Ratios & Harmonics: a Different Way to Trade | Page 1184 | 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

  • #23,661
  • Jan 14, 2017 8:46am Jan 14, 2017 8:46am
Quoting crixus
Question for you guys on YM, last Friday. I took one of Mack2013's charts and showed where i would have tried to go long (see 3 blue arrows) at that time given price structure. Basically, i had identified the white zone acting as my line in the sand, i.e., above this zone i was bullish, below i would have turned bearish. Exception to this would have been a near double top where i would have changed my mind and probably go short at this double top with first target at the white zone (line in the sand). Do you see something faulty in my analysis?...
My 0.02$ on this.

Attached Image (click to enlarge)
Click to Enlarge Name: Mack2013_Chart3.png Size: 108 KB


One last thing... when price makes a very strong move, in this case to the upside and afterwards doesn't retrace to the 38.2 fib and attempt to create a NSH but starts making a pullback with NSLs and LHs on the immediate orderflow (aka AB=CD or three drive) I tend to see this as a major weakness and in our case I would favour a short although the expectation is a NSH.

Edit: In hindsight this is easy to see... but during a session it's a very different thing
  • #23,662
  • Jan 14, 2017 9:22am Jan 14, 2017 9:22am
Quoting Mr. Pip
Well traders that's it for me today. Heading out to lunch . Let me know how following alone worked for you. Was there value? Was it over your head? Waste of time? Sound off let me have it. I hear a bunch of crickets!
Your insight into how you are reading the immediate order flow is remarkable, I find it immensely useful thank you so much. It all makes perfect sense when you commentate live, then I try to apply it to my own live trading and things aren't so clear!

One thing I struggle with, perhaps you can shed some light? Does your expectation always remain a NSH, up until the structure low is taken out, regardless of what the price action within structure is doing? would you change your expectation to a NSL if price fails to make a NSH then makes LH LL within structure? or would this always be considered a complex pullback until NSL is confirmed?

Thanks for all your great work, cheers!
Bulls nor Bears may hide their intent.
  • #23,663
  • Jan 14, 2017 9:45am Jan 14, 2017 9:45am
Quoting wigtrade
{quote} Your insight into how you are reading the immediate order flow is remarkable, I find it immensely useful thank you so much. It all makes perfect sense when you commentate live, then I try to apply it to my own live trading and things aren't so clear! One thing I struggle with, perhaps you can shed some light? Does your expectation always remain a NSH, up until the structure low is taken out, regardless of what the price action within structure is doing? would you change your expectation to a NSL if price fails to make a NSH then makes LH...
I know I'm not Mr. Pip but I'm pretty sure the answer is going to be the same..

1)Does your expectation always remain a NSH, up until the structure low is taken out, regardless of what the price action within structure is doing?
-Technically yes. Your expectation remains for a NSH until the low of the swing that created the said NSH is broken. But depending on factors like orderflow your expectation can weaken.

2)would you change your expectation to a NSL if price fails to make a NSH then makes LH LL within structure? or would this always be considered a complex pullback until NSL is confirmed?
- It's considered a complex correction but the expectation remains the same until the low of the main swing is broken.

Hope this helped!
  • #23,664
  • Edited 10:25am Jan 14, 2017 9:56am | Edited 10:25am
Quoting x3m-PippiN
{quote} I know I'm not Mr. Pip but I'm pretty sure the answer is going to be the same.. 1)Does your expectation always remain a NSH, up until the structure low is taken out, regardless of what the price action within structure is doing? -Technically yes. Your expectation remains for a NSH until the low of the swing that created the said NSH is broken. But depending on factors like orderflow your expectation can weaken. 2)would you change your expectation to a NSL if price fails to make a NSH then makes LH LL within structure? or would this always...
thanks very much! I think I am often getting caught in the trap of thinking too many moves ahead and losing sight of the present order flow, for instance I am treating a failed NSH as an expectation failure before the structure low is taken out confirming the expectation failure.

I'll post up a chart to try and explain what I am wrestling with - cheers!

