Ratios & Harmonics: a Different Way to Trade | Page 907 | Forex Factory

Options

Go to
Permalinks
Print Thread

Similar Threads

"Ratios & Harmonics: a Different Way to Trade." Summary 37 replies

Learning to trade with harmonics 11 replies

Time for Change - Pivots & Harmonics to freedom 67 replies

180 reasons to trade Harmonics and Patterns 13 replies

Group Trading based on Elliott wave and Harmonics 0 replies

Attachments: Ratios & Harmonics: a Different Way to Trade
Exit Attachments

Ratios & Harmonics: a Different Way to Trade

  • #18,121
  • Mar 12, 2016 10:41am Mar 12, 2016 10:41am
Quoting GnG
Hello traders,hello Mr Pip I decided to start writing down a trading plan and then start following it mechanically.One of my first rules will be to take trades that are following the trend because going with the trend puts you in a better position. My question has to do with trend identification, Can we say that for each trader an uptrend or a downtrend has to do with the pips that is willing to risk?? ....and i will explain what i want to say with the following chart. in the chart we can see that long term we are in an uptrend (NSH,HL,NSH etc)...
If you are looking for long because of that huge leg up to the left.... it would be smarter to wait for the order flow to make a new structure high (above the pink "downtrend" ) and then you can look for an entry and your stop would be smaller. Currently the order flow is a downward bias so entering long just to go long here is probably not the best strategy.

I think what is always important to ask the question "What is price doing now?" and "Who is in control - the bulls or the bears?"

In your chart above, price is making new structure lows, the order flow is bearish, and it looks like the bears are in control.
  • #18,122
  • Mar 12, 2016 2:12pm Mar 12, 2016 2:12pm
Quoting Harmonic1976
{quote} If you are looking for long because of that huge leg up to the left.... it would be smarter to wait for the order flow to make a new structure high (above the pink "downtrend" ) and then you can look for an entry and your stop would be smaller. Currently the order flow is a downward bias so entering long just to go long here is probably not the best strategy. I think what is always important to ask the question "What is price doing now?" and "Who is in control - the bulls or the bears?" In your chart above, price is making new structure...
You are right,order flow is a downtrend
that chart was and example though (maybe not a very representative one) to explain my general question.Apart from entering long or short,what is your opinion on that question??
learn more , earn more
  • #18,123
  • Mar 12, 2016 7:10pm Mar 12, 2016 7:10pm
Quoting GnG
{quote} You are right,order flow is a downtrend that chart was and example though (maybe not a very representative one) to explain my general question.Apart from entering long or short,what is your opinion on that question??
Price can only go up or down. You want to stack the odds in your favor and that happens when you can identify the dominant side and you have order flow on your side and a good area to protect your trade if possible with a reasonable target in sight without too many obstacles in your way.

Attached Image (click to enlarge)
Click to Enlarge Name: EG_expectation.jpg Size: 153 KB
  • #18,124
  • Edited 8:45pm Mar 12, 2016 8:02pm | Edited 8:45pm
Does anybody know about the performance of Scott Carney as a trader, not a educator?
Watching recent poor performance of Jason Stapleton, I doubt the accuracy and consistency of harmonics....
Indeed, when Jason's talking about patterns, he says its accuracy is about 60%, which is 10% more than tossing up a coin. I want 70-80% accuracy minimum. Also, RR is somewhat overstated. In my opinion, it's barely 1:1 thanks to stop hunters.
I am 4H based trader but close the position mostly within 3 bars (average trading period is 10 hours). It means I want to watch patterns/structures at lower TFs (5 or 15M). However, candle patterns (inside bar, outside bar, dogi, hammer,..) at trading TF can tell the same story as patterns at lower TFs. Good thing about harmonics is it's a leading indicator. But it also can be a drawback. It involves prediction and therefore often accuracy is not satisfactory (RR should cover this drawback).
By the way, there are tons of good youtube videos made by Jason Stapleton. You may want to see them if you like harmonics trading.
Simplicity is the ultimate sophistication - Leonardo da Vinci
  • #18,125
  • Mar 12, 2016 8:54pm Mar 12, 2016 8:54pm
Quoting heispark
Does anybody know about the performance of Scott Carney as a trader, not a educator? Watching recent poor performance of Jason Stapleton, I doubt the accuracy and consistency of harmonics.... Indeed, when Jason's talking about patterns, he says its accuracy is about 60%, which is 10% more than tossing up a coin. I want 70-80% accuracy minimum. Also, RR is somewhat overstated. In my opinion, it's barely 1:1 thanks to stop hunters. I am 4H based trader but close the position mostly within 3 bars (average trading period is 10 hours). It means I want...
Sounds like an advertisement to me.... but still, everything you need to have an edge in the markets is taught here by Mr. Pip.

