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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

  • #8,721
  • Edited 11:46am Apr 27, 2014 10:59am | Edited 11:46am
Quoting Mr. Pip
Back testing is hard work. It's a manual progress that is designed to not only test your chosen setup but also it teaches you to recognize and trains your eyes to commit the information to memory. As painful as this is do not find shortcuts to this. It has great hidden value. Do the work it will pay off.
Indeed Mr. Pip, very true , I mean the market has a way, with back testing we can flow with the market , I remember a guy that studied with us at the university in English Literature Major, he used to keep a pocket English dictionary at hand and read that every single day in the bus early morning going to the university , kept doing this for nearly 2 years, then he just become the dictionary itself, I mean literally you can ask him any word in the dictionary and you will get the answer

I do at least an hour back testing before London open, I try to incorporate 1 month of data in back testing H1 Time Frame , will continue to do this since this the work I think I should do , no other way

Actually back testing now has became very relaxing and enjoyment, since it teaches me something

Remember doing this every single day for how long it takes
I Have Learned to Take Some Losses to Make Profits
  • #8,722
  • Apr 28, 2014 3:31am Apr 28, 2014 3:31am
Hi to all,
demand for ABCD: 1.272% of AB is calculated using Fibonacci Fibonacci retracements or extensions?

http://i1243.photobucket.com/albums/...ps23c20297.jpg

http://i1243.photobucket.com/albums/...ps775ab2ae.jpg
  • #8,723
  • Apr 28, 2014 4:42am Apr 28, 2014 4:42am
Quoting Mr. Pip
Here is an example of a recent ABCD {image} {image}
http://i1243.photobucket.com/albums/...ps4b0ab320.jpg

Hi Mr.Pip,
in this example, as the entry was made?
1. Limit order to the completion of the pattern
2. Pending the completion of the pattern and then market order
3. Pending the completion of the pattern with a bullish candle and then limit order
  • #8,724
  • Apr 28, 2014 5:05am Apr 28, 2014 5:05am
I have drawn a purposeful move. And tried to guess why it bounced there.
Attached Image (click to enlarge)
Click to Enlarge Name: eurusdm30.png Size: 26 KB
-milkeyway
  • #8,725
  • Apr 28, 2014 9:24am Apr 28, 2014 9:24am
ACBD and BAT in formation
Sell 78.6% C
1 target 38.20%

is correct my trade?
http://i1243.photobucket.com/albums/...ps3fed15dd.jpg
  • #8,726
  • Apr 28, 2014 12:01pm Apr 28, 2014 12:01pm
Quoting GiovanniV
ACBD and BAT in formation Sell 78.6% C 1 target 38.20% is correct my trade? {image}
Yes, I think it is. I too, have that Bat on my chart and I might open a long position if the price completes that Bat.

Also, here are two patterns on the Daily EURAUD that I have been keeping my eyes on for a while and it seems like the price has chosen to go for the Cypher, for now at least:
Attached Image (click to enlarge)
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  • #8,727
  • Apr 28, 2014 12:57pm Apr 28, 2014 12:57pm
Quoting Psyren
{quote} Yes, I think it is. I too, have that Bat on my chart and I might open a long position if the price completes that Bat. Also, here are two patterns on the Daily EURAUD that I have been keeping my eyes on for a while and it seems like the price has chosen to go for the Cypher, for now at least: {image}
Totally agree. It seems like a future cypher.
  • #8,728
  • Apr 28, 2014 7:38pm Apr 28, 2014 7:38pm
Quoting kumaramy
I have drawn a purposeful move. And tried to guess why it bounced there. {image}

Your possible entry marked on chart is about 1 tick above the 618 of the swing low and swing high prior on your 30 min chart. But if you leave the horizontal line at that low on possible entry bar you marked and change to a 4 hour or longer chart and look back to left u will see lots of structure.On daily or weekly chart this area goes back years with a trend line from 2008 highs leading to this area. Also 618 area of 11/ 2009 to 5/2010 then again another 618 from 4/2011 to 9/2012.Not sure how to post a chart, but hope this is helpful.
  • #8,729
  • Apr 28, 2014 7:57pm Apr 28, 2014 7:57pm
Quoting GiovanniV
{quote} {image} Hi Mr.Pip, in this example, as the entry was made? 1. Limit order to the completion of the pattern 2. Pending the completion of the pattern and then market order 3. Pending the completion of the pattern with a bullish candle and then limit order
Hello GiovanniV, I'm not an expert but if I can add my 2 cents (After writing, is more like a buck twenty five lol)..... It would depend on your risk tolerance and your ability to read price action and order flow correctly. NOTE: I can only speak for myself but this is what I found (other results may vary);

