might be a good site to check out harmonic patterns.
Most of it is free including the pdf book - a great read.
When you look at the various patterns you'll see
that a Gartley should have the A to B point as close to the .618
as possible and Point D should be @ the .786.
So, as you'll see you have more of a Bat pattern
when the A to B is between the .382 and .50 and being
a Bat pattern point D is placed at the .886 Fib.
Best of luck in and wishing you lots of pips in 2014 !!!!
Anyways, I appreciate both Scott and Larry's work that they help us to find out trade opportunities. Good luck and wishing you lots of pips in 2014 !!!
You probably saw that if you looked over the pages on patterns.
My question is: With so many moving targets for points B, C, D,
how do you know when you have a gartley or a bat pattern, etc.
Or, which retrace to choose and with more than one your odds
go down almost exponentially.
Sounds like "curve fitting" the pattern to the market instead of fitting
the market to the pattern. To me that's a little like buying a pick up truck -
throwing a bench seat in the back and calling it a convertible.
It's an automobile (like it's a pattern) but, it won't perform as you wanted.
Have a good week ~ !
My answer may not be the best way to solve your question but I would like to share it for further discussion.
For me, the first thing handle is time frame, I would have different strategy to deal with larger picture or smaller picture.
For a larger picture, I would wait for a reversal pattern in smaller time frame. Sometimes, I will use Scott PRZ skill, which you can find at his book, that will help if I am not sure about the pattern.
For small picture, my stop is just above X point, which covers bat and gartley, Therefore, I prefer D@78.6% more than 61.8% as risk-reward ratio is larger.
A butterfly or crab, deep crab pattern is difficult to handle as the risk-reward is difficult to identifies, and market looks like expanding. I would use less percentage of money to trade or not to trade.
Shark pattern is difficult to trade also, it is hard to decide 88.6% or 113% would be used. It is better to wait for 5-0.
I do believe good money management skill is a key to success as different pattern would have different risk.
To choose the retracement level, I have my own wave count to ensure the wave development doesn't valid the trend for those reversal pattern. Moreover, If those points from XA, BC and AB=CD doesn’t look that fit for confluence, I prefer not to trade.
Happy trading and please feel free to share your opinion to my idea. Thanks.