Don't trust anyone's claim about accuracy... test it for yourself. I know a profitable trader who has only a 30% accuracy but his Risk Reward allows him to only be right 30% of the time and still make money.

I can say that I have been trading the methods that Mr. Pip teaches here for about a month now and the methodology is working just fine. Besides that, he clearly puts his money where his mouth is and his results speak for themselves.
  • #18,126
  • Mar 12, 2016 10:00pm Mar 12, 2016 10:00pm
Hey all! Part of my ongoing strategy for growth and learning is to go back over the prior week with a fresh set of eyeballs, bar by bar, during all of the sessions that i would be trading (7am-11am EST). I think it's good practice, and hones in on the skills that we are being taught here by Mr. Pip. To that end, I usually take screen shots of trades I made, and then compare it to where I would have traded with the new knowledge and such. It's a good growth experience, and I think everyone can benefit from that.

With that said, I decided that screenshots don't paint as clear of a picture as a video does for myself, so I decided to make some videos. These are primarily for myself. I'm not trying to replicate or duplicate or infringe upon what Mr. Pip is doing here. I'm recording it so that I can look back and see what I was thinking, and not have to redraw the charts over and over, or sift through dozens (hundreds) of screenshots. I made 2 videos, one for Last monday and one for tuesday. If anyone is interested in watching, feel free to do so. If you watch and see me do or say something contrary to what Mr. Pip teaches, please throw a red flag up and let me know because I really want to be a successful trader and follow as closely as I can to what Mr. Pip is teaching.

**Mr. Pip: Let me know if you want me to refrain from posting these or any more videos and I'll remove them from this post promptly and go back to screenshots like I've done in the past. I don't want to distract or detract others from what you're teaching. **

Monday: PriceAction101 TradeWeekReview 03072016 (https://www.youtube.com/watch?v=Uxv043mNWhw)
Tuesday: PriceAction101 TradeWeekReview 03082016 (https://www.youtube.com/watch?v=-S6LAE5FMQA)
Markets can remain irrational longer than you can remain solvent - JMK
  • #18,127
  • Mar 12, 2016 10:44pm Mar 12, 2016 10:44pm
Quoting Timwelch
Hey all! Part of my ongoing strategy for growth and learning is to go back over the prior week with a fresh set of eyeballs, bar by bar, during all of the sessions that i would be trading (7am-11am EST). I think it's good practice, and hones in on the skills that we are being taught here by Mr. Pip. To that end, I usually take screen shots of trades I made, and then compare it to where I would have traded with the new knowledge and such. It's a good growth experience, and I think everyone can benefit from that. With that said, I decided that screenshots...
Nice work Tim
  • #18,128
  • Mar 12, 2016 11:14pm Mar 12, 2016 11:14pm
Quoting Harmonic1976
Question about futures forex trading vs. spot trading.... can you trade the futures forex pairs 24hrs a day? What are the advantages over spot? Also what time frames do you all trade? 233T, 5m, 15m, 1h, 4h, Daily, ETC.
http://www.babypips.com/school/preschool/why-trade-forex/forex-vs-futures.html
Simplicity is the ultimate sophistication - Leonardo da Vinci
  • #18,129
  • Mar 13, 2016 12:15am Mar 13, 2016 12:15am
Quoting heispark
Does anybody know about the performance of Scott Carney as a trader, not a educator? Watching recent poor performance of Jason Stapleton, I doubt the accuracy and consistency of harmonics.... Indeed, when Jason's talking about patterns, he says its accuracy is about 60%, which is 10% more than tossing up a coin. I want 70-80% accuracy minimum. Also, RR is somewhat overstated. In my opinion, it's barely 1:1 thanks to stop hunters. I am 4H based trader but close the position mostly within 3 bars (average trading period is 10 hours). It means I want...

