Harmonic Patterns

Harmonic patterns play a crucial role in technical analysis as they help predict future price movements, making them an effective trading strategy that leverages Fibonacci retracement and extension ratios.

However, the Fibonacci ratios for the analysis and measurement of Harmonic patterns are 0.382, 0.50, 0.786, 0.886, 1.27, 1.41, 1.618, 2.0, 2.24, 2.618, 3.14, and 3.618.

To ensure the validity of patterns, it is key for Fibonacci levels to align with accurate Fibonacci wave measurements.

Moreover, the application of Harmonic pattern is essential in determining the anticipated duration of price movement and pinpointing the precise reversal point.

 

 


Harmonic

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The formation of a Harmonic pattern typically involves connecting four swing high/low points together, often utilizing the Zig Zag indicator.

This strategy provides a heightened likelihood of achieving favorable outcomes, while concurrently aiding in the identification of demand and supply zones.

Technically, Harmonic patterns can be found within various patterns and are applicable across multiple time frames, as long as the trend exhibits a wavy structure.

Drawing harmonic patterns on higher time frames (from 1 hour and upwards) is crucial since lower time frames tend to contain more noise, which can potentially undermine the effectiveness of these patterns.

The combination of Elliott Wave principles and the analysis of Harmonic Patterns provides experienced traders with a distinct advantage when it comes to achieving successful trading outcomes in currency pairs.

The four most popular patterns are the Gartley, Butterfly, Bat and Crab patterns. We also have the Shark and the Cypher patterns.

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How to Draw Harmonic Patterns:

Step 1:

Load Zig zag custom indicator on the chart (see settings below).

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This trading chart will look like this (see image below).

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Step 2:

Count/identify the last four zigzag lines.

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Step 3:

Label the starting point of Zigzag line 1 as X, also label the end point as A. Label the end point of line 2 as B, and label the end points of line 3 and 4 as C and D respectively as shown in the image below.

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Step 4:

Identify the type of pattern that is formed. For example, in the chart above, point A is higher than point C. Point X is also way higher than point D.

This indicates that a Bearish Cypher pattern is possibly forming on the chart.

However, point D must break higher than point B for a Bearish Cypher pattern to be complete.

Step 5:

Identify the correction and extension lines from point A to D. From the image above, line A-B is a correction of line X-A.

Line B-C is an extension of line A-B.

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Types of Harmonic Patterns:

Gartley Pattern (Wave A to D is correction-correction-extension)

 

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For Bullish Gartley pattern, BA price move is the correction of XA. BC price move is a retracement of AB price movement while CD price move is an extension of wave BC.

Point B is 0.618 retracement of impulsive wave XA. Point C is 0.382 to 0.886 retracement of wave AX. Point D is 0.786 retracement of XA.

The long position is usually entered at point D after bullish price action is confirmed (that is, waiting for the price to start an upward movement).

Looking at the Bearish Gartley pattern, BA price move is the correction of XA. BC price move is also a retracement of AB price movement while CD price move is an extension of BC price movement.

Also, Point B on Bearish Gartley pattern is 0.618 retracement of impulsive wave XA. Point C is 0.382 to 0.886 retracement of wave AX. Point D is 0.786 retracement of XA. The short position is usually entered at point D after bearish price action is confirmed (that is, waiting for the price to start a downward movement).

 



Bat Pattern (Wave A to D is correction-correction-extension)

Harmonic

Analyzing the Bearish Bat pattern, BA price move is the correction of XA. BC price move is also a retracement of AB price movement while CD price move is an extension of wave BC.

Point B is a minimum of 0.382 to a maximum 0.50 retracement of impulsive wave XA. Point C is 0.382 to 0.886 retracement of wave AX. However, Point D is 0.886 retracement of XA.

The short position is usually entered at point D after bearish price action is confirmed (that is, waiting for the price to start a downward movement).

