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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

  • #10,821
  • Nov 14, 2014 6:36am Nov 14, 2014 6:36am
Quoting DizzleFX
Mr. Pip and any of you other traders out there that use FXCM, how do you like the new pricing model they use. Suppose to be super tight spreads with a commission charge. Just curious, thinking about giving them a try.
Hi Dizzle,

I don't currently use them but if the spreads are tight it will definitely be worth investigating further.
  • #10,822
  • Nov 14, 2014 6:50am Nov 14, 2014 6:50am
Quoting claytonator
{quote} Hi Dizzle, I don't currently use them but if the spreads are tight it will definitely be worth investigating further.
My thoughts exactly. They have a much tighter spread but charge per transaction based on the size of your position.
Damn The Torpedoes, Full Speed Ahead!
  • #10,823
  • Nov 14, 2014 6:58am Nov 14, 2014 6:58am
Had 2 trades today, both fully meeting my expectation. On my first trade I exited early, on the first bearish bar. I new I was against long term order flow, so thought it was a good place to exit. I would have been hit at BE had I not closed my position. Price then went right into my PRZ and backed down (see post #10819).

My second trade was back in the direction of long term order flow, to the down side. After price hit my PRZ from my first trade, it went down and made a NSL then retraced and left me with an aggressive C entry on an AB=CD pattern. Price made its way right down to my PRZ and I gracefully exited on the first green bar.

Today I felt like I navigated my way through the chart like a pro. Hopefully I have many more of these days to come.
Attached Image (click to enlarge)
Click to Enlarge Name: $GBPUSD (233 Tick) 11_14_2014.jpg Size: 116 KB
Damn The Torpedoes, Full Speed Ahead!
  • #10,824
  • Nov 14, 2014 7:02am Nov 14, 2014 7:02am
Quoting honestknave
Hello DeepakJ, Just an observation, as I took the same trade. EU has been keeping a very steady rhythm today - the downward pulses are marked up in cyan on the chart. They're about 18 pips today. You can see that your trade moved perfectly in line with the market's pulse. Perhaps a little more breathing room could have turned a BE into a profit? {image}
Hi honestknave,

you are right. After this trade i went back to see that other trades this week would also ended in profit if i would give the trade a bit more room.
I am thinkin about putting the SL above the swing when price reaches the 38,2% and moving to BE when price hits the 50%. But only on trades that are with the orderflow of the market.

Will test that next week.
Thanks for your input!
  • #10,825
  • Nov 14, 2014 7:10am Nov 14, 2014 7:10am
Mr Pip

Thanks for rotation explanation wonderfully set out.
I have a question. I was watching the EU on the 1 min. Trying out would you suggested, when I came across this reversal, red arrow.
Watching it live at the time, there is a big bear power candle, price then does not close below this for 3 candles, then there is a rejection to the downside. Normally I would take this as a sign that price may reverse. But it continues sideways, then dropped again.
Attached Image (click to enlarge)
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  • #10,826
  • Nov 14, 2014 7:15am Nov 14, 2014 7:15am
Quoting Mack2013
Good evening. Here was a losing trade I took today on the GBPAUD - 1 Hr. Set up: There wasn't any pattern, just a harmonic 1 to 1 that met at some ratio confluence with round number (1.8100) and nice structure. In retrospect, I was to eager to get in this trade. I should of waited for some follow up from the bulls but I thought I could get in at a better price by pulling the trigger early. I didn't want to chase price and the risk to reward was good. Price has been ranging (1.81 - 1.86) so I took the chance against strength and against current order...
Its nice to see Traders examine the trades that did not work out. Nice post!
If you fail to plan, you plan to fail.
  • #10,827
  • Nov 14, 2014 7:17am Nov 14, 2014 7:17am
Quoting claytonator
Good Morning Mr Pip, Following your advice I saw what I believed to be an AB=CD structure on the CADCHF 15 min chart (point C was at 38.2% Fib ratio) . After doing some measurements I could see point D was confirmed by 2 sets of measurements as shown in my 1st screen shot. For further confirmation I scrolled back through the chart (zoomed out) and could see price was hitting an area of support around the 0.8460 region. Once I zoomed out I put on a Fibonacci retracement for the big move and could see price had pulled back to the 61.8% level (as shown...
Nice work !
If you fail to plan, you plan to fail.
  • #10,828
  • Nov 14, 2014 7:20am Nov 14, 2014 7:20am
Quoting DizzleFX
Mr. Pip and any of you other traders out there that use FXCM, how do you like the new pricing model they use. Suppose to be super tight spreads with a commission charge. Just curious, thinking about giving them a try.
Hi DizzleFX,