Hi Heispark,

Allow me to offer my opinion here, and I hope that you can learn something new... In order to trade Harmonic Patterns
Successfully, you need to change your perspective a little bit...

Most people use Harmonic as a strategy, but you have to use it as an Entry Technique...

I have 3 simple rules when I make decisions in the market:

#1 - Identify the Overall Market Trend on Daily or Weekly TF
#2 - Look for Entries on Lower Timeframe
#3 - Manage My Risk until my SL is above My Entry, then walk away.

Right now there's a Bearish Bat Pattern on NZD/USD, M30TF, and clearly Price Action Hit 78.6%, then retraced, this
is a sign that the Market wants to go down next week, but when I look at the Hourly TF, I notice a Bullish Gartley Pattern
in motion.

Within a few seconds, I start questioning my views on NZD/USD. I don't know if I have to go Long or Short...

Well, it's simple. Remove the damn Pattern on your chart, and ask yourself 1 question...

What is the Current Market Trend? ----Answer: BULLISH

Now, Since You know that the market is Bullish, you are going to use the Hourly Pattern as an Excuse to go Long.

Now what? Wait for the market to retrace at a certain key level, then Enter.

You see!

When you go against the Trend, you will have a hard time to sleep at night, because your strategy becomes "Hope", on
the other hand, knowing that you have a position that is in the same direction as the market gives you a Great Feeling
that you are doing the right thing....

Heck! if the market stops you out, it's no Big Deal, you just wait for another Entry as long as the Momentum to the upside stays.

Attached Image (click to enlarge)
Click to Enlarge Name: Screenshot 2016-03-12 23.41.17.png Size: 104 KB


Attached Image (click to enlarge)
Click to Enlarge Name: Screenshot 2016-03-12 23.41.41.png Size: 112 KB


Note: The Box between 78.6%-88.6% is very significant and the Trendline tells me where the market is most likely
to retrace on Monday....
Have an INVESTOR Mindset, but Trade like an ENTREPRENEUR
  • #18,130
  • Mar 13, 2016 1:57am Mar 13, 2016 1:57am
a strategy is ever only as good as the trader using the strategy. 2 people doing the same thing following the same process will get different results which is what harmonic has said- go back and test for yourself.
  • #18,131
  • Mar 13, 2016 3:15am Mar 13, 2016 3:15am
Quoting rolandW
a strategy is ever only as good as the trader using the strategy. 2 people doing the same thing following the same process will get different results which is what harmonic has said- go back and test for yourself.
I didn't mean to get you confused RolandW, there's a Big difference between a Strategy, and a Technique... All Strategies should be based on 3 rules of Engagement, and everything else is extra... The questions are: What's the Current Trend? Where to get IN? and Where to get OUT?

Now, the fact that Harmonic gives you the Exact Entry point, SL and TPs, as a trader it's your job to integrate that Technique into your own Strategy....Of course, your results will be different. It all comes down to your level of Knowledge, Experience and Emotions.
Have an INVESTOR Mindset, but Trade like an ENTREPRENEUR
  • #18,132
  • Edited 7:06am Mar 13, 2016 6:10am | Edited 7:06am
Dear all, Dear Mr. Pip,

friday was a mess for me.

After getting at 1 a NSH, I was looking for an opportunity to enter long. Point 2 appeared good (I have now seen that this represents a 78.6 correction of the last up swing; maybe this should have ring my alarm bells). So enter with expectation to get a 1 to 1 move up for building a NSH.
Since at point 3 the expected NSH failed, I looked at the retest to enter short (point 4). However, since price came back strongly to point 5 (now I know that it did not form a NSH), I cancelled my short (with loss) and i entered long. Then price turned to downside. I also closed the long with loss.

