Crab and Deep Crab harmonic pattern
How to trade when you see the pattern?
Trading a bearish Crab pattern
To trade a bearish crab pattern, put a short (sell) order at point D (the 161.8 percent Fibonacci extension of the XA leg).
Entry: Identify where the pattern will end at point D, and place your order
Stop-Loss: Put your stop-loss just below point D
Take Profit: The location of your profit target is highly subjective and depends on your objectives and market conditions. If you desire aggressive profit, place it at point A of the pattern. For a more conservative profit, place it at point B.
Trading a bullish Crab pattern
First of all, choose the crab pattern charting tool and follow all the above rules to identify the pattern. Remember that the Fibonacci ratios are very important to trade the crab pattern. If you notice the pattern on a price chart and if you find the ratios not matching with the pattern rules, it means that the pattern is not valid. So do not trade that pattern.
When the price action confirms the pattern, immediately enter for a buy. If you are a conservative trader, ensure you wait for a couple of bullish confirmation candles before entering the trade.
There are four targets (X, B, C, A) to place the take-profit order in the crab pattern. At the start, traders try to book full profit at point A, but when the price crosses point B, the market turns sideways. So book half of your profit at point B and then close your full positions at point A.
Most of the traders placing their stop-loss way below point D; however, that’s a wrong way to do it because they are risking more due to this simple logic. If the price action breaks point D, it automatically invalidates the pattern.
Trading a bearish Crab pattern
To trade a bearish crab pattern, put a short (sell) order at point D (the 161.8 percent Fibonacci extension of the XA leg).
Entry: Identify where the pattern will end at point D, and place your order
Stop-Loss: Put your stop-loss just below point D
Take Profit: The location of your profit target is highly subjective and depends on your objectives and market conditions. If you desire aggressive profit, place it at point A of the pattern. For a more conservative profit, place it at point B.
Trading a bullish Crab pattern
First of all, choose the crab pattern charting tool and follow all the above rules to identify the pattern. Remember that the Fibonacci ratios are very important to trade the crab pattern. If you notice the pattern on a price chart and if you find the ratios not matching with the pattern rules, it means that the pattern is not valid. So do not trade that pattern.
When the price action confirms the pattern, immediately enter for a buy. If you are a conservative trader, ensure you wait for a couple of bullish confirmation candles before entering the trade.
There are four targets (X, B, C, A) to place the take-profit order in the crab pattern. At the start, traders try to book full profit at point A, but when the price crosses point B, the market turns sideways. So book half of your profit at point B and then close your full positions at point A.
Most of the traders placing their stop-loss way below point D; however, that’s a wrong way to do it because they are risking more due to this simple logic. If the price action breaks point D, it automatically invalidates the pattern.
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