I'm using FXCM since the beginning of this year. The lower spreads are great. Currently the spread on the EU is on average ,03.
i have seen it going negative as well. The comission on my trades are not that significant. So dont bother with them. It will work it self out.
When placing you SL you dont have to factor in the spread anymore on your charts.
  • #10,829
  • Nov 14, 2014 7:22am Nov 14, 2014 7:22am
Quoting DeepakJ
Goodmorning, Was watching the GBPAUD. expecting a NSH. The last swing made a shallow pullback as is was expecting but it did it with strength so was not able to get in. lets see how it will progress. price is at the moment fighting with the round number. Also looking at the EU. with a possible rotation in an Agg C area with structure. so entered long. TP is the roundnumber. Update 1: at the moment at BE. price trying to get past the 61,8 Update 2: price interacting with the roundnumber. removed my limit order. price might get past the roundnumber...
Nice! How did it feel? Did you feel like you were in control of your trade?

Its important to be in control of your trade. Keep those emotions out of trade management. You are managing your trade not the other way around.
If you fail to plan, you plan to fail.
  • #10,830
  • Nov 14, 2014 7:35am Nov 14, 2014 7:35am
Quoting Mr. Pip
{quote} Nice! How did it feel? Did you feel like you were in control of your trade? Its important to be in control of your trade. Keep those emotions out of trade management. You are managing your trade not the other way around.
Mr. Pip,

That rotation chart you posted yesterdat is gold just like your other charts!!
I have that chart on my second monitor and still study it. tried it today on my trades.
It is an amazing feeling when you have expectations and they are being met. looks like your are in control of the market.
I noticed when i have expectations i dont manage my trades with emotions.

At the moment EU is hitting my TP if i had been in the trade. No problem, next week there will be enough pips on the table.
  • #10,831
  • Nov 14, 2014 7:35am Nov 14, 2014 7:35am
A failed EU trade I took this morning. Context of the trade: 1) Main swing is bearish; 2) Retracement of the main swing reached 61.8%, forming possible AB leg; 3) Retracement of AB leg also reached 61.8%; 4) had a nice reaction; 5) then a retest of the 61.8% level. The second retest and bullish reaction had me expecting the completion of a CD leg, so once I saw the pullback from that bullish move, I decided to enter on any bullish indication. Chart 1 shows the high-level view; Chart 2 shows my entry. Ultimately, I entered the trade and price seemed to be moving as expected. Then, the bears showed up and pushed price lower.

Chart 1:

Attached Image (click to enlarge)
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Chart 2:

Attached Image (click to enlarge)
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  • #10,832
  • Nov 14, 2014 7:42am Nov 14, 2014 7:42am
Hey Traders,

I'll come back later to catch up with the rest. Going to do some trading.
If you fail to plan, you plan to fail.
  • #10,833
  • Nov 14, 2014 7:51am Nov 14, 2014 7:51am
Mr. Pi,p that is great explanation as also in your videos that I studied. This time I like to show how I see this setup and also indicating about situation when on C AGGRESIVE SETUP price touch the 61.8 and was unable to close above....That said would be maybe an indication of greater probability to reverse from there as in today`s case. Thank you very much and I would like to have some feedback on this and continue the journey with you on the side.
1. Is it very important to see a close below 78.6 to qualify changing of orderflow ?
2. I see that beside the close it is important on which timeframe it was...15min will be ok but 1h will do better for greater confirmation... Is that very important ?
Attached Image (click to enlarge)
Click to Enlarge Name: EXPLANATION OF C AGGRESIVE.png Size: 65 KB
  • #10,834
  • Nov 14, 2014 9:16am Nov 14, 2014 9:16am
Update on my CADCHF trade. I set my profit target just below the AB=CD pattern completion (as shown by the magenta line). The profit target was reached however I got a little lucky as the CAD news announcement pushed price to my required level. This being said price was just short of my Take Profit before the event so I am very happy with the trade. Everything moved exactly as expected.

