Harmonic Forex Trading
The advantage of Harmonic Pattern is that we can place a position order perfectly. However, it is not easy to find those patterns.
As you might expect, that the advantage of the Harmonic Pattern is that we can place a position order “perfectly”. But in reality Harmonic pattern is not so easy, where you must know and understand first about the basic steps of the harmonic pattern. While the basic steps of the pattern are as follows:
- Discover in advance the potential of the Harmonic Pattern.
- Measure the potential of the Harmonic Pattern.
- Then place the order of Buy or Sell position at the end of harmonic pattern.
With you following these three basic steps, you can find a high probability that can help you generate a lot of pips. let’s look at the picture below:
Step 1 in finding the Harmonic Pattern
From the picture above, where it looks like a harmonic pattern. At one time, we were not really sure of the kind of patterns that existed. Where it looks like a three drive, but it could just be Bat or Crab. it can even be a mouse / mouse. In any case, let’s label the reversal points.
step 2, Measuring the potential of the harmonic pattern Using the Fibonacci calculation to measure the potential.
- In this pattern the length of BC is 0.618 retracement of AB.
- CD length of 1.272 BC extension.
- The length of AB is approximately equal to the length of the CD.
In this pattern qualifies for the bullish ABCD pattern, which is a very strong buy signal.
Step 3 Determining the Position of Buy and Sell orders
If after the pattern is complete, then all you have to do is place the buy order position for the chart as seen above. In this case, you have to open a buy position at point D, which is an extension of the 1.272 Fibonacci level from the CB, and put your stop loss at a few pips below the price of your entry.
What do you think, is this harmonic pattern really easy to use? In this case, you do not have to be exactly like that. because the problem with the harmonic pattern is that they are so perfect that they are so hard to find.
More than knowing the steps, you must have eyes like a hawk, to know the potential of the harmonic pattern and it takes a lot of patience in avoiding the wrong pattern. To know more clearly, you can refer to two articles on ABCD and Three Drive patterns, as well as Gartley patterns.