Ratios & Harmonics: a Different Way to Trade
- #14,387
- Sep 23, 2015 3:13am Sep 23, 2015 3:13am
- Joined Nov 2014 | Status: Trader | 1,300 Posts
Still learning, Can you plz help me out. There was ABCD with retracment 61%, so I was looking for 127% extension, but there was a close above 141%, is it ok to have a close above 141 or it invalidates the pattern ??? {image}
When it comes to retracements, expansions, extensions they are all related mathematically.
So, if you have 61.8 retracement, the 1:1 completion must be at 138.2 (mathematically speaking)
If you get any other values, either:
1. The retracement was not exactly 61.8
2. The CD leg was longer/shorter than the AB leg
Forex lives in an imperfect world. The closer we get to the ideal for any given pattern, the better. As we start to move away from the ideal (i.e. most of the time), the validity gets called into question.
This is where it is good to start looking for: confluence (multiple things happening in the same area) and an assessment of strength and weakness.
Plenty of perfect ABCD patterns will fail, and plenty of questionable ABCD patterns will work.
I don't trade NZDUSD, but that big bearish candle looks like a news announcement to me. In which case, that pattern could have gone either way.
Generally speaking, big fundamentals trump patterns
{quote} Hello fxnikolaev, When it comes to retracements, expansions, extensions they are all related mathematically. So, if you have 61.8 retracement, the 1:1 completion must be at 138.2 (mathematically speaking) {image} If you get any other values, either: 1. The retracement was not exactly 61.8 2. The CD leg was longer/shorter than the AB leg Forex lives in an imperfect world. The closer we get to the ideal for any given pattern, the better. As we start to move away from the ideal (i.e. most of the time), the validity gets called into question....
Thx
- #14,389
- Sep 23, 2015 3:22am Sep 23, 2015 3:22am
- Joined Nov 2014 | Status: Trader | 1,300 Posts
{quote} got it
I'm sorry the answer was a little vague... If I could have given you a yes/no answer to your question, I'd probably be a very wealthy person
- #14,390
- Sep 23, 2015 3:38am Sep 23, 2015 3:38am
- Joined Nov 2014 | Status: Trader | 1,300 Posts
A couple of trades this morning:
Trade 1: EURUSD buy (+29 pips) between Frankfurt and London Open:
Entry:
Result (with analysis):
Trade 2: GBPUSD sell (ongoing) after London Open
Entry:
Strong bearish move, golden zone retracement testing previous day's low from the other side
How it looks now:
Not so good, but still holding the position
Trade 1: EURUSD buy (+29 pips) between Frankfurt and London Open:
Entry:
Result (with analysis):
Trade 2: GBPUSD sell (ongoing) after London Open
Entry:
Strong bearish move, golden zone retracement testing previous day's low from the other side
How it looks now:
Not so good, but still holding the position
- #14,391
- Sep 23, 2015 4:44am Sep 23, 2015 4:44am
- Joined Nov 2014 | Status: Trader | 1,300 Posts
How it looks now: Not so good, but still holding the position
It has now hit the major round number (1.53).
Price reacted very sharply to this round number last time price was here, so I'll be keeping a close eye on the retest.
- #14,392
- Sep 23, 2015 7:17am Sep 23, 2015 7:17am
- Joined Nov 2014 | Status: Trader | 1,300 Posts
{quote} Well, the trade has finally decided to start moving. It has now hit the major round number (1.53). Price reacted very sharply to this round number last time price was here, so I'll be keeping a close eye on the retest.
Hindsight: jumped the gun on the entry causing 12 pip drawdown.
Now looking at a long EU...
- #14,394
- Sep 23, 2015 9:14am Sep 23, 2015 9:14am
- Joined Nov 2014 | Status: Trader | 1,300 Posts
eurusd 1 min chart......lets see {image}
- #14,396
- Sep 23, 2015 9:17am Sep 23, 2015 9:17am
- Joined Nov 2014 | Status: Trader | 1,300 Posts
{quote} All I got to say is WOW!!!
Sometimes things just work out nicely
- #14,397
- Sep 23, 2015 9:21am Sep 23, 2015 9:21am
- Joined Nov 2014 | Status: Trader | 1,300 Posts
{quote} update.......... {image}
- #14,400
- Sep 23, 2015 9:57am Sep 23, 2015 9:57am
- Joined Nov 2014 | Status: Trader | 1,300 Posts
{quote} yeah another low came.....1.1156.....
1:1 completion, 50% fib.
Not entirely convinced by the CD leg... but more importantly I need a nap
