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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

  • #12,481
  • Jan 28, 2015 3:53am Jan 28, 2015 3:53am
Quoting Matts Micro
Currently in this C sell. {image}
SL hit -9. Looks like it is moving into an ABCD pattern. PA may choosing a direction from the consolidation for a retrace of the earlier steep drop.
As the lights go by so too do the shadows move
  • #12,482
  • Edited 4:49am Jan 28, 2015 4:34am | Edited 4:49am
Just took +28 on the EA. Even though the trade wasn't based on this system it was the warning signals watching this system that alerted me. It was like dozing in a chair and somebody bumping you as they are walking past. Huh? who? ....Something changed and then the market moved.

Need a break now, bbl.

Edit: saw it was going to move further up after only a slight pause at the 38.2 fib re-entered +33 (+61 for this leg). Now I will have a break
As the lights go by so too do the shadows move
  • #12,483
  • Jan 28, 2015 5:01am Jan 28, 2015 5:01am
Hello Traders,

Here is a trade I took earlier on the GBPUSD M1 chart. ABCD (Sell @ D retest of the 138 Fib extension of the AB Leg)... Was taken out @ BE. All comments and feedback are very much welcomed...still wadding through all the information on the thread.

Respectfully and with thanks,
Mikali
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  • #12,484
  • Jan 28, 2015 5:22am Jan 28, 2015 5:22am
Hey Traders,

I believe we have a Bearish Bat forming on the EURJPY M1. (Please correct me if I'm wrong)

Respectfully,
Mikali
Attached Image (click to enlarge)
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  • #12,485
  • Jan 28, 2015 5:46am Jan 28, 2015 5:46am
Quoting Mikali
Hello Traders, Here is a trade I took earlier on the GBPUSD M1 chart. ABCD (Sell @ D retest of the 138 Fib extension of the AB Leg)... Was taken out @ BE. All comments and feedback are very much welcomed...still wadding through all the information on the thread. Respectfully and with thanks, Mikali {image}
Hi Mikali, Just my humble opinion, but the bullish momentum looked to be too strong to try shorting. Remember, the ABCD pattern is not something that must happen, only a potential PRZ. BTW, I agree with you bat pattern - if it reaches 88% I think.
  • #12,486
  • Jan 28, 2015 6:04am Jan 28, 2015 6:04am
Quoting Vince1954
{quote} Hi Mikali, Just my humble opinion, but the bullish momentum looked to be too strong to try shorting. Remember, the ABCD pattern is not something that must happen, only a potential PRZ. BTW, I agree with you bat pattern - if it reaches 88% I think.
Hi Vince,

Thanks for your feedback, I agree there was certainly a great deal of momentum from C to the PRZ unfortunately, I just didn't see it at the time when I pulled the trigger...I'm still struggling with order flow...Only on the post mortem did I notice the momentum and sever pitch....Got lucky to get to BE....Good learning experience.

With thanks,
Mikali
  • #12,487
  • Jan 28, 2015 6:05am Jan 28, 2015 6:05am
Quoting Mikali
Hello Traders, Here is a trade I took earlier on the GBPUSD M1 chart. ABCD (Sell @ D retest of the 138 Fib extension of the AB Leg)... Was taken out @ BE. All comments and feedback are very much welcomed...still wadding through all the information on the thread. Respectfully and with thanks, Mikali {image}
Hello Mikali,

Firstly, let me say that (1) I don't trade GU, (2) hindsight trading is always easy, and (3) BE is not a bad result.

Big picture: you're against some very bullish order flow. That will make any short difficult.
I'm not going to say that A is wrong, because swings are very subjective. But it is fair to say it is an odd candle, considering the surrounding price action.

Detail: If you look at the 2 candles leading into D (which is straight after the 1.5200 break), they are very strong bulls. This is confirmation that the bulls are still in charge.

Also note that D occurred early compared to the AB move. This is an increase in momentum, again reinforcing the bullish bias.

Now look at the bearish candle on reversal at D. In isolation, it is good bearish close near its low. But when compared to the previous bulllish candles it is hardly making a dent.

