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Harmonic Trading
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Harmonic Trading

  #31 (permalink)
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George View Post
Gio, I do have a problem with your intentions in this thread!

what are you talking about? - have you ever heard me try to sell anything here (i admit have referred traders to paid services which i find extremely helpful but, i pay for those services myself and get no promos for that)

i do nothing but give some helpful tips ive picked up in my many years of trading

im respectful and curtious to all traders and never come on as a know it all cause i sure as hell dont know it all - ive even told other traders i'd be willing for this old dog to learn new tricks

obviously im not appreciated

on a lighter note - in case you cant see my previous post - this is a 15 min chart using a 34sma to guide the elliot wave and ab=cd (measured move) - gartley pattern is well documented and is in compliance with the 34sma - inverse fib targets are also in compliance

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  #32 (permalink)
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gio5959 View Post
what are you talking about? - have you ever heard me try to sell anything here (i admit have referred traders to paid services which i find extremely helpful but, i pay for those services myself and get no promos for that)

i do nothing but give some helpful tips ive picked up in my many years of trading

im respectful and curtious to all traders and never come on as a know it all cause i sure as hell dont know it all - ive even told other traders i'd be willing for this old dog to learn new tricks

obviously im not appreciated

on a lighter note - in case you cant see my previous post - this is a 15 min chart using a 34sma to guide the elliot wave and ab=cd (measured move) - gartley pattern is well documented and is in compliance with the 34sma - inverse fib targets are also in compliance


Gio,

This is my last post addressed to you!
I believe you've totally misunderstood the meaning of all this.
It's about sharing knowledge, not about showing off!

I started a thread on Harmonic Trading.
In the begging I put out the rules for the AB=CD pattern.
The thread evolved to include Elliott Wave.
I asked nicely everybody to keep Elliott Wave out of this, because it can get confusing, and Fibonacci is not about Elliot Wave.


It's completely idiotic to learn EW in order to find the Fibonacci patterns.
It takes a lot of time, and that time can be spent more rational on Fibonacci patterns instead of learning how to identify waves, in order to apply FP on them.


My opinion was that (and still is) if you direct someone to that indicator you mentioned is not gone help them in order to identify EW. And it's still about EW.

I believe your way of interpreting stuff is a bit impulsive as well, and you're referring to other stuff then what's been written in this thread.

I asked you a couple of questions about your wave counting but instead of answering, you asked me to appologise to you.


I apologized to you, and that was still not enough.

You might have impressed other people with your posts, but you're not impressing me with your posts in this thread.
I've spent some time trying to give you an opportunity to be constructive in my thread, but all you do is to keep on defending yourself.


My conversation with you is over. If you still feel like you want to contribute in a constructive way in this thread -meaning: BE EXPLICIT and bear in mind that a lot of people are not familiar with neither EW or Fibonacci- then please be my guest.

But if you continue with all this nonsense, that has nothing to do with Fibonacci, I'll ask the moderator to close the thread!

Thank you!

/George

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  #33 (permalink)
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Al right. In order to simplify things I'm going to show you how to use the Fibonacci levels from the start. I know there might be some confusion about when to start the measurements, and if every wave is or should have an ab=cd relation. And yes the answer is YES.

And yes you can start the measurement wherever you want. Remember we're not trading waves here, we're concentrating on the relationships that's out there.

I've picked the most recent market relation that's out there right now (from about 14:06 -NYtime + 6h- to 18:09 -5 range chart instr 6E)

I've zoomed this period specially because it's choppy. You can see in the pictures that there are several numbers of way to do this. And that the last one -(last picture) which is according to live trading also drawn on the chart- looks as if it's going to unfold into a good move.

So we're looking for relations according to these patterns. And when the relations aren't met, then it keeps us out of trouble. When they're met then we get the odds on our side.

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/George

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  #34 (permalink)
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Remember that the key word is SYMMETRY. One good thing would be to start training the eye in order to identify the symmetric relationship between the swings.


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/George

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  #35 (permalink)
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As I go along with this I'm going to post rules, lines, key's and other stuff that's necessary to be aware of and use in Harmonic Trading.

See it more as a journey with bits and puzzles that we're going to be able to put together in order to get the whole picture when we have them all.

I'm going to post as I have time!

/George





Last edited by George; October 8th, 2009 at 07:23 AM.
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  #36 (permalink)
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What we're looking for is a way of identifying "Potential Reversal Zones". That means where there's a potential are for a reversal.

History has proven that a convergence of Fibonacci numbers and price pattern provide a highly probable area for a reversal. When such a congregation of numbers occurs, it is possible to assess an optimal point for taking a trade, while defining a loss limit that it is very small relative to the potential profit. This area of convergence is called the POTENTIAL REVERSAL ZONE.


The key to utilizing these harmonic measures when analyzing a price chart is to determine the area where the greatest amount of calculated ratios congregate. When three, four of even five numbers come together within a specific area as defined by their respective structure, you must respect the high probability for some type of reversal.

If a valid reversal does occur, often the price action will typically bounce quickly from the area, holding in the reversal zone for only a short period of time. However, if the reversal zone is invalid, the price action usually will be extreme and will provide clear signals that this trade opportunity is to be avoided.


