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Ratios & Harmonics: a Different Way to Trade

  • #12,321
  • Jan 25, 2015 5:47am Jan 25, 2015 5:47am
Well done Mack2013, nice trade from start to finish , Congratulations to proud new parents! May these tiny feet will tiptoe with love into your hearts and stay there forever!
I Have Learned to Take Some Losses to Make Profits
  • #12,322
  • Jan 25, 2015 5:53am Jan 25, 2015 5:53am
Good Morning Mr.Pip and traders

I was just doing some replay of fridays price action and kind of stumbled on to a question about re-entries. I cant remember who said it recently but they said to question why price has returned, which is awesome advice... I`m just trying to tighten up my game. The first trade I think I read alright, but the second one I have a few questions on....

Question #1: Would you have taken my re-entry (chart#2)? The only reason I can think of why I wouldn't have taken it is that price only made a deep correction establishing a HL instead of a short term LL or even a retest (Circled in blue)

Question #2: (on The re-entry) Would you have placed your stops above entry candle swing high or where my intial stop was on the first trade? Should I have tightened up my stops once I seen there was no follow thru?

As always any comments or observations are welcomed , sorry for the messsy chart. It was hard to clean this one up.

BTW, these were just market replay trades, no actual trade was taken.

This is what I was looking at on the EURUSD Jan 23, 2015 (2min Chart). Basic 1 to 1 harmonic move (x2) into the 61.8 of the main leg. Price did not quit hit structure tho.

Set Up:
http://icmarkets.ctrader.com/images/screens/6hWwn.png

Price Action:
http://icmarkets.ctrader.com/images/screens/0jWwn.png
  • #12,323
  • Jan 25, 2015 6:02am Jan 25, 2015 6:02am
Quoting TheScorpS
Well done Mack2013, nice trade from start to finish , Congratulations to proud new parents! May these tiny feet will tiptoe with love into your hearts and stay there forever!
Thanks.... her tiny fingers are so cute. She sqeaks when she cries. Its kind of funny.
  • #12,324
  • Jan 25, 2015 6:46am Jan 25, 2015 6:46am
Quoting Mack2013
Good Morning Mr.Pip and traders I was just doing some replay of fridays price action and kind of stumbled on to a question about re-entries. I cant remember who said it recently but they said to question why price has returned, which is awesome advice... I`m just trying to tighten up my game. The first trade I think I read alright, but the second one I have a few questions on.... Question #1: Would you have taken my re-entry (chart#2)? The only reason I can think of why I wouldn't have taken it is that price only made a deep correction establishing...
Hi Mack. I will give it a go but that's not to say I will be right as I am still new on this thread too. It is a nicely presented chart so I feel it is good practice for me too

I am looking at the small structure from where your first entry is. To get below that level of support it took 6 candles to break and go lower. On the bull push back up from the low it took 2 candles hinting that the bulls still have the power. That was later reinforced at your second trade when it reached the same structure PA failed to break it, then bounced. The bulls then managed to recapture all of the large bear candle and then that little indecisive candle appears it may have even opened fractionally higher than the open of the large bear candle. I don't know because it's hard just looking at the chart but the low may of also been the 61.8 retracement of your last swing up too.
(If you want me to draw on your chart what I mean let me know)

Hope this helps and if anyone has any comments on my comments please feel free to .....comment

Congrats on the latest addition to your family
As the lights go by so too do the shadows move
  • #12,325
  • Jan 25, 2015 7:27am Jan 25, 2015 7:27am
Hi

I agree with the analysis that the GBPAUD is ready to roll
In the 4 hours time frame we will need to wait maybe 1.5-2 days before the 4 hours cycles will reverse to the down side
  • #12,326
  • Jan 25, 2015 8:18am Jan 25, 2015 8:18am
Congratulations Mack2013. Gob bless. Best luck on tha new addition. Best wishes to you man! 😉
  • #12,327
  • Jan 25, 2015 9:55am Jan 25, 2015 9:55am
Congratulations to Mack2013 - wish you all the best. BTW, your trade analysis is awesome.
  • #12,328
  • Jan 25, 2015 11:37am Jan 25, 2015 11:37am
Quoting Tonete
Congratulations Mack2013. Gob bless. Best luck on tha new addition. Best wishes to you man! ��
Thank you. Just reading your post.... I have to go grab some work boats but as soon as I get back I`ll try my best to address your questions in your last post (referring to the GBPUSD)
  • #12,329
  • Jan 25, 2015 11:48am Jan 25, 2015 11:48am
Quoting Matts Micro
{quote} Hi Mack. I will give it a go but that's not to say I will be right as I am still new on this thread too. It is a nicely presented chart so I feel it is good practice for me too I am looking at the small structure from where your first entry is. To get below that level of support it took 6 candles to break and go lower. On the bull push back up from the low it took 2 candles hinting that the bulls still have the power. That was later reinforced at your second trade when it reached the same structure PA failed to break it, then bounced....
You`re exactly right. You read PA very well, Matts. I guess my question would be. Should I have taken the second trade at all and if so, should I have adjusted stops to candle high (tighten stops) when there was no follow through? I think I kind of answered my own questions but wouldn`t mind some reassurance. Trade management is one of my weak points. I second guess my stop placements. I hate taking bigger loses then necessary.
  • #12,330
  • Jan 25, 2015 12:34pm Jan 25, 2015 12:34pm
Quoting Mack2013
{quote} Thank you. Just reading your post.... I have to go grab some work boats but as soon as I get back I`ll try my best to address your questions in your last post (referring to the GBPUSD)
No rush Mack, especially now with your baby. Anytime. I'm in no rush to get into trades as to yet. Thank you for the taking the time though. I appreciate it any help. (Btw when I looked at my post I reconsidered my possible entry where price is at the moment (PRZ) since it seems to have a downward order flow within the PRZ. The wick of the last candle to the right makes me believe that the Bulls are trying really hard to gain control to retake the price to the upside. However, I see that the bottom of the right candle's well below the bottom of the left candle so I see a stronger attempt by the Bears(over all) to take price back down). Anyways, do what you gotta do and enjoy your baby. Ply daughter is he best thing ithat has ever happen to me. Time goes by quickly. Spend as much time with them as you can and take loads of photos. 😉
  • #12,331
  • Jan 25, 2015 1:49pm Jan 25, 2015 1:49pm
Congratulations, Mack!