In any case, my first long would have been killed, since the down spike below 78.6 fib

All in all a bad day.

Comments on what I did wrong would be appreciated. (It was the DAX). What you can not see in the chart is the main swing which shows a downtrend.
If I look at the chart, I see that I have traded in complex correction, but in realtime I did not see it.


At the end of the day, the dax closed at 9882,7. I should have placed a long at the beginning of the day and closed it at the end of the day. In this case, I would be now rich
Attached Image (click to enlarge)
Click to Enlarge Name: all.jpg Size: 169 KB
  • #18,133
  • Mar 13, 2016 7:47am Mar 13, 2016 7:47am
Quoting OctaveJay509
{quote} Hi Heispark, Allow me to offer my opinion here, and I hope that you can learn something new... In order to trade Harmonic Patterns Successfully, you need to change your perspective a little bit... Most people use Harmonic as a strategy, but you have to use it as an Entry Technique... I have 3 simple rules when I make decisions in the market: #1 - Identify the Overall Market Trend on Daily or Weekly TF #2 - Look for Entries on Lower Timeframe #3 - Manage My Risk until my SL is above My Entry, then walk away. Right now there's a Bearish Bat...
Thanks Octave for your useful input. I will learn more about harmonics.
I agree NU is bullish even at 4H+Daily. I am looking for entry opportunity on Monday or Tuesday... As you said, it needs some pull-back first.
Simplicity is the ultimate sophistication - Leonardo da Vinci
  • #18,134
  • Mar 13, 2016 7:53am Mar 13, 2016 7:53am
Don't get me wrong, I'm not here at all to knock your strategy. What works for you, works for you. But, please go back to the beginning of this thread and catch up with where "WE" are. We are learning how to read price charts, without indicators. Everything on your chart, including that pattern you're talking about, is an indicator. (Bottom left of your screenshot clearly shows me you didn't draw that yourself) Again, no offense, but if you're not even drawing that pattern, you're not following what we are discussing here, and that's going to get US off track with our training. Again, if it works for you, great, but that's not what we are doing here. We are actually learning how to read the charts with a 70% accuracy, without those fancy indicators.

Quoting OctaveJay509
{quote} Hi Heispark, Allow me to offer my opinion here, and I hope that you can learn something new... In order to trade Harmonic Patterns Successfully, you need to change your perspective a little bit... Most people use Harmonic as a strategy, but you have to use it as an Entry Technique... I have 3 simple rules when I make decisions in the market: #1 - Identify the Overall Market Trend on Daily or Weekly TF #2 - Look for Entries on Lower Timeframe #3 - Manage My Risk until my SL is above My Entry, then walk away. Right now there's a Bearish Bat...
Markets can remain irrational longer than you can remain solvent - JMK
  • #18,135
  • Mar 13, 2016 9:48am Mar 13, 2016 9:48am
Quoting OctaveJay509
{quote} ...Right now there's a Bearish Bat Pattern on NZD/USD, M30TF, and clearly Price Action Hit 78.6%, then retraced, this is a sign that the Market wants to go down next week, but when I look at the Hourly TF, I notice a Bullish Gartley Pattern in motion. Within a few seconds, I start questioning my views on NZD/USD. I don't know if I have to go Long or Short... Well, it's simple. Remove the damn Pattern on your chart, and ask yourself 1 question... What is the Current Market Trend? ----Answer: BULLISH...
Interesting your take on this pair. I do not trade it but i had a look and got these observations... (Daily chart)

I think the NSL on my screen capture is more of a rejection and signal a possible change of sentiment but the obstacles to the upside are very significant. We are in a range for sure and it is pretty large.

