Hey guys, hope everyone is good. I have something new here, a HARMONIC PATTERN
Harmonic patterns involve more than just geometric shapes. They also follow strict "rules" measured by FIBONACCI LEVELS
There are several types of harmonic patterns including Gartley, Butterfly, Bat, Cypher, 3 Drives, Crab, and more.
This particular pattern is called the CYPHER PATTERN It is a REVERSAL PATTERN and usually occurs near strong trend reversals.
It's said that CYPHER PATTERNS have a higher success rate than any other HARMONIC PATTERNS but are rarely found on the charts.
The CYPHER PATTERN can be bullish, or bearish. The pattern in this chart is considered a bullish pattern. The buy order should be at point "D" with a stop loss below point "X"
As I mentioned above, There are "rules" (requirements) that need to be met in order for the CYPHER PATTERN to be considered VALID.
X-A > Line X-A is an IMPULSE LEG
A-B > Line A-B is a RETRACEMENT of line X-A. It MUST retrace to 0.382-0.618 (candle close)
B-C > Line B-C is another leg up. "C" MUST end up between the 1.272-1.414 FIBONACCI EXTENSION LEVEL of impulse leg (LINE X-A)
C-D > Line C-D is a RETRACEMENT of X to C. Line C-D MUST touch the 0.786 RETRACEMENT LEVEL
The chart shows a possible CYPHER PATTERN trade setup. Lines X-A, A-B, and B-C are all VALID, therefore IF line C-D touches the 0.786 RETRACEMENT OF X to C, we should have a high risk/reward trade setup.
For this to be considered a VALID HARMONIC PATTERN, all of the "rules" above MUST be met.
So far, the first 3 rules have been met. The only thing that is required now is for ETH to retrace to the 0.786 of X-C which is between $2200 - $2300
If the pattern CONFIRMS to be VALID, the TARGET is set at the 0.382 RETRACEMENT of X to C which is approximately $3700 (A potential gain of around $1500) Stop loss order just below "X" ($1690)
If ETH does NOT retrace to the 0.786 of X to C, The pattern is INVALID.
Because of the strict requirements for the CYPHER PATTERN and other HARMONIC PATTERNS, they do not occur as often as other chart patterns.
TO BE CLEAR, THIS IS A POSITION "NEUTRAL" CHART. IT IS AN ANALYSIS & TUTORIAL. ETHERIUM WOULD HAVE TO DROP TO $2230 FOR THIS IDEA TO BECOME VALID.
Just sharing some interesting things I've learned and can make use of. Hope you guys like this and find it interesting. If so check out my other Ideas. I'll leave my most recent BTCUSD chart link below.
Please LIKE, FOLLOW, SHARE, and COMMENT if you wish. Sometimes I'm busy but I do respond mostly.
*** THIS IS NOT INVESTMENT ADVICE This is just an idea and based off of my research and experience learning and trading cryptocurrencies. Always do your own research before trading or investing***
Harmonic patterns involve more than just geometric shapes. They also follow strict "rules" measured by FIBONACCI LEVELS
There are several types of harmonic patterns including Gartley, Butterfly, Bat, Cypher, 3 Drives, Crab, and more.
This particular pattern is called the CYPHER PATTERN It is a REVERSAL PATTERN and usually occurs near strong trend reversals.
It's said that CYPHER PATTERNS have a higher success rate than any other HARMONIC PATTERNS but are rarely found on the charts.
The CYPHER PATTERN can be bullish, or bearish. The pattern in this chart is considered a bullish pattern. The buy order should be at point "D" with a stop loss below point "X"
As I mentioned above, There are "rules" (requirements) that need to be met in order for the CYPHER PATTERN to be considered VALID.
X-A > Line X-A is an IMPULSE LEG
A-B > Line A-B is a RETRACEMENT of line X-A. It MUST retrace to 0.382-0.618 (candle close)
B-C > Line B-C is another leg up. "C" MUST end up between the 1.272-1.414 FIBONACCI EXTENSION LEVEL of impulse leg (LINE X-A)
C-D > Line C-D is a RETRACEMENT of X to C. Line C-D MUST touch the 0.786 RETRACEMENT LEVEL
The chart shows a possible CYPHER PATTERN trade setup. Lines X-A, A-B, and B-C are all VALID, therefore IF line C-D touches the 0.786 RETRACEMENT OF X to C, we should have a high risk/reward trade setup.
For this to be considered a VALID HARMONIC PATTERN, all of the "rules" above MUST be met.
So far, the first 3 rules have been met. The only thing that is required now is for ETH to retrace to the 0.786 of X-C which is between $2200 - $2300
If the pattern CONFIRMS to be VALID, the TARGET is set at the 0.382 RETRACEMENT of X to C which is approximately $3700 (A potential gain of around $1500) Stop loss order just below "X" ($1690)
If ETH does NOT retrace to the 0.786 of X to C, The pattern is INVALID.
Because of the strict requirements for the CYPHER PATTERN and other HARMONIC PATTERNS, they do not occur as often as other chart patterns.
TO BE CLEAR, THIS IS A POSITION "NEUTRAL" CHART. IT IS AN ANALYSIS & TUTORIAL. ETHERIUM WOULD HAVE TO DROP TO $2230 FOR THIS IDEA TO BECOME VALID.
Just sharing some interesting things I've learned and can make use of. Hope you guys like this and find it interesting. If so check out my other Ideas. I'll leave my most recent BTCUSD chart link below.
Please LIKE, FOLLOW, SHARE, and COMMENT if you wish. Sometimes I'm busy but I do respond mostly.
*** THIS IS NOT INVESTMENT ADVICE This is just an idea and based off of my research and experience learning and trading cryptocurrencies. Always do your own research before trading or investing***
Comment:
Look how nicely ETH followed the CIPHER pattern and even entered the green BUY square before bouncing. Nobody likes BEARISH T.A. but these harmonic patterns seem to work well. When I made this chart, ETH was just under 4K and I was basically telling people that ETH was going to drop 35%. If you listened, CONGRATULATIONS!
Comment:
WOW! Sometimes I even amaze myself. The way the "sell" , "buy" , and "sell" targets played out here is AMAZING!