----------

So, I've been reevaluating my expectations on USD/JPY. As of now, I am glad I got out of the long trade I took Fri afternoon. My current reading suggests to me that it is headed for a lower low, perhaps a retest of the ~116 area or beyond. I've shown some of why on the chart below. Does this seem like an accurate read based on the available information?

I'm not really thinking of taking a trade here since it doesn't seem like a good entry, just working on my orderflow analysis.
Attached Image (click to enlarge)
Click to Enlarge Name: Screenshot1.png Size: 124 KB
  • #12,332
  • Jan 25, 2015 1:52pm Jan 25, 2015 1:52pm
Quoting Mr_Burns
{quote} Hi Mikali, I promised to take a look on your trade and overall it looks like a good analysis. Regarding your decision to TP @50% of AB, practice reading PA, then you would see that while price showed some indecisiveness it didn't violate your expectation. In fact it came into structure with a big green candle meaning there's a lot of bullish strength. Also that structure had been violated multiple times so it shouldn't be strong. That's my few cents, Im still learning myself but I think that if you stay humble and continue with this kind...
Mr_Burns,

Thank you so much for taking the time to review my trade....understanding order flow and price action is where I'm having some difficulties...I have watched Mr. Pip's
videos on these subjects a few times....I'm still very new to Harmonics and I'm barely 1/3 of the way through the thread...I'm certain as I move deeper into the thread the material will start to sink in.

Respectfully and with thanks,
Mikali
  • #12,333
  • Jan 25, 2015 3:04pm Jan 25, 2015 3:04pm
Quoting Matts Micro
{quote} Hey Rog. I am new to Order Flow too but from what I can see technically they could be promising trades. The price bars on GJ to me aren't saying to enter just yet with the close lower but it is the weekend and Monday open may provide the entry, perhaps on the lower tf's there will be another pattern to enter with. I also noticed further confluence with the daily hitting the Golden zone as well. GL
T
Thanks for your reply Mat, certainly glad I did not enter on Friday for the GA setup. Large gap up on open. I entered on the GJ trade, as there is lots of confluence in this zone, and as you mention, retrace to the 61.8 on the daily. Will watch closely and see what happens when Tokyo gets going.
  • #12,334
  • Jan 25, 2015 3:17pm Jan 25, 2015 3:17pm
Quoting Mr. Pip
{quote} Hello Paul and welcome aboard! Congrats on the aggressive short. Looks like there is still some strength heading into the PRZ so use caution. On your second chart price is really accelerating into C so any short there must be handle with some aggressive trade management. I have not validated the patterns you posted for proper ration compliance my assessment is on the order flow you are looking to possibly trade.
Thanks for your reply Mr Pip. Agree with your comments about order flow. The 2nd chart (GBPAUD) has gapped up on open, glad I did not open a position on Friday. However, some GBP strength may help for the 1st chart (gbpjpy), which as mentioned, is also sitting on the 61.8 retracement. I have taken this trade, based on the confluence in this zone. See how it goes..
Thanks
Paul
  • #12,335
  • Jan 25, 2015 3:22pm Jan 25, 2015 3:22pm
Entering short, Greetings
Attached Image (click to enlarge)
Click to Enlarge Name: USDJPYM30entry2501.png Size: 71 KB
  • #12,336
  • Jan 25, 2015 3:25pm Jan 25, 2015 3:25pm
Quoting pampaq
Entering short, Greetings {image}
We take half and adjusting sl, we +10,
close all +16
Attached Image (click to enlarge)
Click to Enlarge Name: USDJPYM5tp2501.png Size: 55 KB
  • #12,337
  • Edited 5:41pm Jan 25, 2015 5:28pm | Edited 5:41pm
Quoting Tonete
This is my second post in this forum and my first post in which I have attached a screen shot of a possible harmonic pattern within another harmonic pattern in the GBP/USD pair in both the 5 and 15 min time frames. Mr. Pip (or anyone else in this forum with a more advance knowledge of Mr. Pips harmonics and ratios approach) please feel free to address any points and/or mistakes made on my side as well as any suggestions if my case is somewhat correct. Thought I would give it a shot although I am still not sure of what would qualify for a future...
Hello Hello

So far I liked how you approached the trade. The only thing I would change is try to identify structure first, structure superceeds all others (except when there is none). Your set ups will increase in probability when they align with structure then determine if order flow and bar by bar confirm your thesis.