1) If you go with limit orders at completion

  1. you'll take more trades
  2. you'll often get better entry
  3. your drawdown will be bigger
  4. your overall pips gained MAY be bigger
  5. you'll take emotions out of the entry process

I trade on the 5 min charts and what I also find is that the success rate is not as high as some would like you to believe but still good enough to stay with the strategy. Even on autopilot you’ll never get in on ever trade.
2) If you go for completion then wait for confirmation

  1. You'll take less trades
  2. Your entry will often be worst. Depending if price overshoots, touches or short changes you.
  3. Your drawdown will be less. Depending on your interpretation of price action and your confirmation signals.
  4. Your overall pips will be less. Depending on your success.
  5. Your success rate will be better. Depending on your interpretation of price action and order flow.
  6. Your emotions may interfere. This will ultimately lower you success rate, if you allow them.

Either way, you’ll have to create a strategy (or buy, steal, clone, etc…) and define your rules of engagement. You'll also have to back test your strategy to come up with your own conclusions then test those strategy in a demo account. This is no easy task. Don’t trust anybody with your wallet, do your homework.

Ultimately you'll have to look at yourself in the mirror and ask, "What kind of trader am I? Does this strategy work for me?” I personally prefer to wait for pattern completion then wait for bar by bar confirmation. I'm not an autopilot trader and I don't want to be an average trader either. I want to be the best and it will take hard work, determination, disciplined and time... a lot of time. Sorry, I’m rambling on.

Mr.Pip has done a great job of providing us with some educational material that I put together on post #8464.

I don't have Mr.Pip's wisdom or expertise but I love his approach and though process. This is just my 2 cents.... I hoped it helped. Sorry for the long answer.... if there is an answer. haha!

  • #8,730
  • Apr 28, 2014 8:00pm Apr 28, 2014 8:00pm
Quoting TheScorpS
{quote} Indeed Mr. Pip, very true , I mean the market has a way, with back testing we can flow with the market , I remember a guy that studied with us at the university in English Literature Major, he used to keep a pocket English dictionary at hand and read that every single day in the bus early morning going to the university , kept doing this for nearly 2 years, then he just become the dictionary itself, I mean literally you can ask him any word in the dictionary and you will get the answer I do at least an hour back testing before London open,...
Awesome metaphor. Truly inspiring
  • #8,731
  • Apr 28, 2014 8:21pm Apr 28, 2014 8:21pm


Quoting Mack2013
{quote} Hello GiovanniV, I'm not an expert but if I can add my 2 cents (After writing, is more like a buck twenty five lol)..... It would depend on your risk tolerance and your ability to read price action and order flow correctly. NOTE: I can only speak for myself but this is what I found (other results may vary); 1) If you go with limit orders at completion you'll take more trades you'll often get better entry your drawdown will be bigger your overall pips gained MAY be bigger you'll take emotions out of the entry process I trade on the...
Enter Signature
  • #8,732
  • Apr 28, 2014 10:11pm Apr 28, 2014 10:11pm
Mr. Pip, I have a question regarding the EURUSD. I saw an AB=CD pattern on 15 min. The PRZ that I identified had very good confluence. It was the 61.8% of the dominant swing(hope I have identified the dominant swing correctly). 127-138 of AB + there was a structure. I didn't take the trade because I thought the order flow was to the upside and also the price was having very good momentum when it approached the PRZ. Can you please tell me if you would have taken a short from there. I have marked PRZ with the blue box.
Attached Image (click to enlarge)
Click to Enlarge Name: EURUSD-15 mins.JPG Size: 151 KB
Enter Signature
  • #8,733
  • Apr 29, 2014 1:09am Apr 29, 2014 1:09am
update: EURUSD