Now remember context - price has just broken through a major psychological level (1.5200). It is natural for price to want to retest this. The question is whether it will hold on retest. When you compare the bulls to the bears, it is not surprising that 1.5200 held the first time.

As the bulls bounce off 1.5200 they have lost some of their previous strength. It takes 5 candles to retest D, compared to 1.5 previously. Then you get a bearish candle that mostly engulfs the final bull candle. That would be a better (not necessarily good) entry short, but the question is: do you want to short a bullish market into support?

I hope some of that is helpful.
  • #12,488
  • Jan 28, 2015 6:20am Jan 28, 2015 6:20am
Potential bear bat/bull cypher developing on UsdCad M15.
http://gyazo.com/6ffe803a2900a99b06fdbff77c35a5c0
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  • #12,489
  • Jan 28, 2015 6:24am Jan 28, 2015 6:24am
Quoting honestknave
{quote} Hello Mikali, Firstly, let me say that (1) I don't trade GU, (2) hindsight trading is always easy, and (3) BE is not a bad result. Big picture: you're against some very bullish order flow. That will make any short difficult. I'm not going to say that A is wrong, because swings are very subjective. But it is fair to say it is an odd candle, considering the surrounding price action. Detail: If you look at the 2 candles leading into D (which is straight after the 1.5200 break), they are very strong bulls. This is confirmation that the bulls...
Hey honestknave,
Thank you so much for your very detailed post mortem and yes it was very helpful. I have just copied your analysis to my trade journal that I review end of day. First let me start-off mentioning that I'm struggling with order flow in context with patterns entries and exits. I also completely missed the round number 1.5200 (hard to believe but true) perhaps not being able to see the trees for the forest (I think that's how the saying goes).

I do have one question which I hope you can clarify...you mentioned that "D occurred early compared to the AB move. This is an increase in momentum..."; what exactly do you mean that D occurred early?

Respectfully and with great thanks,
Mikali
  • #12,490
  • Edited 6:57am Jan 28, 2015 6:39am | Edited 6:57am
Quoting Mikali
what exactly do you mean that D occurred early?
Hello Mikali, I'm glad it helped.

To answer your question, it took 26 bars for price to get from A to B.
It only took 14 bars for price to get from C to D... nearly twice as quick!

I'm sure you'll agree that manually counting bars is tedious.
But if you look at your screenshot, the purple line is a copy of the AB line.
So if D is left of this line (which it is), it has got from C to D quicker, which implies an increase in strength.

Please let me know if that makes sense.
  • #12,491
  • Jan 28, 2015 6:56am Jan 28, 2015 6:56am
Quoting Mikali
I also completely missed the round number 1.5200 (hard to believe but true) perhaps not being able to see the trees for the forest (I think that's how the saying goes).
Not hard to believe at all - I do it all the time! So now I draw them on the chart.
  • #12,492
  • Jan 28, 2015 7:28am Jan 28, 2015 7:28am
Quoting honestknave
{quote} Hello Mikali, I'm glad it helped. To answer your question, it took 26 bars for price to get from A to B. It only took 14 bars for price to get from C to D... nearly twice as quick! I'm sure you'll agree that manually counting bars is tedious. But if you look at your screenshot, the purple line is a copy of the AB line. So if D is left of this line (which it is), it has got from C to D quicker, which implies an increase in strength. Please let me know if that makes sense.
Hi honestknave,

The steeper pitch of the CD Leg as compared to the AB leg...OK that makes perfect sense.

With thanks,
Mikali
  • #12,493
  • Jan 28, 2015 8:20am Jan 28, 2015 8:20am
Trying a C sell on GU. Was late to the party though (green dotted line). Only risking 6.

Mr Pip would you draw my XA TL as I have or would you exclude that dip and make it a swing of its own?
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As the lights go by so too do the shadows move
  • #12,494
  • Jan 28, 2015 8:38am Jan 28, 2015 8:38am
Another update. PA bit tricky today. Not really getting into a trade. but expectations play out, which is the most important.
Still up 17 pips for the day.
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  • #12,495
  • Jan 28, 2015 8:41am Jan 28, 2015 8:41am
I have dropped my risk to 1.5 pips on GU

Trying for a C buy on EA. Risk 11 pips. (Sorry for the scrambled eggs I spilt on the chart, it's a bit messy).
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As the lights go by so too do the shadows move
  • #12,496
  • Jan 28, 2015 8:49am Jan 28, 2015 8:49am
Quoting DeepakJ
Another update. PA bit tricky today. Not really getting into a trade. but expectations play out, which is the most important. Still up 17 pips for the day. {image}
Very nice analysis DeepakJ.
EURUSD has been painfully slow today, ever since London open at the Daily Pivot. Although this isn't unexpected for FOMC day.

