Harmonic Trading...

[sniper012]

Ok, there was a guy who was posting on the forum for a few days. He was really getting at TRO and for the most part, I agreed with everything he was saying. He knew a lot about trading but he never told us too much about how he traded. He mentioned harmonic trading and told us about 5 fib ratios that we needed to learn about and that was that. So I looked into the whole Harmonic Trading method and today, I executed my first Harmonic Trade on a 5 min chart. Pick up the book " Harmonic Trading: Volume One. I'll leave it at that. Trade should have been about 30 pips but I got out a little late.

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[bear]

no clue

[Mike]

I always have a video ready for you Sniper




It is very important that one reads what makes these "indicators" (method really) so important:



VOLUME 1



VOLUME 2

[Mike]

Today's set ups for this method, in fact, there's one on the 1Hour GBPUSD right now







I entered a short at this point here, made 10 pips and got out, things are just not very volatile.

[sniper012]

I didn't know you had this info. I was kinda busy all day so I wasn't on the forum much. I'm going to watch those videos. Thanks a lot Mike.

Today's set ups for this method, in fact, there's one on the 1Hour GBPUSD right now







I entered a short at this point here, made 10 pips and got out, things are just not very volatile.

[sniper012]

Is this from MT4? I would love to get my hands on this indicator. The trade I took today was all manual. It was a bullish bat. I saw it forming while it was on the c leg so I had to wait for that to complete. Point being, it took a lot of watching before I was able to trade it. This indicator would come in quite handy.

Today's set ups for this method, in fact, there's one on the 1Hour GBPUSD right now







I entered a short at this point here, made 10 pips and got out, things are just not very volatile.

[EU_TRADER]

Harmonics is not too simple in the end, those indicators give false positives, the price can do anything after any pattern but some patterns are more fruiful than others.

[sniper012]

I'm focusing on the Bat pattern right now. I don't plan on using any indicators. I'm just basing my entries on price action. As with any method, price can do anything after you get a signal. We just want to tip the odds in our favor.

Harmonics is not too simple in the end, those indicators give false positives, the price can do anything after any pattern but some patterns are more fruiful than others.

[tab]

What indicators do you recommend for this, i got to say it really looks amazing, why have i never heard of this?

[EU_TRADER]

What indicators do you recommend for this, i got to say it really looks amazing, why have i never heard of this?

Like Sniper12 Says, you can just visualize it for yourself, become familiar with the gartley and bat - both bear and bullish which are different.

[Mike]

CADJPY presented a challenge today that I am just chalking up to uncharacteristic Yen weakness combined with news about Japan and their "energy importing" future, so this pair threw me personally for a loop when following the Bat set up on the 15 Minute. Now this goes into the fact that many Harmonic traders recommend trading on nothing smaller than a 1 hour chart, but at times, 15 minute charts will have significant set ups that result in moves that the higher time frame charts do not. Not the major point, the point is first of all anyone asking for these harmonic forex trading indicators must realize they are just a visual Aid like the EURO_TRADER said, in your own mind you can draw these formations. In fact, the video tests prove more or less that even these formations can "repaint" when higher highs or lower lows force it to, just the nature of things, but can you denounce harmonics in forex totally for a few false positives?

At any rate, see how on CADJPY in MT4 it seems like a short is forming, even on higher time frames, but look to the TopGunCharts, a short, just by definitions of my own rules (to each his own) is suicidal in essence, something I just would not consider. Again, this is more paradoxical than an indictment of the indicator and greater harmonic trading system, but a good example of how things don't always work, but I have a lot of examples of it working well.



You can see it works, slightly, but not significantly, especially in a strong uptrend that the TGS charts show us to be in the midst of.

[sniper012]

Obviously I'm not an expert, but based on Carney's book, it's fine to trade these on any time frame. Most of the chart examples in his book (Volume 1) are 5min, 15 min and 30 mins. I always like to learn straight from the source when I'm testing the waters.

CADJPY presented a challenge today that I am just chalking up to uncharacteristic Yen weakness combined with news about Japan and their "energy importing" future, so this pair threw me personally for a loop when following the Bat set up on the 15 Minute. Now this goes into the fact that many Harmonic traders recommend trading on nothing smaller than a 1 hour chart, but at times, 15 minute charts will have significant set ups that result in moves that the higher time frame charts do not. Not the major point, the point is first of all anyone asking for these harmonic forex trading indicators must realize they are just a visual Aid like the EURO_TRADER said, in your own mind you can draw these formations. In fact, the video tests prove more or less that even these formations can "repaint" when higher highs or lower lows force it to, just the nature of things, but can you denounce harmonics in forex totally for a few false positives?

At any rate, see how on CADJPY in MT4 it seems like a short is forming, even on higher time frames, but look to the TopGunCharts, a short, just by definitions of my own rules (to each his own) is suicidal in essence, something I just would not consider. Again, this is more paradoxical than an indictment of the indicator and greater harmonic trading system, but a good example of how things don't always work, but I have a lot of examples of it working well.



