It’s good that you were able to close early…I know you hate having to do that though…
I’m gonna make a prediction…that US dollar will be strong start at 3-4am EST on Friday…So I will look for an opportunity to to sell the EU then…
I agree, this system isn’t working for most people…hopefully, I can post a few of my trades tonight…
Sounds like it’s been a tough week for all, mine was a fairly disastrous return to trading this week. Not sure about you guys, but it feels like the market is very jittery at the moment.
A couple of comments/ questions on some of the posts I have been catching up on…
Firstly, hi Stu! Thanks for your message a while ago! 
Some of the posts I have seen on here, posting examples of Gartleys or bats etc, I noticed a-b and c-d legs, being one or two bars… Personally I don’t think these are good examples (IMHO), thats just the market ‘breathing’. I read somewhere, ( cant remember exactly where, possibly Carney), each leg should be a minimum of 5-8 bars…
Yesterday, someone posted an opportunity to sell Euro… (sorry, im on an ipad, not easy to flick back and forth) But what I think may have been missed is that a downtrend on the euro had just been broken… And an uptrend was being established… Major trend lines still need to be adhered to… I think. I know the hip shooting answer to this maybe, ‘but these patterns are about finding turning points’ but you have to still observer major trends in higher tf’s.
Last comment for now, yesterday, there were a number of news items… I find usually, the news items cause a glitch to the major trend and then the trend continues… However, afte some post analysis yesterday, I noticed most trends and channels were breeched by the news… Psychologically, once a trend has actually been breeched, that should have signified ‘sit and wait’ for another opportunity, as the trend may or may not re establish itself.
I sincerely hope I do not come across as someone who thinks he knows it all… Far from it, just voicing some opinions that I hope will help some and stir discussion.
All in all, it’s been said a few times and affirmed by TMB, that this should not be seen as a ‘be all an end all’ in trading strategies, more so, a valuable confirmation tool to your trading strategy toolbox. I find, when I observe major trends, observe macd, look out for flags, pennants, triangles, wedges and especially channels, then combine harmonics and elliot waves to those, I get consistent results. This week, on post analysis, I have been quite lax on some of these and paid for my lack of patience and greed… Time to regroup over the weekend.
One thing I have observed this week, the market seems (to me anyways) to be more volatile and jittery this week than ever… This could be due to the market ‘finding its feet’ again after the hols, combined with what seems to be a turn in the us economy? So, when I place a trade, I have to tolerate wilder swings… This means, potentially, bigger losses… However, so far every trade I have put on, they have always swung back in my favor, unfortunately, on some occasions, I pooped myself and pulled the trade on a loss! :’(
Have a great weekend all… Sorry this turned into a bit of an essay!
Sanjoz, great point about the change in trend, as a newbie I had not thought about that! Thanks for that important reminder!
Hi Sanjoz,
nice job on summary of the market.
I just in the middle of the Carney books. I happened to reading the part that the ideal bars of the AB leg would be 5-8 bars, and CD would be similar to AB or a variant in a fib scale (example 5, 8, 13 …). Is there the same requirement about the BC legs?
Hey NBF,
Yes and no… (how’s that for a straight answer?)
What I mean is, the BC leg I think should be ‘relative’ to the AB and CD legs. So if the AB leg is only 5 bars, you may expect the BC leg to only be upto 3 bars… personally, any lower then three, gives me caution, there would have to be other overwhelming factors to trade it… eg, doubles, or top/bottom of a channel etc.
If the AB leg is say 8-10 bars, I would ecpect the BC leg to last a little longer.
My thought on this is that with this trading strategy - harmonics, we are looking for market sentiment at a given moment, over a time period. So therefore, we need to be looking for prominant and deliberate moves that reflect actual sentiment, not a knee jerk reactions or market breaths.
Importantly, the ideal patterns Gartleys, bats etc dont come up ‘all the time’, so I think it is important we save the trades for when they do come up, because I find that when all conditions are met AND we are going with the trend… well, lets just say I cant remember one that has gone against me… even if it fakes out in this scenario, you still get your 30 P’s.
