Harmonic Trading - page 87
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hello all
here is a pic of Eur/Usd day chart with indicator named"harmonic-patterns.ex4" which posted in this forum.
This indicator keep telling me that if the point "d" is hit, buy form there.
Good indicator!! Very smart.
I will keep watching what is going to happen, and report it here again.
Buy the way,
I think this forum should kept going with people who want to understand this great system.
If we go, people will come back soon!!
ted!!
I wish to add.
Indicator ZUP refers to ZigZag universal with patterns Pesavento. It was created not for a competition to other indicators. At its creation problems were put:
1) to unite in one indicator ZigZag with different algorithms of work;
2) to make patterns Pesavento. For MT4 earlier there was no the accessible indicator showing patterns Pesavento.
3) to put in pawn in the indicator many of service functions.
Automation of search of patterns - a problem complex. All the same in some cases no automatic device will replace the person. ZUP is the tool helping the dealer in decision-making.
Regards;
I come back to a theme of an automatic finding of patterns. I assume, that it was formed BAT. Whether it is possible by means of indicators automatically to define the given pattern?
I come back to a theme of an automatic finding of patterns. I assume, that it was formed BAT. Whether it is possible by means of indicators automatically to define the given pattern?
Dear nen,
I understand some of falks don't want to hear any stories about non-free indicators, which I believe non-sense, however, since I think I am one of the few person who do this automatically, I will answer your question.
Yes, as long as the fib ratio is right and makes sense, it is possible.
However, as you can see, my result and your indication is a bit different.
The reason is simple.
Your B point is NOT the local highest turning point since A,which your ZIGZAG also indicates there.
Actually, I do not like Their categorization such as bat or crab which I think meaningless. Please remember such names and 'ratio table' is defined by some guy, and I observe their job is not that great, so I won't follow.
I merely categorize whole Harmonic Pattern variation down to 3 groups, which are Gartley, Extention1236 and Extention1618 based on the retracement of XA-AD=whole range retracement of the patttern. You have just another variations of fib ratio internally for each.
The categorization method I present here is much more systematic and fudamental way. I could see this because I do programming.
When I implement this Harmonic Pattern matching algorythm, I easily could see, their ratio- table for each Butterfly, Crab or Bat means nothing.
In fact, in my programming, my code does not have any ratio table at all. Just compairing parameters I show later depending on major frame or internal frame.
Very systematic, and here it works as I intended.
If you insist to stick to Crab name, for instance, just pick up the ratio table(which I think meaningless) and set up the parameter according to the table.
The below parameters are well enough to cover all, and that is the essense of Harmonic pattern.
Remember,fib numbers are fundamentally from Golden Ratio, a single number.
Using a single number, why you end up with 2 or 3 or 4 categorized pattern which they claims DISCOVERED?
In my opnion, Harmonic pattern variation is just from combination number of each Fib ratios.
In addition, I didn't employ Fib sequence more than 1.618. The risk is obvisouly higher above that. It's on trend, and the indicator I offer here has already sufficient number of the patterns without such a risk.
Major variations(Major frame of the harmonic pattern)
bool XA_ADgartley854 = true;
bool XA_ADextention1236 = true;
bool XA_ADextention1618 = true;
Internal variations 1(Internal frame)
bool XA_AB382 = true;
bool XA_AB500 = true;
bool XA_AB618 = true;
bool XA_AB764 = true;
Internal variations 2(Internal frame)
bool XA_XC500 = true;
bool XA_XC618 = true;
bool XA_XC764 = true;
bool XA_XC854 = true;
Q. So far whatever I have read about harmonic pattern (e.g pasavento, carney etc), the common XAD ratios are 786/886/1.27/1.68, depending on the pattern. I have never came across 854 ratio for XAD. Could you please tell me source of your info, from where you have arrived at this figure.
A. Very Good Question in fact.
The harmonic pattern is based on FIbonacci retracement, and Fibonacci retracement is fundamentally based on a single number,which is Golden Ratio 1.618 or 0.618. <---
(1/1.618 = 0.618 .just from different side of perspective)
This single magic mysterious number does all the trick and covers the entire Fibonacci numbers or Levels.
