30 Pips A day Keeps the your money at bay

[defiance888]

Of course it’s up to everyone to decide which pattern to trade and what retracements to use. What i want to say is that there is no right or wrong. It’s all depending on your own backtesting and the information you collect regarding which strategy, pattern or plan is the most profitable. And that also depends on where you place your stops and take profit points so it’s very subjective and difficult to pinpoint something thats working for everyone. Regarding the pattern shane posted, i would call it a gartley and if i would have traded it i would have entered at the 78,6% retracement of XA. Since i place my stops below/above X this one would have been a winning trade for me. Not a nice trade since the pattern not got respected but it would still have been profitable. I will get back later or tomorrow explaining in more detail what i mean. If someone else with another trading plan and money management plan would have traded it maybe it would have been a loosing trade and a failed pattern. I hope you understand what i’m trying to say.

By the way. For those of you who still are struggling with the cypher pattern, here is the drawing i made of it myself with the retracement levels. This is a bullish pattern and for the bearish one just turn it around.

I think yes, trading is very individual and one should try and trade in such a way which suits his style and personality. For me, I tend not to open a trade unless there is atleast a 1:2 R:R, If I don’t think I can get that I will pass on a trade. A stop loss is used for every trade, no exception, I do not trade with visual stop loss like TMB.

currently, I only trade in the direction of a trend, or possibily a sideways trend. If the gartley D’s is against a clear trend then i will pass on the pattern. Sometimes it is hard to identify the trend though, the last 4-5 days might have been a clear uptend …but when you zoom out and can see a couple of weeks back it looks like a downtrend. In such cases I use caution but may still trade it sometimes.

I also trade mostly gartleys and bats, i am now a cautious over cyphers after that one a few days ago that was both a gartley and a cypher. the price found support on the 70.7 of the gartley and then eventually bounced back up. it did not reach the 78.6% of the Cypher/Gartley [they were the same place for both]. in this case i had decided to go with the gartley so did profit.

im a bit cautious over butterflys too, but mainly because i rarely see them.

the way i place my trades is with fairly tight stop losses.
I do not currently open more than one position on an individual trade. I have one limit order with a set TP level. the TP level is always usually 2 fib points down from D, so if D lands on the 78.6, my TP will be just before the 50% in almost all cases. I dont place my stop loss below or above the X as this scares me tbh lol, and would force me to make various other adjustments to my trading plan to ensure an adequate R:R,

I am also very picky about my trades, I don’t like loosing money. If there is something about a pattern I do not like, then most often or not I wont trade it.

I trade probably much less trades than most people, due to pickyness …but the majority of patterns i do trade are winners so i guess as long as im making money thats more important than patterns traded.

It is not in my trading plan to scalp C to D moves.

that is basically how i trade, but all this is subject to change as i develop. I think I may experiment soon with trading fakeouts. I am getting more experienced [am seeing and finding patterns everywhere this week], and re-reading some of TMB’s old posts i think it would be achievable for me.

and yes. happy easter everyone
I usually buy chocolate the day after easter as prices are rock bottom lol

[Diablo1505]

I think yes, trading is very individual and one should try and trade in such a way which suits his style and personality. For me, I tend not to open a trade unless there is atleast a 1:2 R:R, If I don’t think I can get that I will pass on a trade. A stop loss is used for every trade, no exception, I do not trade with visual stop loss like TMB.

currently, I only trade in the direction of a trend, or possibily a sideways trend. If the gartley D’s is against a clear trend then i will pass on the pattern. Sometimes it is hard to identify the trend though, the last 4-5 days might have been a clear uptend …but when you zoom out and can see a couple of weeks back it looks like a downtrend. In such cases I use caution but may still trade it sometimes.

I also trade mostly gartleys and bats, i am now a cautious over cyphers after that one a few days ago that was both a gartley and a cypher. the price found support on the 70.7 of the gartley and then eventually bounced back up. it did not reach the 78.6% of the Cypher/Gartley [they were the same place for both]. in this case i had decided to go with the gartley so did profit.

im a bit cautious over butterflys too, but mainly because i rarely see them.

the way i place my trades is with fairly tight stop losses.
I do not currently open more than one position on an individual trade. I have one limit order with a set TP level. the TP level is always usually 2 fib points down from D, so if D lands on the 78.6, my TP will be just before the 50% in almost all cases. I dont place my stop loss below or above the X as this scares me tbh lol, and would force me to make various other adjustments to my trading plan to ensure an adequate R:R,

I am also very picky about my trades, I don’t like loosing money. If there is something about a pattern I do not like, then most often or not I wont trade it.

I trade probably much less trades than most people, due to pickyness …but the majority of patterns i do trade are winners so i guess as long as im making money thats more important than patterns traded.

