Harmonic Trading...

[DickP]

Thanks for losing me money... jerk

[DickP]

Another big disappointment

GIVE UP MIKE!

[Mike]

Another big disappointment

GIVE UP MIKE!

Harmonic patterns are in my opinion the most profitable "indicator" I've ever followed, and they aren't really indicators even though I use an MQ4 file to draw the patterns on the chart for me turning them in to an indicator technically.

All I'll say is on a higher time frame these patterns are usually always profitable, and I'll give some examples to help everyone for next week, possibly.

One example is on USDCHF that is in the past but you can see worked REALLY, hundreds of pips gained over 2 weeks.



USDCHF on WEEKLY, 2/2 this year, 100% accuracy.



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AUDUSD only had 1 weekly harmonic pattern, it formed, you could enter, and reach the target and make hundreds of pips, price retraced to entry and then once again moved in our direction and move 10 whole cents!



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GBPJPY Daily Harmonic pattern, only 1 this year and it was SUPER accurate, 100% and it went nearly $10 in basis points.

[Mike]

My thoughts on setting stop losses and Harmonic patterns taken from a "stop loss" discussion.


In my humble opinion I think a stop loss level shouldn't be a set amount in your mind every time you enter a trade, rather, the stop loss level should reflect (and be placed) where price is likely to reach and touch off a true retracement and turn into a move in the opposite direction against the move you predicted. Now, this could be 10 pips from your entry, 12, 15, or 100, it all depends on if you are a short term trade, a long term trader, or just a scalper.

As stated above I find it supremely important that once your trade has turned positive to move your stop loss up to break even, or whatever is "even" with your broker's spread taken into consideration so that you lose no money at all if and when price goes against you which often happens to me.

Three things can happen at this point, price can retrace and begin a move against you and you can't re-enter; price can go back across your entry point and you keep entering (hopefully just once) so that you can continue trying to gain pips on your original prediction that caused your initial entry (and subsequent entries); or price can just move sideways and seem to play tricks on you.

Personally, lately I've been trading harmonic patterns on long term time frames 1h and above, and these patterns turn out accurate signals almost every time but all of the problems above are not against the realm of possibilities and often do occur to me. But thanks to these patterns being so accurate I can say to myself, alright, price moved against me, caused a small loss or break even, but I will keep trying with entries in the same direction in the hopes that the pattern will pan out and precipitate "the move" on the next movement up or down.

But back to where to set stop loss, let me share a chart.

Here the stop loss is set to where the previous move's low is, and you can see indeed once that stop loss is it, any hope for a move upward which this Harmonic Pattern suggested is lost.

Here is another example of how an indicator will predict a move downward, but price goes sideways.

We enter, but don't exactly exit after waiting for a while to see where it may go, for us or against us. What it does in the end (and hindsight is 20/20) finally begins to go our way about 3 bars (horus) after price passed over our entry level (and we were in the trade for 3+ hours), it goes for us for another 7 hours but goes only 25% toward our target level near 0.93700 before retracing to our entry where I would have long before moved my stop loss to the entry level 0.94240.

Here you see that price flirts with the stop loss level which is intuitively placed in an area where, for lack of a better term, "all hope is lost" for the price going with the pattern. But this should go for any type of indicator or method you're using, ideally you should set your stop loss at the point where "all hope is lost" that the indicator or method was true (in that specific case), and indicators are never 100% accurate and this should always be in the forefront of your strategy, "what can and will go wrong almost always does." So, even though you can and I should say wisely follow a trade size calculator and figure out where your stop loss should be according to your account size and risk appetite, it has helped me to keep stop losses at the logical level according to where price will start working against you, what I call above the "all hope is lost" level.

[dwi_siswati]

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

Oh my God,, That's really nice indicators...
Is that not confusing??
There are too many chart and indicators there

[Talor]

My opinion is: the more you need to consider while using the indicator, the less effective it is. Piling data on top of each other is not a good idea. As for patterns, it has never worked for me ether.

[Mike]

My opinion is: the more you need to consider while using the indicator, the less effective it is. Piling data on top of each other is not a good idea. As for patterns, it has never worked for me ether.

Oh my God,, That's really nice indicators...
Is that not confusing??
There are too many chart and indicators there

They are really nice indicators, honestly, I have one monitor with a bunch of charts showing many different pairs with Harmonic patterns since on higher time frames they are so rare and they are extremely time sensitive (you snooze you lose), so having them all up in front of me on one screen helps more than having to click through them one by one. You're also talking to a guy with about 8 screens dedicated to trading at any given moment, so 1 screen for harmonic patterns is a small sacrifice of space.

But it takes practice and patience, thus the need to have them on 8 different charts at once, I simply do not want to miss them on the pairs I trade. Couple that with the fact that I would gladly trade them on the Daily and/or 4 Hour chart, I need two monitors to show all of my favorite pairs and on both of those time frames.

As for having too many indicators, it's actually, well, the "extra" stuff on that chart is an indicator zig-zag which is an integral part of the calculus for the Harmonic patterns. When adding one ZUP_Harmonic indicator to the chart, it adds all that clutter, and I generally ignore it since the only reason to actually pay attention to the zig-zag indicator is to formulate these patterns in your head, which becomes redundant when the very same indicator draws the patterns for you automatically. I totally agree, tons of clutter, the more you weight down your charts with indicators, the more likely you are to weigh down your thought process when you are deciding whether or not to take a trade.



As for the patterns themselves, I don't believe there are too many specific patterns in my personal method, I only follow 3, bat, gartley, and crab as those seem to be the most accurate of all the other kinds, too many to even remember let alone list here. If you look through this thread you'll probably see an indicator that catches all of the patterns, and if you read Carney's books you'll read about them, but the proof is in the pudding for me after working with them for a few years now. And as I keep saying, these patterns dramatically decrease in success rate the lower the time frame gets. A daily or 4 hour chart and any of the three patterns I use almost always produces pips, and I say that cautiously because anything is possible, but where I have thought the same about indicators throughout my trading endeavors dating back to 2004ish, many indicators have let me down after I have thought they were "awesome" but after years of using Harmonic patterns, the long term patterns rarely let me down.

But anyway, I make these videos for you the viewers to decide whether or not the indicators or strategies are right for you, they are free to watch, the strategies are free to use, the indicators are mostly free, and most importantly YOU are free to choose. That, to me, is what becoming the best trader you can be is all about, not following someone else's strategy to a T, but getting the idea from someone on a general way to trade and then conforming it to your own personal risk appetite.

[orni308]

not tried it yet.....but seems good

[Rene]

I can't undersatand the logic that stands behind the harmonic trading. Can you expalin it to me?