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Ratios & Harmonics: a Different Way to Trade

  • #15,521
  • Jan 27, 2016 2:16pm Jan 27, 2016 2:16pm
Quoting Mr. Pip
{quote} It looks like the sellers are in charge and I would not seek anything long.
Hi Mr. Pip

I am confused, will appreciate if you can clarify this-

In the pic its a nice looking bull butterfly pattern, forming at the top of an uptrend. Yea, I can see that at this instance, the order flow is bearish, so in this way most of the standard harmonic pattern will get disqualified from trading isn't? Specially butterfly and crab pattern cause D is crossing beyond the X.

- So does it mean that the standard harmonic pattern and order flow contradict each other?
- Or after a Harmonic pattern forms, we need to wait for the order flow to go in our favour so as to enter, most likely the price will already be gone from PRZ


Sorry, it might sound like dumb question, but please bear me.

Thanks
Hoved
  • #15,522
  • Jan 27, 2016 2:20pm Jan 27, 2016 2:20pm
Quote
Yea, I can see that at this instance, the order flow is bearish, so in this way most of the standard harmonic pattern will get disqualified from trading isn't?

I was just wondering about the same thing.
  • #15,523
  • Jan 27, 2016 2:56pm Jan 27, 2016 2:56pm
AN UPDATE ON MY CURRENT TRADE

we have a gartley pattern on nzdusd.

if anyone was watching mr pips video,,,and was sharp eyes would have noticed i message him and the info was in the message on the video

price has come down towards d point for completion,,,,normally d point would be entry for a bullish move.
but
if you noticed in the video one reason why the cypher failed was strength and projection to the down side,,,making it hardly likely that the pattern would work out to the up side.
we have 2 very strong bear candles pushing with momentum to the downside
this could well be due to the fomc

i already have my stops moved so am in a free trade.
i will trail the stops,,,shadowing price
at the moment my expectation is d point to complete but with the bear strength may look for extended targets beyond D.
i will actively manage the trade,,,,,
i also have my hurst channels on the chart which adds to my analysis,,,but that is something seperate.

mr pips i hope something can happen as per our conversation for the good of not only me but also everyone else here past present and future
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  • #15,524
  • Jan 27, 2016 3:46pm Jan 27, 2016 3:46pm
Quoting beepbop2015
{quote} I was just wondering about the same thing.
I've been reflecting more about this and whether I might not already know the answer. I suppose it all depends on the bar by bar analysis and the strength of the minor swings as price approaches the completion point of the pattern. On the other hand, Scott Carney says that price often accelerates towards the PRZ. . .
  • #15,525
  • Jan 27, 2016 3:51pm Jan 27, 2016 3:51pm
Quoting beepbop2015
{quote} I've been reflecting more about this and whether I might not already know the answer. I suppose it all depends on the bar by bar analysis and the strength of the minor swings as price approaches the completion point of the pattern. On the other hand, Scott Carney says that price often accelerates towards the PRZ. . .
yes beepbop

just look at my picture in posting before
  • #15,526
  • Jan 27, 2016 4:25pm Jan 27, 2016 4:25pm
Quoting hovedguy
{quote} Hi Mr. Pip I am confused, will appreciate if you can clarify this- In the pic its a nice looking bull butterfly pattern, forming at the top of an uptrend. Yea, I can see that at this instance, the order flow is bearish, so in this way most of the standard harmonic pattern will get disqualified from trading isn't? Specially butterfly and crab pattern cause D is crossing beyond the X. - So does it mean that the standard harmonic pattern and order flow contradict each other? - Or after a Harmonic pattern forms, we need to wait for the order...
Hello,

Your question is not about the Butterfly pattern it's about a re-entry if I am not mistaken. The rules say to move to break even at the 38% for this particular reason. Price found resistance at structure and the 50% indicating that we are bearish since the swing pivot which is the 50% held. Order flow was particularly very bearish into point D. Which poses challenges in price moving up. Once price starts moving down again what is your expectation at that point? It's a NSL it cannot be anything else. So for those reasons I would not be looking to re enter long.