IDEAL BULLISH REVERSAL

In an ideal bullish reversal, it is important to see a bullish price bar in the PRZ. Ideally, a bullish continuation will validate the reversal.

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This of course is an ideal situation. BUT, price action that reverse in such a way after hitting a Harmonic area IS an ideal situation. It is important to get a good follow through as well, by having a price action that has higher highs and higher lows.


IDEAL BEARISH REVERSAL

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INVALID HARMONIC SET-UPS


Markets often gives us clues to determine future price action. In other words the market will provide evidence of "probable future action".

It is important to read these signs that the market offers to gauge the next potential move.
There are three primary signs:

1. Price Gaps
2. Tail Closes
3. Abnormally Large Price Ranges


It is very common for price gaps to occur in a Potential Reversal Zone. A price gap occurs when the price action opens beyond the previous close, leaving an open area where no trading has occurred. A price gap in a PRZ indicates that the set-up is to be treated with extreme caution. It is important to respect an extreme sign like this because a price gap indicates a significant change in sentiment.

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Price gaps in the PRZ are the most frequent and the strongest of all of the warning signals. A price gap is an extremely significant indicator of an invalid set-up and will keep you out of many bad trades.



TAIL CLOSES


Price bars that close at either the high or low. TC suggest extreme price action that is to be respected. Therefore, when a tail close occurs after hitting a PRZ, it is prudent to exercise extreme caution.

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When price action closes at the high or the low of the day, it indicates sentiment that is overwhelmingly strong. If you contemplate this action, you understand that it idicates that the majority of the participants trading that particular market are extremely biased in one direction. A TC is a clear signal to step aside and let the market give you the signals of when to enter a trade.



EXTREME PRICE RANGES


EPR reflects a very strong trend. One way to determine if a price range is extreme is to compare it to the average range. As a rule of thumb, if a future trades greater than two times its average range, it can be considered extreme. However, it is not necessary to calculate this comparison, because an extreme price range should be practically obvious. (Remember this is not working with range bars, because they're all equal)

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Normally EPR reflects exhaustion. Meaning that we could be getting a reversal from here, but remember that in order to get a reversal we also have to get it confirmed by higher highs/lower lows in the continuation of the price action.
In order to be safe, it might be better to respect it a non potential entry set up.

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  #37 (permalink)
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WHAT HAPPENS IN CASE THE SET-UPS ARE BLOWN OUT?

We get a very significant information about the primary trend. Since a PRZ is a critical area to examine, the price action will indicate a great deal about the current trend. In the case of a blowout, the price action will indicate that the predominant trend is very strong, especially if the future continues beyond the PRZ.


The most imporant consideration when assessing a warning sign is the price action after the future (the instrument you're trading) enters the PRZ.
Now and then it will reverse and provide you with the right set-up, despite such warning signs. So it is important to wait for the market to provide some type of confirmation for the reversal.
When a set-up is extremly harmonic- possessing three or more numbers in the PRZ-the opportunity can still be valid.
However, waiting at least one price bar will prevent you from "jumping in front of a runaway train".
As mentioned before the principle of continuation will be very indicative of the validity of the reversal. Price action that continues in the predominant trend beyond the PRZ will definitely invalidate the trade.

However, if the price action reverses after a warning sign, it might signal that the harmonic area still is a valid trade opportunity. Sometimes, it is prudent to wait even a few price bars for a clear reversal signal.



SUMMARY


My hope is that we all are going to benefit from the information that will follow in the next future posts and to get a truly change of how we're viewing the markets.
The goal is to clearly illustrate that these methods are reliable in order to determine critical areas of support and resistance within price trends.

The harmonic techniques are most effective when one is patient. These opportunities will materialize frequently, providing ample opportunities to be consistently successful.


Last edited by George; October 8th, 2009 at 08:32 AM.
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  #38 (permalink)
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Reversal Confirmation

George

I trade Harmonics in a slightly different manner when it comes to confirmation. I don't wait for it. In my previous trading I was always looking for confirmation of trend change or reversal and I was always late to the trade. That's why I like Harmonic trading, it allows me to set entry, stop, and targets ahead of pattern completion. So for me, I am looking for the pattern to complete within the rules I set for execution. My risk is defined ahead of time so sometimes it may appear I am stepping in front of a speeding train, but it's amazing how many times the patterns hold and the price action reverses in the expected direction. Do I have trades that never reverse and run right on through my stop, YES. I am not always in front of a screen daily so setting up a trade in this manner leaves me with a confident feeling for a high probability trade to be executed and I can live with whatever happens.

Jeff

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  #39 (permalink)
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Jeff,

Thanks for your input. And yes it's true, that's the beauty of Harmonic Trading. It gives you a road map. Knowing where you are, and knowing where you're going excludes a lot of noise in trading and allows the trader to master the emotions in a better way. One gets rid of all the what IF, and most of all the uncertainty for the future that a bad trade can give you. In other words, one stops the fight for surviving knowing that the probability is always on ones side.

/George

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Alignment


George

Do you primarily trade continuous contract instruments, futures and currency with Harmonic trading? Do you align your trades with an overall trend bias or do you take counter-trend trades based on the pattern? Example, would you pass on a bullish Gartley trade at the top of an extended uptrend? Maybe it's easier to just ask do you filter patterns? Do you trade any stocks or ETFs with this methodology?

Jeff

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