It is not in my trading plan to scalp C to D moves.
may
that is basically how i trade, but all this is subject to change as i develop. I think I may experiment soon with trading fakeouts. I am getting more experienced [am seeing and finding patterns everywhere this week], and re-reading some of TMB’s old posts i think it would be achievable for me.

and yes. happy easter everyone
I usually buy chocolate the day after easter as prices are rock bottom lol

Sounds like you have a good plan and a healthy approach to the market. A big plus that you stick to your plan!

Nothing bad with beeing picky with your patterns. Thats a good thing. Every time you pass on a trade that does not meet your requirements you do not risk loosing any money which is a good thing.

Yeah, this week was crazy regarding patterns. They were everywhere on every time frame. Many of them never completed though.

Haha, good idea with the chocolate. I made it really easy for myself this year. I have not eaten any candy or other sweets since the 1st of january and i’m not going to for the rest of this year either.

[defiance888]

Yeah, this week was crazy regarding patterns. They were everywhere on every time frame. Many of them never completed though.

I have been wondering over the last few weeks if there is some sort of gartley conspiracy lol. So many patterns invalidating themselves after the C has formed i am finding.
I notice the more obvious and easy to spot the pattern is, the more likely that it will invalidate itself or fakeout.

The ones that seem to work out for me, are the hard to spot ones, like ones that form under the nose of a bigger pattern or ones that form very shortly before a news event.

[shane]

@Diablo1505

Hey guys,

Interesting discussion you are having.

Since the first gartley pattern was born i think many have made a lot of adjustments to it and changed it. I do not think there is a right or wrong gartley.

Google the gartley and you will find different retracement levels.

For example, this is the gartley i am trading and the D point for me always is at the 78,6% of XA.

If you google “gartley 222 pattern” you can find this drawing with different retracement levels for B, C and D.

If you use the second gartley 222 drawing i posted you cannot name or trade a bat pattern since a pattern with a B retracement of 50% of the XA leg also is a gartley for you even if it completes at the 88,6% of XA. I hope you get my point.

Of course it’s up to everyone to decide which pattern to trade and what retracements to use. What i want to say is that there is no right or wrong. It’s all depending on your own backtesting and the information you collect regarding which strategy, pattern or plan is the most profitable. And that also depends on where you place your stops and take profit points so it’s very subjective and difficult to pinpoint something thats working for everyone. Regarding the pattern shane posted, i would call it a gartley and if i would have traded it i would have entered at the 78,6% retracement of XA. Since i place my stops below/above X this one would have been a winning trade for me. Not a nice trade since the pattern not got respected but it would still have been profitable. I will get back later or tomorrow explaining in more detail what i mean. If someone else with another trading plan and money management plan would have traded it maybe it would have been a loosing trade and a failed pattern. I hope you understand what i’m trying to say.

By the way. For those of you who still are struggling with the cypher pattern, here is the drawing i made of it myself with the retracement levels. This is a bullish pattern and for the bearish one just turn it around.

Keep in mind that for it to be a valid cypher, A has to touch the 1.272 extension of XA but must not close below/above the 1.414 extension, B has to touch the 0.382 retracement of XA but must not close below/above the 0.618 level.

Talk to you guys later. Have a nice eastern and be nice to the easter bunny.

Thanks Diablo. Now I think I get the point about gartley pattern already. Just to confirm my point on gartley. It means drawing fib from A to X leg, B should be retrace at 61.8 of XA leg and C should retrace at 38.2 of XA leg follow by D forms at 78.6 of XA. Am I right?

While for the cypher, draw fib from X to A must have C form at 127.2 of XA leg. Then draw another fib from A to X , 38.2 retracement will form B and 78.6 will be D

[shane]

I think yes, trading is very individual and one should try and trade in such a way which suits his style and personality. For me, I tend not to open a trade unless there is atleast a 1:2 R:R, If I don’t think I can get that I will pass on a trade. A stop loss is used for every trade, no exception, I do not trade with visual stop loss like TMB.

currently, I only trade in the direction of a trend, or possibily a sideways trend. If the gartley D’s is against a clear trend then i will pass on the pattern. Sometimes it is hard to identify the trend though, the last 4-5 days might have been a clear uptend …but when you zoom out and can see a couple of weeks back it looks like a downtrend. In such cases I use caution but may still trade it sometimes.