You can see it works, slightly, but not significantly, especially in a strong uptrend that the TGS charts show us to be in the midst of.

[sniper012]

you're really going to have to read the book(s). It's really about some advanced and very specific fibonacci ratios. The Bat and The Gartely do seem to be the most solid patterns. So EU is right to mention those patterns.

What indicators do you recommend for this, i got to say it really looks amazing, why have i never heard of this?

[tab]

you're really going to have to read the book(s). It's really about some advanced and very specific fibonacci ratios. The Bat and The Gartely do seem to be the most solid patterns. So EU is right to mention those patterns.

Bat and Gartley, I will remember this, thanks.

[Mike]

I have some more examples from the week.

On CADJPY before I hit record you can see the indicator without that shaded in area still draw for us a bearish Bat formation and sure enough a very sizable reversal occurs as the strategy suggests



02:36 in the video you see the indicator start to work in real time again and once again a pretty sizable move results from the bearish formation that occurs mere hours after a similar move.

[Mike]

Today's example with trading this system on the CADJPY wasn't as easy if you're looking for those reversal patterns, but harmonics is much more than just looking for a Gartley or Bat or any other type of pattern, its determining the statistical relationship between the legs of each move and trying to logically deduce where a suitable entry and exit may occur, but combined with the fact that CAD was really unstoppable today and Yen was so weak this pair (despite any pattern - even Carney concedes this) was going nowhere but up and we perhaps were in the midst of the CD leg of a bigger pattern. According to Carney the C/D Leg is "the most powerful price segment that possesses substantial implications for trading opportunities..."

[Mike]

Is this from MT4? I would love to get my hands on this indicator. The trade I took today was all manual. It was a bullish bat. I saw it forming while it was on the c leg so I had to wait for that to complete. Point being, it took a lot of watching before I was able to trade it. This indicator would come in quite handy.

Sure Sniper

This indicator does save a lot of time and brain power having to figure out where these patterns are occurring, I have an entire monitor dedicated to 6 majors with these patterns on testing it out this week. I've known about the method for quite some time but never really gave it much thought because I wasted a lot of money on this book by Elias Stein and it was purely the mathematical workings behind harmonics, while Carney's book is purely Harmonics and trading, applying it to trading, known methods like RSI, his BAMM method, and others, just a great book.


There are actually two different indicators when it comes to Harmonics in Trading

A) The NEN Harmonic System

1. cZigZag.ex4
2. DT_ZZ.ex4
3. Swing_ZZ.ex4
4. ZigZag_new_nen3.ex4
5. ZUP_v14.mq4
6. ZUP_v62.ex4

The NEN Harmonic Forex trading system is the system we have been concentrating on, or at least Sniper, EU trader and I so far, this is the system that makes the calculations between the XABCD legs on any time frame, adds a blue shadow to the immediate pattern that might result in the next reversal.


B) The Ultimate Market Harmonics System UMH

1. Ultimate Market Harmonics.ex4
2. HarmonicPatterns1.1.ex4

Very odd that the UMH is very Memory intensive, having it on only 3 charts it ate up a lot of system resources and I had a very hard time even using MT4 with the indicators installed. BUT, it is quite an interesting system, watch the video and make your own judgment. On the hourly you can see the advantages of it (potentially) as support and resistance areas which are dotted red or green are touched and hold. What I did notice however, after a while the color patterns dissipated in a sense from the charts and all that remains are the historical bands, which in fact do prove to provide support and resistance when price hits them. What I do like about this is the EX4 part of this which draws the bat patterns and even says to us in the top left corner if its a bearish or bullish pattern which I add to the NEN template as well which you see in the video.

[Mike]

Here's a video of the NEN method by itself on EURUSD on multiple time frames - 15 minute and hourly. Now you see patterns form on each time frame but the hourly is the one that bears fruit at first which the video did not catch (the tail end of it), a huge drop in EURUSD after completing the bearish formation. But this is just based on this blue indicator, if you trade the Harmonic method literally, on the 15 minute you go short at the first peak, you are wrong, but it eventually does drop a few pips, so you still can't say the method does not work based on this test either.

Then later on in the video at 01:06 on the 15 minute chart we see another bullish bat formation appear thanks to the indicator and within an hour price begins to fall, yet again.



The rest of the video shows some very exciting sideways action and can be skipped

[Mike]

This video tests the UMH Harmonics strategy on EURJPY on March 29, and early on in the video you can see how important (even though they repaint/replot often) they are to price, these historical range lines. I'll let the video do the talking however, remember this is the other method to this great Harmonics strategy, not the NEN method for MT4.

[Mike]

Again, not the best pair to test this on this day plus if you notice I had two hourly charts up for most of the video meaning the whole time to have a 5 minute, hourly, then 4 hour to see which bore more fruit.