I believe your set up is valid but it has some barriers like the 1.50 round number and I still think that the long term sentiment is Bearish. You are with short term order flow tho which is good. I think your entry would of been good except that its at the end of the day and week. the weekend can do funny things and gap crazy. As you can see in the second chart, it would of played into your targets but it could of easily gapped a 100 pips against you, pass your stops. It just isn't worth the risk.

I was half way thru my analysis when I had to cook dinner so price kind of played itself out but here is the information anyway. LOL

Anyway I like your game plan. Set up's are just set up's you got to make sure price follows thru.

Overview:
https://www.tradingview.com/x/lcVOj1mF/
.
Price Action:
https://www.tradingview.com/x/OKwvpn8M/

Summary:
Not sure if I answered any of your questions. Again I liked your set up and trigger for a short term trade even tho it was against my over all Bearish Bias but the risk of gapping against me during the open would of proved to much even tho it worked in our favor this time.

This is just my observation and I'm just an amatuer trying to make it to the pro's tho. Its to bad the market spoiled my analysis....

Trade management: I'm not really sure what would be the correct way to trade manage this position if it wasn't the end of the week. Definately manage aggressively. I would like to say stops below the candle lows and see what the next candle would produce.
  • #12,338
  • Jan 25, 2015 5:36pm Jan 25, 2015 5:36pm
Quoting Tonete
{quote} No rush Mack, especially now with your baby. Anytime. I'm in no rush to get into trades as to yet. Thank you for the taking the time though. I appreciate it any help. (Btw when I looked at my post I reconsidered my possible entry where price is at the moment (PRZ) since it seems to have a downward order flow within the PRZ. The wick of the last candle to the right makes me believe that the Bulls are trying really hard to gain control to retake the price to the upside. However, I see that the bottom of the right candle's well below the bottom...
I see what you mean but you did have double rejection with only price breaking below... no close below (in the PRZ)....

I break below weakens your position but a close below should invalidate your entry. what I found interesting is the 2 Deep rejections. They are larger in volume then the previous 9 candles....
  • #12,339
  • Jan 25, 2015 6:11pm Jan 25, 2015 6:11pm
Quoting Mack2013
{quote} I see what you mean but you did have double rejection with only price breaking below... no close below (in the PRZ).... I break below weakens your position but a close below should invalidate your entry. what I found interesting is the 2 Deep rejections. They are larger in volume then the previous 9 candles....
Attached Image (click


Superb! Thank you so much for taking the time to give me such detailed (not amateur) answer to my analysis!
I defenetly missed the structure to the left of the chart.
Once again, thank you Mack2013.
I will keep on studying and taking notes!

Tonete

QUESTIONS:
1. What kind of pullback qualifies for each pattern developed in the third leg? Which retracements does price have to surpass but never close bellow or above per Mr. Pip's refined ROE?
2. Would we always place a 10 pip SL bellow the PRZ's 161.8 or above structure (A) in case of an ABCD regardless of the time frame we are trading? It seems as if a 10 pip SL could compromise our risk/reward timeframe in the smaller time frames?
3. Since this possible setup was spotted during the weekend could have I entered as soon as the market opens with my broker this Monday? Should I expect a weekend gap that would make you Mr. Pip pass upon this trade?
4. What kinds of tips could you give us Mr. Pip in regards to managing a poor entry at an aggressive C or D/PRZ in case entering a trade that might go against us due to trading against order flow, wrong price action read, a surpassed PRZ..? Any tips or techniques that you use?
  • #12,340
  • Jan 25, 2015 6:22pm Jan 25, 2015 6:22pm
Quoting Mack2013
{quote} You`re exactly right. You read PA very well, Matts. I guess my question would be. Should I have taken the second trade at all and if so, should I have adjusted stops to candle high (tighten stops) when there was no follow through? I think I kind of answered my own questions but wouldn`t mind some reassurance. Trade management is one of my weak points. I second guess my stop placements. I hate taking bigger loses then necessary.
I am not the best for trade management as I still need work in this area for this method myself. All I can say is have a clear reason as to why you enter a trade and stick to the PRZ's. If your reasoning for the trade is good then holding stops at original level despite the PA becomes easier, it can be a tricky and sneaky thing sometimes.

GL
As the lights go by so too do the shadows move
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