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Ratios & Harmonics: a Different Way to Trade

  • #15,441
  • Jan 25, 2016 2:31pm Jan 25, 2016 2:31pm
Quoting Mr. Pip
I extended it further to really make a point I included 26 of which 5 failed identified in the same manner as in the previous post. The accuracy went up to 80%. Here is the chart. I want feedback. If this isn't a part of your analysis or if you are ignoring this then you are at the very least trading and an 80 disadvantage. Am I making my point clearly? {image}
Every now and then, when work permits, I follow this thread, as this is really good stuff.
So, what I read from your chart and comments: your expectations were only wrong when the price direction changed. And while the price changes your expectation changes when the prices breaks through the 86% level, and beyond. That means a break of direction.
  • #15,442
  • Jan 25, 2016 2:45pm Jan 25, 2016 2:45pm
Quoting Mr. Pip
{quote} I explained things out on the chart attached. Let me know if it's clear enough and if you understand. {image}
  • #15,443
  • Jan 25, 2016 3:03pm Jan 25, 2016 3:03pm
Quoting sanderov
{quote} Every now and then, when work permits, I follow this thread, as this is really good stuff. So, what I read from your chart and comments: your expectations were only wrong when the price direction changed. And while the price changes your expectation changes when the prices breaks through the 86% level, and beyond. That means a break of direction.
Glad you are able to stop by and pick up some nuggets every now and then. Not exactly but close. My expectations change when price breaks them, meaning if it get a NSH or NSL against my expectation. If price closes above the 78.6 or below depending on the direction of travel I know my expectation is in trouble and I need to concede on the possibility of a test of that structure or a very, very weak NSL or NSH. This is important so let me know if its understood or if I need to use a chart to illustrate.
If you fail to plan, you plan to fail.
  • #15,444
  • Jan 25, 2016 3:04pm Jan 25, 2016 3:04pm
Quoting Georji
{quote}
Were you able to see the thought process?
If you fail to plan, you plan to fail.
  • #15,445
  • Jan 25, 2016 4:22pm Jan 25, 2016 4:22pm
Quoting Mr. Pip
{quote} Glad you are able to stop by and pick up some nuggets every now and then. Not exactly but close. My expectations change when price breaks them, meaning if it get a NSH or NSL against my expectation. If price closes above the 78.6 or below depending on the direction of travel I know my expectation is in trouble and I need to concede on the possibility of a test of that structure or a very, very weak NSL or NSH. This is important so let me know if its understood or if I need to use a chart to illustrate.
For me now it is clear, that one's expectation is a forecast/ projection based on the previous LHs or HLs, and when the price goes against that projection (close > 78.6% or close < 78.6%) that means you wait for confirmation, which can be either test of structure, or a NSL or NSH.

In your '26 expectations' screenshot the most right LH (at 11:37) and the bars succeeding, why is this a LH and not a NSH. Because price wasn't higher than the previous LH in the downtrend? But, looking at the ratio's this one closes > 78.6 (I didnt measure it), when looking at this LH at 11:37 compared to the ratio of LH at 11:00 and NSL at 11:21.
  • #15,446
  • Edited 4:48pm Jan 25, 2016 4:31pm | Edited 4:48pm
this is great stuff guys,,,just wish videos could be posted to

mr pips just a quick one

done the picture as shown.

1 2 1 as shown in blue?
or
3 drives as shown in black?

not sure if we included the wicks

my expectations is the bigger order flow is to the upside with current down move being a HL
personally i would be looking for some reversal reaction at 38 to 50 fib level
Attached Image (click to enlarge)
Click to Enlarge Name: mr pips.JPG Size: 103 KB
  • #15,447
  • Jan 25, 2016 5:16pm Jan 25, 2016 5:16pm
Quoting Mr. Pip
How important are expectations and how often do they play out? They are extremely important because they offer extremely accurate forecasting for the future path of price. If you knew where price was likely to go into the future, would that have great value to you? Would that potentially help you filter some of your trades? I want to know your points of view on this. This type of analysis alone can make you a huge return. Get acquainted with structure analysis. The chart below is of today's DOW E-Mini Futures the one I traded today. I identified...