I took a short with very small position only(since I was not very confident in this.) I had 5 pips stop loss and 10 pips reward and the SL got hit (-5 pips). The reason why I entered a short after mentioning that I passed on the short because of bullish order flow and strength is because I saw the momentum decreasing. I have done a bar by bar analysis on the chart from candle which I have marked in blue on the chart. No candle after that have managed to close above that candle and also the bears trying to bring it down. So I took a short after the bearish candle in yellow arrow closed. Can you please help me to identify what went wrong or highlight what is wrong with my bar by bar analysis.
I have written what I thought when doing the bar by bar analysis on the chart. Can you please tell me if it was right and please correct me if I missed something.



Quoting Wills
Mr. Pip, I have a question regarding the EURUSD. I saw an AB=CD pattern on 15 min. The PRZ that I identified had very good confluence. It was the 61.8% of the dominant swing(hope I have identified the dominant swing correctly). 127-138 of AB + there was a structure. I didn't take the trade because I thought the order flow was to the upside and also the price was having very good momentum when it approached the PRZ. Can you please tell me if you would have taken a short from there. I have marked PRZ with the blue box. {image}
Attached Image (click to enlarge)
Click to Enlarge Name: EURUSD-Update.JPG Size: 248 KB
Enter Signature
  • #8,734
  • Apr 29, 2014 5:00am Apr 29, 2014 5:00am
Quoting Mack2013
{quote} Hello GiovanniV, I'm not an expert but if I can add my 2 cents (After writing, is more like a buck twenty five lol)..... It would depend on your risk tolerance and your ability to read price action and order flow correctly. NOTE: I can only speak for myself but this is what I found (other results may vary); 1) If you go with limit orders at completion you'll take more trades you'll often get better entry your drawdown will be bigger your overall pips gained MAY be bigger you'll take emotions out of the entry process I trade on the 5 min...
LOL
thanks!
  • #8,735
  • Apr 29, 2014 6:50am Apr 29, 2014 6:50am
Morning All
Aus/Usd 5Min

Took this Aus/Usd trade Gartley completion today. -12 pip.

Had structure and ratio confluence and orderflow. Price action stalled in PRZ zone took the short, price fell, which was my expectation, then just went on to make new highs past the 161, and took me out.
Attached Image (click to enlarge)
Click to Enlarge Name: aus.PNG Size: 52 KB
  • #8,736
  • Apr 29, 2014 6:59am Apr 29, 2014 6:59am
EU 4H

BAT inside GARTLEY.
is correct?
http://i1243.photobucket.com/albums/...ps1903bffc.jpg
  • #8,737
  • Apr 29, 2014 7:57am Apr 29, 2014 7:57am
Quoting Wills
Mr. Pip, I have a question regarding the EURUSD. I saw an AB=CD pattern on 15 min. The PRZ that I identified had very good confluence. It was the 61.8% of the dominant swing(hope I have identified the dominant swing correctly). 127-138 of AB + there was a structure. I didn't take the trade because I thought the order flow was to the upside and also the price was having very good momentum when it approached the PRZ. Can you please tell me if you would have taken a short from there. I have marked PRZ with the blue box. {image}
Yes I would have taken the trade but being against order flow I would have been aggressive on the management.
If you fail to plan, you plan to fail.
  • #8,738
  • Apr 29, 2014 8:00am Apr 29, 2014 8:00am
Quoting GiovanniV
EU 4H BAT inside GARTLEY. is correct? {image}
Don't get too crazy on the patterns trade what you see if there is a trade take based on the order flow and confluence not because of the potential patterns. At the moment you have no patterns.
If you fail to plan, you plan to fail.
  • #8,739
  • Apr 29, 2014 8:06am Apr 29, 2014 8:06am
Hey Traders, Getting back to some of my roots for a while on the higher time frames since some things are going on in my life that prohibit me to stay at my PC took this short a few minutes ago AUDUSD AB=CD aggressive sell.
Attached Image (click to enlarge)
Click to Enlarge Name: AUDUSD.jpg Size: 125 KB
If you fail to plan, you plan to fail.
  • #8,740
  • Apr 29, 2014 8:19am Apr 29, 2014 8:19am
hi mr pip, is it bullish butterfly pattern?
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