Harmonic Trading...

[BudFoxFx]

I have found that for me, it's better to wait for some type of price action signal to occur after completion of the harmonic pattern. Sure it would be great to get in as soon as the reversal starts, but you can still pick up plenty of pips if you wait for the candlesticks to also show you signs of a reversal.

That's a great way to think about it.

[BudFoxFx]

You should write a book HARMONIC TRADING FOR DUMMIES :-p

[callwicak]

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[Toscani]

does anyone have the latest version of the ZUP Harmonic indicator?

[Toscani]

I think the highest is gartley success 80% something like that but the longer time frame charts is higher success rate than 1 minute or around there...

[FxMassa]

gartley, bat, whatever, they all are strange to trade, take patience and are subject to change at any minute... the harmonic strategy on the whole is a tough tough tough strategy to follow I've come to realize...

[marketswfx]

The market, starting from Fourier Analysis, and ending finally to the Neural Networks and wavelets. I use the wavelets to extract the cyclic events that occur in the market (at every timeframe). Then I use a NN based trading system called NeuralSpray, to trade on the markets. When the direction predicted by the wavelets (Morlet is better than Mexican Hat) is the same of the one opened by NeuralSpray, I leave them to run. Counterwise, I close the order of the robot. Actually my equity is very interesting, but maybe it depends by the broker (fibo group), very honest respect to others.

[Mike]

Possible HARMONIC TRADE - BEARISH BAT GBP/JPY




Trade at your own risk, Harmonic patterns are not guarantees for future long or short movements.

[Mike]

Bearish Bat Success, 50+ Pip Gain

[Mike]

Same pattern precipitated a nearly 200 pip move starting last night and ending about 2 hours ago. Remember these patterns appear all the time, but generally trade them only in the direction of the long term 1 hour, 4 hour, or Daily chart trend. Trade at your own risk, but these help.

[Mike]

Possible long signal on USDCAD



Be careful trading this pattern, it's not the right time of day per say, but price has passed the entry mark and moving a bit higher, target near 1.05270. Trade these patterns at your own risk.

[Mike]

Alerting you to a pattern that is a possible short signal. Beware that this signal is against the longer term trend which has USDCHF going upwards. But anything can and has been known to happen. Trade at your own risk.

[Mike]

Very fast acting price action made me miss this easy Harmonic Pattern on EURUSD hourly.

[Mike]

Here's a good example of why you should, if you are risk averse like me, always move your stop loss up to break even when a trade is going your way. The two options being, take that advice and lose NOTHING when the trade goes against you, or lose 10-20 or more pips when the trade goes against you and hits your original stop loss. And I am making these comments under the assumption you all are wisely using a tight but logical stop loss relative to your risk appetite and/or history of price action.



So you see here how a Bearish Bat harmonic pattern failed only after reaching half way to our taret near 97.55. But I did not trade this myself because it was a BEARISH signal in an overall BULLISH market for USDJPY specifically, since price has been moving upwards and/or sideways for nearly 2 weeks on this pair. So, trade these patterns which appear all the time at your own risk but a wise move would be only to trade the ones that are going in the direction of the longer term trend, i.e. 1 hour trend, 4 hour trend, and daily trend.

[bear]

I don't get it, why follow these patterns if they fail so often.

[Mike]

Well, as I said there's much more to trading the Harmonic patterns than just blindly buying or selling when you see it.

Generally speaking, even though these patterns can signal a reversal in a short term trend (and precipitate huge moves), I don't ever trade them against a longer term trend, i.e., I'm trading these Harmonic patterns on 1 hour time frames because they are GREATLY more accurate than 30min, 15min, 5min, 1min Harmonic patterns. That being said 4h, Daily, and Weekly chart Harmonic patterns are supremely more accurate but much more rare. On a 1 minute chart there can be 10-15 Harmonic patterns appearing each day but only produce a few pips if they do work; whereas on a 4 hour chart a Harmonic pattern may only appear once a week but almost always produce pips. I did an analysis a year or so ago and it's somewhere around 80% accurate on a 4 hour chart, 60% accurate on a 1 hour chart, and so on. BUT, if you introduce filters or caveats on which patterns to trade, the big one for me is are we trading against a 4 hour or Daily trend on a 1 hour pattern no matter if it's bearish or bullish, if it's against the trend, I don't trade it, and in my experience it has increased the accuracy of the patterns on an hourly time frame.

In the end, like I said trade these at your own risk, I can only give you examples of these working and give you reasons why it worked, and conversely, like the chart above, I can give you examples of it not working and give reasons why.

Just trying to help

[bear]

Okay that makes more sense, thanks Mike

[bear]

Did this work out or fail like your other suggestion?

[bear]

Wow, that one really did work! Cheers mate!

[Mike]

Trade this one at your own risk, it's a small pattern with a target of only a dozen or so pips, BUT this could precipitate a large move since it's in the direction of the longer term trend. The choice is yours.