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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

  • #18,161
  • Mar 13, 2016 5:03pm Mar 13, 2016 5:03pm
Quoting Mr. Pip
{quote} We really haven't directly discussed the harmonic patterns but I would like to mention that pattern summitry is important when we consider the quality of the patterns. The first half should be complimentary of the second half. This adds more strength to the patterns and the opportunity. This of course does not mean what these are going to fail but something to keep in mind and I will discuss this in detail when we get to them.
Hi Mr Pip,

Absolutely! As you know, we all have access to the same chart, but we tend to see different stories based on our level of knowledge, and the ratios are going to be respected regardless as long the market maintains its structure throughout the day...I figured that it was very important for Heispark to get a quick answer instead of waiting for the discussion to happen....

I look forward to getting some nuggets from you once you get there....In the meantime, I will step back and observe.....
Have an INVESTOR Mindset, but Trade like an ENTREPRENEUR
  • #18,162
  • Mar 13, 2016 5:14pm Mar 13, 2016 5:14pm
Quoting OctaveJay509
{quote} Hi Mr Pip, Absolutely! As you know, we all have access to the same chart, but we tend to see different stories based on our level of knowledge, and the ratios are going to be respected regardless as long the market maintains its structure throughout the day...I figured that it was very important for Heispark to get a quick answer instead of waiting for the discussion to happen.... I look forward to getting some nuggets from you once you get there....In the meantime, I will step back and observe.....
No need to step back just wanted to mention that since it's important to the qualification and value to the pattern setups. Please post your options at will. They add value even even if they vary at times from my opinion. I am not one of those guys that everyone has to agree with me or that I know everything. So please post what's on your mind.
If you fail to plan, you plan to fail.
  • #18,163
  • Mar 13, 2016 6:59pm Mar 13, 2016 6:59pm
Hello,

I am seeing the AUD/USD in 5 min chart and trying to get an expectation about the size of the correction.
I have 2 ideas, but I do not know if they are correct or wrong. What should I expect?

Thank you,
Gaston.
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  • #18,164
  • Mar 13, 2016 7:58pm Mar 13, 2016 7:58pm
Quoting Mr. Pip
{quote} Hello, Thank you for your question and I will be blunt and 100% honest with you. I hope you don't take it the wrong way but I would not be doing you any favors if I answer this any other way. Every Trader will have different performances, success is a measure of the individual and not the system. Accuracy improves from the hours you spend working on your technique. I completely on your position on harmonics perhaps this comment comes from receiving poor instructions from the Stapleton group. They have taken Scott's work and turned it into...
Dear Mr. Pip
I really appreciate your comment and details. Now I have to go back to page#1 and start reading your whole postings. Although (I think) I have already made some decent study about the harmonics, I strongly believe you're delivering a value different from others.
Thank you again for your contribution!
Regards,
Simplicity is the ultimate sophistication - Leonardo da Vinci
  • #18,165
  • Mar 14, 2016 12:36am Mar 14, 2016 12:36am
Quoting Mr. Pip
{quote} Hello, Thank you for your question and I will be blunt and 100% honest with you. I hope you don't take it the wrong way but I would not be doing you any favors if I answer this any other way. Every Trader will have different performances, success is a measure of the individual and not the system. Accuracy improves from the hours you spend working on your technique. I completely on your position on harmonics perhaps this comment comes from receiving poor instructions from the Stapleton group. They have taken Scott's work and turned it into...
Dear Mr. Pip,

Following order flows/structural analysis/ Patterns is possible in 4H right? Hope you said closing the trades with in 3 4Hr is not the right way time(Bolded above). As i am trading/analysing only in 4H. Let us know if this is fine.
  • #18,166
  • Mar 14, 2016 1:12am Mar 14, 2016 1:12am
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...
Good evening timothy

nice videos. Its erie how much you sound like Mr.Pip, as terminology and grammar goes. Good job. I just had a question on the stats you've collected. Since your stops are more aggressive , I would think that you get stopped out a bit more but your avg loss is a lot less. Have you back tested what your win/loss is and your profit ratio?

second question: First video, second trade: when the candles wick hit your profit target area but you were looking for a close in that area. Would you have B/E at that point? and I'm assuming you take your profits at candle close and not set points?

Thank You
  • #18,167
  • Mar 14, 2016 1:19am Mar 14, 2016 1:19am
Quoting gastonforex
Hello, I am seeing the AUD/USD in 5 min chart and trying to get an expectation about the size of the correction. I have 2 ideas, but I do not know if they are correct or wrong. What should I expect? Thank you, Gaston. {image} {image}
I'm not Mr.pip but here is my 2 cents anyway (probable worth 1.50 with the USDCAD rate) I know terrible forex joke.