Here we go something like this - all feedback welcomed thanks guys and girls
Attached Image (click to enlarge)
Click to Enlarge Name: Bhot0rka.png Size: 38 KB
Bulls nor Bears may hide their intent.
  • #23,665
  • Jan 14, 2017 10:42am Jan 14, 2017 10:42am
Quoting Mack2013
This is what I kind of want to see. I'm aware that its friday afternoon and sometime price doesn't behave rationally later in the session. So, I'll be cutting myself off and just monitor 1.5 - 2 hours before the close. US30 -89T S/T order flow is bearish and has some room before I anticipate Bulls re-entering. with these wide swings, you got to believe both Bulls and Bears are willing to enter this market. the only real variable should be value. Friday January 13, 2017 game plan....... wooooooo Halloween came real early save the tricks and give...
Quoting crixus
{quote} Just wanted to say i like your analysis and levels. Your charts seem so clear and your plan easy to grasp. I have seen a lot of progress on that front since last year. Bravo!
Mack - I just wanted to mirror Crixus' sentiment.

Also in regard to your trailing post, I think you managed that trade excellently. That was a beautiful trade!
  • #23,666
  • Jan 14, 2017 10:48am Jan 14, 2017 10:48am
Quoting wigtrade
{quote} thanks very much! I think I am often getting caught in the trap of thinking too many moves ahead and losing sight of the present order flow, for instance I am treating a failed NSH as an expectation failure before the structure low is taken out confirming the expectation failure. I'll post up a chart to try and explain what I am wrestling with - cheers! Here we go something like this - all feedback welcomed thanks guys and girls {image}
Until price closes below your horizontal green line, the expectation remains a NSH. However it retraced nearly 100% so the expectation for a NSH is weakened and deemed suspect.

In your first red arrow asking if you should be looking for longs there - I absolutely would not. Price was unable to make a NSH, then it consolidated and dumped with force. Trying to long after those huge red bars is suicide.

In your second red arrow asking if that's an expectation failure - IMO if price TESTS past your boundary but does not CLOSE past it then it is not an expectation failure. However the expectation is severely weakened and I'd be on the lookout for a short opportunity. The expectation did fail a few bars later, after price had that minor bounce and then close below your horizontal line.
  • #23,667
  • Jan 14, 2017 10:49am Jan 14, 2017 10:49am
Quoting wigtrade
{quote} thanks very much! I think I am often getting caught in the trap of thinking too many moves ahead and losing sight of the present order flow, for instance I am treating a failed NSH as an expectation failure before the structure low is taken out confirming the expectation failure. I'll post up a chart to try and explain what I am wrestling with - cheers! Here we go something like this - all feedback welcomed thanks guys and girls {image}
JUST FROM STRUCTURE yes ..your expectation would still be a NSH and looking for longs. But if you take into consideration the whole picture... the fact that PA retested the low and could not make a NSH afterwards plus the strong bearish candles makes this expectation of a NSH very weak and unreasonable and a very shitty long
  • #23,668
  • Jan 14, 2017 10:52am Jan 14, 2017 10:52am
Quoting jmezz
{quote} Until price closes below your horizontal green line, the expectation remains a NSH. However it retraced nearly 100% so the expectation for a NSH is weakened and deemed suspect. In your first red arrow asking if you should be looking for longs there - I absolutely would not. Price was unable to make a NSH, then it consolidated and dumped with force. Trying to long after those huge red bars is suicide. In your second red arrow asking if that's an expectation failure - IMO if price TESTS past your boundary but does not CLOSE past it then it...
thanks very much, I enjoy your posts and chart analysis immensely. you seem to have an epic win ratio!

