Trading in harmony, harmonic patterns and price action

What do you think about a bid at 1.6302 in GBPUSD?

the D there would’ve been exactly the .786 but unfortunately the B point didn’t reach the .618 of XA it only reached the .500

If we are being super strict CD doesn’t equal AB exactly but i love the level D is at 1.63000 is a very important level on cable. it has acted as SR on every timeframe. i personally am looking at trading this, however if D wasn’t at such a strong level i wouldn’t as it doesn’t strictly meet the parameters

I know B isn’t at the 618, but here’s another one i’m bid on

Since we’re talking harmonics, i figured it’s good to show how the market swings. personally i look for reactions to the fib numbers to confirm that my XA swing is important. In this USDCAD example, I like that it reacted to the 382, thus making the 618 a more desirable entry.

so basically your looking at trading a BC leg of a possible gartley?

No my bid is 1.09, point D of the 618 gartley forming. I was just saying that when looking for gartleys potentially forming, I like to see the AB retracement hit a fib number. This helps me confirm that I have a decent XA swing. But AB=CD also helps confirm a good entry point at D. This one happens to have both.

If you have some reading material that would be great. Currently I only trade PA and am subscribed to Krugman’s thread, but it looks like harmonics coincide well with PA so it would be ideal to have a good knowledge of both. Question on your video, how much are you taking out at target 1 & 2?

ok i see what you mean. to be honest calling that a gartley isn’t strictly right though. I’m not saying its not going to work out, obviously you have traded these and make them work for you but for clarity for anyone who hasn’t traded with harmonics before i would prefer if we could just use the names for the classic patterns

I am sorry to be a sour puss but sometimes these patterns work and sometimes they don’t. Sure when they work you can make pretty graphs with them but the all the ones that don’t seem to be ignored by people pushing this method

if you pm me your email i will send you over scott carneys book and some other stuff.

as to the targets i take 50% off at each target, depending on the strength of the trend and wether the pattern is with it or not i sometimes open 3 positions and leave one on to see if it can run with the trend

well of course they’re not a 100% method. personally i have never found, and don’t know of anyone who has, a method that has a 100% win rate. by all means if you have share it with us. historically and statistically speaking these patterns work between 60% and 80% of the time. in my opinions thats not too bad considering the RR that they give to

Just so we are clear, who defined the gartley parameters that you use?

The parameters i use come from Scott Carney and Larry Pesavento

I know personally Larry doesn’t subscribe to that strict of parameters in defining his entry points using gartleys. I’m not sure about Scott.

Please don’t perceive my questions/comments as negative, I am sure that your rules provide a great trading system for YOU! I just want to emphasize that a trader can use both the 618 and 786 on a gartley. Profits in the stock market, H.M. Gartley’s book simply shows the ABCD retracement of a swing. It is up to the trader to measure the swings in the context of fib ratios, as Larry did to define the modern “222 Gartley”.

no please don’t get me wrong I’m not taking your comments as negative at all. every trader is different in his approach. i think you will find that although larry doesn’t have .786 as the only D he does use the .618 as B.

also i would like to mention that AB=CD is another perfectly valid pattern to trade, i just don’t personally trade it

Check out his radio show sometime on TFNN. This will provide plenty of insight into his personal methods.

Do you have a screener or do you watch only a set number of pairs? Do you have any size requirements for the patterns? For instance, I require that BC > 25 pips for my pattern to be tradeable.

What is your average duration on your trades? I haven’t been holding over the weekend, but I am considering changing this, given I can define what would allow me to hold over the weekend.

i thought i would post some charts of the patterns I’m monitoring at the moment

EURGBP H4 Bat D@ 0.8244

GBPCHF H4 Gartley D@ 1.4955

GBPJPY H4 Cypher D@ 173.414

GBPUSD H4 Gartley D@ 1.6301

USDJPY H4 Bat D@ 102.103

i will thanks for the info.

i watch 20 pairs. for me this provides plenty of trades each month. i used to over trade a lot when i first started out but now generally take 8-12 a month. with regards to size i only trade on H1 and up and require that the patterns are at least 30 candles in length. i don’t have any rules regarding leg sizes in pips but it sounds interesting. i might well apply some sort of rule after a bit of research. my average trade duration is around 2 days and i used to use a rule when i just traded PA that i could hold H4 and Daily trades over the weekend (as long as there are no high risk events early monday) which i still apply

Thanks for posting charts. I think it’s great to see what others are looking at, and we all know that preparation is key in this business! Just one note, it’s hard to see the numbers on the chart. Can you either make the attachments clearer, or just post what your entry point is? The only trade i’ve held over the weekend in the last few years was on a daily signal. My plan is to do something similar as to your rules above - obviously want to only hold if i’ve caught the longer term potential trend.