I would stick with your short term expectation in the second chart until short term confirms your long term expectations with a NSH follow by a HL. But in theory to make things easier I would trade on only the 1, either long term or short term.

like I said , just my 2 cents. Please correct me if i'm wrong Mr.Pip.
  • #18,168
  • Mar 14, 2016 6:52am Mar 14, 2016 6:52am
Thanks, Mack2013! I can't tell you how many times I've watched Mr. Pips videos, so I'm hoping that all of the information he is teaching is being absorbed and duplicated. :-) I haven't backtested long term, but I have forward tested since January now, and every week I'm becoming more profitable with less losses, as I learn the methods and strategy that is being taught here. I'll have solid numbers soon. But forward testing I'm definitely at or around 65-67% wins. Now, because I'm still learning to remove myself from my account balance in a trade, I admit those aren't all 2:1 or 3:1 wins. There a significant amount of break evens, there are a significant amount of me having to remove risk and trade on 0.3% of my balance to get my head back in the game, you know?

To answer your second question, Yes, I would close my trade at the end of the candle. I've always either entered the market or left the market at a close. As far as the wick goes, if this were 3 weeks ago, I would have been at break even there. Today, I would either not move my stop at all, or I would reduce my risk by half at that point. You have to "give price room" as Mr. Pip says. And a lot of my 65-67% wins are break evens because I didn't give price the room it needed, only to watch it soar or fall like a knife with me shaking my head.

Quoting Mack2013
{quote} Good evening timothy nice videos. Its erie how much you sound like Mr.Pip, as terminology and grammar goes. Good job. I just had a question on the stats you've collected. Since your stops are more aggressive , I would think that you get stopped out a bit more but your avg loss is a lot less. Have you back tested what your win/loss is and your profit ratio? second question: First video, second trade: when the candles wick hit your profit target area but you were looking for a close in that area. Would you have B/E at that point? and I'm assuming...
Markets can remain irrational longer than you can remain solvent - JMK
  • #18,169
  • Mar 14, 2016 7:56am Mar 14, 2016 7:56am
AUDUSD my 2 cents
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  • #18,170
  • Mar 14, 2016 8:15am Mar 14, 2016 8:15am
Quoting Mack2013
{quote} Good evening timothy nice videos. Its erie how much you sound like Mr.Pip, as terminology and grammar goes. Good job. I just had a question on the stats you've collected. Since your stops are more aggressive , I would think that you get stopped out a bit more but your avg loss is a lot less. Have you back tested what your win/loss is and your profit ratio? second question: First video, second trade: when the candles wick hit your profit target area but you were looking for a close in that area. Would you have B/E at that point? and I'm assuming...
Quoting Timwelch
Thanks, Mack2013! I can't tell you how many times I've watched Mr. Pips videos, so I'm hoping that all of the information he is teaching is being absorbed and duplicated. :-) I haven't backtested long term, but I have forward tested since January now, and every week I'm becoming more profitable with less losses, as I learn the methods and strategy that is being taught here. I'll have solid numbers soon. But forward testing I'm definitely at or around 65-67% wins. Now, because I'm still learning to remove myself from my account balance in a trade,...
Regarding the tighter stops, this is something that I've been more curious on. I read on Bulkowski's site that his research led him to believe that 80% of pullbacks retrace less than 75% of the AB leg, making the 78.6 (or just past) a great area to place stops.

I am more of a 'right or right out' trader and because I trade options I don't see the benefit in placing a stop past the 100% retracement due to the fact that I'm trading a depreciating asset and even if price pulls back to around the 90-100%, meanders, then eventually heads in the direction that I thought, there will most likely be a fair amount of premium decay to make the r:r not worth it.

I think getting stopped out earlier would be more beneficial and if I still believe in the move I can re-enter.

So this is something that I'll have to test on my own as I believe everyone in this thread is trading either forex or futs. However, if anyone is using tighter stops then please chime in your experience.
  • #18,171
  • Mar 14, 2016 8:17am Mar 14, 2016 8:17am
Mr Pip -

Just saw in your profile that you also trade/traded options.

