FX:AUDJPY   Australian Dollar/Japanese Yen
99 6 0
*NT**Posting this possible bat pattern on the AUDJPY             way ahead of time. I will determine whether the trade is a go or no go once it gets closer to the entry
HatZ
3 years ago
Is this pattern valid? The c point retracement has exceed 0.886 AB.
The B point has also closed very close to the 0.618 XA, making it a possible gartley.
Reply
JesusDiaz
3 years ago
If you follow the strict guidelines of trading harmonic patterns, you are absolutely correct. However, how many times have you seen bat patterns (or even gartleys for that matter) terminate exactly on the .886? Isn't it true that if you buy lower with the same stop loss level you are reducing your risk exposure? A rigid rule based plan isn't the most effective method of trading dynamic markets....Just my honest opinion...That being said, I will decide my entry once price is closer to the entry that has been drawn. I'll be sure to notify here by comment.

Of course, I could be absolutely wrong about this trade. The wonderful part is that with a historical win rate of >50% and a RR > 1.7, it doesn't matter whether I am right or wrong. All that matters is that I enter trades that make sense to me.
Reply
HatZ
3 years ago
You have been doing this alot longer then me. I just started trading recently and have decided to start with harmonics. Your right about the patterns not always completing at the expected point. Honestly it seems to me that in forex, these patterns violate the D-point fib cluster more often then not, before reversing.

Have you looked into applying different confirmation techniques in price and time? As a standard I always look for price divergence close to the D-Point. I'm currently trying to integrate MJP (balance points) and fractal dimensioning / Hurst to confirm the reversal.

What do you use to confirm harmonics besides the standard S/R lines and price action? A 50% success rate seems a bit on the low side, especially when I read about harmonic patterns being backtested to have success rates above 80%.
Reply
JesusDiaz HatZ
3 years ago
80% but at what Reward to Risk ratio? What kind of trade management is applied? Don't be misled by grand figures. Developing a trading plan is finding what works for you, through your *own* backtesting. Do your own backtesting. If you find a strategy that gets you 80% winners and has the highest profitability than any other strategy then you have hit a gold mine. But from my own experience, trading is not about being correct as much as possible, its about making more money than you lose. That means that win rate is not the only factor you should be evaluating when chosing your desired trading plan.
However, if you do find a strategy that has a win rate of 80% and a positive expectancy please share this, as I share my strategy with you. I do advise you to start paper trading those harmonic patterns that claim 80% win and see if you get the same results. Post some charts so the tradingview community can see.
Reply
HatZ
3 years ago
Good advice :). I'm currently putting together a trading plan and after I backtest, I'll start posting. I need to find a way to consolidate a decent set of confirmation techniques that's easily applied.

I honestly believe if you follow Scott Carney's high probability trading setups (i.e trade respecting the pre-dominante, good RvR, etc), and apply a strong set of confirmation in both price and time not based in Fibonacci, with a solid trade management strategy you should be able to significantly decrease failure rate.

Anywho, I'll watch this trade and post if I see it confirming a reversal at the completion point.
Reply
JesusDiaz
3 years ago
Trade cancelled.
Reply
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