Harmonic Trading, Volume One: Profiting from the Natural Order of the Financial Markets

Harmonic Trading ~~~ A system of critical decision making based on the natural order of life. What a definition! In fact, this definition did enough to attract me in the first place. However, it proved my naivety once again...

Yes.. In my humble opinion, this is another pollutant stuff. The so called "natural order of life" is actually the famous Fibonacci calculation which was circulated in traders' circle since day one. Harmonic trading just utilizes its calculation and patterns being develop through "carefully selected" charting. Why I said it was selected carefully? Well, similar with most analysis; the main criteria in selecting a chart is to suit the accuracy of analysis. In another word, it may works at certain times; but, it would not work in other times. So, the problem is: what is the contingency plan when it does not work? Your guess is as good as mine...

I am not trying to be sarcastic. At the end; from the perspective of mathematics, a figure remains a figure. As such, a price remains a price. For the price to repeat what it did in the past, certain conditions have to be met. That kind of "condition" varies greatly even within similar context. That is why trading is tough and not as simple as "harmonic trading". Even if the "harmonic" stuff is excellent enough, traders will face another immediate problem: What is the time frame to choose for each respective product? (market?) Every now and then, are we going to stick with the same time frame? Again, your guess is as good as mine... LOL.

In my humble opinion, different time frames mean too many parameters relative to the number of observations. As a result, over-fitting (which describes random error instead of the real relationship) occurs and an over-fitting model will have poor predictive performances. So, this is what it bothers me while I tried to digest the whole book....

Having said that, this book definitely not my cup of tea. This book is on title one. Meaning, there is another title to explore. In fact, I did flip through the volume two. In my humble opinion, it is another over-fitting stuff with tons of historical evidences which might or might not occur in the future. Rating wise; out of 10, I am not going to give any point to this book. End of the day, it does not benefit me at all...

P/s: This is not a how-to introduction book. As such, do not be surprise if you could not settle into it as it is a real hard read thanks to the very brief explanation.