For the Bullish Bat pattern, BA price move is the correction of XA. BC price move is a retracement of AB price movement while CD price move is an extension of BC price movement.

Also, Point B on Bullish Bat pattern is a minimum of 0.382 to a maximum of 0.50 retracement of impulsive wave XA. Point C is is a minimum of 0.382 to a maximum of 0.886 retracement of wave AX. Point D is 0.886 retracement of XA.

The long position is usually entered at point D after bullish price action is confirmed (that is, waiting for the price to start an upward movement).

XAUUSD 15MINS BAT



Butterfly Pattern (Wave A to D is correction-correction-extension)

Harmonic

Analyzing the Bearish Butterfly pattern, BA price move is the correction of XA. BC price move is also a retracement of AB price movement while CD price move is an extension of BC price movement.

Point B is 0.786 retracement of impulsive wave XA. Point C is a minimum 0.382 to a maximum 0.886 retracement of wave AX. Point D is 1.27 extension of XA.

A short position is usually entered at point D after bearish price action is confirmed (that is, waiting for the price to start a downward movement).

For the Bullish Butterfly pattern, BA price move is the correction of XA. BC price move is a retracement of AB price movement while CD price move is an extension of BC price movement.

Also, Point B on Bullish Butterfly pattern is 0.786 retracement of impulsive wave XA. Point C is minimum 0.382 to maximum 0.886 retracement of wave AX. Point D is 1.27 extension of XA.

A long position is usually entered at point D after bullish price action is confirmed (that is, waiting for the price to start an upward movement).

XAUUSD 15MINS BUTTERFLY AFTER6

V75 BUTTERFLY

V75 BUTTERFLY FINAL

 



Crab Pattern (Wave A to D is correction-correction-extension)

Harmonic

Analyzing the Bearish Crab pattern, wave BA is the correction of wave XA. BC price movement is also a retracement of AB price movement. While CD is an extension of wave BC.

Point B is a minimum of 0.382 to a maximum of 0.886 retracement of impulsive wave XA. Point C is a minimum of 0.382 to a maximum of 0.886 retracement of wave AX.

Basically, Point D is 1.618 extension of XA. A short position is usually entered at point D after bearish price action is confirmed (that is, waiting for the price to start a downward movement).

For the Bullish Crab pattern, BA price movement is the correction of XA. BC price movement is a retracement of AB price movement, while CD price move is an extension of wave BC.

Also, Point B on the Bullish Crab pattern is a minimum of 0.382 to a maximum of 0.886 retracement of impulsive wave XA.

Point C is a minimum of 0.382 to a maximum of 0.886 retracement of wave AX. Point D is 1.618 extension of XA.

A long position is usually entered at point D after bullish price action is confirmed (that is, waiting for the price to start an upward movement).

Harmonic



Shark Pattern (Wave A to D is correction-extension-extension)

Harmonic

Looking at the Bearish Shark pattern, wave BA is the correction of wave XA. BC price movement is an extension of AB price movement. While CD is an extension of wave BC.

Point B is a minimum of 0.382 to a maximum of 0.886 retracement of impulsive wave XA.

However, Point C is a minimum of 1.13 to a maximum of 1.618 extension of wave AX.

Point D is a minimum of 0.886 to a maximum of 1.13 retracement/extension of XA.

The short position is usually entered at point D after bearish price action is confirmed (that is, waiting for the price to start a downward movement).

For the Bullish Shark pattern, BA price movement is the correction of XA.

BC price movement is an extension of AB price movement, while CD price movement is an extension of wave BC.

Also, Point B on Bullish Shark pattern is a minimum of 0.382 to a maximum of 0.886 retracement of impulsive wave XA.

Point C is a minimum of 1.13 to a maximum of 1.618 extension of wave AX.

While Point D is a minimum of 0.886 to a maximum of 1.13 retracement/extension of XA.

The long position is usually entered at point D after bullish price action is confirmed (that is, waiting for the price to start an upward movement).