For me the single most important thing here is that you have the ability to see how/where price is printing by looking at structure and how structure is playing out. How it is respected or violated. This allows you to stay in line with price movement and enables you to realise when you are on the wrong side and correct quickly.
It's a dirty job but someone's gotta do it!
  • #15,448
  • Jan 25, 2016 5:18pm Jan 25, 2016 5:18pm
Quoting Mr. Pip
I extended it further to really make a point I included 26 of which 5 failed identified in the same manner as in the previous post. The accuracy went up to 80%. Here is the chart. I want feedback. If this isn't a part of your analysis or if you are ignoring this then you are at the very least trading and an 80 disadvantage. Am I making my point clearly? {image}
Great stuff Damian, I have to admit I have lost my way (totally) from the start of this year. I think the break over Christmas did more harm than good. I need to get back to basics and the simplicity of this trading method.

Due to the lack of skill I am showing, when I am getting an expectation then I am not listening to it and later inadvertently trading against this. Today is a great example, I lost 35 pips but if I went with expectation I would have finished +50 at a minimum.

Very frustrating but having you back in here is helping me a lot, just through posts like the above.

P.S. I enjoyed the thrashing you gave to a recent posted
  • #15,449
  • Jan 25, 2016 5:49pm Jan 25, 2016 5:49pm
Quoting sanderov
{quote} For me now it is clear, that one's expectation is a forecast/ projection based on the previous LHs or HLs, and when the price goes against that projection (close > 78.6% or close < 78.6%) that means you wait for confirmation, which can be either test of structure, or a NSL or NSH. In your '26 expectations' screenshot the most right LH (at 11:37) and the bars succeeding, why is this a LH and not a NSH. Because price wasn't higher than the previous LH in the downtrend? But, looking at the ratio's this one closes > 78.6 (I didnt measure it),...
Here is a visual it's easier to see the picture sometimes.
Attached Image (click to enlarge)
Click to Enlarge Name: YM 03-16 (233 Tick) 1_25_2016.jpg Size: 92 KB
If you fail to plan, you plan to fail.
  • #15,450
  • Jan 25, 2016 6:20pm Jan 25, 2016 6:20pm
Quoting devontrader
this is great stuff guys,,,just wish videos could be posted to mr pips just a quick one done the picture as shown. 1 2 1 as shown in blue? or 3 drives as shown in black? not sure if we included the wicks my expectations is the bigger order flow is to the upside with current down move being a HL personally i would be looking for some reversal reaction at 38 to 50 fib level {image}
Hello Jason, I know videos are easier for you but as a quick not let me explain why it's so difficult for me sometimes. Let's say I shoot a 20 min video once that is done I have to play it back to make I made sense and that I made my point. If I did not achieve what I wanted to say, I have to start again. We are talking well over an hour for 20 min.. Then I have to produce, render and upload which combines takes about another 30-40 min. This is a tremendous amount of time.

To answer your questions, both scenarios are a possibility and agree with your overall expectation and lick you predetermined PRZ. The bears are already showing some fatigue which should produce a weaker NSL in the short term order flow. Well Done!
If you fail to plan, you plan to fail.
  • #15,451
  • Jan 25, 2016 6:21pm Jan 25, 2016 6:21pm
Quoting LaBoca
{quote} For me the single most important thing here is that you have the ability to see how/where price is printing by looking at structure and how structure is playing out. How it is respected or violated. This allows you to stay in line with price movement and enables you to realise when you are on the wrong side and correct quickly.
If you fail to plan, you plan to fail.
  • #15,452
  • Jan 25, 2016 6:25pm Jan 25, 2016 6:25pm
Quoting PipTrendz
{quote} Great stuff Damian, I have to admit I have lost my way (totally) from the start of this year. I think the break over Christmas did more harm than good. I need to get back to basics and the simplicity of this trading method. Due to the lack of skill I am showing, when I am getting an expectation then I am not listening to it and later inadvertently trading against this. Today is a great example, I lost 35 pips but if I went with expectation I would have finished +50 at a minimum. Very frustrating but having you back in here is helping me...
Keep at it sometime we lose our way but the next expectation should realign us. Thanks it's been a while since I had to hand out some discipline.
If you fail to plan, you plan to fail.
  • #15,453
  • Jan 25, 2016 6:34pm Jan 25, 2016 6:34pm
Hello Traders,

