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Ratios & Harmonics: a Different Way to Trade

  • #19,561
  • May 20, 2016 8:53am May 20, 2016 8:53am
ES -2.25

Was a little too early on this one. Attempted aggressive entry off demand due to the buying wicks and rotation up.
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  • #19,562
  • May 20, 2016 9:02am May 20, 2016 9:02am
Back at it. Short AUDUSD. This thing just started falling as I was editing the chart. My explination for entry is in the chart. Let me know if you have any questions. #PipTrain
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Damn The Torpedoes, Full Speed Ahead!
  • #19,563
  • May 20, 2016 9:27am May 20, 2016 9:27am
Bed time guys. Closed the trade for 13 pips and as I write this, price just continued to drop. Of course. Either way, I end the week in the green. #PipTrain
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Damn The Torpedoes, Full Speed Ahead!
  • #19,564
  • May 21, 2016 9:44am May 21, 2016 9:44am
Quoting jmezz
ES -2.25 Was a little too early on this one. Attempted aggressive entry off demand due to the buying wicks and rotation up. {image}
Trade deconstruction on this.

Note: Entry markers are correct on the very first image attachment only. Attachments after that the entry markers will not be lined up due to the way Ninja stores its historical data after you close out of your chart.

This trade pissed me off because I thought for sure I had everything timed correctly. I thought the setup was very similar to a YM trade I made last week so that was my basis for the trade. Below is a side-by-side comparison:

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-Price is bullish
-Makes NSH then comes down very shallow to test support before continuing higher.

There were a ton of buying wicks coming down to the demand zone (chart on right side) and once we closed back above the overnight high with a rotation bar I thought the trade was good to go. Clearly you can see this was not the case however as I was stopped out before it eventually ripped and made the move I was expecting.

So naturally I want to figure out what I did wrong and I see a few details that could have changed the course of this trade, that whole 'hindsight' thing.

1. On the YM trade, price did not close back below the level, it was defended by the bulls and then put in a rotation candle. When compared to the ES trade, price action did close back beneath the overnight high. While the ES did pop up and then trade back below the overnight high again before taking off, this might be one detail to keep in mind for future setups.

2. The pull back was not even close to at least a 382. The YM trade had a little bit of space between the price low and the 382 but big difference in that one is that it never closed back beneath the level. Notes in following chart:

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3. See following chart.

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4. Setting stop to below the demand zone would have kept me in the trade however that would have been more room than I wanted to give it. I thought with the wicks that I was fine setting the stop to just below the swing low.

5. Arguably the most important - notes on the chart.

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If anyone has any input or sees something I missed please post away.
  • #19,565
  • May 21, 2016 10:06am May 21, 2016 10:06am
Also I know the expectation when making a weak NSH/NSL is for a deep retracement, however I am finding that when there's a change of orderflow with weak NSH/NSL that the retracement is rarely deep when using the larger swing.

This example similar to the 2 examples of this I posted prior.

Seems like when this happens your best bet is to look for confluence of the larger and smaller swing ratios. Typically I'm finding that this is usually around the 382 of larger and 618 of smaller.

This was another textbook trade and I was not at my desk to take advantage of it to try and erase some of my loss earlier in the day.

I really need to stop leaving my desk when I think that there will not be anymore moves in the day, this is my biggest struggle right now it seems due to the lost opportunities.
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  • #19,566
  • May 21, 2016 7:59pm May 21, 2016 7:59pm
Quoting jmezz
Also I know the expectation when making a weak NSH/NSL is for a deep retracement, however. {image}
When I expect a deep retracement, off of a weak NSL, I take into consideration the momentum that was used to make the NSL. I tried to explain in the picture below. Thats my take on it, hope it helps.
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Damn The Torpedoes, Full Speed Ahead!
  • #19,567
  • May 21, 2016 8:24pm May 21, 2016 8:24pm
Quoting jmezz
Also I know the expectation when making a weak NSH/NSL is for a deep retracement, howeve{image}
Jmezz, I used your picture and broke it down as I see it. The bulls struggled to make a NSH, so a deep retracement would have been a logical expectation. Notice that the orange lines show lot of bearish strength and yielded smaller retracements. Weak NSL/NSH doesn't necessarily mean you will get a deep pullback each time, take in the information leading up to each NSL/NSH to better determine if a deep pullback can be expected. I'm no pro, but that is how I look at it.
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Damn The Torpedoes, Full Speed Ahead!
  • #19,568
  • May 22, 2016 10:24am May 22, 2016 10:24am
Quoting DizzleFX
{quote} When I expect a deep retracement, off of a weak NSL, I take into consideration the momentum that was used to make the NSL. I tried to explain in the picture below. Thats my take on it, hope it helps. {image}
Quoting DizzleFX
{quote} Jmezz, I used your picture and broke it down as I see it. The bulls struggled to make a NSH, so a deep retracement would have been a logical expectation. Notice that the orange lines show lot of bearish strength and yielded smaller retracements. Weak NSL/NSH doesn't necessarily mean you will get a deep pullback each time, take in the information leading up to each NSL/NSH to better determine if a deep pullback can be expected. I'm no pro, but that is how I look at it. {image}
Sup Dizzle.

