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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

  • #24,901
  • Feb 7, 2017 3:44pm Feb 7, 2017 3:44pm
Quoting wigtrade
{quote} Great just what I needed to hear thank you Massa
Great!
If you fail to plan, you plan to fail.
  • #24,902
  • Feb 7, 2017 7:04pm Feb 7, 2017 7:04pm
Hi guys, did not trade YM but wanted to illustrate a nice PB to a fib level and where a potential counter trend trade could have been tried...

This is the Dow (Ym) CFD version with Oanda. Chart using a renko where each body is 2.5 pts.

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  • #24,903
  • Feb 7, 2017 7:44pm Feb 7, 2017 7:44pm
Quoting Mack2013
{quote} Small loss , a lot of pain US30 -62T (-10) Chart 9.png;2177243 {image}
Even though a loss, very nice recovery! I think the reason you aren't seeing "others" trading errors is because many people aren't posting them. No one wants to look like they are wrong but we can't be right or wrong in the market. The market doesn't care about us, our accounts, or timeframes. It does what it is going to do and if we are disciplined in our method and the method has a positive expectancy, we will make money over time. But somehow our ego gets involved.... however posting trades win or loss is the best way to learn because it holds you accountable and you can learn from feedback.
  • #24,904
  • Feb 7, 2017 7:51pm Feb 7, 2017 7:51pm
Quoting fxtrading201
I always find it interesting when people think that Fibonacci plays any role what so ever in trading/market movement. There is absolutely no statistical evidence that shows us that it does. However, so many traders seem to use it. Which is hard to understand seeing as trading is based on statistics. Let alone the use of harmonics. Nothing that is taught in books about trading will ever make money in the long run or at all. All this rubbish about gartley patterns being 80% accurate - with zero statistics to back up the nice graphs and such a claim....

Wow, I really love when we get such an honor. We are truly blessed to have had the opportunity to read such a profound statement. Every now and then we get these Extra Terrestrials come through and make extreme and outrageously ignorant comments. My goal is not to attack or insult you but you came into my house to do nothing more than to undermined my efforts and to discredit the work that has taken me so long to put together.

I noticed you are new here to FF and have posted a few times on other threads with similar statements. You are either an extremely knowledgeable and experienced trader that can offer more than personal attacks or a broken trader who has tried many things and nothing seems to work for you. In reading the other posts you wrote I can tell that there is some experience in you but the comments you offer do nothing to contribute in the way of learning and tells me you are not a seasoned professional as I am. We simply comment to improve and teach. My goal as I said is not to insult you but to hopefully educate you on some basics of Fibonacci and Harmonics so that you can know better the next time you feel the need to attack me again.

I look forward to healthy discussions that promote learning. You see, if I do not understand something I ask constructive questions that I can grow from. If you are frustrated, lost, or broken down by the countless forms of useless material out there, then stick around and you will learn something you can use.
I will now address your points and then I will finish this on a chart as it will do more for you visually then I can do in writing.

Before I do so, again I was going to not entertain your post but for the sake of the newbies that are trying hard, I did not want it to be of any influence and if you are a broken trader at the end of your rope perhaps this will give you a sense of a light at the end of a long tunnel. I will not be trading insults with you and hope beyond my words you find it helpful and constructive.

The reason most people fail at trading is because they use the tools they have at their disposal incorrectly. We must first establish the fact that nothing works 100% of the time. And that any indicator or any other thing that people use are just tools. They have been designed to help the trader make better decisions. The issue is that traders use these tools incorrectly as entry signals and that, they are not.

There are a few studies at the university level that support the validity of Fibonacci and trading. They also conclude that more research needs to be done. It’s an easy find in google so look it up for yourself if you are so inclined to do so. As having used Fibonacci retracement and extensions for years, I can tell you the accuracy and frequency by which price respects these levels is precise and occurs too frequently to support your claim.

There are many kinds of statistics in trading so we will not discuss this. What will give any trader and edge is finding occurrences that have a tendency to reproduce repeatedly and being able to capture this in real time to benefit from them.

Harmonics is a very complex methodology that takes years of study to understand and master. The pioneer of harmonics is Scott Carney he is a friend and is far better qualified then me to speak on the subject. What I can tell you is that these patterns are highly precise and effective once you learn to identify them correctly and do not force them into price action. I’m not sure if you are one of these traders that believes the market is random and completely unpredictable. I could not disagree with this ideology more. There is a natural order to the financial markets and they often display or seek symmetry which we like to call market harmonics that extend past the general patterns you comment on. It’s a disciple that offers an incredibly accurate way to forecast the future path of price. I will show you this in greater detail when I get to the chart.

