Shark Rules and conditions The main differentiating factor between the Harmonic Shark and other patterns is that it relies on the 88.6% and the 113% reciprocal ratios. Once the price point at D is formed, prices rally or decline very swiftly and therefore it requires active management of the trade. In other words, you simply cannot set up the harmonic shark pattern and come back a while later to trade it as by that time price would have moved a significant distance.
The Shark pattern has the following ratios.
BC leg extends XA leg between 113% – 161.8% CD leg extends beyond X by 113% of the XA leg CD leg is also an extension of XA by 161.8% – 224% Unlike other harmonic patterns, the trades are entered as follows:
Entry is at 88.6% of XA leg with stops coming in at point D Targets can be 61.8% of CD