I also trade mostly gartleys and bats, i am now a cautious over cyphers after that one a few days ago that was both a gartley and a cypher. the price found support on the 70.7 of the gartley and then eventually bounced back up. it did not reach the 78.6% of the Cypher/Gartley [they were the same place for both]. in this case i had decided to go with the gartley so did profit.

im a bit cautious over butterflys too, but mainly because i rarely see them.

the way i place my trades is with fairly tight stop losses.
I do not currently open more than one position on an individual trade. I have one limit order with a set TP level. the TP level is always usually 2 fib points down from D, so if D lands on the 78.6, my TP will be just before the 50% in almost all cases. I dont place my stop loss below or above the X as this scares me tbh lol, and would force me to make various other adjustments to my trading plan to ensure an adequate R:R,

I am also very picky about my trades, I don’t like loosing money. If there is something about a pattern I do not like, then most often or not I wont trade it.

I trade probably much less trades than most people, due to pickyness …but the majority of patterns i do trade are winners so i guess as long as im making money thats more important than patterns traded.

It is not in my trading plan to scalp C to D moves.

that is basically how i trade, but all this is subject to change as i develop. I think I may experiment soon with trading fakeouts. I am getting more experienced [am seeing and finding patterns everywhere this week], and re-reading some of TMB’s old posts i think it would be achievable for me.

and yes. happy easter everyone
I usually buy chocolate the day after easter as prices are rock bottom lol

So your tp placed before the 50 of fibs and sl depends on tp with ratio of 1:2?

[shane]

this should be of some use to you as a rough guide.

also a few pages back I posted a detailed link to information on the Cypher. I’m not sure how much pages back exactly my post is as this topic is quite active …but the post with the link is probably within the last 10 pages.

also diablo has a fair bit of experience with the cypher so ask him too if necessary.

[B]edit:[/B] Sometimes the [B]gartleys[/B] can have slightly differant retracements to the one in the picture though.

Thanks a lot defiance. Now I get to know more patterns and their retracement point. But still I think is better to focus on few patterns

[Halit]

trading plan

[defiance888]

So your tp placed before the 50 of fibs and sl depends on tp with ratio of 1:2?

yes, if D is due to land on the 78.6% of XA I will usually set mt TP to just before the 50% fib and my stop loss is in line with a minimum 1:2 risk reward ratio,

If when I look at the pattern I feel I cannot get a minimum 1:2 risk reward on the pattern then personally i will pass on it and look for another one.

[shane]

I got 1 more ques defiance. For Gartley pattern, is it possible for B to retrace at 61.8 and C at 23.6 which form D on 88.6?

[defiance888]

I got 1 more ques defiance. For Gartley pattern, is it possible for B to retrace at 61.8 and C at 23.6 which form D on 88.6?

Such a setup I think is unlikely to happen IMO. Usually D would find support at the 78.6% or possibly over-run upto about half way to the 88.6% fib if it had poor convergances but i’d be surprised if it actually reached all the way there and then [U]also[/U] found support there.

I wouldn’t rule it out completely though.

maybe if B retraced to half way between the 61.8% fib and 78.6% fib then D landing on the 88.6% fib might be a possibility.

[shane]

@defiance888

Such a setup I think is unlikely to happen IMO. Usually D would find support at the 78.6% or possibly over-run upto about half way to the 88.6% fib if it had poor convergances but i’d be surprised if it actually reached all the way there and then also found support there.

I wouldn’t rule it out completely though.

maybe if B retraced to half way between the 61.8% fib and 78.6% fib then D landing on the 88.6% fib might be a possibility.

This is the Gartley that I mentioned. But it seems there is retracement at 78.6 too. another retrace at 88.6 , or maybe my drawing was wrong. Pls correct me if I am wrong.

This is Cypher that I found. Is it the drawing of cypher correctly?

This is another Gartley but D was failed to form. Right?

[defiance888]

the first diagram you are drawing your fibs points in wrong. you did not take the first option as your B point and instead opted for the second option. you MUST take the first valid point as your B after you have your A point. Also your C is lower than your A. C must never be lower than A for gartleys, bats, and butterflys.

on your third diagram. you did not take the first valid C point so the pattern is invalid. but even if you had the gartley still hasn’t formed yet. they do not always form. often patterns will not complete and you’ll have to look for another one until you find one that completes.
[B]edit:[/B] actually there is a point where the price comes very close to the 78.6% fib line. perhaps that could be the completion [depending on your other fib point convergences] but without having drawn in fibs myself i do not know

as for the second diagram. i cannot see the fibs clearly enough to know if you’ve done it correctly.

[MrLicano]

Hi there I’m new at this harmonic patterns trading. I started reading this thread and it’s awesome, you make the trades seem so easy…

Well, I’ll start practicing on the trading plataform and will keep reading this awesome thread.

By the way, I think it would be better for me to just operate 2 patterns and not all of the harmonic patterns because it can be confuse to me since I’m new at this (new at the harmonic patterns trading, but I’m in this Forex business since 2011)

Some suggestions??