just to clarify I would not take longs based on that particular price action either, hence my question was specifically relating to structure breaks, ie ignoring the price action, should I still be looking for longs UNTIL a NSL is made, that chart wasn't a great example but I wanted to illustrate purely structure and expectation - you have answered my question thanks!
Bulls nor Bears may hide their intent.
  • #23,669
  • Jan 14, 2017 10:54am Jan 14, 2017 10:54am
Quoting x3m-PippiN
{quote} JUST FROM STRUCTURE yes ..your expectation would still be a NSH and looking for longs. But if you take into consideration the whole picture... the fact that PA retested the low and could not make a NSH afterwards plus the strong bearish candles makes this expectation of a NSH very weak and unreasonable and a very shitty long
thank you, my question was related to structure breaks only and 'ignoring' price action and I didn't find a great chart example either regarding price action. bit of a paradox really as you cannot ignore the price action but I just wanted to understand for how long the expectation remains in tact. Cheers!
Bulls nor Bears may hide their intent.
  • #23,670
  • Jan 14, 2017 11:29am Jan 14, 2017 11:29am
Quoting crixus
Question for you guys on YM, last Friday. I took one of Mack2013's charts and showed where i would have tried to go long (see 3 blue arrows) at that time given price structure. Basically, i had identified the white zone acting as my line in the sand, i.e., above this zone i was bullish, below i would have turned bearish. Exception to this would have been a near double top where i would have changed my mind and probably go short at this double top with first target at the white zone (line in the sand). Do you see something faulty in my analysis?...
You trade returns to balance areas right? If so, I think the play for that was the pullback after that small range-break in p/m session.

I think if I was going to attempt a long it would have been right at the harmonic pb / first touch of untested b/o / ONH / 50fib, here:
Attached Image (click to enlarge)
Click to Enlarge Name: Screenshot2.png Size: 96 KB


You had a few things supporting the long at this point - such as that price was still above yesterday's open and also there were 2 very large offers at 880 and 881 which I took note of when we were at HOD. Usually price will trade through large orders. If they fade before taking them out, then a lot of times it's just a pullback before eventually getting back to those orders and taking them out.

But to be honest with you I was not looking long anymore once we hit 76. To me that was going to be an easy short back to retest the ONH. The problem was that price was hanging around the zone for a long time instead of rejecting quickly.

At the time I had drawn this short term supply zone and thought we could see a hns:
Attached Image (click to enlarge)
Click to Enlarge Name: Screenshot3.png Size: 21 KB


However even when it looked like that's what was going to happen, there was no real strong push by the bears to show that they wanted to take the ball. The price action was slow and there were large offers above that I thought were a possibility to hit before then going lower.

So ultimately I stayed out of the short.

Then we got the ONH test and bounce however at this point I was still leaning toward shorting. When we bounced I had my eye on 57/58 because it was an untested breakdown and also there was a nice shelf there from the ride up at open. We got the rejection candle but afterwards there wasn't a good followthrough candle to enter on:
Attached Image (click to enlarge)
Click to Enlarge Name: Screenshot4.png Size: 19 KB


I did happen to end up seeing this level which had I seen it before, I would have been more inclined to pull the trigger on the 57 rejection short:
Attached Image (click to enlarge)
Click to Enlarge Name: 2017-01-13.png Size: 20 KB


But the fact that we lost this pivot and were unable to get back above it said to me that lower prices were coming and longs were out of my mind completely.

Ultimately watching more of the morning, with PA and overall pace of market I just didn't think it was worth it to push a trade.

Hope this gives some insight as to why I personally wasn't looking for a long.
  • #23,671
  • Jan 14, 2017 11:33am Jan 14, 2017 11:33am
Quoting wigtrade
{quote} Your insight into how you are reading the immediate order flow is remarkable, I find it immensely useful thank you so much. It all makes perfect sense when you commentate live, then I try to apply it to my own live trading and things aren't so clear! One thing I struggle with, perhaps you can shed some light? Does your expectation always remain a NSH, up until the structure low is taken out, regardless of what the price action within structure is doing? would you change your expectation to a NSL if price fails to make a NSH then makes LH...
Great questions. Let's break them down.

Quote
Does your expectation always remain a NSH, up until the structure low is taken out, regardless of what the price action within structure is doing?

No matter how weak the expectation has become we must always for price accountable to the expectation. If the order flow presents a situation where the expectation although present has become unreasonable due to extreme weakness. You may pass on a trade as you saw me do Friday the expectation was for a NSH but the bulls looked like crap so I was looking for shorts. RR and aggressive trade management would be followed and you are trading against an expectation.