What sort of stop placement / risk control did you employ when you were trading them?
  • #18,172
  • Mar 14, 2016 8:23am Mar 14, 2016 8:23am
I am currently interested in EG, NJ, GN and GC for day trading. Please anybody share your analysis of these pairs... I want to know how it can be interpreted in this method.
Simplicity is the ultimate sophistication - Leonardo da Vinci
  • #18,173
  • Mar 14, 2016 8:28am Mar 14, 2016 8:28am
Quoting heispark
I am currently interested in EG, NJ, GN and GC for day trading. Please anybody share your analysis of these pairs... I want to know how it can be interpreted in this method.
only trade EG, my take...
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  • #18,174
  • Mar 14, 2016 8:48am Mar 14, 2016 8:48am
First trade of the day. I started seeing weakness so I got out at a 1:1 ... You can see the cyan line I drew which would have been the 2:1. It didn't quite make it there and that's where it meandered, so I took a clear profit and was happy. I would still be in the trade at this point, price is nearing where my break even was placed. I'm not upset, if it rolls over nicely again, I'm still expecting a 1:1 from the last swing into a NSL.

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Markets can remain irrational longer than you can remain solvent - JMK
  • #18,175
  • Mar 14, 2016 8:53am Mar 14, 2016 8:53am
Quoting jmezz
{quote} {quote} Regarding the tighter stops, this is something that I've been more curious on. I read on Bulkowski's site that his research led him to believe that 80% of pullbacks retrace less than 75% of the AB leg, making the 78.6 (or just past) a great area to place stops. I am more of a 'right or right out' trader and because I trade options I don't see the benefit in placing a stop past the 100% retracement due to the fact that I'm trading a depreciating asset and even if price pulls back to around the 90-100%, meanders, then eventually heads...
Hi

do you have any stats for stop placement just above the 78.6 from this Bulkowski?
  • #18,176
  • Mar 14, 2016 9:03am Mar 14, 2016 9:03am
Hello !!! AU M5, I missed the initial entry, sell was placed lil bit later, end up +3%
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Even though I walk through the darkest valley, I will fear no evil
  • #18,177
  • Mar 14, 2016 9:18am Mar 14, 2016 9:18am
Quoting Ren1058
{quote} Hi do you have any stats for stop placement just above the 78.6 from this Bulkowski?
This link is where I got the info. http://thepatternsite.com/fib.html

He may go more in depth in his books however I have not read them.

The info I'm referring to is located in the table half way down the page, I'll add a screenshot of the table.

Towards the top he states, "New research (http://thepatternsite.com/SwingSetup.html) suggests that Fibonacci retracements offer no benefit in swing trading and that probably holds true for stop placement." I simply take this as using the specific levels (38.2, 50, 61.8, 78.6, 88.6) offers no benefit, however there is still validity in placing stop levels based off the how far price retraces as evidenced by his research.

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  • #18,178
  • Mar 14, 2016 9:39am Mar 14, 2016 9:39am
Quoting jmezz
{quote} This link is where I got the info. http://thepatternsite.com/fib.html He may go more in depth in his books however I have not read them. The info I'm referring to is located in the table half way down the page, I'll add a screenshot of the table. Towards the top he states, "New research (http://thepatternsite.com/SwingSetup.html) suggests that Fibonacci retracements offer no benefit in swing trading and that probably holds true for stop placement." I simply take this as using the specific levels (38.2, 50, 61.8, 78.6,...
That's very interesting thank you so much for your time and effort
  • #18,179
  • Mar 14, 2016 10:24am Mar 14, 2016 10:24am
Quoting jmezz
{quote} This link is where I got the info. http://thepatternsite.com/fib.html He may go more in depth in his books however I have not read them. The info I'm referring to is located in the table half way down the page, I'll add a screenshot of the table. Towards the top he states, "New research (http://thepatternsite.com/SwingSetup.html) suggests that Fibonacci retracements offer no benefit in swing trading and that probably holds true for stop placement." I simply take this as using the specific levels (38.2, 50, 61.8, 78.6,...
You might also be interested by these studies from Adam H Grimes:

http://adamhgrimes.com/blog/testing-fibonaccis-12/
http://adamhgrimes.com/blog/fibonacci-conclusions-22/
  • #18,180
  • Mar 14, 2016 10:37am Mar 14, 2016 10:37am
Quoting gastonforex
Hello, I am seeing the AUD/USD in 5 min chart and trying to get an expectation about the size of the correction. I have 2 ideas, but I do not know if they are correct or wrong. What should I expect? Thank you, Gaston. {image} {image}
It's always hard to do this when there are large gaps to deal with. I never worried about that because I never trade on Sundays but always expect the gaps to fill as many trade this premise.
If you fail to plan, you plan to fail.
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