I don’t completely disagree with you on your rant on the books but the fact that there is such a high failure rate in this business and it is easier to make money selling people the idea of trading profitably rather than being able to do it saturates the market with useless courses and books of things that just don’t work. If 90% of people fail, then in theory 90% of what you buy and try to learn from is just crap. The true value is the needle in the hay stack which is so hard to find. Statistics in trading is a double edge sword. I say this because you could have a statically proven set up but if you are unable to capture it in real time then it is useless.

The patterns are nothing more than a trade setup. Entering on that setup blindly puts your capital at risk. What I teach it how to properly read a price chart so that when your favorite setup appears on a chart you can make an educated assessment as to the strength of that signal. I also teach traders how I utilize other tools to help me trade the markets with success.

The references you make as to how the hedge funds, banks, dark pools trade is of no concern to me. They use many different strategies and algorithms and tool which include Fibonacci and indicators. I could really care less what they do but, because of the skill set I have and teach the members of my thread, we can see their footprints on a price chart. I will not go deeper into this as you may understand this by the comment you made. You seem to know exactly what and how they do it so we won’t waste each other’s time. I simply just don’t care how they trade as long as I can see where they are on the chart.

You asked me why I use it I think I can best show you this on a chart to give you a visual reference and to show you why I felt the need to address your post and provide this video. I hope you find value in my response and encourage your to comment

https://youtu.be/QCc47vNuDiw
If you fail to plan, you plan to fail.
  • #24,905
  • Feb 7, 2017 7:54pm Feb 7, 2017 7:54pm
Quoting Harmonic1976
{quote} Even though a loss, very nice recovery! I think the reason you aren't seeing "others" trading errors is because many people aren't posting them. No one wants to look like they are wrong but we can't be right or wrong in the market. The market doesn't care about us, our accounts, or timeframes. It does what it is going to do and if we are disciplined in our method and the method has a positive expectancy, we will make money over time. But somehow our ego gets involved.... however posting trades win or loss is the best way to learn because...
100% That is why I post every trade in real time, nowhere to hide. Also to show you all that I practice what I teach. Walk the walk and talk the talk. Transparency is the best way.
If you fail to plan, you plan to fail.
  • #24,906
  • Feb 7, 2017 7:56pm Feb 7, 2017 7:56pm
Okay Traders, The video is nothing new really it was more for the benefit of the post from yesterday and for the newer traders to appreciate what we learn here. It's a nice short glance into our world. See you all tomorrow on the battle field. Trade well and talk to you soon.
If you fail to plan, you plan to fail.
  • #24,907
  • Edited 6:53am Feb 8, 2017 3:04am | Edited 6:53am
Dear Damian/fellow traders,
I am trading the USDJPY 15m as i experienced this pair was for me the most profitable (EURUSD unfortunately didn't work for me, bad experience or its just psychological) Please have a look at mi chart.
1.First as i tried to recognize the Supply/Demand area
2.I recognized the NSH/NSL and HL/LH
3.I waited for the 61.8 fib
4.I entered at the bleu arrows
For me it's a little bit difficult to follow this great tread constantly because of my busy life(full time job and family responsibility's).
Last week i had 8 winners and 2 Losses, for me at this moment is great all thanks to you Damian, i will do mi best to post more of mi trades.
I am also not sure if i am entering the trade a lite bit to late see mi blue arrows.

Thank you very much and greatings from Belgium.
Rachid
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  • #24,908
  • Feb 8, 2017 3:39am Feb 8, 2017 3:39am
Quoting Mr. Pip
{quote} ...You asked me why I use it I think I can best show you this on a chart to give you a visual reference and to show you why I felt the need to address your post and provide this video. I hope you find value in my response and encourage your to comment https://youtu.be/QCc47vNuDiw
Thank you for highlighting the trading session and to point out the key levels and trade opportunities and the confluences.
It looks always really easy when you talk about, but when I have to take a decision in realtime it is not always easy for me.
Moreover, I have the impression that my emulated CFD chart has much more noise in it.
  • #24,909
  • Feb 8, 2017 3:57am Feb 8, 2017 3:57am
Quoting Mr. Pip
{quote} 100% That is why I post every trade in real time, nowhere to hide. Also to show you all that I practice what I teach. Walk the walk and talk the talk. Transparency is the best way.
i liked your comment very much. Although from my experience i can tell that there is none so deaf than those who do not want to hear. But it's a very valuable comment to me, and other followers of yours nevertheless.

Btw, yesterday before I left home to send my girls to the dance school (as i said), noticing the strength of bears which resulted with that great winning trade that you took, i placed a limit sell at about 50% of that swing right where there was a great level, and went without much stress about the trade because I know that when you follow order flow and strength of the market than more than 70% of the time your cant miss. and when i came home, saw market didn't hit my target (i was a bit too greedy) and i closed the trade for +28 pips recovering the little loss and ending with +20 pips for the day, which is my goal. I don't recommend going with limit orders, but this is just to say that i have gained so much trust in harmonics and order flow that sometimes I am confident enough to take trades blindly knowing that probability is on my side. that's it. Again, not recommended especially to novice traders.

