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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

  • #16,461
  • Feb 16, 2016 7:33am Feb 16, 2016 7:33am
Thanks Mr. Pip! I love this video. Finally understand how you trade the direction of structure analysis and use order flow to expect the depth of retracement to structure for entry. And your trade management is an eye opener too!

As I don't get the luxury of time to sit on the PC to monitor every bar, I tend to use limit orders for my entry and exits, unless I trade the boring daily charts.

Thanks again Mr. Pip!
  • #16,462
  • Feb 16, 2016 7:40am Feb 16, 2016 7:40am
Quoting rolandW
Hi Damian, Many thanks for the really good video- I think it was really clear and all adding up to the decision making process which is nice and itterative in nature as we go thorugh these videos. One question I do have, only because it was not really in the video is when do we expect Mid range corrections. It seems that if we have: a runaway market, we look at least to the 38.2 retracement, and expect a shallow pull back with structure a weak NSx, we look for a deep correction which will be from the 61.8 retracement with structure to support the...
Yes post it I would read it. As for your question, If that heavier structure is between the 38.2 and the 61.8 which is the mid range PB area then that is the area you want to consider looking for opportunities. Don't get too wrapped up in deep vs shallow vs mid pull back it will be one of those over 70% as our analysis has shown us find the toughest zone that offers the strongest barriers for price and look for opportunities in that range. Your expectations are guidelines but price action has the final word.
If you fail to plan, you plan to fail.
  • #16,463
  • Feb 16, 2016 7:44am Feb 16, 2016 7:44am
Quoting hovedguy
Mr. Pip Thanks a lot for the video. Great volume of information to digest. Watching it very minutely and also making some notes, cause I'm not in hurry. Meanwhile looked at the chart and here's my observation. Expecting deep correction to go short form the area marked 1. Price made a weak NSL (as it almost touch 127 % extension) 2. Momentum is almost same, but weaker projection 3. Presence of structure 4. Harmonic correction confluence with 61.8 to 78.6% fibo PS- Correction seems to be weakening, it might not be able to make such deep correction....
You have to assess your risk. Are you happy taking on the risk? What is your reward? Is the order flow breaking down in you intended trading direction? Where is the heaviest structure area within that correction? These are questions you must answers for before you get into any trade.
If you fail to plan, you plan to fail.
  • #16,464
  • Feb 16, 2016 7:44am Feb 16, 2016 7:44am
Quoting monocor
{quote} I will wait, It looks like double top. Is it CFD ???
it is Japanese Yen futures, equivalent to J/U. did you catch this trade?
Attached Image (click to enlarge)
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  • #16,465
  • Feb 16, 2016 7:45am Feb 16, 2016 7:45am
Quoting monocor
Hello ! Thx for sharing Mr.Pip ! It is really good method. Can you plz comment on this one. Break down and test of high. {image}
It's a higher risk trade but I don't have many issues against it.
If you fail to plan, you plan to fail.
  • #16,466
  • Feb 16, 2016 7:49am Feb 16, 2016 7:49am
Quoting ujku80
{quote} it is Japanese Yen futures, equivalent to J/U. did you catch this trade? {image}
i think there is smth wrong with the data here. that recent chart is not correct.
  • #16,467
  • Feb 16, 2016 7:52am Feb 16, 2016 7:52am
Quoting monocor
Do you trade test and deeper correction which goes below 78 ? Thank you !!!
Deep corrections offer the best R/R however they are also a double edge sword at times because deep corrections weaken expectations specially when they occur with increase momentum. I personally like to see the 78.6 respected it gives me some assurance if you can call assurance that the golden zone was respected.
If you fail to plan, you plan to fail.
  • #16,468
  • Feb 16, 2016 7:53am Feb 16, 2016 7:53am
Quoting monocor
Sorry for bothering, I had this three trades today 2 in + and 1 BE. Is everything correct ? Or I am doing it wrong ? Thank you {image}
Like what I see, were they real trades or hypothetical?
If you fail to plan, you plan to fail.
  • #16,469
  • Feb 16, 2016 7:58am Feb 16, 2016 7:58am
Quoting Mr. Pip
{quote} Like what I see, were they real trades or hypothetical?
And I like what I see in the video you have posted.

Amazing

A real eye opener

Aj1
  • #16,470
  • Feb 16, 2016 7:58am Feb 16, 2016 7:58am
Quoting lithium1
Thanks Mr. Pip! I love this video. Finally understand how you trade the direction of structure analysis and use order flow to expect the depth of retracement to structure for entry. And your trade management is an eye opener too! As I don't get the luxury of time to sit on the PC to monitor every bar, I tend to use limit orders for my entry and exits, unless I trade the boring daily charts. Thanks again Mr. Pip!
Anytime! Glad it helps.
If you fail to plan, you plan to fail.
  • #16,471
  • Feb 16, 2016 8:24am Feb 16, 2016 8:24am
Quoting ujku80
{quote} oh yeah, market is still down for you (I have the reverse pair J/U instead of U/J , so for me is up {image}
Sold UJ
Even though I walk through the darkest valley, I will fear no evil
  • #16,472
  • Feb 16, 2016 8:24am Feb 16, 2016 8:24am
Okay Traders,

Catch ya after trading session. Post, post, post.
If you fail to plan, you plan to fail.
  • #16,473
  • Feb 16, 2016 8:28am Feb 16, 2016 8:28am
Quoting Mr. Pip
{quote} Like what I see, were they real trades or hypothetical?
Real, I use fxtrade for trading, it is really bad as charting software, I am watching charts on another platform.

When market is tranding it is easy to see expectation, but when market is getting in to correction, it is really hard to see where it is going to make next move
Even though I walk through the darkest valley, I will fear no evil
  • #16,474
  • Feb 16, 2016 8:40am Feb 16, 2016 8:40am
Hi everyone,

Please find attached Millionaire traders.

