What are Harmonic patterns?
Harmonic patterns are new trading opportunities in the form of technical analyses that can help traders to predict the price value that may go next. The harmonic patterns are in the form of a chart pattern, Fibonacci numbers are used to predict the trade reversal. The traders have to identify the best pattern and use them in their next trading decision.
There are various types of chart patterns that are used in trading. Each pattern is used to determine the different types of trades. You should be confident while choosing the pattern style for your trade so that you will always make the best and fastest trade decisions.
Top 7 Harmonic pattern used in modern Trading Opportunities-
The Bat Pattern
The Bat pattern got its name from the Bat-Shaped products. It was introduced by Scott Carney in 2001. This has a 5 point retracement. Measure in the Fibonacci numbers. It is necessary to identify that D is not a point. There is a zone where the price is being reversed that zone is known as the Potential Reversal Zone (PRZ).
It gives the traders the best opportunity to enter the market at the best price. The harmonic bat pattern gives the idea of how to trade in the market and start earning money by using modern technical analysis. the market pattern is also part of the harmonic trading system of the Modern Pattern. There are many harmonic patterns where we will find the bullish version of the bat pattern.
Butterfly harmonic pattern
The Butterfly Harmonic pattern will let you know how you can use it to trade the butterfly trading pattern. This pattern gives you an immediate result and you can start earning profit right away after using this modern technical analysis. Gartley butterfly patterns is also another name for the butterfly trading pattern. This pattern was identified in the book written by Scott Carney on page 222. It is just the same as other Harmonic patterns, which show the reversal trading pattern that can be traded globally.
Gartley harmonic pattern
The Gartley harmonic is just the same as the bat harmonic function only some ratios are different. They provide us with the important properties for calculating the value of the pattern. They offer us a high reward value after trading. Before applying the Gartley trade pattern, you should underline the four price swings in the diagram. You should also check that they should respond to their proper Fibonacci groups.
Crab harmonic pattern
If you are facing a problem earning money in the trade marketing strategy then the crab harmonic pattern will be best and the faster way for you to grab money from the trade market daily. The crab harmonic strategy pattern just comes under the Harmonic trading pattern. It is a unique pattern and has the same price structure just as the butterfly trading pattern. This trading strategy has very sharp and unstable prices. The modern technique and the advance in technology made the trading platforms for traders much easier to identify the crab pattern.
The ABCD pattern
ABCD pattern is like the intraday chart pattern. Each letter in the name comprises of each price movement as A stands for Morning rally to a new high, B stand for Midday pullback and consolidation, C stands for the Higher low and grinds up breaks through the morning high and the last D stand for the rally to a new high of the day. It helps the traders by giving them the framework about where to take risks and then enter the trades.
To start the pattern you should have to make an intraday pattern and also the multiday charts too. A stock that continues to get higher all day is not the ABCD pattern. As it doesn’t have the risk you needed to have. If you don’t have the time to watch the market rates all day then you should set the alerts. Be ready to take the proper risks. You should immediately sell the product if it looks like the stock might reverse.
The deep crab pattern
This pattern is a mixture of both the bat trading pattern and the crab trading pattern. It is the variation of the crab pattern. It is a reversal pattern that follows strict Fibonacci ratios. Helps to determine when the current price is likely getting to end just like we see in the butterfly trading pattern. Represent the important overbought and oversold conditions. It is the quickest and the most profitable way to grab more profit out of all the harmonic trading patterns.
The shark pattern
The shark harmonic pattern is the newly identified pattern in the trading market. It has the basic appearances and has the specific Fibonacci relationship. It was identified by Scott Carney who did detail research on the Fibonacci-based harmonic pattern including three more Harmonic patterns like Bat, crab, and the Gartley patterns.
In this, the price makes a move from upside to a sharp price decline. We should be cautious when trading the shark harmonic pattern and also keep in mind that only trade the best price structure that gets fit in the Fibonacci ratio. This pattern works very well as well as has a strong strategy. It requires immediate price reversal with the chart pattern completion which makes it learn pretty faster.
So these are the complex pattern that occurs in the financial charts measured by using Fibonacci levels on the geometric price action. Harold Mckinley Gartley in 1932 introduce these patterns in the trading world. The book named ‘ Profit in the stock market’ written by Gartley created these patterns. These types of patterns identify traders to enter the stock market by grabbing higher profits with minimal risks. If we see the success rates of the harmonic pattern that reaches 80% in some cases it crosses even 90%. It is important to take the right decision for using the harmonic pattern for trading.