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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

  • #16,541
  • Feb 17, 2016 1:11am Feb 17, 2016 1:11am
Good morning. Usd Cad, moved to be, complex correction. There was no momentum, or bulls, dont know how to say it correct, test of high, momentum with bears, 50% retracement and test of structure

Sorry it is morning, my brain still a sleep
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Even though I walk through the darkest valley, I will fear no evil
  • #16,542
  • Feb 17, 2016 2:09am Feb 17, 2016 2:09am
I have a saying that if i cant see what is happening within the first 30 seconds of looking at a chart, i will stay away...

At the moment i am looking at the EUR/USD and GBPUSD charts, and so far nothing to see particularly, waiting for a decent pullback to even contemplate trading at the moment... GBPUSD has made a NSH after a big move down and then back up, and the EU has made a NSL with a tiny pull back and a NSL... Coming into an area of support at the moment, so shall be interesting to see where this goes...
  • #16,543
  • Feb 17, 2016 2:55am Feb 17, 2016 2:55am
just came right on time for second trade. here it goes. now have to run to another damn meeting. cheers
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  • #16,544
  • Feb 17, 2016 3:26am Feb 17, 2016 3:26am
On the pull back on the GBPUSD, expecting a NSH, so bought in the shaded area, where i was anticipating a pull back.

Not sure if this one will work out, but only trade with 1% of my account, so well within my tolerance level if it goes wrong!

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  • #16,545
  • Feb 17, 2016 5:01am Feb 17, 2016 5:01am
Can you help me, I bought in red circle was looking to go long at 61, price went lower for deeper correction, and when price came back to my entry point, there was slowing in momentum, and it looks like H&S. Should I close BE at that point, or wait for test high ?
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Even though I walk through the darkest valley, I will fear no evil
  • #16,546
  • Feb 17, 2016 5:06am Feb 17, 2016 5:06am
Quoting rolandW
On the pull back on the GBPUSD, expecting a NSH, so bought in the shaded area, where i was anticipating a pull back. Not sure if this one will work out, but only trade with 1% of my account, so well within my tolerance level if it goes wrong! {image}
it looks like a good trade. GL. just careful when market reaches that high as it may offer some good resistance. also, 1.4360 is an area to watch.
  • #16,547
  • Feb 17, 2016 5:08am Feb 17, 2016 5:08am
I moved my S.L. just below the small swing (+10 pips). TP is were it was. I still think that the market should retrace deeper than 50%. but let's see. also, news are coming in < 30 min from now, so...

ok, closed with +10 pips.
  • #16,548
  • Feb 17, 2016 5:27am Feb 17, 2016 5:27am
Quoting monocor
Can you help me, I bought in red circle was looking to go long at 61, price went lower for deeper correction, and when price came back to my entry point, there was slowing in momentum, and it looks like H&S. Should I close BE at that point, or wait for test high ? {image}
hindsight is a wonderful thing, but I woudl ask why did you buy there when price was still heading down? there was only two candles in there, with the second one not really going anywhere? This looks to me like weakness - although we have not done bar by bar yet... that is just how i interpret it.

The longer term order flow suggests that we are looking to move down, and because price failed to move thorough that zone once, it is signifying weakness, and we are into a complex correction for both long term and short term order flow. The bias on expectation on short term looks right to me, but the pull back to that S/R zone is red flagging it for me...

The answer i have, is that I dont know what i would do, but i like to try to protect - which often means getting stopped out before i get any real profits (so far...)

if you are defensive, get out for BE (if you still can) or if you are more aggresive, let it run, as you can only lose what you were happy to stake in any case... I woudl probably say longer term we are in for a push back down (expectation NSL on long term order flow)...

not very helpful I know...
  • #16,549
  • Feb 17, 2016 6:19am Feb 17, 2016 6:19am
question: what happens when you are wrong in predicting the market direction?

answer Nr.1: You lose money - NO! Wrong answer!

answer Nr2: You change your bias, estimate and enter in opposite direction. - YES! correct answer. See the example below:
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  • #16,550
  • Feb 17, 2016 6:25am Feb 17, 2016 6:25am
ok, let's hope TP is hit on this one. I hate to see all these pips wasted. it would be the third time in a row.
you really have to have a strong heart in this business. and I guess that's one of the reasons why many people fail here.

Here is where Damian truly kicks ass I think. It's not rocket science to enter after a PB at 50% or 61.8%. It's holding the trade and keeping a solid mentality that's the most important thing. and in this part I got a lot to learn. and unfortunately no one can help me with that.
  • #16,551
  • Feb 17, 2016 6:25am Feb 17, 2016 6:25am
Quoting rolandW
I have a saying that if i cant see what is happening within the first 30 seconds of looking at a chart, i will stay away... At the moment i am looking at the EUR/USD and GBPUSD charts, and so far nothing to see particularly, waiting for a decent pullback to even contemplate trading at the moment... GBPUSD has made a NSH after a big move down and then back up, and the EU has made a NSL with a tiny pull back and a NSL... Coming into an area of support at the moment, so shall be interesting to see where this goes...
I guess it's all in how you are looking. I saw this on the EUR/USD so I took it. I could have managed the trade better as I got taken out due to having too aggressive of a trailing stop on my trade. I got taken out just above the 38.6% retracement. But I still made my daily target profit goal (which is why the aggressive trailing stop) so I'm not really complaining. :-)