It is relatively old, with most of the examples talking about end of the 80's up to the noughties, but i love reading about successful traders!

A quick synopsis if you dont want to read it...

1) Pretty much all of the traders say that they are only in competition with themselves - no one else pays their bills, so why compete with others (moral - trade what you are comfortable with, no one else's success or failure has anything to do with your trades!)
2) don't chase losses or get greedy - Every day is a new trading day, keep your money management the same (whatever your rules may be)
3) Most, if not EVERYONE of these traders lost money in the beginning- each one however knew the variances, and came back to make millions, whatever their market or strategy... losing is temporary if you analyse where you lose the trades - all about knowing yourself- your strategy, your money management, everything could be right, but if you trade during news, or trade in less/more volatile markets... It could be the external forces which cause you to lose trades...
4) One guy only looks to make 10 pips per day... pips are irrelevant, the dollar amount is not! i think this is similar to what Mr P looks at as well!

I found it it a really good read, and loads of different strategies, with different vehicles - Fx/options/stocks/commodities/metals... but they all have the same psychology when it comes to trading, which is still relevant today, even if the markets have changed MASSIVELY... they still talk of the change of decimalisation!!!
Attached File(s)
File Type: pdf Millionaire Traders.PDF   1.8 MB | 4,468 downloads
  • #16,475
  • Feb 16, 2016 8:46am Feb 16, 2016 8:46am
Uj, M3 . Price made a new LL, but not a NSL, bcz it didn't close below. And there was a deep correction LH. Isn't it decrease my expectation on NSL???
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Even though I walk through the darkest valley, I will fear no evil
  • #16,476
  • Feb 16, 2016 8:49am Feb 16, 2016 8:49am
I didn't trade this one. Can I get your comments, is everything ok here
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Even though I walk through the darkest valley, I will fear no evil
  • #16,477
  • Feb 16, 2016 8:52am Feb 16, 2016 8:52am
Uj loss. So far, today 3+, one be, and one loss
Even though I walk through the darkest valley, I will fear no evil
  • #16,478
  • Feb 16, 2016 8:58am Feb 16, 2016 8:58am
Quoting monocor
Uj, M3 . Price made a new LL, but not a NSL, bcz it didn't close below. And there was a deep correction LH. Isn't it decrease my expectation on NSL??? {image}
Monocor, we don't have a LL (and your line is a little bit off - on a slant! ) It is a retest of the NSL. Because there was no NSL - we should probably expect a deep pull back, and it will probably test the previous LH (so the swing high basically) There does seem to be weakening momentum heading north, but on such poor projection and increasing depth, and no determined structure level at the furthermost LH on your chart, would you want to risk entering a trade there? I think on the projection, depth and momentum, you have 0/3 to take a trade at the present time...

The expectation of a NSL has not increased or decreased... It is just an expectation of NSL. The chances of it making the NSL has decreased though, as the momentum was not strong enough to push through the buying pressure.
  • #16,479
  • Feb 16, 2016 9:08am Feb 16, 2016 9:08am
Quoting rolandW
{quote} Monocor, we don't have a LL (and your line is a little bit off - on a slant! ) It is a retest of the NSL. Because there was no NSL - we should probably expect a deep pull back, and it will probably test the previous LH (so the swing high basically) There does seem to be weakening momentum heading north, but on such poor projection and increasing depth, and no determined structure level at the furthermost LH on your chart, would you want to risk entering a trade there? I think on the projection, depth and momentum, you have 0/3 to take...
ok, thx
Even though I walk through the darkest valley, I will fear no evil
  • #16,480
  • Edited 9:57am Feb 16, 2016 9:31am | Edited 9:57am
Here was my trade today. (I'm still using NinjaTrader for the tick chart, but using MetaTrader to place my trades) I watched the new video from Mr. Pip this morning (Amazing, thank you Mr. Pip!) and then I began my day. I saw that there was a NSH followed by a NSL. So I waited until a Fib pullback to go SHORT. I messed up, and should have waited until a DEEP correction. It was right there in the video from Mr. Pip, and I just completely forgot about that. :-) Anyways, I watched price go against me for a while. You can see my stop loss (red horizontal line) was just above the 78.6% fib mark. So when I realized that I should be waiting for a DEEP correction, when I saw the rollover happen AT the 78.6% fib mark, I made 1 more trade short. With the stop loss at the same place as my other trades. This may or may not be the best money management strategy, but I was still EXPECTING a NSL. And honestly, the risk was only like 1/8 of 1% of my balance, so it was definitely worth it. So, I wasn't breaking any rules there. My final Take profit target was at a One-to-One harmonic move, which you can see in the Cyan line. Comments, constructive criticism, all welcomed here! (Also note, I'm using a 161 tick chart. It's just a little faster than the 233). Risk to reward at the first trade was around a 1.7:1 or somewhere in that ballpark. Risk to reward was MUCH better on the trade I made at the 78.6% fib rollover, more like a 15:1!

Update: Also note, I'm calling NSH and NSL for shorter term swings, not the long term swing. I just noticed the long term would suggest that my marking of a NSL was invalid. But if you follow the short term swings, it should be valid. I didn't mark every spot, so at glance it looks like I would be using the long term, so I wanted to mention that. :-)

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Update 2: Here's an updated chart to show the NSH / NSL from my perspective. ;-) Also, there's another equal harmonic move down again. As you can see by the cyan line at far right. I'm sad I missed it, but I made my profit target goal for the day, so I'm fine being out of the market. Not greedy. :-)

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Markets can remain irrational longer than you can remain solvent - JMK
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