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pthegreat
 Posted : Thursday, December 27, 2012 2:29:51 PM

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Just started reading "Harminic trading" by Scot Carney. Got my interest since I like to use fibonnaci, and indicators based on fibonacci.

The basic harmonic pattern is the AB=CD pattern

If you see a retracement from 38.2 up to 88.6% then using the following tabel you can set a target:

retrace         projection

38.2             2.618

50                2

61.8             1.618

70.7              1.41

78.6              1.27

88.6              1.13

Today's AAPL 5min is a good example. Pont C is a 38.2% retrace of the AB leg. therefore calculate 2.618 * BC, and subtract that from C-high, gives you a target of 503.43

pretty cool. Created a spreadsheet and calculated a bunch of patterns for tickers such as AAPL, AMZN, GOOG, LNKD, SPY,  so far pretty accurate.

pthegreat
 Posted : Thursday, December 27, 2012 2:43:48 PM

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Another example; LNKD pulled back 50%, therefore :

2xBC + Clow = 112.38

Have a GR8 New Year!

funnymony
 Posted : Thursday, December 27, 2012 10:15:56 PM

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isn't it simply called an abc continuation pattern? take a look at the qqq's intraday over the last two days, and you'll see one.

pthegreat
 Posted : Thursday, December 27, 2012 10:44:25 PM

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yes indeed, but I like the comparison of depth of retrace (BC) in fib numbers compared to the projected target of the CD leg. with these formulas one can capture these patterns in a non-ambiguous way. ultimate goal is to transform this into a realcode indicator for stockfinder.

Also this pattern is part ofmore complex patterns:

pthegreat
 Posted : Thursday, December 27, 2012 11:03:49 PM

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Q's with the EOD rally,looking like a "bat" pattern. with the given fib rleation between reversals, this should be programmable:

funnymony
 Posted : Friday, December 28, 2012 12:27:53 AM

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go back a few more hours and theres a leg (A) down, and a flag (B) up.

you're showing the final leg (C) down, and the w bottom that came out of nowhere today.

funnymony
 Posted : Friday, December 28, 2012 12:33:39 AM

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not sure if will link or not but..................

sbukosky
 Posted : Tuesday, January 01, 2013 7:57:20 PM
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With all the other great indicators and flexibility of them, I'm disappointed that we don't have more fractional Fibonacci extensions.

Steve Bukosky

pthegreat
 Posted : Wednesday, January 02, 2013 12:20:57 PM

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QUOTE (sbukosky)

With all the other great indicators and flexibility of them, I'm disappointed that we don't have more fractional Fibonacci extensions.

Hence the need for a sophisticated programming interface. which we have in SF.

Once the XYZ pattern is qualified, meaning we have YZ retracement of XY that is within 38.2% - 88.6% range, then to trigger an entry :

for the "UP" patterns:

entry = Zlow + 23.6% * XY

for the "Down" patters:

entry = Zhigh - 23.6% * XY

I choose 23.6%, since it's a fib number, but of course, different values can be tested.

Example GOOG 5min down pattern (it's in the spreadsheet)

Z is a 71.73% retrace of XY.

To calculate a PRZ (Price Reversal Zone), I looked up the "projection" numbers, as mentioned in 1st post (also in spreadsheet)

The 70.7% retrace suggests a 1.41 projection

The 78.6% retrace suggests a 1.27 projection

Therefore : Z - 1.41 * YZ = 709.92 - 1.41 * 7.51 = 699.33

and Z - 1.27 * YZ = 709.92 - 1.27 * 7.51 = 700.38

GOOG reversed at 699.14

Pretty good results with the few examples in spreadsheet.  Now write a realcode.

pthegreat
 Posted : Thursday, January 10, 2013 4:19:41 PM

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Been testing this for a while now, and liking it very much:

SPY two times in a row, after "entry", ending up into the target zone:

pthegreat
 Posted : Thursday, January 17, 2013 4:46:55 PM

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wow, and amother one.  SPY 15min. pulled back 43.78% on Jan 15th. therefore multiply the Y-Z leg with 2, and 2.618 , add it to Z low, and there we have the target zone. Today reached a high right in the middle of the target zone before selling off, and falling below the lower target.

What can happen from here ?: the A level will be determining factor if rally continues. if it fails, we could expect a down swing like depicted in purple:

so, watching 148.10 area.

pthegreat
 Posted : Friday, January 18, 2013 9:59:41 PM

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That worked out perfectly.

Pullback to the 38.2% fib. then back up to the A line. since we pulled back just slightly below the 38.2 the A line was recalculated at 147.95.  At least good for an intraday trade.

New target zone calculated, as per the spreadsheet:

That was 3 trades in a row, ending up exactly in the target zone.

Lets see what this one does next week.

pthegreat
 Posted : Friday, January 18, 2013 10:09:41 PM

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To Worden developers:

I think this would be a great indicator for TC2000.

I'm getting tired of drawing fib retracements, and entering values in spreadsheet, and then drawing new lines on the chart.

