I bet you have traded some chart patterns during your career. Double Tops, Double Bottoms, Head and Shoulders – we all know these. Therefore, I have decided we are going to take our knowledge of chart craft to the next level. I will introduce you to Harmonic Patterns, which are a little more advanced as far as trading patterns go. Although they are harder to spot, it is certainly worth watching out for them, since these patterns can lead to highly profitable trading opportunities when analysed properly! So in this book, I will be teaching you how to implement harmonic pattern trading.
Harmonic chart patterns are considered harmonic because these structures have an integral relationship with the Fibonacci number series. Identified harmonic patterns conform to crucial Fibonacci levels. As you may already know, Fibonacci numbers can be seen all around us in the natural world, and these harmonic ratios are also present within the financial markets.
Harmonic trading in the currency market includes the identification and the analysis of a handful of chart figures. In most of the cases these patterns consist of four price moves, all of them conforming to specific Fibonacci levels. Therefore, a harmonic chart pattern should always be analysed using Fibonacci Retracement and Extensions tools. For the more inclined, there are also harmonic indicators and software programs that will automatically detect various harmonic trading patterns. The most widely traded harmonic patterns include the Gartley pattern, Bat Pattern, Butterfly Pattern, Cypher pattern, the Crab pattern and the AB=CD.
- Publication date:November 8, 2016
- File size:2879 KB
- Print length:33 pages
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- Screen Reader:Supported
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