Thanks and greetings.

[system]

Hey Diablo,
What’re thoughts on this Cypher pattern on the EUR/USD W1? I’m just now starting to see more and more of them.

[Diablo1505]

@MikeCa

Hey Diablo,
What’re thoughts on this Cypher pattern on the EUR/USD W1? I’m just now starting to see more and more of them.

Hi Mike,

Overall it looks real good to me and you pointed out a possible valid cypher since B is a 0.382 retracement of XA but does not close below the 0.618 level.

BUT what is concerning me is that the candlesticks that form the C point close exactly at the 1.414 extension of XA and i would not trade this particular pattern. For it to be a valid cypher pattern price has to touch the 1.272 extension but not close at or above the 1.414 level.

Nice one even though i would be careful with this one since price in my trading platform closes at the 1.414 level. But since it’s so close you can get different results with your broker and data feed. If it clearly does not close at or above the 1.414 extension you have a valid pattern.

Ignore the stuff that is at the far right side of my screenshot. It’s stuff i drew on a lower time frame for another possible setup.

[Diablo1505]

Allright guys. Here is some more info to help you along your way. Take whatever information you need out of it.

Here is how i normally would trade a gartley pattern. I’ve marked all the points for you and the white line above the X represents where i would place my stop loss. I would enter this point a few pips below the D point to ensure that my orders get filled and i do not miss out on the trade. The two other lines represent my first and second take profit targets, TP1 & TP2.

As you can see this pattern was picture perfect and also worked out perfect. After hitting D, price just waterfalled down.

Here is another example i want you to give since there were questions about it a few pages ago. The way i trade patterns i always place my stop above/below X depending on if it is a bullish or bearish trade of course. As you can see in this particular trade it would have been a winner for me even though the pattern did not work out the way it was intented to.

It’s also a gartley but the D point was not respected at all. What happened instead was that price respected previous structure, in this case the X point as a support level. Since i have my stops mostly 10 pips below X (represented by the red line in the screenshot) this trade would have given me profit for both of my take profit points and beeing a double winner instead of a loosing trade if i would have had my stops closer. Just one example why i’ve chosen to trade the way i do.

[shane]

the first diagram you are drawing your fibs points in wrong. you did not take the first option as your B point and instead opted for the second option. you MUST take the first valid point as your B after you have your A point. Also your C is lower than your A. C must never be lower than A for gartleys, bats, and butterflys.

on your third diagram. you did not take the first valid C point so the pattern is invalid. but even if you had the gartley still hasn’t formed yet. they do not always form. often patterns will not complete and you’ll have to look for another one until you find one that completes.
[B]edit:[/B] actually there is a point where the price comes very close to the 78.6% fib line. perhaps that could be the completion [depending on your other fib point convergences] but without having drawn in fibs myself i do not know

as for the second diagram. i cannot see the fibs clearly enough to know if you’ve done it correctly.

for the 3rd diagram, the C point should be the one at the mid of 23.6-38.2?

[Robert_T]

@Diablo1505

Allright guys. Here is some more info to help you along your way. Take whatever information you need out of it.

Here is how i normally would trade a gartley pattern. I’ve marked all the points for you and the white line above the X represents where i would place my stop loss. I would enter this point a few pips below the D point to ensure that my orders get filled and i do not miss out on the trade. The two other lines represent my first and second take profit targets, TP1 & TP2.

As you can see this pattern was picture perfect and also worked out perfect. After hitting D, price just waterfalled down.

Here is another example i want you to give since there were questions about it a few pages ago. The way i trade patterns i always place my stop above/below X depending on if it is a bullish or bearish trade of course. As you can see in this particular trade it would have been a winner for me even though the pattern did not work out the way it was intented to.

It’s also a gartley but the D point was not respected at all. What happened instead was that price respected previous structure, in this case the X point as a support level. Since i have my stops mostly 10 pips below X (represented by the red line in the screenshot) this trade would have given me profit for both of my take profit points and beeing a double winner instead of a loosing trade if i would have had my stops closer. Just one example why i’ve chosen to trade the way i do.

Hi there.

Quick question: Shouldn’t your AB=CD at least, or 1.27AB=CD and so on?

Thanks.

[Halit]

eurjpy

which do you prefer ?

[Diablo1505]

Hi there.

Quick question: Shouldn’t your AB=CD at least, or 1.27AB=CD and so on?

Thanks.

Hi Robert,

You’re correct. D point of a gartley according to my rules = 0.786 retracement of XA, 1.272-1.618 extension of BC

Did not have a correct example in this case since i was in a hurry and just wanted to give you guys an example of why i place my stop below X. Don’t get hung up on the pics that i posted.