Here is a tip for all, that I have found useful… when you find a leg has lasted only one or two bars, flip over to the next lower tf, and you may find a flag you can trade instead and gain anywhere from 10-40 pips… Always wait for confirmation of the flag before entering the trade!!!Keep your stop tight and move it down the trade… when it is over, it will be over… no swinging around…
Just thought I would add also that AB/DC legs that last for more than 15 bars start to show less reliability also… thats not to suggest that they are invalid, just I personally have found them less reliable.
Hey thanks Sanjoz, good to have you back…
You are like our team leader for now…until TMB comes back…
I know that TMB mention his updated system called the Hydra…but he never taught it here…but he did post some insane results…
Again, thanks for coming back.
I wanted to share a few trades/set ups…
[B]We’ve all had the issue of waiting for a D[/B]…and many times it:
So here are a couple of trades from C to D…and NOT RECOMMENDED:[/B]
[B]EU 30MIN:[/B] I entered here with my SL just below my “A”…I had intended to go for 100+ pips…but got only 20 (everyone was telling me EU would go down that day…so I set SL to BE +20 and got stopped out right away…as you know, it went well over 100 pips.)
EG 4HR: I’m currently in this C to D trade…currently up 60 pips, with SL moved to BE +50 pips. Currently no TP.
I’m not sure what yall think, but for me…C to D has been doing better with a higher risk to reward ratio…and I can trade during the day and sleep at night…
anyone have link to download the ebook Harmonic trading?
That is exactly what I want to know. If AB/DC legs are more than 15 bars, you could normally go to a higher tf and find the same pattern in that tf (if steps from 15m, 1h, 4h, 1d, 1w, 1m), unless the number of BC legs is too tight (less than 4, 6, or 7 based on the tf), if just for the argument point of view, two legs is a minimum for a pattern.
If practically 3 bars are the minumum and 15 bars are maximum, we could then define a pattern in a right time frame more easily. at present in the thread, some 30 m patterns can be more suit in a 4H, or 1H patterns in a 4H or even 1D time frame (based on at least 3 bars of the short leg and ideally 5-8 bars of AB/CD legs).
Thanks Stu, I hope people don’t read my comments as authoritative, I’m as much a beginner if not more so than anyone else here. It’s great to be able to trade with others who are like minded, it can be a lonely profession otherwise!
Yes, TMB did mention Hydra, although I’m not sure he intends to teach that system on this forum. Did anyone else hear back from TMB regarding his Friday classes he was going to hold? Maybe he intended to start it a bit later.
I had my reply all typed up yesterday, then just before hitting submit, my battery died… Aarrrrrgh!
I sort of agree with what you said above, yes of course you can simply move up/down a tf or two to get the pattern in a ‘required’ number of bars… Perhaps when I spoke of numbers of bars I oversimplified what I meant.
Personally, I wouldn’t try to make up a generic rule to say the pattern must be within a 3-15 bar range, each potential pattern needs to be treated on its own merits. What I am getting at is you need to draw up what you think is an ‘ideal’ set up, this ideal would probably contain a number of criteria. Then you measure each potential set up against that ideal, and judge on a case by case basis, how far away from the ideal is your set up and is it worth the risk/how likely are you to get a hit…
I know I may be stating the obvious, but I think getting to a conversation or thought of, ‘the set up must be in this or that range’ is dangerous. The reason I say this is because what validates or invalidates a set up can be quite subjective. There are numerous factors that I personally take into consideration when I see a set up, eg cyclicity; is it sticking closely to a leg trend line; is it in line with the major trend; candle size consistency; candle patterns; ma’s; macd etc. So if a leg takes say 30 candles, but I’m happy with say all the other factors I just mentioned, then I would definitely take the trade. At the other end of the scale, if it only takes say three candles to form the bc leg, but each leg sticks like glue to the trend line, the candles towards the end of the cd leg are small or consistsntly sized, then I probably would take the trade.
My previous comment was really short cutting that I find ‘generally’, if it takes more than 15 candles to form a leg, then I find other criteria start losing too, especially cyclicity, trend line adherence etc.
I think what is important is that the patterns do actually take shape before trading them. Sometimes, with some of the patterns that were posted, I wouldn’t have called some of the legs a leg, it was clearly in a very strong directional trend with some normal ‘market breathing’ - again, only IMHO when this is happening, it’s much better to trade the trend, not a forced gartley.