Great questions today and awesome postings. Like how we are progressing. I will make that video tomorrow for you. I wanted to make it today but my daughter had no school today and it was impossible to get it done. I was barely able to trade. Well remember to post your questions and I will do my best to get them answered in a timely manner.

Practice Structure analysis and remember to trade with expectation. this alone should improve your profitability.

Such a simple thing, I wonder why the masses completely disregard it?
If you fail to plan, you plan to fail.
  • #15,454
  • Jan 25, 2016 7:18pm Jan 25, 2016 7:18pm
Quoting Mr. Pip
Hello Traders, Great questions today and awesome postings. Like how we are progressing. I will make that video tomorrow for you. I wanted to make it today but my daughter had no school today and it was impossible to get it done. I was barely able to trade. Well remember to post your questions and I will do my best to get them answered in a timely manner. Practice Structure analysis and remember to trade with expectation. this alone should improve your profitability. Such a simple thing, I wonder why the masses completely disregard it? ...
Man, so much great info Damian! I can't tell you how many "aha moments" I just had with the write-ups of your expectations. Thanks!
Damn The Torpedoes, Full Speed Ahead!
  • #15,455
  • Jan 25, 2016 7:24pm Jan 25, 2016 7:24pm
Quoting DizzleFX
{quote} Man, so much great info Damian! I can't tell you how many "aha moments" I just had with the write-ups of your expectations. Thanks!
Awesome! Great to hear! Keep them coming let's make 2016 a year to remember. I'm ready to work.
If you fail to plan, you plan to fail.
  • #15,456
  • Jan 25, 2016 7:59pm Jan 25, 2016 7:59pm
Ok, here's my first post to the thread. I've been watching for a while now, and I am gleaning so much good information from Mr. Pip. What better way to start the posts than with a huge mistake this morning. :-)

I was looking at the EURJPY 5m chart with wide eyes and ready to take on the trade week, and my eyes deceived me. I thought I was looking at a Gartley pattern. Specifically, I thought I was looking at the C point of the Gartley pattern. The setup looked great! We had a double top with bearish RSI divergence and right where the "C" point came in at 61% Fibonnaci, we also had a bearish RSI divergence. Oh snap, it's trade time!!!

The first screenshot attached shows what I saw this morning. The little red down arrow in the 61-78% fib area (marked in blue) is where I took the trade. For money management, I place 2 trades at half my intended size. It's easier to cut out half of the trade that way, YMMV. It was just after a failed attempt for price to go higher and break out of that structure, and I was walking on clouds with the "good" trade setup I had found. :-) My stop loss was place above the double top (as shown in the red horizontal line at top). Since this was "aggressive C", my initial profit target was 38% retracement downward and my final profit target was 61% to where I thought price would turn to complete the pattern... Whoops...

Attached Image (click to enlarge)
Click to Enlarge Name: Screen Shot 2016-01-25 at 8.42.12 PM.png Size: 153 KB


The second screenshot shows that right at 10am on the dot, price spiked up and took out my stop loss. I hate when that happens... Then when I was trying to figure out why the pattern failed me... I noticed I was being aggressive on the "B" leg, not the "C"... So, I failed myself, and now I know to triple check before I get into a trade. It's like building a house, measure twice and cut once... Or you'll end up getting cut. ;-)

Attached Image (click to enlarge)
Click to Enlarge Name: Screen Shot 2016-01-25 at 8.42.30 PM.png Size: 164 KB