XAUUSD 15MINS SHARK



Cypher Pattern (Wave A to D is correction-extension-extension)

Harmonic

 

Analyzing the Bearish Cypher pattern, wave BA is the correction of wave XA. Wave BC is an extension of wave AB. While CD is an extension of wave BC.

Point B is a minimum of 0.382 to a maximum of 0.618 retracement of impulsive wave XA.

However, Point C is a minimum of 1.13 to a maximum of 1.41 extension of wave AX. Point D is 0.786 retracement of XA.

A short position is usually entered at point D after bearish price action is confirmed (that is, waiting for the price to start a downward movement).

For the Bullish Cypher pattern, wave BA is the correction of wave XA. Wave BC is an extension of wave AB. While CD is an extension of wave BC.

Also, Point B on Bullish Cypher is a minimum of 0.382 to a maximum of 0.618 retracement of impulsive wave XA.

Point C is a minimum of 1.13 to a maximum of 1.41 extension of wave AX. Point D is 0.786 retracement of XA.

A long position is usually entered at point D after bullish price action is confirmed (that is, waiting for the price to start an upward movement).

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AB=CD Pattern

Harmonic

Analyzing the Bearish ABCD pattern, wave BC is the correction of wave AB. While CD is an extension of wave BC.

Point C is a minimum of 0.618 to a maximum of 0.786 retracement of impulsive wave AB.

While Point D is a minimum of 1.27 to a maximum of 1.618 extension of BC.

The short position is usually entered at point D after bearish price action is confirmed (that is, waiting for the price to start a downward movement).

For the Bullish ABCD pattern, wave BC is the correction of wave AB. While CD is an extension of wave BC.

Point C is a minimum of 0.618 to a maximum of 0.786 retracement of impulsive wave AB.

However, Point D is a minimum of 1.27 to a maximum of 1.618 extension of BC. The long position is entered at point D after bullish price action is confirmed (that is, waiting for the price to start an upward movement).



3 Drives Pattern

Harmonic



How To Identify Harmonic Patterns At The Start

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Harmonic Signals

AUDUSD: 1HR CHART 6TH NOV 2020

HARMONIC

USDJPY: 4HR CHART (02 JAN 2020 00:33 GMT)

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GBPJPY: DAILY CHART (17 FEB 2019 8:36 GMT)

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AUDJPY: 1 HR CHART (17 FEB 2019 7:48 GMT)

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USDCAD: 1 HR CHART (16 FEB 2019 23:13 GMT)

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GBPJPY: 1 HR CHART (16 FEB 2019 20:37 GMT)

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GBPUSD: 1 HR CHART (16 FEB 2019 19:53 GMT)

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AUDUSD: 1 HR CHART (16 FEB 2019 17:28 GMT)

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EURUSD: 1 HR CHART (16 FEB 2019 11:52 GMT)



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EURUSD: 1 HR CHART (15 FEB 2019 4:47 GMT)

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GBPUSD: DAILY CHART (5 FEB 2019 23:37 GMT)

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EURUSD: DAILY CHART (5 FEB 2019 23:20 GMT)

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GBPJPY: DAILY CHART (5 FEB 2019 22:49 GMT)

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GBPCAD: DAILY CHART (5 FEB 2019 22:32 GMT)

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EURUSD: 30 MINS CHART (24 JAN 2019 05:57 GMT)

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EURCAD: DAILY CHART (20 JAN 2019 23:37 GMT)

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EURUSD: DAILY CHART (20 JAN 2019 23:24 GMT)

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USDJPY: DAILY CHART (20 JAN 2019 22:57 GMT)

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AUDJPY: DAILY CHART (20 JAN 2019 22:50 GMT)

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GBPJPY: DAILY CHART (20 JAN 2019 22:37 GMT)

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EURCHF: DAILY CHART (15 DEC 2018 23:44 GMT)

