Harmonic Patterns are price patterns based on Fibonacci ratios, pioneered by H.M. Gartley and further developed by Scott Carney and others. Harmonic patterns identify high-probability reversal points through precise Fibonacci ratios, providing exact entry, stop loss, and target levels.
Major Harmonic Patterns: Gartley Pattern: AB = 61.8% XA BC = 38.2-88.6% AB CD = 127.2-161.8% BC AD = 78.6% XA Butterfly Pattern: AB = 78.6% XA BC = 38.2-88.6% AB CD = 161.8-224% BC AD = 127.2-161.8% XA Bat Pattern: AB = 38.2-50% XA BC = 38.2-88.6% AB CD = 161.8-261.8% BC AD = 88.6% XA Crab Pattern: AB = 38.2-61.8% XA BC = 38.2-88.6% AB CD = 224-361.8% BC AD = 161.8% XA
Gartley Pattern: Most classic harmonic pattern
Butterfly Pattern: AD exceeds XA
Bat Pattern: More compact pattern
Crab Pattern: Deepest retracement pattern
Shark Pattern: Unique 0-O structure
Cypher Pattern: Newer harmonic pattern
5-0 Pattern: Based on 50% retracement
3-Drive Pattern: Three-push structure
PRZ (Potential Reversal Zone): Point D complete, optimal entry
Bullish Harmonic: Buy at Point D, expect price rise
Bearish Harmonic: Sell at Point D, expect price decline
Stop Loss: Certain distance beyond Point D
Target 1: 38.2% AD retracement
Target 2: 61.8% AD retracement
Target 3: 100% AD retracement (back to Point A)
Pattern Failure: Price breaks beyond Point D, pattern invalid
Harmonic patterns provide one of most precise trading setups, with clearly defined entry, stop loss, and targets. PRZ (Potential Reversal Zone) is area near Point D, optimal entry point. Harmonic patterns have relatively high success rate but require precise measurement and identification. Many traders use specialized software to automatically identify harmonic patterns. Harmonic patterns can be used across all markets and timeframes, but more reliable on larger timeframes. Harmonic patterns work better when combined with other technical tools (like support/resistance, trendlines).
Provides precise entry and exit points, high-probability reversal signals, clear risk-reward ratio, based on objective Fibonacci ratios, applicable to all markets
Identification requires experience and specialized software, patterns occur infrequently, measurement must be precise, may have false patterns, requires patience waiting for perfect setup
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