The Bearish BAT pattern pattern is also a rare harmonic pattern to find. On the 4hours time frame the price chart of AUDUSD has been spotted forming a bearish BAT pattern which the use of Fibonacci retracement ratio is of great importance. Just the same way we used the Fib to calculate the Gartley pattern, it is still the same way but different ratio combinations. Below are the details:
Peaks/Valleys - The peaks and valleys in the pattern need not be consecutive(based on mere observations).
XAB - Price climbs to peak at X, the first point in the pattern. It drops from there to valley A and rises to peak B. The BA/XA retrace should be either 38.2% or 50%.
ABC - Turn ABC shows a BC/BA retrace of one of the following Fibonacci ratios: 38.2%, 50%, 61.8%, 70.7%, 78.6% or 88.6%.
BCD - Extension DC/BC is one of the following Fibonacci ratios: 161.8%, 200%, 224% or 261.8%.
DAX - Retrace DA/XA is 0.786 down to 0.5(this is the major target).
NOTE:
Price may dip after point D, in fact it's likely that it does so 60% of the time, but the drop usually doesn't amount to much 13% average. 21% of chart patterns see price decline less than 5% below D. A potential stop loss should be used here.
Breakdown: 0.67858
Support 1: 0.67598
Support 2: 0.67453
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Ideas published should not be referred to as an investment advice.
Peaks/Valleys - The peaks and valleys in the pattern need not be consecutive(based on mere observations).
XAB - Price climbs to peak at X, the first point in the pattern. It drops from there to valley A and rises to peak B. The BA/XA retrace should be either 38.2% or 50%.
ABC - Turn ABC shows a BC/BA retrace of one of the following Fibonacci ratios: 38.2%, 50%, 61.8%, 70.7%, 78.6% or 88.6%.
BCD - Extension DC/BC is one of the following Fibonacci ratios: 161.8%, 200%, 224% or 261.8%.
DAX - Retrace DA/XA is 0.786 down to 0.5(this is the major target).
NOTE:
Price may dip after point D, in fact it's likely that it does so 60% of the time, but the drop usually doesn't amount to much 13% average. 21% of chart patterns see price decline less than 5% below D. A potential stop loss should be used here.
Breakdown: 0.67858
Support 1: 0.67598
Support 2: 0.67453
Good luck to everyone! Click the follow button to stay tuned for more trading ideas! Like the idea? Hit the like button!
Ideas published should not be referred to as an investment advice.