Lots to learn from this mistake, and I hope others can glean some from it as well. :-)
Markets can remain irrational longer than you can remain solvent - JMK
  • #15,457
  • Jan 26, 2016 6:29am Jan 26, 2016 6:29am
Quoting Timwelch
Ok, here's my first post to the thread. I've been watching for a while now, and I am gleaning so much good information from Mr. Pip. What better way to start the posts than with a huge mistake this morning. :-) I was looking at the EURJPY 5m chart with wide eyes and ready to take on the trade week, and my eyes deceived me. I thought I was looking at a Gartley pattern. Specifically, I thought I was looking at the C point of the Gartley pattern. The setup looked great! We had a double top with bearish RSI divergence and right where the "C" point came...
Welcome and great post. I've said in past post to always scale out to make sure something wasn't missed. This is one of those reasons why. It is sometimes easy to get a bit of tunnel vision.

Also keep in mind that although it's not a guideline it's always a good thing to keep in mind. These patterns in general decisive turns or points. Price action should not be stretched out like in your case. This is usually an indicated that extended moves to the opposite side is likely to take place. As price gets stuck in a congestion area for extended periods of time huge pressure starts to build like in volcanoes and when it blows it blows.

Well done! The trade did not work out but you went back and realized the mistake and learned from it.
If you fail to plan, you plan to fail.
  • #15,458
  • Jan 26, 2016 7:15am Jan 26, 2016 7:15am
Quoting Mr. Pip
How important are expectations and how often do they play out? They are extremely important because they offer extremely accurate forecasting for the future path of price. If you knew where price was likely to go into the future, would that have great value to you? Would that potentially help you filter some of your trades? I want to know your points of view on this. This type of analysis alone can make you a huge return. Get acquainted with structure analysis. The chart below is of today's DOW E-Mini Futures the one I traded today. I identified...
Morning Damian

What a great post and explanation and the image too, so simple but so beneficial. Damian to you this may seem simple, as to where the market may go. But this ONE image has given me such a big Ahaa moment. I cannot thank you enough.

These things may be very basic to you, but to me they are great nuggets of information, and how I process that during my trading and learning process.

I think as people we want to learn to run before we can walk. Rather than paying attention to the real basic, key elements of chart reading, we want over complicated information that is not that relevant, to our trading success.

You are a master of your art, I have said it before, I am thankful, and wish to travel this road no matter how long this will take.

Looking forward to more of your teachings, and many more Ahaa moments in the near future.

Regards
Aj1
  • #15,459
  • Jan 26, 2016 7:21am Jan 26, 2016 7:21am
Could somebody point out what was wrong with 1st PRZ zone as per Cypher pattern? Its EU 233 tick chart

FYI - I am still learning, please bear me !!
Attached Image (click to enlarge)
Click to Enlarge Name: Screenshot1.png Size: 82 KB
  • #15,460
  • Jan 26, 2016 7:32am Jan 26, 2016 7:32am
Quoting Aj1
{quote} Morning Damian What a great post and explanation and the image too, so simple but so beneficial. Damian to you this may seem simple, as to where the market may go. But this ONE image has given me such a big Ahaa moment. I cannot thank you enough. These things may be very basic to you, but to me they are great nuggets of information, and how I process that during my trading and learning process. I think as people we want to learn to run before we can walk. Rather than paying attention to the real basic, key elements of chart reading, we want...
Thanks AJ,

Keeping it simple is what its all about. We wonder why so many fail at this when you break it down you have a 50/50 chance of getting it right so why is it so hard? Well it's us we tend to complicate the simplest of things. I've just shown you all how to increase that to at least 70% probability. The majority fail because they are constantly trying to catch that reversal. Always trying to swim against the current. so it's no longer a 50/50 shot. they have a 70+% chance as I illustrated of taking a losing trade. It's time to start swimming with the current. It's time to start winning consistently.

The patterns have to be in the direction of the order flow they mainly occur in consolidation areas. But empower yourselves to trade what you see. Price tells you where it wants to go. Listen to it, obey it's warnings and stay out of trouble.
If you fail to plan, you plan to fail.
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