My last post-learning about patterns got a very lively response. I realized that this topic is interesting to you. In the messages, I was also asked to talk about the "Harmonic Patterns" or, in other words, the Gartley patterns, which got their name thanks to the first who discovered them on the charts - Harold Gartley. What do you need to know about these patterns?
A) They consist of 5 points - X, A, B, C, D. In a bullish scenario, point X is the lowest, in a bearish scenario, it is the highest B) harmonious patterns are based on the ratios of Fibonacci levels. The most important ratios are 0.382; 0.618; 0.5; 0.786; 1.127; 1.618; 2; 2.618. The closer the pattern is to the ideal aspect ratio, the more accurately it predicts price behavior. C) patterns can be found on any available TF and on the chart of any underlying asset.
1. AB = CD This is the basic pattern found in all other patterns. The main condition for its formation: the CD segment is equal to the AB segment - that is, the price ratios are equivalent (expressed through Fibonacci). • Value of the correction level BC - 0.618, • The value of the CD line is 1.272.
2. Gartley butterfly Reversal pattern that gives the best result on the higher (from H1) TFs. In this case, the following ratios of quantities must be observed: • AB - segment 0.786 from XA • BC - from 0.322 to 0.866 AB • CD - from 1.1618 to 2.24 AB / 0.382 from BC The CL for this pattern is determined by entry point D.
3. Bat Also formed by another harmonious AB = CD pattern. However, in this case, it requires little recalculation due to expansion. And this is the first thing to pay attention to: CD - 1.27 from AB. Otherwise, the ratios of quantities are determined as follows: • AB - segment 0.382 / 0.5 from XA • BC - from 0.382 to 0.886 XA; • CD - at the level of 0.886 from XA.
4. Crab The location of the values on the chart is as follows: in a "bullish" chart, the maximum is point A, the minimum is point D. In a bearish chart, the opposite is true. • AB - from 0.382 to 0.618 from XA • BC - from 0.382 to 0.618 from AB • CD - 2.24 to 3.618 from BC
5. Shark The aspect ratios are as follows: • AB - from 1.13 to 1.618 from OX • BC - from 1.618 to 2.24 from AB • CD - from 0.866 to 1.13 segments from O to B.
Please share with me if you use harmonic patterns in your trading? Which ones do you use, what results do they bring?
In shark patternn AB is a ratio of XA, not OX. Harmonic patterns always use previous adjuscent leg as reference. That's why Scott Carney says that Cypher is not harmonic - Cypher breaks this very rule
Alexander_Nikitin
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@Alexander_Nikitin,
There's a mistypo in Bats. BC should be referenced to AB, not XA.
There's no such pattern as "gartley butterfly". There's either a gartley pattern or a butterfly pattern
For a gartley pattern a primary completion of the CD is 0.786XA
GoldenEngine
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Great Content and nice Vision - Keep it up
keanzoe
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if you using this method, there's no guarantee it will work very well. but if you figure out how they work, it will work very well.. it's holy grail