Attached Image (click to enlarge)
Click to Enlarge Name: NU_expectation.jpg Size: 120 KB
  • #18,136
  • Mar 13, 2016 10:45am Mar 13, 2016 10:45am
Quoting OctaveJay509
{quote} Hi Heispark, Allow me to offer my opinion here, and I hope that you can learn something new... In order to trade Harmonic Patterns Successfully, you need to change your perspective a little bit... Most people use Harmonic as a strategy, but you have to use it as an Entry Technique... I have 3 simple rules when I make decisions in the market: #1 - Identify the Overall Market Trend on Daily or Weekly TF #2 - Look for Entries on Lower Timeframe #3 - Manage My Risk until my SL is above My Entry, then walk away. Right now there's a Bearish Bat...
with every respect....im sure your method works.....we all been there...using indicators.....you have moving average=lagging.....zup..korharmonic indy for pattern?..repaints like other indys do.Thats why i decided to ditch indicators and go from lagging to leading....as in price action.I was kind enough to talk to mr pips about price action and learn his successful method.but i found it a lot of info in one go to learn so my friend for me and for you and others i asked if he would like to teach his method to help all.....so here we are.Take my advice my friend.....join the party ..study....the link is page one post one line one.Follow us its nit hard and you will trade price action and harmonics.After you learn this if u thibk your method is better...fairplay my hat off to you...but i promise you......ditch indicators and do the pip and you will be singing the ka-ching song
  • #18,137
  • Mar 13, 2016 11:46am Mar 13, 2016 11:46am
Quoting evocpr19
Dear all, Dear Mr. Pip, friday was a mess for me. After getting at 1 a NSH, I was looking for an opportunity to enter long. Point 2 appeared good (I have now seen that this represents a 78.6 correction of the last up swing; maybe this should have ring my alarm bells). So enter with expectation to get a 1 to 1 move up for building a NSH. Since at point 3 the expected NSH failed, I looked at the retest to enter short (point 4). However, since price came back strongly to point 5 (now I know that it did not form a NSH), I cancelled my short (with loss)...
Here is the same chart, same interval but using line on close as price representation. The trick is to know if your minimum risk reward is skewed in your favor before taking a trade. I like using lines because they give me a sense of direction and i like to take the breakout pullback continuation. If i can get more reward or at least a 1:1 RR then i take the trade otherwise i pass. Here i would have skipped one trade (see no. 2)

Attached Image (click to enlarge)
Click to Enlarge Name: DAX_expectation.jpg Size: 134 KB
  • #18,138
  • Edited 12:59pm Mar 13, 2016 12:40pm | Edited 12:59pm
@crixus: thank you very much for your chart (I never use this chart representation)
To be honest, I did not intend to start scalping, but this trade destroyed my (little) confidence in price action,.... I just wanted to get at least a 1:1 harmonic move
  • #18,139
  • Edited 12:59pm Mar 13, 2016 12:44pm | Edited 12:59pm
Hi,

I apologize if this has been spelled out somewhere, I wasn't able to find it.
In the bar-by-bar video, rotation is described at 14:26 as a candle that barely trades above/below its open and then closes beyond its 50% (or in its bottom/top 2/3).

But Mr Pip wrote here that it's when a candle does not trade outside the previous candle (volume?) and then closes beyond the 50% of the previous candle:
http://www.forexfactory.com/showthread.php?p=8779215#post8779215

Am I correct in thinking that both of these is a valid rotation? I just want to be sure of what I'm looking for.

Sorry if this has been answered before. Thanks ahead of time
  • #18,140
  • Mar 13, 2016 1:01pm Mar 13, 2016 1:01pm
Quoting GnG
Hello traders,hello Mr Pip I decided to start writing down a trading plan and then start following it mechanically.One of my first rules will be to take trades that are following the trend because going with the trend puts you in a better position. My question has to do with trend identification, Can we say that for each trader an uptrend or a downtrend has to do with the pips that is willing to risk?? ....and i will explain what i want to say with the following chart. in the chart we can see that long term we are in an uptrend (NSH,HL,NSH etc)...
Hello,

You can't look at anything from a pip value specially trends. The truth of the matter is that we can never know when a trend will continue or fail. What we do have is expectations. You must know with 100% certainty what is the expectation you are looking to trade (long term or short term) and have realistic targets and stops.

If there is enough room to trade counter an expectation of a NSH or NSL you must understand that you are trading a correction and you must manage that trade with more aggression. Don't get lost in the order flow and be realistic with your targets and expectations.
If you fail to plan, you plan to fail.
13 traders viewing now