Other TA software have indicators like these

Bruce_L
 Posted : Monday, January 21, 2013 10:05:02 AM

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Thank you for your suggestion. It has been assigned case number 9939.

-Bruce
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pthegreat
 Posted : Tuesday, January 22, 2013 12:49:01 PM

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CF 5min.

X = 216.35

Y = 221.69

Z = 219.61

calculated :

entry : 220.87

traget zone : 223.77 to 225.06

almost there.  220 weekly calls from \$2.50 to \$4.10.  tighten stops.

pthegreat
 Posted : Tuesday, January 22, 2013 1:09:31 PM

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Bruce, i have somethign working in stockfinder.

I'm using "addtooutput" to draw the lines. however as you see in the TC drawings I'd like to draw both the low end as well as the high end of the target zone at the same time. with the stockfinder code, It loops until price breaks one line, and then draws the next.

Bruce_L
 Posted : Tuesday, January 22, 2013 1:13:28 PM

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As you already know, I cannot help you with that particular RealCode Indicator. You would probably need two RealCode Indicators to draw two lines. Or you could create RealCode Indicator which outputs OHLC data at each bar instead of a single value and then extract the open, high or low by adding a Moving Average of OHLC indicator.

-Bruce
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pthegreat
 Posted : Tuesday, January 22, 2013 1:23:14 PM

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This indicator is based on AB=CD indicator by Scott M. Carney, book : Harmonic Trading. as far as I know there are no trademark issues. I'll give it some more thought, with what you suggested.

Bruce_L
 Posted : Tuesday, January 22, 2013 1:28:02 PM

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The ABCs and XYZs in the indicator visualized in your posts seems quite similar to the indicator for which I cannot provide assistance. If the indicator of interest is the AB=CD indicator from the Harmonic Trading book and you are sure there are not copyright issues, then go ahead and post your current RealCode in one of the StockFinder forums and I will take a look.

-Bruce
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pthegreat
 Posted : Wednesday, January 23, 2013 10:02:25 AM

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CF hit the upper target of the target zone at 225.

SPY 5min hit the upper target zone at 149.10

SPY 15min target zone, almost there. so tightening stops.between 148.85 - 149 IMO.

in order to change trend I will wait see a pattern like the drawn purple lines.

pthegreat
 Posted : Wednesday, January 23, 2013 10:34:15 AM

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I'm all out. SPY 15min stopped 8 pennies short of target.

some 5 consecutive profitable trades in a row.

waiting now for new patterns to develop.

pthegreat
 Posted : Wednesday, January 23, 2013 5:26:32 PM

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SPY did top out just a few pennies above the lower target line.

Decision to exit all longs was only about \$0.15 pre-mature. can't complain. :-)

time for a little speculation:

If price pulls back to 38.2% (light blue on the chart) then entering the new X, Y, and Z numbers in the spreadsheet gives us a new long entry if after the 38.2% retrace it comes back up just over 149. (blue lines.  If however it turns below the 149, we can start a AB=CD down pattern. (purple)

so depending on how far price retraces. long entry will be around 149 to 149.10 (in case a retrace between 38.2 and 50%), or a short entry if it can not come back up over these levels.

pthegreat
 Posted : Thursday, January 24, 2013 1:51:03 PM

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Perfect target zone again. although I got out yesterday.  Not getting any responses here.  so last post.

wwrightjuly4
 Posted : Thursday, January 24, 2013 5:00:12 PM
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pete,

I am sure, I am not the only one interested this or other posts.

Hope to get a copy of the book.

Seems programmatically, should not be too difficult to implement.

great post(s) thanks.

BobMc
 Posted : Thursday, January 24, 2013 5:55:18 PM
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Ditto for me, too

You and Peter have shared some great ideas for a long time now.

Don't know about the programming tho'

Regards

Bob Mc

pthegreat
 Posted : Tuesday, January 29, 2013 10:13:10 AM

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PRZ ; Potential Reversal Zone.  Spy on longer time frame in the zone. lower PRZ level 149.31

pthegreat
 Posted : Tuesday, January 29, 2013 4:07:54 PM

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and another one 5min, entry yesterday, SPY weekly 150 calls almosy a double:

Hit High PRzone and Low PRzone to the penny.

pthegreat
 Posted : Wednesday, January 30, 2013 3:47:52 PM

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TLT 60min finished a bullish crab pattern?  I had the PRZ between 115.3 and 115.8

pthegreat
 Posted : Thursday, January 31, 2013 10:49:06 PM

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ok so now that we have seen that the AB=CD pattern gives some excellent trade opportunities, and I have it programmed and working in SF, I'm going to look at some other harmonic patterns.