0.618x0.618 =0.382
0.382x0.618 =0.236
0.236x0.618= 0.146
So, here is the full sequence of Fib numbers(levels) from 0.1 to 1.0
0.146 1- 0.854
0.236 1- 0.764
0.382 1- 0.618 (= 0.146+ 0.236)
0.5 mid point
0.618 1- 0.382 (= 0.236+ 0.382)
0.764 1- 0.236 (= 0.146+ 0.618)
0.854 1- 0.146 (= 0.236+ 0.618)
(1.236 = 1+ 0.236 = 0.382+ 0.854 = 0.618x 2 = 2- 0.764)
(1.618 = 1+ 0.618 = 0.764+ 0.854 = 1/ 0.618 = 2- 0.382)
0.5 is not a fib number to be precise, but it is as important as fib.
At the same time, there is a Gap betwen 0.382 and 0.618, PLUS
(0.382 + 0.618)/2
(0.236 + 0.764)/2
(0.146 + 0.954)/2
= 1 /2
= 0.5
which means that the middle point of
0.382 and 0.618
0.236 and 0.764
0.146 and 0.854
is 0.5, and obviously it is also the middle point of 0 and 1.
These numbers cover fair range between 0 to 1.0.
It's as simple as that, just +or -. besed on 0,618=Golden Ratio
in some Harmonic Trading book, they mention 0.786 or 0.886 using Root calculation etc.
I think these are rather Artificial manipulation of Golden Ratio, and I have no idea why they insist such numbers instead of employing the simple Fibonacci sequense.
An author tells readers in his book like - The next important level of 0.618 is 0.786 etc... and I thought What? and he says 0.786 is root of sometihng.
As you seen already next important level that is fib sequence of 0.618 is 0.764 NOT 0.786.
You see 0.786 is close to 0.764 and 0.886 is close to 0.854.
This difference doesn't mean much, so why don't you use simpler ones?
The real simplicity from the Goldenratio apperas on the seqence list I shown first.
So, I totally ignored these artificial numbers according to their book or site, and instead, employ simple Fib numbers.
Actually, For Gartley Pattern.(in the chart above)
If
XAB =0.618
ABC =0.618
BCD = 1.618,
XAD = 0.854 (= 0.236 + 0.618) !!
not 0.886.
Harmonic patterns behave liks this, if you set up a couple of Fib ratio for each retracements, Automatically, another Fib retracement ratio show up. That is why this pattern is called as Harmonic.
You can do math or using MT4 Fib line tool.
Again, as long as you stick to pure Fib numbers, since Golden Ratio would repeat itself, whatever you manipulates among Fib numbers, the result is Always on FIb numbers.
That is the beauty.
However, once you include the other biased fib numbers such as 0.886, it will be broken.
I come back to a theme of an automatic finding of patterns. I assume, that it was formed BAT. Whether it is possible by means of indicators automatically to define the given pattern?
yes, we have a bearish gartley on EURUSD,H4, Tolerance is 16%
also we had another gartley on EURUSD on 30/5 with a Tolerance of 15% which worked great
also we had a bullish bat on the same pair/timeframe on 6/1 with a tolerance of 20% that also worked great
Why can't you show the patterns in a single chart?
Do you optimize some parameters step by step by hand for each to force to show the patterns? Is it usable??
One more important thing you don't notice.
Ziko indicator uses a single wave of zigzag.
He comments it Worked great etc, but dear readers, please show MT4 default Zigzag. AnyTurnng point looks working GREAT if you see, but everyone knows zigzag is actually not tradable.
Zigzag parameter optimization is NOT pattern matching, and that is what the Ziko indicator is doing.
The forum starts to come to life.
It is good.
Thanks fxsystemtrader for the answer. The good answer.
Also thanks Ziko123.
fxsystemtrader. In my program numbers from works Scott Carney and Larry Pesavento are used. The development at me are not present. It is necessary to carry out researches that there were development. But development Carney and Pesavento well have shown themselves in work. Why they cannot be used? Numerical dependences Fibonacci prove often unusual image. About it wrote Pesavento.
Let there will be various approaches at the analysis ðàíêà.nen,
I understand 0.786 or 0.886 is from their books, and I read also.
The numbers can be used of course, but it is because the numbers are close enough to the fib sequense I already have shown here.
In mathmatical sense, using root of Goldenratio is Not justified than using the original Fib sequense. However, both are close enough and both works, so it might be ok to use either one, but again, to me it does not make any sense why they introduce such a secondary number in their book and ppl follow without any questions...
FXST