Quote
would you change your expectation to a NSL if price fails to make a NSH then makes LH LL within structure? or would this always be considered a complex pullback until NSL is confirmed?

No I would not it may be and immediate NSH on the short term order flow but the main swing has not been taken out. This is where newer traders sometimes make mistakes and develop incorrect expectations As long as the main swing high and long remain unbroken the only thing the could be present are complex corrections. Those complex corrections sometimes offer insight as to the probability of the expectation failing and can even position you for great setups.
If you fail to plan, you plan to fail.
  • #23,672
  • Jan 14, 2017 11:34am Jan 14, 2017 11:34am
Quoting x3m-PippiN
{quote} I know I'm not Mr. Pip but I'm pretty sure the answer is going to be the same.. 1)Does your expectation always remain a NSH, up until the structure low is taken out, regardless of what the price action within structure is doing? -Technically yes. Your expectation remains for a NSH until the low of the swing that created the said NSH is broken. But depending on factors like orderflow your expectation can weaken. 2)would you change your expectation to a NSL if price fails to make a NSH then makes LH LL within structure? or would this always...
If you fail to plan, you plan to fail.
  • #23,673
  • Jan 14, 2017 11:42am Jan 14, 2017 11:42am
Quoting jmezz
{quote} Until price closes below your horizontal green line, the expectation remains a NSH. However it retraced nearly 100% so the expectation for a NSH is weakened and deemed suspect. In your first red arrow asking if you should be looking for longs there - I absolutely would not. Price was unable to make a NSH, then it consolidated and dumped with force. Trying to long after those huge red bars is suicide. In your second red arrow asking if that's an expectation failure - IMO if price TESTS past your boundary but does not CLOSE past it then it...
Great answer thanks 100% agree!
If you fail to plan, you plan to fail.
  • #23,674
  • Jan 14, 2017 11:46am Jan 14, 2017 11:46am
Quoting rocky
{quote} Eaglestar, I totally agree with you. Combining Fibs with Andrews Pitchfork provides a trader with a clear road map. Structure like this gives a trader more confidence on where and when to enter a trade with minimal risk. . A good daily plan is to build a framework of market structure around price structure which it looks like you've done. Nice job on your trade. Jmezz, I would call a profit of 28 ticks a very good day. Nothing wrong with your trades, nice work
Rocky have you ever made a post on how you choose which swings to use for your pitchforks and how you use them in general? I don't recall seeing one when I've gone through your thread. If you've made one before then I'll do a better search but if you have some spare time, a quick chart and explanation of how you use them would be cool. Can keep that in your thread too if you like.

Quoting Mr. Pip
I did not get feedback on the Supply Demand video I posted. Do we need a new one or is that one good?
I think that original is all you need, gives people the foundation which can serve as standalone or they can fine tune it if needed as they put it into practice.

Quoting Mr. Pip
Well traders that's it for me today. Heading out to lunch . Let me know how following alone worked for you. Was there value? Was it over your head? Waste of time? Sound off let me have it. I hear a bunch of crickets!
Quoting Mr. Pip
Don't get me wrong guys, it's not that I need the attention. But when I don't see participation or questions being asked I can't help but feel like I may be wasting my time. What I do is for your benefit not mine for your growth and development. Just venting. I teacher likes to see student participation. It's how he sees if the information is getting through and what we need to work on.
I think the biggest takeaway is how you use shorter term levels in regard to current price / atmosphere and also identifying when buying / selling is still in an area.

I know for me I've placed a much larger importance on short term levels as well as longer term pivots and what that means for price when they break above or cannot hold. Also like to use them for entries, find myself talking to myself in my head "I'm goin to enter here and I want price to hold underneath / above this short term level for lower / higher." Gives me more composure with the trade.