Previous post showed a bullish crab pattern in TLT, that so far is working out. by the way today on the 5min it triggered a AB=CD with an entry at 116.77, and a low PRZ trgt at 117.46. so we'll keep watching that.

skipping through some charts I saw a beautifull bullish crab on AMZN in Oct. last year:

B is 61.8% retrace of XA

C is 88.6% retrace of AB

The PRZ (Potential reversal zone) is calculated:

261.8% projection of BC and/or 161.8% projection of XA

in this case Price (D) reversed exactly in the zone.

just like the AB=CD I think you can trade this in two ways: go short after point C. I use 23.6% * BC, subtracted from C to find an entry.  and you can go long once price has reached the PRZ.

pthegreat
 Posted : Friday, February 01, 2013 4:52:30 PM

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The 5min setup on TLT worked for a quick trade, closing out this AM when it fell back to the PRZ. Hourly finished today right in the middle of the PRZ . so next week we'll see if indeed it will reverse.

thekubiaks
 Posted : Sunday, February 03, 2013 4:13:33 PM
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So now you got me curious.  What do you see happening with the SP-500?

pthegreat
 Posted : Sunday, February 03, 2013 6:39:04 PM

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longer term on the indexes;

Dow daily; broke the PRZlow 13983.27 on Friday, with PRZhigh at 14149.93

but the oscillator (which can not be mentioned), comprised of volume and open versus close, pulled back on this large friday up bar.

on an ideal AB=CD pattern you would also like to see time symmetry. where AB more or less has same amout oof bars as CD. so far AB has taken more time then C to current.

SPX daily; AB=CD almost there. and we're very close to the 161.8% extension of the April-June '12 leg down.

Interestingly stepping back to a 2 hour chart, you'll catch a AB=CD from the Nov '12 low.  Price is in the PRZone, with the high target at 1528.72, pretty much the same as the low target on the daily.

TLT daily has an exhaustion signal to the downside, which could trigger a buy signal within 12 bars, using the indicators which can not be mentioned here. the 60min chart, as stated before has reached the PRZone as stated before.

If I were a long term trader/investor (which I'm not) I would definitely adhere to my trading plan/ money management at this state. IMO the charts are starting to look exhausted, targets have reached, or very close to them. Possibility for a pullback definitely there. Using smaller timeframes to look for AB=CD down patterns to show up.

pthegreat
 Posted : Monday, February 04, 2013 4:06:20 PM

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And there you go ; an AB=CD down, starting on the SPY 5min:

the 149.22 is an intermediate target on a different indicator.

Anybody short?

pthegreat
 Posted : Tuesday, February 05, 2013 10:31:39 AM

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ok that pattern bunked, but be carefull; yesterday is a lower low. and if we start making new lower highs.......

todays brkout oiver the resistance good for quick intraday long trades, GS, GOOG, SPY.

hmm same as last year? Feb-April lateral(since we're in the PRZones on indexes),  May-go away. better to trade the short term/intraday IMO.

will post some more if I can get the more complicated patterns programmed in SF.

pthegreat
 Posted : Wednesday, February 06, 2013 1:11:23 PM

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GOOG on 5min chart; two very profitable trades, using Harmonics:

First XABCD in yellow a bearish bat, entered long yesterday at the open on the CD leg.

Second XABCD in orange a bullish bat, went long this morning on reaching the D target ,

Could have made a 3rd trade, going short, yesterday afternoon, either at reaching the D target of the bearish bat, or on the CD leg of the bullish bat.

Stockfinder Ab=CD indicator got me the long entry, and the perfect target:

Again I would like to express my feelings about TC and SF, this is just my opinion, but in orrder to make TC worhtwhile, I think Worden should include something that makes it stand apart from the rest, every charting program has a fib retrace and trendlines, not to many have some advanced indicators like Harmonics.

SF is the perfect program that has all the standard indicators, and then the ability to program advanced stuff. Either include advanced indicators in TC, or continue development of SF.

pthegreat
 Posted : Wednesday, February 06, 2013 4:41:18 PM

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TLT update:

After calling the reversal (2 days in advance) see Jan30 and Feb1 posts, I need to see starting it to break the ranges of the previous bounces during the decline. the smallest, lines up pretty much at current resistance 117.15, then 118, then 119.

I'm in a Feb 116/120 vertical call spread. It's a bit of protection, since I still trade on the long side short term : NFLX- GOOG

Usually don't trade this far out, but would like to see this bullish pattern, I talked about, work out.

pthegreat
 Posted : Thursday, February 07, 2013 12:21:52 PM

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Where are the fib non-believers ??????!!!!

B : 50% retrace XA

C : 88.6% retrace AB

D : 161.8% projection BC and 78.6% retrace XA

voodoo ???  coincedence???

pthegreat
 Posted : Thursday, February 07, 2013 12:23:23 PM

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Please write indicators for TC !!!!!

pthegreat
 Posted : Thursday, February 07, 2013 2:25:51 PM

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OK one more chart  :-)

GS 2day (since not enough data in TC to draw daily)

minimum projection 161.8% of BC achieved today on Bearishbat. 88.6% retrace XA possible with 200% BC.

so reversal here, or shot towards 165?

Jpetesmith
 Posted : Thursday, February 07, 2013 11:56:52 PM
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Haha! This is very cool bro. You even got thekubiaks to briefly comment! This has been a very fun(!) article or post to keep up with. Thanks Pthegreat

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