[TheNegotiator]

Do any of you guys use 'harmonic' type trading setups? The Gartley 222 is one I believe and there are others. This website seems to have some good information (although it is about the author selling products).

http://harmonictrader.com

Nonetheless, there is plenty of free info provided.

I was wondering which markets this is effective in if any and whether traders find the setups easy to spot or if they need to comb multiple markets looking for these setups.

Would be interested to hear any thoughts on this.

[UrmaBlume]

The Harmonic setups and the site you reference use price only inputs and are not true harmonics. The actual harmonic of real-time buying and selling can be much more useful.

Below are shots of two different algorithms that produce true harmonics of buying and selling volumes that, as the graphs show, often lead price.

cheers

UrmaBlume

[TheNegotiator]

In what way are these displaying 'real' harmonics and the site I posted doesn't? Would they be more realistic if they based the candles on volume/ticks rather than time?

[UrmaBlume]

Originally Posted by TheNegotiator »

In what way are these displaying 'real' harmonics and the site I posted doesn't? Would they be more realistic if they based the candles on volume/ticks rather than time?

When one component of the harmonic does the exact opposite of the other component and does it in the same amount then you have a balanced harmonic. In this case it is a balanced harmonic of order flow or the balance of trade.

You will note that when selling is increasing, the red line moving up, that buying is decreasing, blue line moving down, by the same amount = a balanced true harmonic - one component is a harmonic of the other.

In the work you showed there was only one component, price, and we operate under the belief that one of the lest effective predictors of price is price itself.


cheers

UrmaBlume

[TheNegotiator]

Either I have misunderstood what it is you are saying or you have a different definition of harmonic oscillation. Or perhaps you have just not revealed the nature of your oscillator. As I understand it, harmonics are based on geometric patterns which tend to repeat over time. Are your indicators geometric but based on volume and/or other variables? From what you have said so far, I am far from understanding you clearly. Also, why couldn't these patterns be good predictors on a volume based chart for example? That would factor in volume geometrically. Or even delta could be used...

[UrmaBlume]

My small group endeavors to explore what we call the physics of market information. The harmonic of trade flow we have shown is designed as a leading indicator of price without any inputs from price. The net of order flow as shown in the graphic is the force and price is the particle or object.

As buying and selling displace each other in harmony (the graphic) so is price displaced.

The definition of simple harmonic motion is simply that the acceleration causing the motion a of the particle or object is proportional and in opposition to its displacement x from its equilibrium position.

The geometric representations of price you referenced measure result and not cause. Our work attempts to measure the motivator/force and thus predict result. That's the difference.

cheers

UrmaBlume

[flyingscotsman]

i use HamFon's HamRadar01-1 to pick them up in tradestation as i'm not that good at picking them up visually. Metatrader 4 has some good indicators to identify bats and butterflies etc WRR_ZUP_INFO_V02.mq4 and ZUP_V92.mq4. You need to check different timeframes on each market. Hope this helps.
cheers

[jdevron]

Wow, those are indeed very impressive charts UrmaBlume. Kudos to your talented team!
I agree that there is a cause effect relation in market dynamics and last trade price
is part of the composite result but not the dominant cause of the market physics you
describe. It's really just an extension of supply and demand theory. There is just one
small clarification I am seeking in reference to your comment about "net order flow".
Strictly speaking the volume size of a last trade at a given price is technically past
tense history, even though it may have occurred just microseconds ago. Likewise quotes,
whether level 1, level 2, or montage orderbook depth all refer to a future event. The
reality is we can take action in the future but not in the past. Therefore it would be
interesting to know how much of a purist approach your research has taken. Do the charts
showing bipolar balanced harmonics use last trade price/size info, or are they derived
from quote price/size info?


All the Best,
JDevron