Thank you so much again.
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  • #24,910
  • Feb 8, 2017 4:24am Feb 8, 2017 4:24am
Quoting ujku80
{quote} i don't think we have so many news today, do we?
The "orange" colored news on here may not be considered as important but sometimes it can move price. For example 2 "orange" news may move price a bit. Also look at the openings. As predicted price went up.
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The things that we love tell us what we are Thanks Redsword11 and Tim Morge
  • #24,911
  • Edited 6:07am Feb 8, 2017 4:26am | Edited 6:07am
Quoting eaglestar
{quote} The "orange" colored news on here may not be considered as important but sometimes it can move price. For example 2 "orange" news may move price a bit. Also look at the openings. As predicted price went up. {image}
Price reversed, hit the 61.8 and now at the "PRZ" 161.8 extension. Looking at reversal down here. Notice also heavy volume.
Monitoring 1min

Also PRZ 1h

Holding at 1m 78.6
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The things that we love tell us what we are Thanks Redsword11 and Tim Morge
  • #24,912
  • Feb 8, 2017 4:35am Feb 8, 2017 4:35am
Quoting ujku80
{quote} i liked your comment very much. Although from my experience i can tell that there is none so deaf than those who do not want to hear. But it's a very valuable comment to me, and other followers of yours nevertheless. Btw, yesterday before I left home to send my girls to the dance school (as i said), noticing the strength of bears which resulted with that great winning trade that you took, i placed a limit sell at about 50% of that swing right where there was a great level, and went without much stress about the trade because I know that...
Haha similar feeling. Once I see opportunity I will just enter trades. Then set a tp. But I also set a trailing stop if I'm going away. Variable trailing from 15 to 30 pips depending on market volatility.
  • #24,913
  • Feb 8, 2017 5:28am Feb 8, 2017 5:28am
Quoting kelvinyun
{quote} Haha similar feeling. Once I see opportunity I will just enter trades. Then set a tp. But I also set a trailing stop if I'm going away. Variable trailing from 15 to 30 pips depending on market volatility.
i haven't experimented with trailing stops yet. probably i should put some efforts to it. I never thought about mainly because i plan to stay and attend my trades. but it's a good idea nevertheless. thx for suggestion.
  • #24,914
  • Feb 8, 2017 5:40am Feb 8, 2017 5:40am
Quoting eaglestar
{quote} Price reversed, hit the 61.8 and now at the "PRZ" 161.8 extension. Looking at reversal down here. Notice also heavy volume. Monitoring 1min Also PRZ 1h Holding at 1m 78.6 {image} {image} {image} {image} {image}
yeah, charts are clear. your getting close to an hourly support, or u could just say that u already are there. at first sight, u seem to be going against order flow but it's just when everybody thinks that market is headed south that a turning point occurs. If u're aiming for a nice reversal, do u place your stop below that hourly support (ca.1.0625) or u don't want to risk so much?
  • #24,915
  • Edited 6:15am Feb 8, 2017 6:03am | Edited 6:15am
Quoting ujku80
{quote} yeah, charts are clear. your getting close to an hourly support, or u could just say that u already are there. at first sight, u seem to be going against order flow but it's just when everybody thinks that market is headed south that a turning point occurs. If u're aiming for a nice reversal, do u place your stop below that hourly support (ca.1.0625) or u don't want to risk so much?
I use the 5 min ATR as a guide as mentioned in previous posts. This is how I get a high RRR. I use the greater of the 200 or 55 ATR X 1.3 plus spread. Lately I have been using 11 pip sl as a guide and modify accordingly. Also you need to have SL above or below major structure. If price goes up 40 pips I have around a 4:1 RRR which is very good. For some trades though, the 1:1 symmetrical formation will get hit and keep going, so the real RRR is static, or it can go much greater than 4:1. This is a bit different than Mr. Pip's way. If I am in a trade on the 5 min and price goes up 100 pips that is around 10:1 RRR so it gives you a lot of room to be wrong/right. I don't have to worry a lot about the trade going in my direction or not, as I have my statistics in my favor. I could place my stoploss much smaller utilizing the 1min but I want to keep a buffer for now. 9-12 pip stop loss on the 5min chart is good for me at the moment. I also move my stop to Break Even rather quickly compared to others, so my trade is a risk free trade with high profit potential.

