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I will need to look at the numbers you are talking about . I have been using the fib extension tool instead of the retracement tool. A trick I learned from Gio on this board. It provides pretty safe entries. I think it is the same numbers just inverted..... looking into it now.
I draw A-B and C. Then wait for the price to make a decision to fail the retrace and go back thru the 0 line or confirm with a move up thru the 50% line (green). This is entry at the latest. Then looking for price to shoot through the 100% line. (seashell) If price goes thru this and comes back immediately I exit with breakeven or small gain. If price contines thru the 100% line then the target is the 127/161 (fuschia) area look to take profits here. If continues then next area is 231/261 (dark cyan) and final target is 423 (seashell). 423% is a great day...
Price really seems to respect these levels...
In image below I was hoping for a long but it could have gone either way. Confirmation was break of green line (50%) A break to the downside would have just set up in the opposite direction....
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Also I use the tool to look for tops... If momentum seems to fading. The put the "tool" on and watch. If price can't make it past the 100% (seashell line) then look for more weakness.
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Last edited by websouth; October 2nd, 2009 at 09:29 AM.
Reason: image
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Yes George, Thanks. My questions really is, in your last attachment for example, why are not the waves previous to the one you are showing A-B waves. How come you started showing the possible point A from there and not before.
Thanks for the input. But isn't the effect of what you're describing giving you somehow random probabilities?
What you're describing is not Pessavento AB=CD, because it lacks the relationship BC = ,618 or ,786 of AB
What I mean by random is that it doesn't respect the harmonic retraces of ,618 or ,786 (,382 if strong move). The BC which is the key in this case is random. The way I understand it, you could be jumping on any pullback, as long as it's a pullback!
Just my 2 cents.
/George
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They could be, put a retracement on them and measure them. See if they respect the rules, if they don't it means that the AB=CB relationship doesn't exist. What you want is the odds with you. Imagine you are out there with a stick, measuring stuff, when you've found the thing you're looking for and it fits your stick, then it means it's gone work well, with your expectations. And your expectations are based on the value of your stick.
Or imagine this. You're looking for a constant value of 10 bars. If we look at a chart with a frame of 3 ranges for i.e. then you might get a range from 1 to 5! So each bar represents 3 ranges, and what you want is the value of 10 bars.
Now if you take a bar of 10 ranges, will you then get another range value? Yes you will!
But nevertheless the relationship hasn't changed! You still have a value of 10 bars.
So in this case if you measure the top from another position, you're still looking for that value of retracement. Aren't you?
R u with me now?!
/George
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I have to look at it in a closer detail I think. Thanks for the explanation. My experience with waves has been that let's say market drops from point A to point B, then it retraces back (and they usually do by .38, .5 or .618). Most do that. So does that mean each one is a wave AB?
The answr to Your question is simple. To understand Harmonic patterns some one must have sound knowlege/understanding of Elliot waves and Fib. For Elliot waves you must look for good ZigZag Indicator. Some are available free on this forum as well as on Ninja trader forum. But all just works up to certain level. So I advise you to look into market for some good Elliot wave tool. Then make your self well trained in Elliotwave count. After that make lot reading on Fibs and read charts or their proper application. As Elliot wave and Fib have very close relation to each other and always keep you on write side of market. I spent a complete year to study them. Now I am comfortable. Once you get all this, then Its very easy for you to see harmonic patterns and pattern with in patterns. Answer for AB indification, it can be be any wave. I hope may be These few words helpful or you.
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Here is a AB=CD example PDF with illustrations/charts.
Mike
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The following 4 users say Thank You to Big Mike for this post:
This indicator will probably do the searching as far as finding qualifying retracements.... Because the fib draw tool is a stock ninja feature I don't think you can edit it or call an edited version. You can click on it and edit while on your chart but a refresh goes back to standard settings as far as the fib - showing all the levels and the text description. It would be nice to show clean just the 3 levels you mention as in screen shot... https://futures.io/free_downloads/ninjatrader/indicators/25-download.html?view
