Harmonic Patterns

Harmonic patterns are used for technical analysis and the main function is to predict future price movement. It is a trading strategy that works with Fibonacci retracement and extension ratios.

However, the Fibonacci ratios used in 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. Fibonacci levels must align with accurate Fibonacci wave measurement for patterns to be valid. Moreover, the Harmonic pattern is used to identify how long price will move and the exact point where reversal is expected to occur.

 

 

3Lrsk2Qzmoi1w1MwHvUL5ooqUJKbKUUvUz

For your Bitcoin Transactions, think LUNO … hit the link to sign up https://www.luno.com/invite/KQRSXS

Harmonic Pattern is usually formed when four swings high/low points are connected together (using Zig Zag indicator). This strategy gives a high probability of success and it also helps to identify areas of demand and supply.

Technically, patterns exist within other patterns, and this also cut across time frames as long as the trend is formed in a wavy manner. It is important to draw harmonic patterns on higher time frames (1hr upwards) as lower time frames have more noise that may render the patterns ineffective.

The combination of Elliott waves principles and the analysis of Harmonic Patterns is what gives experienced traders the upper hand when it comes to trading currency pairs successfully.

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

Check Out

Support and Resistance

LONDON BREAKOUT STRATEGY FOR GBP PAIRS

ELLIOTT WAVE PRINCIPLE

Introducing the Pips-Beantrapper Indicator!

Achievable End Of Year Target For Newbies

Bollinger Bands and Scalping Strategy

 

How to Draw Harmonic Patterns:

Step 1:

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

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

 

Step 2:

Count/identify the last four zigzag lines.

 

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.

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.

Types of Harmonic Patterns:

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

 

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)

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. 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).

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

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).

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

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. 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).

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

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 mimum 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. 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. 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).

 

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

 

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 minmum 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 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).

AB=CD Pattern

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. 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. 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

How To Identify Harmonic Patterns At The Start

Harmonic Signals

AUDUSD: 1HR CHART 6TH NOV 2020

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

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

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

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

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

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

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

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

 

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

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

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

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

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

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

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

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

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

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

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

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

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

After

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

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

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

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

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

 

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

BEFORE

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

 

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

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

GBPJPY: DAILY (21 OCT 2018 22:42 GMT)

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

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

 

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

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

After

 

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

 

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

After

 

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

 

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

After

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

After

 

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

 

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

After

 

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

 

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

 

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

After

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

 

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

 

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

 

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

 

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

After

 

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

After

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

 

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

 

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

 

 

 

EURGBP

 

 

Referral links;

(Broker: Binary…https://record.binary.com/_WxWzztorkVi6tyDIijdDK2Nd7ZgqdRLk/1/)

(Broker: Alpari …   https://alpari.com/en/?partner_id=1244646)

(Broker: Exness … https://www.exness.com/a/t0q1u0q1)

(Broker: FXTM… http://forextime.com/?partner_id=4806145)

(Email: beanfxtrader@gmail.com)

(Telegram:  https://t.me/joinchat/KWBvKBDyn1nFB_3JQkR6GQ)