Not everybody is a fan of trend lines, but I find them useful to complement my analysis. For example, where to expect a LH to form. Marked in yellow...
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  • #12,497
  • Jan 28, 2015 9:08am Jan 28, 2015 9:08am
Quoting Matts Micro
I have dropped my risk to 1.5 pips on GU Trying for a C buy on EA. Risk 11 pips. (Sorry for the scrambled eggs I spilt on the chart, it's a bit messy). {image}
EA hit SL for -12 (1 slip). May re-enter yet.

I trailed stop my GU to the 76.8 retrace and TP. +29
As the lights go by so too do the shadows move
  • #12,498
  • Jan 28, 2015 9:22am Jan 28, 2015 9:22am
Been a busy day on the charts today. I have not been posting live as I am not quick enough to post and then get back to the charts to analyse things, so I am going to start posting at the end of the day.

So here are my 4 trades for the day and a walk through.

1. First green arrow, entered in line with OF on a slight correction of the current swing. At the time I measured a smaller AB=CD within the current bigger swing I have drawn on the chart. I then entered after a small correction in price.

Really I should have looked at the bigger picture and other swings on the charts, as you can see the high met the end of the 1:1 completion perfectly. It is only really on reviewing my trades after my first 2 trades that I saw that. For this reason my TP was higher with my expected 1:1 finishing at 1.5225 and my TP at 1.5220 (1 pip above where it got to.

I had moved my SL to BE so that was a BE trade. (If it went 1 pip higher would have been +14)

2. A correction in the golden zone of the last swing and although momentum had slowed a little I still expected a NSH, albeit weaker. Price went against me initially then continued up. As with the first trade my TP was in the same place and missed by 1. On this trade I had moved the SL to BE +5 so when price came back down I got stopped out at +5 pips.

(Again if it went 1 pip higher it would have been +20 pips)

3 & 4. I honestly have no idea what I was thinking here!!

After price made a NSL I got a slight pause in price then it continued down, I entered WAY too early!! I really should have been expecting price to correct a lot more than I let it. Hence why I moved my SL quite high, to try to counter my mistake. Then when price did correct in the golden zone I then traded again, I know I was adding to a losing position and shouldn't do this!!

I was confiedent in the second of my sell trades and this was a lot more in line with where I should be trading. Price then continued down for both trades and hit my TP slightly before the 1:1 completion of the ABCD. +12 & +21

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So a good day really, more chart time, more mistakes to learn from but also some good trades too. Had a better day all round today compared to the last few, yesterday was still positive but with only +8 and today got a stonking +38.

Feeling that things are getting a little better with more chart time so it is all helping me learn.

I will now read through the thread to see what the rest of you have been up to
  • #12,499
  • Jan 28, 2015 9:33am Jan 28, 2015 9:33am
re-entered EA at a confluenciual level (I don't think that's a word but it should be, it makes it sound important )
Edit: Forgot to mention Risk was 12 now down to 10 pips.

PS. I keep getting bugged by trying to preview a pic before uploading it in IE, it keeps crashing and I have to start over again....grrr.
Attached Image (click to enlarge)
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As the lights go by so too do the shadows move
  • #12,500
  • Jan 28, 2015 10:31am Jan 28, 2015 10:31am
Quoting Matts Micro
re-entered EA at a confluenciual level (I don't think that's a word but it should be, it makes it sound important ) Edit: Forgot to mention Risk was 12 now down to 10 pips. PS. I keep getting bugged by trying to preview a pic before uploading it in IE, it keeps crashing and I have to start over again....grrr. {image}
Straight up, straight back down, tough market. Out at B.E.
As the lights go by so too do the shadows move
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