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EURCAD: 4HR CHART (15 DEC 2018 22:49 GMT)

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After

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NZDUSD: DAILY CHART (15 DEC 2018 22:14 GMT)

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GBPCHF: DAILY CHART (15 DEC 2018 21:52 GMT)

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EURCAD: 4HR CHART (26 NOV 2018 21:36 GMT)

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GBPJPY: DAILY CHART (26 NOV 2018 20:52 GMT)

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EURUSD: 1HR CHART (14 NOV 2018 06:24 GMT)

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EURUSD: 1HR CHART (13 NOV 2018 18:08 GMT)

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BEFORE

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EURUSD: 4HR CHART (9 NOV 2018 06:40 GMT)

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AUDUSD: DAILY CHART (28 OCT 2018 21:03 GMT)

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EURUSD: DAILY CHART (28 OCT 2018 20:42 GMT)

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GBPJPY: DAILY (21 OCT 2018 22:42 GMT)

Harmonic

 

USDJPY: DAILY (20 OCT 2018 23:33 GMT)

Trendline

 

AUDJPY: DAILY (20 OCT 2018 23:26 GMT)

Trendline

 

USDCHF: DAILY (10 OCT 2018 22:16 GMT)

Diagonal

 

GBPUSD: DAILY (9 OCT 2018 23:21 GMT)

Harmonic

 

EURAUD: DAILY (9 OCT 2018 23:14 GMT)

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USDCAD: 4HR (9 OCT 2018 23:05 GMT)

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AUDUSD: DAILY (9 OCT 2018 22:41 GMT)

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NZDUSD: DAILY (9 OCT 2018 22:35 GMT)

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AUDJPY: DAILY (9 OCT 2018 22:27 GMT)

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USDJPY: DAILY (9 OCT 2018 22:09 GMT)

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EURCHF: DAILY (8 OCT 2018 00:01 GMT)

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EURUSD: DAILY (7 OCT 2018 23:29 GMT)

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EURCAD: 4HR (3 OCT 2018 06:50 GMT)

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After

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AUDUSD: 4HR (TUE 2 OCT 2018 23:11 GMT)

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CHFJPY: DAILY (TUE 2 OCT 2018 23:05 GMT)

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After

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EURCAD: 4HR (TUE 2 OCT 2018 06:44 GMT)

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USDCAD: 4HR (MON 1 OCT 2018 22:25 GMT)

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After

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EURAUD: 4HR (MON 1 OCT 2018 08:49 GMT)

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After

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AUDUSD: 4HR (MON 1 OCT 2018 01:14 GMT)

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EURUSD: DAILY (MON 1 OCT 2018 00:07 GMT)

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After

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EURCAD: (FRI 28 SEP 2018 06:13 GMT)

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EURCAD: (THUR 27 SEP 2018 06:52 GMT)

Elliott

 

EURGBP: SELL –  4HR CHART (26 SEP 2018 22:51 GMT)

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After

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EURGBP 4HR CHART (24 SEP 2018 23:02 GMT)

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USDCAD 4HR CHART (24 SEP 2018 22:40 GMT)

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EURAUD 4HR CHART (24 SEP 2018 02:35 GMT)

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GBPJPY 4HR CHART (24 SEP 2018 02:35 GMT)

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NZDJPY 4HR CHART (24 SEP 2018 02:35 GMT)

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After

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AUDJPY 4HR CHART (24 SEP 2018 02:25 GMT)

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After

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USDJPY DAILY CHART (24 SEP 2018 02:18 GMT)

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EURUSD DAILY CHART (24 SEP 2018 01:54 GMT)

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USDCAD 4HR CHART (24 SEP 2018 01:34 GMT)

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EURGBP

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8 Replies to “Harmonic Patterns”

  1. very informative Pattern Strategy of Harmonic and Partner of Elliot Wave in the Future Prediction of the Market. Hoping a lot of Learnings of this Lesson. Thank you a lot and More Power.

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