Harmonic Trading...

[Mike]

This is how one of my monitors is now trying out the NEN and UMH Harmonic indicators on MT4, multiple time frames, multiple currency pairs.



I am looking on higher time frames (along with the aid of trend channels) and no other indicator to look for likely places where price is going to be, but in a way to anticipate the move well ahead of time. On smaller time frame charts, I agree, these patterns are occurring all over, but they do not usually give us huge amounts of pips, in fact, I found myself following a 5 minute chart and getting into trades that worked based on what the pattern indicated but barely enough to cover the spread before reversing, so that's the problem I have encountered so far trading with harmonics on smaller time frames, that's why I use other charts for that, but on the hourly, 4 hour, daily, weekly charts, these patterns just end up jumping out at you after a while with or without the aid of an EX4 or MQ4 indicator.

Anyway, there's much to this method even I need to learn so I can not espouse any type of deep knowledge on Harmonics and Forex, I just share what I see and what I trade so please take caution with any method, but also be open to any method until you have proven it to be less than useful to you.

[Mike]

Looking at GBPUSD right now, bearish bat formation except for the fact we're selling into an positive channel bottom, so it did get us a 50 pip if you recognized it in time.

I am interested to see if the pattern really proves true and breaks through this channel and try to retest down toward 1.6000 again, but I think we might see it continue to go higher based on even higher time frame analysis.

1 HOUR CHART


This is the other thing I wanted to mention about the Harmonic Market Indicator that comes with UMH, I am almost certain that when they say which pattern we are looking at actually refers to the last one it recognized even though we could be days into the future from when point D appeared, so, this even threw me at first as I said to myself, thats not a bullish or bearish pattern, etc, crab patter, no, thats a perfect bat formation, etc.

So, it helps when it helps and the key to this is catching point D within a bar after close, working on the hourly this is not too difficult and is very accurate compared to a 5 minute chart.


4 HOUR CHART

[sniper012]

the bearish bat didn't pan out for me. price did respond to the 0.883% level initially, but it didn't go down to the level I anticipated after that. Mike, do you draw those channels yourself or is there and indicator for that?

[Mike]

Indicator all the way, sometimes they just do not work so bear that in mind whoever tries this method out, also I've said it before that mixing the indicators might not be wise until you know all of the patterns simply because the UMH method has this great indicator that tells you the name of the pattern and outlines it in red if its bearish, blue if its bullish, but it might I stress might be referring to a pattern that occurred hours ago (patterns that are for sure a bat, crab, gartley and have waited for a bar close to make sure) and therefore the NEN method (which has indicators forward looking and constantly updating you on the level you are compared to other legs/points, draws them for too) combined with knowing where price is in the trend channel can help you more in real time; but I have to say just being patient on the hourly or sometimes 30 minute, the UMH method picks up the aforementioned patterns, alerts you to it, you usually have a good time in between to enter the trade or use some other method for a more precise entry on a breakout in volume, so that's exactly what I',m doing, dedicated one monitor to hourly charts of the pairs I trade; I'm respecting these patterns that much and sadly enough sometimes I don't believe it when it happens that a bearish or bullish move will occur based on this but in retrospect it often does (allow me to upload some new examples from last week to the Youtube). That said, I must admit the patterns, as evident from some of these videos I made, are just on the money quite often, but it takes patience if you're using this and nothing else, or like Sniper and Yogi do use price action, but that in itself takes patience as well.

So maybe a hybrid of Harmonics and Price action could be the most profitable/free way to trade I've seen yet

[sniper012]

This was from last night. A bullish Gartley from last night (sunday). Point D was the reversal zone. Once it did reverse, the take profit was the 0.382 fib line, which you can see it reached in about an hour. There was another set up on a different pair but I didn't get to trade it and for the life of me I can't remember which pair it was or when it formed. I have to tell you, I have been having a lot more success using this method when I use it on shorter time frames. I know that goes against when most of us have heard all of our trading lives, but I'm just sayin..

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[sniper012]

the first chart is a plain 5 min chart of gbp/usd.

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looks a little different with the zig zag indicator...

