What does Harmony mean in the financial market?
When Price and Volume trend in the same direction and is confirmed by order flow then the market is in Harmony.
How do I apply the concept of Harmony into Trading the Financial Markets?
The Harmony Trading System takes advantage of price and volume movements moment by moment. It is a clear and concise reading of price action as it relates to volume flow. This is important because it gets to the truth of price movement in a way that will make you more flexible to the zigs and zags of the markets. You do not need to wait for the sun, moon and stars to align before you can make a trade. Instead, you are watching very few factors that are intrinsic to how price moves in the markets then reacting to those factors. There is no needed research to determine important price levels and you don’t need to write a dissertation on why a certain level is important. All of that research is based on information from past price behavior that may not have anything to do with how the price will move today. Yesterday, people reacted to that level because there was enough order flow in and around those levels, but today the order flow can, and most likely will be totally different. The participants that showed up yesterday will be very different than the participants that show up today.
So, my question to you is a simple one: Why are you making decisions that are based on a non-truth, or a truth that happened yesterday, when the truth today could be totally different? That by itself is an advantage and an edge when you are using the Harmony Trading System.
The Harmony Trading System looks at price and volume movements that are happening right now. The harmony between price and volume will lead you to profitable trades, not your ideas and/or opinions of what price did yesterday or will be doing later on. Just what is happening now, right now, in the framework of now does trading make sense.
How does Price and Volume Harmony looks like?
Once Volume and price is moving in the same direction the optimum conditions present it self.
What is Support & Resistance and Why do I NOT believe in it?
“Support and resistance is a concept in technical analysis that the movement of the price of a security will tend to stop and reverse at certain predetermined price levels. These levels are denoted by multiple touches of a price without a breakthrough of the level.” ~https://en.wikipedia.org/wiki/Support_and_resistance
The premise of Support and Resistance that sometime in the future or in the past a price level is important because people reacted to that level. You are making an assumption based on some criteria that order flow in and around that predetermined level will keep the price from moving past that level. I have a problem with this thought process for three reasons:
If you waiting for predetermined levels to happen, you miss opportunities. When you are making the assumption that there will be enough buying interest at a certain level for the price to bounce off that level then you are missing the opportunity of what the market is doing right now. While you are waiting for that level to hit, you are missing all the price action in the hope that when the price reaches that level it will bounce back up according to your thesis. The more likely scenario is that the market will either continue past that level or bounce off that level in a lethargic manner during a very extended period of time never really going anywhere.
Support and Resistance is based on order flow that happened in the past. A support and resistance trader sits around saying that he will only buy when a price hits this level and sell when a price hits that level. So he is in a holding pattern until those levels are reached. A Harmony trader watches the market and when they see that the market in bearish harmony, they go short. When they see that the market is in bullish harmony, they go long. The Harmony Trader isn’t waiting for the market to reach a certain level, they are reading the market moment by moment for 2 states: in harmony or out of harmony. That’s it! Simple thinking is what the Holistic Trader is adopting.
The concepts of support and resistance is static and not responsive to the market. When you give up the concepts of Support and Resistance you are freeing yourself to be in sync the waves of the market as they come. You are not shackled by the opinion of support and resistance that may or may not materialize. You are able to be flexible in reacting to what the market is doing right now and not worrying about what the market will be doing in the future. You go with the flow of the market.
The market is much like your brain. One minute you are ecstatic over the thought of a long awaited vacation and the next moment you are pissed off at the dude in the parking lot that dinged your car. Your mind goes from one thought and emotion to the next continuously moving between highs and lows with no predictable pattern. The market acts in the same manner, so you need to react and respond to the changing emotional states of all the participants of the market. You are buying into the emotional states of the market. You will see that when trends manifest themselves in a direction, the price just keeps going and going crushing the people who are thinking that various levels are important. It will blow through those predetermined support and resistance levels and repeatedly hit your stops. When you look at the market in a static manner, you are not responding to the emotional states of what is actually happening in the market. That is what defines a Harmony Trader!