FX:AUDUSD   Australian Dollar / U.S. Dollar
85 views
16
85 0
This is a rather bizarre situation that can occur if you trade harmonic price patterns.
If the price would follow the green line in this example, it would create a Cypher pattern and a Gartley pattern at the same time. So why is that interesting? Well, for starters, both of these patterns are valid!

The question you should want to ask is "Which pattern to trade?"
Should you trade the one you saw first? The one with the best risk/reward ratio? Or maybe trade both?

In my opinion, this is something you should consider in your backtesting when you test harmonic patterns .
The funny thing is that it probably happens much more often than you realize, and if you backtest one pattern at a time you probably don't notice that you're taking the same position twice. However, when you trade it live, you probably don't bother looking for patterns within other patterns, which means that technically, you could be breaking your rules without knowing it.

Well, how often does this happen, then? It depends on the ratios you use to define your patterns. Thus, the only way to know if it would really make a difference in your trading or not, is to actually go through your backtesting data to see how many of the trades you entered were at the same time, and what the outcome of these trades were.

Thanks!
Home Stock Screener Forex Screener Crypto Screener Economic Calendar How It Works Chart Features Pricing House Rules Moderators Website & Broker Solutions Widgets Charting Solutions Get Help Feature Request Blog & News FAQ Wiki Twitter
Profile Profile Settings Account and Billing TradingView Coins My Support Tickets Get Help Ideas Published Followers Following Private Messages Chat Sign Out