Also still patiently (yet excitedly) awaiting the accumulation / distribution video.
  • #23,675
  • Jan 14, 2017 11:54am Jan 14, 2017 11:54am
Quoting Mr. Pip
{quote} Great questions. Let's break them down. {quote} No matter how weak the expectation has become we must always for price accountable to the expectation. If the order flow presents a situation where the expectation although present has become unreasonable due to extreme weakness. You may pass on a trade as you saw me do Friday the expectation was for a NSH but the bulls looked like crap so I was looking for shorts. RR and aggressive trade management would be followed and you are trading against an expectation. {quote} No I would not it may...
Thanks very much Damian, this is very clear to me now following your and others responses thank you all.

Regarding your last sentence then, as this is where I feel I am getting too creative too often and changing expectation before structure is broken: When you say these complex corrections can sometimes position you for great setups, do you mean great setups with the expectation of an expectation failure? ie trading counter trend to catch the expected failure and therefore trend change?

That was a bit of a mouthful of a sentence and may not be clear please let me know if I need to make my question clearer thanks
Bulls nor Bears may hide their intent.
  • #23,676
  • Jan 14, 2017 12:08pm Jan 14, 2017 12:08pm
Quoting jmezz
{quote} {quote} Mack - I just wanted to mirror Crixus' sentiment. Also in regard to your trailing post, I think you managed that trade excellently. That was a beautiful trade!
Thanks man. Btw, nice analysis on the question u answered
  • #23,677
  • Jan 14, 2017 12:32pm Jan 14, 2017 12:32pm
Hi I'm just starting to study forex trading and found this thread the best one on this forum, I feel like I have missed the boat a bit from 1st Feb 2016 page 785 when the lessons were done every week I've read about 70 pages from page785 and find it a lot to take in, I have tried to copy a chart just for practice can you tell me from what I said about NSH and NSL are right is would the NSL on right of chart be right as if you look to the left corner there is a NSL which is at a lower level im just wondering if the more recent price action can cancel that one out so I can take the NSL from the right I will try to load chart never done this before so not sure if it will work could you let me know from chart what you think.

Regards Gary



Attached Image (click to enlarge)
Click to Enlarge Name: $EURGBP (10 Min) 13_01_2017.jpg Size: 100 KB
  • #23,678
  • Jan 14, 2017 1:05pm Jan 14, 2017 1:05pm
Quoting wigtrade
{quote} Thanks very much Damian, this is very clear to me now following your and others responses thank you all. Regarding your last sentence then, as this is where I feel I am getting too creative too often and changing expectation before structure is broken: When you say these complex corrections can sometimes position you for great setups, do you mean great setups with the expectation of an expectation failure? ie trading counter trend to catch the expected failure and therefore trend change? That was a bit of a mouthful of a sentence and may...
Complex corrections can usually off better trading opportunities as they improve the RR of the possible entry. They also help you time better entries. In cases where the second or third legs show increasing strength over the first or second on the more complex ones then you could position yourself early into the very probable expectation failure. So there are two ways to play them and the short term order flow in the complex correction will give you to indications if you short trade against the expectation.
If you fail to plan, you plan to fail.
  • #23,679
  • Jan 14, 2017 1:54pm Jan 14, 2017 1:54pm
Quoting Mr. Pip
{quote} Complex corrections can usually off better trading opportunities as they improve the RR of the possible entry. They also help you time better entries. In cases where the second or third legs show increasing strength over the first or second on the more complex ones then you could position yourself early into the very probable expectation failure. So there are two ways to play them and the short term order flow in the complex correction will give you to indications if you short trade against the expectation.
you make perfect sense, thank you
Bulls nor Bears may hide their intent.
  • #23,680
  • Jan 14, 2017 2:48pm Jan 14, 2017 2:48pm
Quoting worrawalan
Hi I'm just starting to study forex trading and found this thread the best one on this forum, I feel like I have missed the boat a bit from 1st Feb 2016 page 785 when the lessons were done every week I've read about 70 pages from page785 and find it a lot to take in, I have tried to copy a chart just for practice can you tell me from what I said about NSH and NSL are right is would the NSL on right of chart be right as if you look to the left corner there is a NSL which is at a lower level im just wondering if the more recent price action can cancel...
Welcome to this wonderful thread. Take your time with the lessons because they are the most valuable thing you will find in one place on internet about trading.

Your chart is correct.
16 traders viewing now