The pattern is the pattern it does not mean that it should not be traded but you must process the information price is clearly telling you. We do not need to wait for order flow to go in favor to take action but if it looks like a freight train is coming towards you at 100 mph why would you jump in front of it. It's not a dumb question. If I was not clear enough let me know and I will give it another shot.
If you fail to plan, you plan to fail.
  • #15,527
  • Jan 27, 2016 4:26pm Jan 27, 2016 4:26pm
Quoting beepbop2015
{quote} I was just wondering about the same thing.
answered above
If you fail to plan, you plan to fail.
  • #15,528
  • Jan 27, 2016 4:31pm Jan 27, 2016 4:31pm
Quoting devontrader
AN UPDATE ON MY CURRENT TRADE we have a gartley pattern on nzdusd. if anyone was watching mr pips video,,,and was sharp eyes would have noticed i message him and the info was in the message on the video price has come down towards d point for completion,,,,normally d point would be entry for a bullish move. but if you noticed in the video one reason why the cypher failed was strength and projection to the down side,,,making it hardly likely that the pattern would work out to the up side. we have 2 very strong bear candles pushing with momentum to...
Hey Jason, nice trade and I will process our discussion but I liked your idea. Glad you followed my advice about looking for extended targets.
If you fail to plan, you plan to fail.
  • #15,529
  • Jan 27, 2016 4:33pm Jan 27, 2016 4:33pm
Quoting Mr. Pip
{quote} Hey Jason, nice trade and I will process our discussion but I liked your idea. Glad you followed my advice about looking for extended targets.
yes it makes sense and higher timeframe analysis certainly supports it.

looking at the strength of the bearish candles it is possible that d point could fail,,,,,we will see

this trade was a combnination of things,,,2 were an aggresive c sell and hurst channels

as for our discussion,,,,,it was mere feed back and from a personal learning point of view and the wider audiance.

maybe my idea,,,but this is your thread,
with out you we all have nothing

so,,,,,ill keep my eyes peeled

ps,,dont forget my 10% as your agent lol (joking)
  • #15,530
  • Jan 27, 2016 4:34pm Jan 27, 2016 4:34pm
Quoting beepbop2015
{quote} I've been reflecting more about this and whether I might not already know the answer. I suppose it all depends on the bar by bar analysis and the strength of the minor swings as price approaches the completion point of the pattern. On the other hand, Scott Carney says that price often accelerates towards the PRZ. . .
I disagree that price often accelerates into the PRZ. Keep in mind that structure is expected to hold unless it is approached with strength. This hold true for PRZ. Don't jump in front of the freight train the outcome is usually not good for you.
If you fail to plan, you plan to fail.
  • #15,531
  • Jan 27, 2016 4:36pm Jan 27, 2016 4:36pm
Quoting devontrader
{quote} yes it makes sense and higher timeframe analysis certainly supports it. looking at the strength of the bearish candles it is possible that d point could fail,,,,,we will see this trade was a combnination of things,,,2 were an aggresive c sell and hurst channels
You can keep the hurst channel
If you fail to plan, you plan to fail.
  • #15,532
  • Jan 27, 2016 4:38pm Jan 27, 2016 4:38pm
Quoting Mr. Pip
{quote} Hello, Your question is not about the Butterfly pattern it's about a re-entry if I am not mistaken. The rules say to move to break even at the 38% for this particular reason. Price found resistance at structure and the 50% indicating that we are bearish since the swing pivot which is the 50% held. Order flow was particularly very bearish into point D. Which poses challenges in price moving up. Once price starts moving down again what is your expectation at that point? It's a NSL it cannot be anything else. So for those reasons I would not...
well i guess mr pips you could say this is a typical example of our discussion

price action 1 book
pattern trading another book

chapter by chapter
  • #15,533
  • Jan 27, 2016 4:40pm Jan 27, 2016 4:40pm
Quoting Mr. Pip
{quote} You can keep the hurst channel
i agree,,as i said ,,,i wanna lose all indicators and just price action analysis