While the trade was only 36 pips it has added a lot of confidence in the harmonic trading way. I very much look forward to your further teachings Mr Pip and am very grateful to you.

Attached Image (click to enlarge)
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  • #10,835
  • Nov 14, 2014 9:40am Nov 14, 2014 9:40am
I currently use FXCM trading station. Are the tick charts available on FXCM?

Thankyou
  • #10,836
  • Nov 14, 2014 9:44am Nov 14, 2014 9:44am
Quoting amfx
I currently use FXCM trading station. Are the tick charts available on FXCM? Thankyou
Just apply for an demo Ninjatrader account on the FXCM website.
You will not be able to execute orders or see orders on the chart.
I execute everything through FXCM trading station and analyse with Ninjatrader.
  • #10,837
  • Nov 14, 2014 10:11am Nov 14, 2014 10:11am
Quoting claytonator
{quote} Thank you for posting your failed trade Mack. Being new to Harmonic trading it is really good for me to see how some trades don't work and also people's analysis as to why they took/didn't take a trade.
No worries. I often learn more from my failures then my successes. If someone learned something from my mistakes then it was worth it. Thanks
  • #10,838
  • Nov 14, 2014 10:16am Nov 14, 2014 10:16am
Quoting DizzleFX
{quote} My thoughts exactly. They have a much tighter spread but charge per transaction based on the size of your position.
My broker does the same. It works well untill you become super active / over trading. Also, for a long time I was bearly making profit and I found that the commissions were eating me up. I dont have that problem now that I'm doing alittle bit better.

Sorry just seen that Mr.Pip answered your question
  • #10,839
  • Nov 14, 2014 11:03am Nov 14, 2014 11:03am
Thought I would share my 2 trades for today as I haven't contributed much and think that they are both in keeping with the thread-


first trade
With Rotation in Mind I entered the first trade here at 61.8% retracement test when I saw weakness step in.

It went into profit and I went out setting stop at break even (They almost got me LOL) and limit just above 127% extension, trade closed automatically & left me happy but wishing id gone for more ... (greedy I know)

Second trade

after waiting for a 61.8% retrace test that never happened I missed the first test of 50% got the second one and exited using a measured move off the first test AB = CD

I didn't take the third test, or do anything else, just decided to sit on my profit and relax a bit

Lots of nice rotations though, my question for Mr Pip is when do you feel its best to enter?

I find that by waiting for a rotation to complete, the entry is poor compared to entering at a harmonic level, before rotation but when price stalls.

Hope all is clear
Any questions please ask
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  • #10,840
  • Nov 14, 2014 11:39am Nov 14, 2014 11:39am
Quoting Datura
Hi Mr Pip I've been following your thread recently and still busy going through all the posts and I must say it is very informative! I've been trying to apply these patterns, but not 100% sure if I'm getting it right, so I do have some questions. The first picture, is a Gartley pattern on the GBPUSB. It was a past pattern, but I am only looking at past patterns to train myself to recognise them. In that picture I show my X point, but also show another point that may have been X ('X?' on the chart). The reason I chose the X point that I did, is because...
The main swing in this example was correct also the main swing is not based on whether its big enough or not that is a subjective statement and unreproducible. Instead ask yourself if a retarded monkey would agree with you that that was a high or a low.

On point B from your chart it can darn close to that 61.8, remember, price movement is not exact all the time you must determine what is acceptable to you. What margin are you considering on both sides of that Fib? 2 pips? 5 Pips? the smaller the better but have one in mind. My suggestions is 2 pips on the 5M and 5 pips on the higher 1H or whatever you feel is reasonable to you and your rules.

Tails count so the PRZ was indeed reached.

I sound like a broken record here but focus on the Order Flow and learn to have expectations of price. The patterns are nice but if you can't read price's intentions then how would you know when to pass on a pattern because it's adding risk to your trade setup?
If you fail to plan, you plan to fail.
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