- What is Harmonic?
Harmonic trading is the combination of patterns and math into a trading method that is precise and based on the premise that patterns repeat themselves.
At the root of the methodology is the primary ratio, or some derivative of it (0.618 or 1.618). Complementing ratios include: 0.382, 0.50, 1.41, 2.0, 2.24, 2.618, 3.14 and 3.618.
- Types of Harmonics patterns
We have different types of harmonic patterns, but there are four that seem most popular. These are the Gartley, butterfly, bat, and crab patterns.
The Gartley was originally published by H.M. Gartley in his book Profits in the Stock Market and the Fibonacci levels were later added by Scott Carney in his book The Harmonic Trader.
The butterfly pattern is different than the Gartley in that the butterfly has point D extending beyond point X.
The bat pattern is similar to Gartley in appearance, but not in measurement.
The crab is considered by Carney to be one of the most precise of the patterns, providing reversals in extremely close proximity to what the Fibonacci numbers indicate. This pattern is similar to the butterfly, yet different in measurement.
The crab is considered by Carney to be one of the most precise of the patterns, providing reversals in extremely close proximity to what the Fibonacci numbers indicate.
- Harmonic trading is a precise and mathematical way to trade, but it requires patience, practice, and a lot of studies to master the patterns. The basic measurements are just the beginning. Movements that do not align with proper pattern measurements invalidate a pattern and can lead traders astray. The Gartley, butterfly, bat, and crab are the better-known patterns that traders watch for. Entries are made in the potential reversal zone when price confirmation indicates a reversal, and stop losses are placed just below a long entry or above a short entry, or alternatively outside the furthest projection of the pattern.
If you want to learn how to trade Harmonics patterns, Elliot Wave, Pivot Point, candlesticks, Chart Patterns, Spread, and Volume Analysis, Risk Management and so on, call 00233-302906626 or send a mail to firstname.lastname@example.org or email@example.com
By Dede Elorm ADJANKE
Business Development Team Leader
00233-302906626 / 0501471104