The elements of trading the pattern
The pattern starts (with 0) at the beginning of a long price move
After 0 has formed, an impulse reversal at X, A, and B should have a 113 to 161.8 percent extension
The projection off of AB has a 161.8 percent extension requirement to C. C can extend beyond the 161.8 percent extension but not beyond 224 percent.
How to Trade the Bat Pattern
The bat pattern market strategy like any other harmonic pattern is a four-leg reversal pattern that follows specific Fibonacci ratios. A proper Bat pattern needs to fulfill the following three Fibonacci rules:
AB= minimum 38.2% and maximum 50% Fibonacci retracement of XA leg;
BC= minimum 38.2% and maximum 88.6% Fibonacci...
How to Trade the Shark Harmonic Pattern
The Shark trading strategy like any other harmonic pattern is a five-leg reversal pattern that follows specific Fibonacci ratios.
The harmonic Shark pattern differentiates itself from the other harmonic patterns by its five points setup being labeled as O, X, A, B, C. Also the termination point of leg B ends above wave X...
Anatomy of a Dragon Pattern
A. Head of the Dragon
B. Formation of first leg
C. Hump (must be 0.38 to 0.5 of AB)
D. Second leg (can be 0.618 to 1.27 of AB)
E. Trend line breakout (Long Trigger)
F. First target at 1.27 of CD
G. Second target at 0.886 to 1.0 of BC
H. Third target at 1.38 of AB
I. STOP: Place a stop few ticks below
the lowest low of two legs.
Cypher Pattern – Rules
The Cypher pattern starts with a market price that establishes the X and A points. Once this leg is determined, the pattern evolves.
Point B retraces to 0.382 – 0.618 Fibonacci level of the leg XA
Point C is formed when prices extend the XA leg by at least 1.272 or within 1.130 – 1.414 Fibonacci extension level
Point D is...
The first 3 condition are met to form a pattern,
Now to form a CD leg these conditions have to meet to name a pattern.
Bat = 88.6% of XA leg
Crab = 1.618% Ext of XA
to confirm this price has to drop below Point B
The Bat /Crab is void if price cross Point A
Other scenario If Point A crosses Point C will be marked at 1.272-1.414 ext of AB