I made a post a few weeks ago about expecting a deep retracement after a weak NSH and stavro had mentioned that there was a big increase in momentum when the weak NSH was made, so he would be looking out for a more shallow retracement (just as you have also said here).

I thank you for the 2 screenshots and notes that you have provided because they illustrate your point very clearly.

I think going forward that when it comes to NSH/NSL being made after an order flow change that these really need to be handled as a case-by-case scenario vs a hard and fast rule (like I had been doing mostly incorrectly prior, lol).

I had it ingrained in my head that when you have a change of order flow with weak NSH/NSL that you automatically expect a deep and sometimes complex retracement. However I much prefer the idea that you analyze the price action that setup the weak NSH/NSL and look for clues there as further study and experience is telling me that more often than not you will get a shallow retracement. We analyze price action everywhere else in this method and base our decisions upon the price action given so it makes more sense to do the same thing when it comes to change of order flow NSH/NSLs vs just automatically expecting the deep retracement.
  • #19,569
  • May 22, 2016 9:33pm May 22, 2016 9:33pm
Quoting jmezz
{quote} {quote} Sup Dizzle. I made a post a few weeks ago about expecting a deep retracement after a weak NSH and stavro had mentioned that there was a big increase in momentum when the weak NSH was made, so he would be looking out for a more shallow retracement (just as you have also said here). I thank you for the 2 screenshots and notes that you have provided because they illustrate your point very clearly. I think going forward that when it comes to NSH/NSL being made after an order flow change that these really need to be handled as a case-by-case...
Glad I could help!
Damn The Torpedoes, Full Speed Ahead!
  • #19,570
  • May 23, 2016 4:58am May 23, 2016 4:58am
Morning Traders !! New week, new trades

UJ M3, Exp -NSL, still running, moved to BE, looking for 1 to 1
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Even though I walk through the darkest valley, I will fear no evil
  • #19,571
  • May 23, 2016 5:35am May 23, 2016 5:35am
Quoting monocor
Morning Traders !! New week, new trades UJ M3, Exp -NSL, still running, moved to BE, looking for 1 to 1 {image}
locked in 5 points
Even though I walk through the darkest valley, I will fear no evil
  • #19,572
  • May 23, 2016 5:51am May 23, 2016 5:51am
Quoting monocor
{quote} locked in 5 points
Heavy support level at 109.33 109.38 ( Fib , MA 200 and structure higher TF )
Trading in the shadow of SM
  • #19,573
  • May 23, 2016 6:11am May 23, 2016 6:11am
UJ [M5 Chart]

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Looking for an opportunity to go long!

ps. lot of JPY strength throughout the day so OF is still to the downside so I'll wait patiently.

Masterrmind............
Master your Mind then Master your Trades
  • #19,574
  • May 23, 2016 6:25am May 23, 2016 6:25am
I went short on EJ,
Couldn't resist to lock in some profits, doing same error again
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  • #19,575
  • May 23, 2016 6:37am May 23, 2016 6:37am
Quoting Shuael
I went short on EJ, Couldn't resist to lock in some profits, doing same error again {image}

Yes an aggressive C sell with a nice 1:1 to be had!

You have to start breaking that habit for sure its cutting into nice trades.

Masterrmind..........
Master your Mind then Master your Trades
  • #19,576
  • May 23, 2016 7:02am May 23, 2016 7:02am
Quoting Earleone
{quote} Heavy support level at 109.33 109.38 ( Fib , MA 200 and structure higher TF )
may be, but I am not looking what is above my time frame, I dont need it, I follow the price and that is it
Even though I walk through the darkest valley, I will fear no evil
  • #19,577
  • May 23, 2016 7:06am May 23, 2016 7:06am
Quoting Shuael
I went short on EJ, Couldn't resist to lock in some profits, doing same error again {image}
I had the same problem, but I fixed it, simply moving to BE at low, setting up tp at my target, and closing that chart, you make profit or getting be, you not loosing money anyway
Even though I walk through the darkest valley, I will fear no evil
  • #19,578
  • May 23, 2016 7:26am May 23, 2016 7:26am
moved both trades in to BE, UC and AU M3, exp new structure
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Even though I walk through the darkest valley, I will fear no evil
  • #19,579
  • May 23, 2016 7:28am May 23, 2016 7:28am
Quoting monocor
Morning Traders !! New week, new trades UJ M3, Exp -NSL, still running, moved to BE, looking for 1 to 1 {image}
That orange triangle is your entry right?

I'm just curious as to why you chose to enter there vs perhaps a little bit earlier where I circled on the following screenshot. Maybe there is something I can learn to help my entries as well.
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  • #19,580
  • May 23, 2016 7:43am May 23, 2016 7:43am
YM

Kind of debating which swing to use as my long term order flow but right now I'm leaning towards the green swing.

Regardless this looks like some fuckery action so I will most likely be staying out at the open to give price a chance to get ahold of itself.
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