Looking forward to your thoughts…
I sold short Friday night…and “luckily”, I made 97 pips by holding short of EU over the weekend…
EXCELLENT! I have never held a position over a weekend, just because you can’t pull the trade if it goes south… But yours worked perfectly! Nice way to start the week!
covered 1/3rd @ +40pips, 1/3rd @ +80pips, 1/3rd runner remaining.
This was my only trade for the week.
The harmonic pattern was just one of TEN reasons for the trade.
Hi Modo,
Excellent trade… the gartley/butterfly (cant quite telll if d went above x) looks great. would you mind sharing your other nine reasons for the trade?
Hi Sanjoz.
The reasons are on the chart, but it’s not clear and can’t be expanded, must be the way I uploaded.
I use harmonic patterns in conjunction with moving averages, average true range, price action, trendlines, and support/resistance.
Trading to me is simply determining if price is going up or down. If you can’t answer that question there is no trend and the market should be avoided.
If the market is going up, you buy dips. If the market is going down you sell rallies.
I use dual timeframe analysis. I work top down, using moving averages on the weekly to determine trend, and harmonic patterns lower timeframes to determine possible termination of corrections in order to enter [B]in the direction of the higher timeframe trend[/B]. I use ATR on both timeframes to find where price may be stretched.
For example, with the eurgbp, the weekly was in a clear downtrend…it should be plain as day. We then saw a rally on the weekly of ATR. This should get our interest as an area to start looking for shorts.
I then watch price action and look for a trend change in the rally, simply with dow theory/price action of a series of higher lows being broken by a lower low. Once we see this, we can say that the correction (or pullback) to the downtrend has failed, and can now look to the lower timeframes for rallies to sell. IMHO, THIS is the best place to look for harmonic patterns…ie pullbacks after trend changes - but in the direction of the higher timeframe trend. If we also use ATR then we are combining trend following with mean reversion. With these harmonic pattern you are trading for reversals, trying to pick tops/bottoms, which can be dangerous, UNLESS you have a clear idea of the trend ABOVE you.
I believe combining ATR, trendline support/resistance, broken tl test, time of day, can improve your probablilities.
Reasons for the trade were
Obviously, waiting for all this to fall into place takes patience, and this is where discipline matters. I only enter in the first 2 hours of the three equity market sessions. I had to cancel my initial limit of 0.8365 because it did not hit in the first two hours of the ftse - that was tough - and the time of day rule i find the hardest to keep. When you have waited that long for a trade it’s not easy to cancel the order. But if you don’t stand for something you will fall for anything. I believe a universal law of attraction is that you can’t be desperate. The same is true for money. You can’t be desperate to trade. I had to wait another 10 hours until asia opened, but am glad i did as i got a slightly better entry at 0.8370, and each time you stick to your rules improves your discipline.
Finally, this trade gave me absolutely NO STRESS, because I knew i had followed my plan and done absolutely everything I could. Also, starting top down and having a clear picture of the bigger picture makes holding onto the profitable position easier.
Hope that makes sense. Of course this is just my style, and no two people are the same. But the one thing I hope I can pass on is that it’s the trades you DON’T take that might make your week.
Anyway, here is my trading plan modoforex: How . As you can see the last month has not been good to me. In hindsight although the yen trades were not horrible, but the trend was not clear enough. I have not written up the eurgbp trade yet as there is still a portion open, and I am unable to update the “results page” to include the last profitable trade as I spilt coffee on my laptop on the weekend (wohoo!). I am hardly setting the world on fire, only 0.5% of notional / 5% nominal in 4 months, but that is with just 25bps positions. My goal is to build a low risk/low return track record in order to one day secure a trading role or attract capital. It’s slow work, but I am satisfied I’m making progress.
Hi Modo,
yep, this is exactly the sort of thing I have been speaking about in rather vague terms on the last couple of posts. There are a couple of things on your list I havent used to consider an entry point, and a couple of things I use that are not on your list… (I think my stategy is a little less sohisticated and more basic).
Still taking some of the points you raised in, but noticed you are in Sydney as well! coffee sometime?
sure thing, i’m in the city monday to friday after midday. just pm me to work out the details
