Ratios & Harmonics: a Different Way to Trade

YM

Looks like we are entering a consolidation phase. The expectation was for a NSH however it failed at supply and now looks as if it could put in a HnS.

A 1:1 on this move would put price back at demand, not saying this will happen though.

Going to be very patient today and look for clues on short term swings.



Edit - Well nothing so far and don't think I'll be chancing anything with today's action.

I did see a short setup that I was thinking of taking however ultimately decided to stay out of it due to the fact that price was unable to create a NSL. In hindsight I would have been able to hit my daily quota but I don't feel bad for passing this trade up.

Ok I see. I think I remember you saying you move to b/e fairly quick when you take these countertrend trades right? You had the right idea, just a swing too early :/

Nice roadmap Rocky. Did you adjust your target at all? Price looks to have gotten very close to it so far today.

Lol, I spent a little more time than I'd like to admit playing around with ninja's session settings trying to get my PA to look similar to your initial chart. Looked on TOS as well but was coming up with the same as ninja.

Anyway, definitely working out nicely for you so far. Gotta love the feeling of weight being lifted off your shoulders when you lock in some profit, although you personally may be past the point of feeling emotion while trading.

Hope this continues to work for you.

Edit: 10:12 HRS...Took 1st Target @7732

Edit, 10:22 hrs... 2nd target taken @7738
Trade closed.

YM +47

Notes on charts

Congrats Jmezz. You managed it wonderfull.

I took the first up move on the previous low (bottom box) and ended up with +11.
Yesterday was not clear for me and I ended with +2.

What I find strange the last days is that we get NSH but also LL.

You managed this excellent. I can see why you stuck with your conviction, all of that confluence and once price had that huge dump you had new resistance at .7775 and 4hr resistance at .7782.

I'd marked a couple areas on a 2hr chart as I was following your trade and wanted to see how price would react if / when it got to them. But so far looks like price is showing you that you took your profits at a great area because it just went ahead and had a nice bounce haha.

Tried several reversal trades on YM. Not the best thing to do today. Ended with +4 (hit of protected entries).

Lucky those who went short from the beginning.

looks so f@#@Ing easy on hindsight

anybody jumped in ?

Its hard to jump in on a falling knife. You don't want to be jumping in on the ended and get burned. So you want to enter on your own terms while getting a good R:R. Nice chart tho

I spent most of the morning just watching. missed a couple of entries but I wasn't getting what I was looking for. I hopped in for a quick +20 but wasn't to happy with it. ignored some basic rules probably due to impatience and greedy.

How I justified it. Price was making 38.6% PB consistently and the current swing was a bid longer. L/T structure was coming up but the initial test was soft so expected deeper penetration. Honestly I should of let it go and focused on preserving capital rather then risking it.

US30 -89T (Demo)

Nice trade Jmezz. its nice when your sailing with the wind and luck is at our backs. You showed very good patience and your exit was magnificent.

I am interested in your justification for taking the trade and how you distinguish net short vs net long positions. I do agree with your position and it was a great strategy. How did you determine net shorts? Was it just based on order flow control and the strength of the initial move?

Nice chart on both accounts (original and revised). Interesting use of fibs on the PB that started the consolidation. I assume, this is used to build a case with structure for potential consolidation peaks? Are the only numbers that proove to be of improtance 27.0 and the 98.7


By my calculations you should be close to hitting targets. I hope you get it today before the weekend. congrats

Hi Mack2013, you're correct. Running Fibs, Pitchforks, Trendlines, Parallel lines, Supply/Demands zones are used to build structure. Like Jmezz mentioned, it's like a road map for me. If I find confluence in this area I then wait for other factors using my other tools. My decision to enter is then either based on a Strong Imbalance of Bids vs Offers (or vice versa) or Iceberg orders, Stacking, (it would take me to long to explain Stacking), Block orders. Retail Flush....

I actually took my profits on the Cad trade @7732 and 7738. Also, my decision to exit is based on the above too.

I spent all day cruising on this hot, sunny NY day. Looks like the ES was in a free fall. Have a good weekend, Rocky!

Also, if I'm bored this weekend I'll build a structure chart for anyone who would like one. Just need the Instrument and time frame?.

Good Thread.
I believe in confluences..... support and resistance

Here's a great example.

When you're finding the overnight distribution you're looking at how much of the overnight price action is above or below the prior day's close. The reason that this can be beneficial is that when the overnight session is net long or net short there can be a countermove to balance out the inventory.

In the pic you see that there are only a few bars above the prior day's close. Then you see intense selling which leads to price generally staying near the low of the overnight session until the open. Once the market opened on this day, even MORE selling occurred.

Ultimately when this happens I'm a bit apprehensive to push in the prevailing direction (in this example I'd be nervous to press short.) So instead, I'm looking at structure around the area and I'm also looking to see if I can build a PRZ. Then I'm watching for the order flow to break down as price is nearing the PRZ. Damian does not use BC extensions however I do like to use them when creating a PRZ.

In this example you can see that price neared the 1:1 and also hit the PRZ. From here you'd wait to see if the order flow breakdown gives clues about possibly wanting to head back up to torch shorts. The projection on the last NSL that neared the 200% was extremely weak when compared to the projection of the last swing and the momentum weakened a good deal as well, so these were clues that this move was possibly coming to an end. Not shown in this image, but this entire leg down was a pullback into a larger 618.

You see that price made a nice structure zone in the white box so you could have used that to play off of.

A lot of times when you catch these price has created the low or the high of the day so you can just sit back and let the squeeze rocket you up.

Sometimes you'll look to the overnight inventory and you'll see price chopping around the prior day close or you'll have a difficult time trying to figure out the distribution. When these instances occur then imo there's no edge in trying to use the overnight inventory for a possible play so I'd just ignore it in that regard.

These situations don't always work out like this, I've cherry-picked an A+ example for education purposes. And actually it can definitely be a drawback trying to play these as you could wait for a reversal that just doesn't come, like what happened to me today. Overnight inventory for today was 100% net short and the selling looked pretty violent leading up to the open. Instead of following all the selling that was going on, I spent my morning waiting for a reversal setup so I can get in for an explosive squeeze. This never happened. I found myself becoming annoyed at the position that I was in because I did not want to jump in short after all the selling that had been going on as I thought that I'd be chasing, but the reversal setup was not presenting itself either so I just got up and left the computer before I did something dumb. I came back toward the end of the day and decided that there was no setup worth playing here. So ultimately I really should have just followed our method here and stuck to following the order flow.

True. That was my problem today (when to enter short in the middle of a move; especially when price dropped already more as you expected). I did not expect such a price drop down. Luckely my strategy to protect my entries quickly made of the whole a small winning day instead of a catastrophic one (with my long entries; especially when trading with big lots).

Hi Rocky,

it would be nice if you could build a case for YM (preferably 233 Tick; alternatively 5 min).