Harmonic Analysis - page 185
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Good to see you back irad! Let's talk about the cypher on AUDJPY. The cypher did work out. Let's think why it worked out. Was it because support or demand? Was it because that's what just cypher pattern does? I think we should focus more on why.
Hi, Thanks
fibonacci is a very mystic and has it's own unique way to look at those pattern, and sometimes it'll work sometimes not, we all know it
the whole market moves from supply to demand and vice-versa but some level are more likely to hold and some are not. anyway those zones that price went away from and haven't turn back into means that there is great imbalance - the bank and insitutions are making those areas because they have lot of power
to move the market.
anyway in supply and demand you take trades that haven't been tested yet- the meaning is that stack of order are still waiting there to get filled, but once you get a re-test some orders get filled and market could break that zone if not that much of orders left on those zones - the zones look like peaks/valleys or like a short consolidation on the chart(something like candle up candle down, candle up, candle down the same size ~) and then a big candle up that went away from the zone
anyway price tested this zone which happened to be our cypher 88.6XA
and went up.
as far as I can see that level wasn't strong enough to hold and several hours without any supply area to take that level out it' just blew though the demand area.
so we took our profit at 38.2% say thank you market and move on
.
Can you explain why you drew the supply zone like that?
I wonder if that supply zone will hold because that's not a peak/valley(Rally-Base-Drop/Drop-Base-Rally), this one is a continuation formation which used to join a trend after that pattern formed(Rally-Base-Rally/Drop-Base-Drop)
anyway If we happened to use harmonic with it, why not drill that zone down to 45 pips with our fibonnaci tool?
Hi, Thanks
fibonacci is a very mystic and has it's own unique way to look at those pattern, and sometimes it'll work sometimes not, we all know it
the whole market moves from supply to demand and vice-versa but some level are more likely to hold and some are not. anyway those zones that price went away from and haven't turn back into means that there is great imbalance - the bank and insitutions are making those areas because they have lot of power
to move the market.
anyway in supply and demand you take trades that haven't been tested yet- the meaning is that stack of order are still waiting there to get filled, but once you get a re-test some orders get filled and market could break that zone if not that much of orders left on those zones - the zones look like peaks/valleys or like a short consolidation on the chart(something like candle up candle down, candle up, candle down the same size ~) and then a big candle up that went away from the zone
anyway price tested this zone which happened to be our cypher 88.6XA
and went up.
as far as I can see that level wasn't strong enough to hold and several hours without any supply area to take that level out it' just blew though the demand area.
so we took our profit at 38.2% say thank you market and move onWhy would you put X on that low though? To me it's not a swing low. My cypher would be like this.
Why would you put X on that low though? To me it's not a swing low. My cypher would be like this.
it's almost the same.. I don't mind put my swing low there too, i just look at where most of the trading in that zone occour..
it's almost the same.. I don't mind put my swing low there too, i just look at where most of the trading in that zone occour..
"Zone" maybe it's almost same but price action wise it's not to me. Anyways that's your rule and I respect that.
I wonder if that supply zone will hold because that's not a peak/valley(Rally-Base-Drop/Drop-Base-Rally), this one is a continuation formation which used to join a trend after that pattern formed(Rally-Base-Rally/Drop-Base-Drop)
anyway If we happened to use harmonic with it, why not drill that zone down to 45 pips with our fibonnaci tool?
I think it's a good idea but why not lower lot size and put sell limit at the bigenning of the zone? Price might not reach your sell limit and price might reverse after barely entering the zone. Zone is what we consider where price may reverse, right? Which means that we think when price could reverse as soon as it enters. So why don't we put sell/buy limit at the entrance of zone? We could miss a trade.
I think this is a good example of considering demand. There was a potential bullish bat that I'd wait for to complete. It didn't complete but price went a different direction after reaching 78.6 instead of 88.6. I was thinking why it happened like that and I concluded that it's because of demand zone. Sometimes patterns don't complete but price goes different direction. It may be because of supply/demand. I'll read upon s/d.
I think it's a good idea but why not lower lot size and put sell limit at the bigenning of the zone? Price might not reach your sell limit and price might reverse after barely entering the zone. Zone is what we consider where price may reverse, right? Which means that we think when price could reverse as soon as it enters. So why don't we put sell/buy limit at the entrance of zone? We could miss a trade.
The wider the zone, the worst risk:reward I'll have, and more winning patterns I have to get.
but that wouldn't be a valid entry for crab, I'll take the risk of not getting fille and have limit order up there, I'll watch for price action around that zone and might jump in with reduced lot size. if the difference was couple of pips than i'll widen my area, I'll look for example on the one for you.
anyway,
*need to be tested!*
I think this is a good example of considering demand. There was a potential bullish bat that I'd wait for to complete. It didn't complete but price went a different direction after reaching 78.6 instead of 88.6. I was thinking why it happened like that and I concluded that it's because of demand zone. Sometimes patterns don't complete but price goes different direction. It may be because of supply/demand. I'll read upon s/d.
take a look at history,
the XA leg is reaction to the filliing of a gap(a gap formation of Rally-Base-Rally(think of the gap as a long long green candle that explanation helped me understand that :P)) that one I'd call Demand area.
but since that X point area what you called demand haven't removed a supply area, that one isn't qualified as a demand area(at least not on the timeframe - it's important to stick supply&demand rules to your trading time frame and not go lower because you'll get confused) so you can treat that pattern normally as support and resistance as a reason for entry.
in order to qualify an area as supply or demand, it must take out opposite zone by 1 pip.
take a look at history,
the XA leg is reaction to the filliing of a gap(a gap formation of Rally-Base-Rally(think of the gap as a long long green candle that explanation helped me understand that :P)) that one I'd call Demand area.
but since that X point area what you called demand haven't removed a supply area, that one isn't qualified as a demand area(at least not on the timeframe - it's important to stick supply&demand rules to your trading time frame and not go lower because you'll get confused) so you can treat that pattern normally as support and resistance as a reason for entry.
in order to qualify an area as supply or demand, it must take out opposite zone by 1 pip.X of the bat is resistance, I'd took that swing low as X because that's swing low for me. That PRZ is combined with resistance and demand (to me). If treated the bat pattern normally, I would miss it cuz it didn't complete but if I treated it with demand zone that I found. Sticking to rules of any method is important and also sticking to one's rules is important too if it's profitable.
AUDJPY - Potential bullish shark.