oh and,,,,10%

i thankyou
  • #15,534
  • Jan 27, 2016 4:45pm Jan 27, 2016 4:45pm
Quoting devontrader
{quote} i agree,,as i said ,,,i wanna lose all indicators and just price action analysis oh and,,,,10% i thankyou
If you fail to plan, you plan to fail.
  • #15,535
  • Jan 27, 2016 5:01pm Jan 27, 2016 5:01pm
Quoting Mr. Pip
{quote} Hello, Your question is not about the Butterfly pattern it's about a re-entry if I am not mistaken. The rules say to move to break even at the 38% for this particular reason. Price found resistance at structure and the 50% indicating that we are bearish since the swing pivot which is the 50% held. Order flow was particularly very bearish into point D. Which poses challenges in price moving up. Once price starts moving down again what is your expectation at that point? It's a NSL it cannot be anything else. So for those reasons I would not...

Yea I get the idea, Thanks.....I guess that's why it's called P 'R' Z, reversal trading.... a different approach.
  • #15,536
  • Edited 5:13pm Jan 27, 2016 5:02pm | Edited 5:13pm
Looking at a bearish shark pattern on cadjpy

i dont normally look at sharks but found this one and price has completed D
price has retraced to structure ,,also failing the expectation of NSH
to confirm change price would make a NSL
but
with price respecting structure and harmonics involved,,,,along with a 3:1 RR.....stops above the high

lets take a pip or two
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  • #15,537
  • Jan 27, 2016 5:10pm Jan 27, 2016 5:10pm
Quoting hovedguy
{quote} Yea I get the idea, Thanks.....I guess that's why it's called P 'R' Z, reversal trading.... a different approach.
Yes and no, every trading opportunity seeks a change in directional movement. The only difference is whether you are trading a correction or an extension, regardless of which the entrance is always in a PRZ because we are seeking a turning point.
If you fail to plan, you plan to fail.
  • #15,538
  • Jan 27, 2016 5:13pm Jan 27, 2016 5:13pm
Quoting devontrader
Looking at a bearish shark pattern on cadjpy i dont normally look at sharks but found this one and price has completed D price has retraced to structure ,,also failing the expectation of NSH to confirm change price would make a NSL but with price respecting structure and harmonics involved,,,,along with a 3:1 RR lets take a pip or two {image}
Hey Jason

Could you explain it little more how the expectation to break that line? As I see till now its kept making HH and HLs. Also, the last projection is larger in size.
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  • #15,539
  • Jan 27, 2016 5:14pm Jan 27, 2016 5:14pm
hello Mr. Pip,

This is what I think after learning your order flow analysis. Let me know your experience. Thanks in advance.

I have been trading mostly gartley, bat and cypher, and my experience is the win rate is low, most of the time below 50%.

With your order flow, we don't really try to enter the end of D anymore, more often we will try to exit at D. And using order flow, our entry will sometimes more likely at C of harmonic patterns.

With your order flow trading method, we are not trading the typical Scott cartley way, but I start to have a feeling this will give more trade setups and also higher win rate. I will start to trade with order flow and experience it myself. Thanks once again, you are a very generous trader, I have never met someone like you in my entire trading journey. Thank you. :-)
  • #15,540
  • Jan 27, 2016 5:15pm Jan 27, 2016 5:15pm
Quoting devontrader
Looking at a bearish shark pattern on cadjpy i dont normally look at sharks but found this one and price has completed D price has retraced to structure ,,also failing the expectation of NSH to confirm change price would make a NSL but with price respecting structure and harmonics involved,,,,along with a 3:1 RR lets take a pip or two {image}
I don't trade sharks but all of these patterns have similar construction only different ratio point. My point is that you anchor leg or the XA leg is weak as there are multiple highs behind it. This pattern is weak not because it is a shark but because you anchor leg (XA) is not off of a clear high. You may be forcing that shark into price action. Be careful.
If you fail to plan, you plan to fail.
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