail.
  • #6,659
  • Dec 26, 2013 7:49pm Dec 26, 2013 7:49pm
Mr. Pip,
Can you please tell me the process of how to upload charts?????????? I have asked but no one has been willing to answer. I desperately need your help
  • #6,660
  • Dec 26, 2013 7:56pm Dec 26, 2013 7:56pm
Quoting dpaulinla
Mr. Pip, Can you please tell me the process of how to upload charts?????????? I have asked but no one has been willing to answer. I desperately need your help
Save the chart as an image to your desktop or documents. Then look at the bottom when you are writing a post. It gives you the option to attach a file click on that and select the file you want. That's it.
If you fail to plan, you plan to fail.
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