Harmonic Trading System. This time, I will try to discuss the harmonic pattern. Lessons might be a little bit difficult, but once you understand it will help you to get a good profit.
On the whole idea of this pattern is to be able to predict the possibility of a retracement. We will use the tools that we have discussed previously, the Fibonacci retracement and extensions.
By combining these tools will help us to be able to distinguish the area of the continuation of a trend as a whole.
In this lesson, there are some things that we will discuss , Among them are:
- Pattern ABCD
- Pattern 3-Drives
- Pattern Gartley
- Pattern of crab (Crab)
- Pattern Bat (Bat)
- Pattern Butterfly (Butterfly)
Once you learn and understand all the patterns above, try to look back, any you already have to trade in Forex. Great is not it?
Pattern ABCD
Let us begin this lesson with harmonic patterns easier. To use this pattern, all you need is Fibonacci and a watchful eye.
Both versions are good, Bullish or Bearish Pattern ABCD, has a line AB and CD are now well-known foot. BC While we are familiar with the correction or retracement.
If you use Fibonacci retracement on the legs AB, BC retracement level must be touched until 0618. Then the line CD should be in 1272 Fib.Extensions of BC.
Easy, right? All you have to do is wait until the entire pattern is formed (touch point D) before taking positions Sell or Buy.
However, if you want more stringent, here are the rules for pattern ABCD is more valid:
- Long legs of AB must ama lengths CD leg
- time when price moves from A to B should be equal to the time when the price moves from C to D.
three-Drives
this pattern is similar to the pattern ABCD, the difference is that the pattern has three legs (known as drives) and two corrections or retracements. This pattern is the ancestor of the Elliott wave pattern.
As you can see in the picture above, A Must 0.618 retracement of drive 1. Similarly, B must be extension 1272 of koreki A and drive 3 to be extension 1272 of correction B.
Once the pattern is formed , that is the time where you can take a Buy or Sell. If the price touches the point B, you can take an order to buy or sell at extension 1272 so you will not miss a moment.
But first, it's good to see the rules to be applied:
- The time when the price of completing drive 2 should be the same as the time on when the price of completing the drive 3.
Once there is a great trader, he calledHarold GartleyMcKinley.
he was an adviser to the stock market in the mid 1930s. His job is to analyze the behavior of the stock market.
According Gartley, he was finally able to solve two major problems of seorng trader, namely: what and when to buy.
Over time, traders are aware that these patterns can diteapkan other markets. Since then, an assortment of books, software and other patterns created and developed based on the basic principles of Gartley,
Pattern Gartley Pattern aka "222"
Gartley pattern "222" named after the dengaan page book by HM Gartley, Pofits in the Stock Market. Pattern Gartley is a pattern that consists of a basic pattern ABCD which we have discussed previously, but added with highs or lows are significant.
Now, this pattern is generally formed when a correction of an entire trend and looks like the letter "M" ( or "W" on the bearish pattern). This pattern is used to help traders find a good point to take a stand and follow / entered into trends,
patterns Gartley formed when the price has been in a trend either uptrend or downtrend, but has given the sign will appear a correction.
What makes patterns Gartley be set-up right when it formed a reversal point, a Fibonacci retracement level and Fibonacci extension. This provides a strong indication that prices may be reversed.
This pattern is difficult to see and when you see it, it can be very confusing. In some cases, the pattern can consist of an ABCD pattern is bullish or bearish, but this happens at point (X) that are behind the point (D).
The pattern Gartley perfect has the following characteristics:
1. AB should be .618 retracement of XA.
2. BC should be at least .382 or .886 retracement from AB.
3. If BC is .382 retracement from AB, then CD should by 1272 from C. If BC is .886 of AB, then CD should be added dri 1,618 BC
4. CD must be at .786 of XA.
The pattern of Animals
Over time, the popularity of patterns Gartley growing and more people are trying with their own variations. For some reason, the inventor of some of these variations decided to name this pattern with the name of the beast.
The pattern Crabs
In 2000, Scott Carney, someone adherents pattern of harmonious find the pattern "Crab".
According to him, this pattern is a pattern that is most accurate among the patterns harmonious because it's so extreme Potential Reversal Zone of XA.
this pattern has a ratio of reward to risk is very high, because you can put the stop-loss is very tight.
the pattern of the perfect crab must have the following aspects:
1. AB must be at .382 or .618 retracement of XA.
2. BC could at .382 or .886 retracement from AB.
3. If BC is .382 retracement from AB, then CD should be at 2:24 of BC. And if BC is .886 of AB, then CD should by 3618 extension of BC.
4. CD must by 1618 extension of XA.
The pattern Bats
Ditahun 2001, Scott Carney find other harmonic patterns that he calls a pattern of "bat". This pattern was found by the .886 retracement of XA as Potential Reversal Zone.
The pattern of the bat has the following aspects:
1. AB must be at .382 or .500 retracement of XA.
2. BC could at .382 or .886 retracement from AB.
3. If retracement of BC is .382 of AB, then CD should by 1618 extension of BC. And if BC is .886 of AB, then CD should by 2618 extension of BC.
4. CD must be at .886 retracement of XA.
Pattern Butterflies
Then the next pattern is the pattern of a butterfly. Created by Bryce Gilmore, butterfly pattern that perfectly match .786 retracement from AB.
The characteristics of this pattern are:
1. AB must be at .786 retracement of XA.
2. BC could at .382 or .886 retracement from AB.
3. If retracement of BC is .382 of AB, then CD should by 1618 extension of BC. And if BC is .886 of AB, then CD should be added 2,618 of BC.
4. CD must be at 1:27 or 1618 extension of XA.
3. STEP TRADING PRICE PATTERN harmony
Below are the stages of the harmonic pattern:
✓ Step 1: Finding potential a harmonious pattern
✓ Step 2: Measure the potential harmonic patterns
✓ Step 3: Buy or sell the harmonic pattern that forms
the basis of this third stage, you can get a great opportunity that can help
you to make a profit. Let's see more!
Step 1: Look for the potential of a harmonious pattern
Wow, the above picture looks like a harmonious pattern of potential! Now we are not sure what kind of pattern in the image above. As a three-drive pattern, but can also bat or crab pattern.
Step 2: Measure the potential pattern of harmonious
use Fibonacci tools, sebuaj pen and piece of paper, let us note the results of our observations.
1. BC of .618 retracement from AB.
2. CD amounted to 1,272 extension of BC.
3. AB length equal to the length CD.
4. This pattern fits a pattern ABCD bullish, which is a signal buy powerful.
Step 3: Buy or sell patterns of harmony that is formed
when the pattern has been formed, all you have to do is respond by taking a position to buy or sell.
If you have long positions in D, which is 1,272 Fibonacci extension of the CB, and put a stop-loss at a few pips below the price at the time you enter a position.
Easy, right? Actually, not too .. The problem with this pattern is that they are too perfect, so sometimes difficult to see. But with practice and can also with the help of indicator, this will become easier.
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