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Markets can remain irrational longer than you can remain solvent - JMK
  • #16,552
  • Feb 17, 2016 6:37am Feb 17, 2016 6:37am
Quoting rolandW
{quote} hindsight is a wonderful thing, but I woudl ask why did you buy there when price was still heading down? there was only two candles in there, with the second one not really going anywhere? This looks to me like weakness - although we have not done bar by bar yet... that is just how i interpret it. The longer term order flow suggests that we are looking to move down, and because price failed to move thorough that zone once, it is signifying weakness, and we are into a complex correction for both long term and short term order flow. The bias...
don't understand what order flow you are talking about ??? HL was broken, price heading up, in short term trend, deep correction happened, but I don't see any reason for NSL
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Even though I walk through the darkest valley, I will fear no evil
  • #16,553
  • Feb 17, 2016 6:38am Feb 17, 2016 6:38am
Quoting Timwelch
{quote} I guess it's all in how you are looking. I saw this on the EUR/USD so I took it. I could have managed the trade better as I got taken out due to having too aggressive of a trailing stop on my trade. I got taken out just above the 38.6% retracement. But I still made my daily target profit goal (which is why the aggressive trailing stop) so I'm not really complaining. :-) {image}
this is good analysis. actually I was looking at the third time the price hit that sort support between 38.2 and 50% that you shown on your chart, but it looked like the market wanted to break that. So I waited and then bang bang bang. I had a chance to close at +15 pips profit but didn't because of hope that market may still test that area... and of course it didn't.

now, I think the last trade is going to be a breakeven trade too. it didn't hit SL by a pip but it will probably do that as I'm typing. i need to change my management strategy i think.
  • #16,554
  • Feb 17, 2016 6:41am Feb 17, 2016 6:41am
Quoting Mr. Pip
{quote} Well done Tim! You said the most important thing and it was that you didn't break your rules and you evaluated the risk and it was acceptable to you. Nice work again. Use the 144T it's a Fib number. I use tick charts associated with fibs. 610 is up from 233 and down is 144
I do see your point. But I think it depends on how you look at Fib numbers. :-) I started using 161 because 161.8 is the golden ratio level, which technically could be 162 then, if you round it up. I didn't want to use 0.618, or 61 ticks, for the inverse golden ratio because that was way too fast for me. And I didn't want to go all the way to 1618 to get to that golden ratio number because it was way too slow for me. And you said before it doesn't really "matter" what numbers or time frame we use, it all leads us to the same place. ;-) It's like goldilocks and the three bears. 161 feels just right. lol
Markets can remain irrational longer than you can remain solvent - JMK
  • #16,555
  • Feb 17, 2016 6:42am Feb 17, 2016 6:42am
yeap...BE.
  • #16,556
  • Feb 17, 2016 6:50am Feb 17, 2016 6:50am
Quoting monocor
Can you help me, I bought in red circle was looking to go long at 61, price went lower for deeper correction, and when price came back to my entry point, there was slowing in momentum, and it looks like H&S. Should I close BE at that point, or wait for test high ? {image}
I didn't understand your decision to take it long, although u have nsh retest by now. But the way i look at the chart of uj m5, it was weaken nsh momentum because really close to previous LH swing. Maybe i may give us a lesson to remember from your chart, if we expected it will make another nsh retest, at least we need a reason such as exhaustion bearish candle and/or at good structure HL point. U place to early when the bearish candle still make a good momentum.

But congrats to u, at least u have those pips
  • #16,557
  • Feb 17, 2016 6:50am Feb 17, 2016 6:50am
Quote
this is good analysis. actually I was looking at the third time the price hit that sort support between 38.2 and 50% that you shown on your chart, but it looked like the market wanted to break that. So I waited and then bang bang bang. I had a chance to close at +15 pips profit but didn't because of hope that market may still test that area... and of course it didn't.

now, I think the last trade is going to be a breakeven trade too. it didn't hit SL by a pip but it will probably do that as I'm typing. i need to change my management strategy i think.

You'll get there, my friend! I'm still ironing mine out, to be honest. I'm modifying one of my old expert advisors that I wrote with really good money management built-in to be a script with a hotkey (MetaTrader) that will automagically place the orders for me. Apparently, Ninjatrader has this type of trade management built in. I'm not to the point to switch over there entirely yet. I already have the initial part done, where it places a static order (hard coded lot size, stop loss and take profit). But, that doesn't really take into account the risk I want per trade. My stop loss here was like 80 points (8 pips), but my script defaults to 200 points (20 pips). So, my actual risk on this trade was less than 1% of my balance, and I came out with 3.2% profit. Had I calculated lot sizing properly, my reward could have been a little more than double that. ;-) I'm still ok with the trade, because at the end of the trade (the only trade I made today actually), I had achieved my daily profit target.
Markets can remain irrational longer than you can remain solvent - JMK
  • #16,558
  • Feb 17, 2016 6:57am Feb 17, 2016 6:57am
About Sell 2, not sure.
projection getting smaller, momentum smaller, did take it, but it was risky
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Even though I walk through the darkest valley, I will fear no evil
  • #16,559
  • Feb 17, 2016 6:57am Feb 17, 2016 6:57am
Quoting Timwelch
{quote} You'll get there, my friend! I'm still ironing mine out, to be honest. I'm modifying one of my old expert advisors that I wrote with really good money management built-in to be a script with a hotkey (MetaTrader) that will automagically place the orders for me. I already have the initial part done, where it places a static order (hard coded lot size, stop loss and take profit). But, that doesn't really take into account the risk I want per trade. My stop loss here was like 80 points (8 pips), but my script defaults to 200 points (20 pips)....
great job Tim. keep up. Actually I have met my daily targets too with the first trade today that went straight to profit, but I'd like to make some more to compensate for yesterday loss (and also, because I love this business...) here is my take on this pair right now.
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  • #16,560
  • Feb 17, 2016 6:59am Feb 17, 2016 6:59am
Quoting monocor
{quote} don't understand what order flow you are talking about ??? HL was broken, price heading up, in short term trend, deep correction happened, but I don't see any reason for NSL {image}
​Hi Monocor, this was the long term order flow I was talking about!

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