Harmonic Pattern

Trading Tips
 Gartley
Pattern

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 Gartley
Pattern
How to trade Gartley pattern:
• Look for a trend - bullish or bearish channel
• Inside the trend do not look at the beginning of a channel, but after the channel has formed with few touching points
on the upper or lower channel line
• Gartley pattern is used to trade tests of highs and lows in the direction of a trend

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 Gartley
Pattern
When not to trade Gartley pattern
• If it is not in the channel
• If it is the first in the channel – wait until the channel forms with few touches on the upper or the lower side of the
channel
• This way you are protecting yourself from false start of a channel which could lead to false start of a trend
• Do not trade bullish Gartley in bearish channel
• Always trade bearish Gartley in bearish channel and bullish Gartley in bullish channel

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 Gartley
Pattern
Pattern failure
• The pattern has failed if it goes through PRZ which is Potential Reversal Zone
• That means the price has gone through support/resistance level which is X point on the chart
• Failure of one pattern is an opportunity for another pattern to develop
Take Profit 3
161.8%

A Take Profit 2
38.2%
C Take Profit 1

61.8%

B
Buy
D Potential Reversal Zone
X Stop Loss Below
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 Butterfly
Pattern

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 Butterfly
Pattern
How to trade Butterfly pattern:
• place your sell order at point D (the 127% Fibonacci extension of the X-A leg)
• position your stop loss just above/below the 161.8% extension of the X-A leg and
• place your profit target at either point A (aggressive) or point B (conservative)

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 Crab
Pattern

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 Crab
Pattern
How to trade Crab pattern:
• place your order at point D (the 161.8% Fibonacci extension of the X-A leg)
• position your stop loss just above/below point D and
• place your profit target at either point A (aggressive) or point B (conservative)

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 Bat
Pattern

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 Bat
Pattern
How to trade Bat pattern:
• Enter with a limit order to buy/sell at the 88% retracement of the X-A leg
• Stop loss to be placed just below/above the swing low at point X
• Exit using a scale out approach, with three target points

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 Cypher
Pattern

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 Cypher
Pattern
How to trade Cypher pattern:
• When the C-D leg gets to the 78.6 percent retracement level, the cypher pattern
is complete and valid. However, the 78.6 percent Fibonacci retracement level of
X to C also acts as the standard entry point for a valid cypher pattern trade
• place the stop-loss at least 10 pips lower than the low of X
• For a bearish pattern, place the stop-loss at least 10 pips higher than the high of
X

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 Shark
Pattern

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 Shark
Pattern
How to trade Shark pattern:
• Enter a limit order to buy as price approaches the swing low at point O(X)
• Place a stop loss at the 127% extension of the O-X leg
• We will use a target with the initial target set just below point A of the pattern
• The second target will be set just below point B of the pattern

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 XABCD
Pattern

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 XABCD
Pattern
How to trade XABCD pattern:
• XABCD harmonic pattern falls into the category of the retracement patterns
• all having a D point that does not go beyond the X point of a pattern
• They will have a D point (where a price reversal is preferred) close to the B point
• Different retracement XABCD harmonic patterns can be used in ranges or
channels, so, you have to be sure to know which one to apply in which situation

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 ABCD
Pattern

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 ABCD
Pattern
How to trade ABCD pattern:
• Find A-B leg
• If there is A-B leg, then find B-C leg
• If there is B-C leg then draw C-D leg
• Look for Fibonacci ratios, pattern, trend convergence
• Watch for price gaps and/or wide-ranging bars/candles in the CD leg, especially
as market approaches point D

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 123
Pattern

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 123
Pattern
How to trade 123 pattern:
• look for point 1, which is essentially the highest point of a trend
• mark the point number 2. When the market pulls back to the recent support or
resistance area after reacting from point 1
• The formation of the 123 pattern is complete after identifying the third point.
When the market moves in the area between points 1 and 2 and later comes
goes back to point 1, the point from where the market reversed becomes our
point 3
• take an entry on a break of point 2, and as the market starts moving in that
direction
• The stop loss is placed a little higher than point 3

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 5-0
Pattern

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 123
Pattern
How to trade 5-0 pattern:
• Look for uptrend or downtrend because that is the first step in trading 5-0
pattern
• That means in the uptrend you need to look for a bearish 5-0 pattern
• In the downtrend you need to look for a bullish 5-0 pattern to have a high chance
of success
• When you find the 5-0 pattern which is drawn by the 5-0 pattern rules you can
look for D point as an entry point
• If you have bullish 5-0 pattern you can set stop loss below D point because the
price should move down
• In the case of bearish 5-0 pattern you can set stop loss above D point
• Profit target is not simply defined by you can look for the first target at the C
point. Because the pattern suggests the previous trend ends, this means you are
targeting a new trend

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Three Drives
Pattern

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 Three Drives
Pattern
How to trade Three Drives pattern:
• Here are the ways how you can enter into the trade:
• Set a pending sell or buy order at the last 127.2 percent level which is extension
of B-3 leg
• The stop-loss can be set few pips below or above the current swing low or high
• Take profit can be set on the B point which will be the first resistance for the
price on the trend reversal
• Having the trade in profit and reaching the B point it would be a good idea to
move stop loss to break even just in case the market decides to return in the
previous trend direction

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