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finally we put fibs on the chart and we see the magic happen. This is a bullish bat pattern. How do we know? The point B retracement tells us. It's a perfect 50% retracement. .382 is acceptable as well. The defining moment is when we see how price reacts at the 0.886 level (Point D). This level is our harmonic support level. I would suggest going long after that first green candle closes at point D. My entry was 1 pip above the high of that candle and my exit was the 0.382 fib level, which was reached and blown through 30 minutes after I opened the trade.

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[yogibear]

Thats interesting stuff sniper. Good trade.
A trader i really respect, who is a pa trader, adopted harmonics a while back, and incorporated it into her strategy. I thought at the time it looked pretty complicated, and switched off.
I've downloaded the book you recommended, and i'll look at it at the weekend.
Excuse my ignorance, but i guess what you're looking for is that first impiulsive move, followed by a retrace to 38 or 50 fib.
I think without that zig zag indicator, it would be quite hard to identify the various legs.
I've pulled 2 fibs on the chart, the first on your trade, the second on the subsequent impulsive move down.
Would that be valid ? That would indicate the next pattern would be bearish.
The price has retraced to the 50fib.
I guess i should read the book first, i'm probably talking nonsense.

[sniper012]

Actually, you're chart could potentially be forming a bearish bat. It's best that you read the book though because you have to add some fib levels that aren't usually on there. I have also executed some trades using a combination of harmonic patterns and price action. If you need some more info, just PM me.

Thats interesting stuff sniper. Good trade.
A trader i really respect, who is a pa trader, adopted harmonics a while back, and incorporated it into her strategy. I thought at the time it looked pretty complicated, and switched off.
I've downloaded the book you recommended, and i'll look at it at the weekend.
Excuse my ignorance, but i guess what you're looking for is that first impiulsive move, followed by a retrace to 38 or 50 fib.
I think without that zig zag indicator, it would be quite hard to identify the various legs.
I've pulled 2 fibs on the chart, the first on your trade, the second on the subsequent impulsive move down.
Would that be valid ? That would indicate the next pattern would be bearish.
The price has retraced to the 50fib.
I guess i should read the book first, i'm probably talking nonsense.

[BudFoxFx]

I'd lean more toward a 15minute or 5minute chart with Harmonics, just my opinion.

[tab]

I'd lean more toward a 15minute or 5minute chart with Harmonics, just my opinion.

Why's that sir?

[sniper012]

this is a bullish butterfly pattern that I got in on a little while ago. 30 min chart. I got out a tad early because I didn't actually get in where I wanted to so I figured I would just take a little profit and wait for a better opportunity. The first bullish target was point B on the chart, but again, I got out early.

[sniper012]

This was a bearish crab pattern from tody as well. Once you learn what levels identify which patterns, this should be a lot easier. The reversal point for the crab pattern is the 1.618 fib level. If you look at point D, that is where you started to see the turn around. It's not just happenstance that it reversed at this level. The first bearish target was point B, and as you can see, once the pair started reversing from point D, it made it down (at least very close) back to point B. By my calculations. this was a 49 pip move.

[mk3fx]

Do you still have this on your charts?

[sniper012]

Not sure that I understand what you're asking. This is not an indicator, with the exception of the zig zag indicator.

Do you still have this on your charts?

[DickP]

I found this, same principals

http://rapidshare.com/files/44991982..._v_2.2_exp.ex4

Free too.

www.elementaltrader.com



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[ChartWizQ]

the bearish bat didn't pan out for me. price did respond to the 0.883% level initially, but it didn't go down to the level I anticipated after that. Mike, do you draw those channels yourself or is there and indicator for that?

Thank you Harmonics!

[ChartWizQ]

I found this, same principals

http://rapidshare.com/files/44991982..._v_2.2_exp.ex4

Free too.

www.elementaltrader.com



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That doesn't pop up on my charts when I add them....

[Raegen]

I don't understand how this works exactly, those are indiactors but where are they which ones work best, what time frame?

Beyond that, i don't have time to read those books, cant someone just break it down real quick?

[ACE]

Where do I buy these indicators? After reading your comments I think it would be worth $100 at least worth more than most of the commercially available crap out there.

[ACE]

Thank you Harmonics!

From what I see it has a 75% success ration just from that one night? The last being the best move!!! That would have totally overcome the losses of the losing trades from the method.

Again I need to know where to get those indicators!