Refer to this table that I have posted before. Lately I have been charting the 5min and switching to 1min to see what the volume is doing as well at important levels. Mixing Fib's with Andrews Pitchfork has given me more entry opportunities on smaller time frames as well as given me a way to calculate price targets that is amazingly effective.

Look at the 4:1 column below. Notice how you only have to be right 25% of the time. That is the power of the RRR that I am following.

Also I recommend following 1 or 2 vehicles when you start. If you follow many things it can be distracting. I have been trading the 5 minute chart and am focused only on that with the 1h and Daily as a loose guide. If you were trading 5 5min charts it may be difficult to manage your trades.
Attached Image
The things that we love tell us what we are Thanks Redsword11 and Tim Morge
  • #24,916
  • Feb 8, 2017 6:29am Feb 8, 2017 6:29am
Quoting eaglestar
{quote} I use the 5 min ATR as a guide as mentioned in previous posts. This is how I get a high RRR. ..... Look at the 4:1 column below. Notice how you only have to be right 25% of the time. That is the power of the RRR that I am following. Also I recommend following 1 or 2 vehicles when you start. If you follow many things it can be distracting. {image}
this is interesting. of course harmonics (including fibs) is a tool that can be successfully applied to various trading techniques. regarding strong S/R levels, i've noticed that those hourly ones are quite strong actually. but it's hard to snipe the market like that with a 10-12 pip SL. so far Jmezz has been successful in that from what i've seen. And u get a few hits until u fine tune to the exact entry i suppose. anyway, GL and keep up.

And yes, not to forget, i too only focus on one pair and don't recommend trading more than a couple at a time. cheers
  • #24,917
  • Feb 8, 2017 6:41am Feb 8, 2017 6:41am
Quoting Rachid34
Dear Damian/fellow traders, I am trading the USDJPY 15m as i experienced this pair was for me the most profitable (EURUSD unfortunately didn't work for me, bad experience or its just psychological) Please have a look at mi chart. 1.First as i tried to recognize the Supply/Demand area 2.I recognized the NSH/NSL and HL/LH 3.I waited for the 61.8 fib 4.I entered at the bleu arrows For me it's a little bit difficult to follow this great tread constantly because of my busy life(full time job and family responsibility's). Last week i had 8 winners...
Hi and welcome to the thread. I'm not able to see a chart. Maybe you haven't attached one or is it a problem on my part ?
  • #24,918
  • Feb 8, 2017 6:54am Feb 8, 2017 6:54am
Quoting x3m-PippiN
{quote} Hi and welcome to the thread. I'm not able to see a chart. Maybe you haven't attached one or is it a problem on my part ?
Hi Pippin, thank you. I have added the attachement.
Best. Rachid
  • #24,919
  • Edited 8:13am Feb 8, 2017 7:21am | Edited 8:13am
Hi damian, your post and video yesterday in response to the new poster was a great reminder to me so thanks for that. If you have time i'd like your opinion on a trade ive taken this morning that i lost on, as you can see in the chart below price had made a nsl and was struggling to climb and that horizontal line is the low of yesterday, so i waited for 2 painstakingly slow hours for it to reach that level and took a trade after the rotation candle. I know the recent nsl was a weak one but the trade offered decent RR even at just the test of structure. Is this a trade you would of taken yourself and what are you thoughts about it? Many thanks

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EDIT: I just covered my loss to make me +6 pips up for the day with this trade, i trailed more agressively then usual as i was already down for the day and protecting my money is the first option when ive already occured a loss, although it looks with that strength to pass through the structure, there is the BRN there and also the overall longer trend is down this week.

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Also just to show the power of harmonics, i draw the yellow line yesterday afternoon when leaving my computer before all that price action had happened and look where it reversed.....exactly to the point at the harmonic completion, just.......beautiful.

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  • #24,920
  • Edited 3:28pm Feb 8, 2017 7:57am | Edited 3:28pm
Hello Mr Pip. Another lurker popping out of the woodwork. Would like to thank you for all you have done... truly amazing that you have been able to empower so many traders in so little time! I can now see the markets with clarity and precision thanks to your concepts around structure and order flow. Two years ago that was just a dream and I was stacking loss upon loss, but now the losers are few and far between! You rock Damian!

Quoting Hazza88
Hi damian, your post and video yesterday in response to the new poster was a great reminder to me so thanks for that. If you have time i'd like your opinion on a trade ive taken this morning that i lost on, as you can see in the chart below price had made a nsl and was struggling to climb and that horizontal line is the low of yesterday, so i waited for 2 painstakingly slow hours for it to reach that level and took a trade after the rotation candle. I know the recent nsl was a weak one but the trade offered decent RR even at just the test of structure....
Hi Hazza,
Appears you took a short immediately after a short term NSH. The longer term and shorter term order flow were working against each other here.
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