I bet you have traded some chart patterns during your trading career. Therefore, today we are going to take our knowledge of chart stop suiveur forex to the next level.
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. 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 analyzed using Fibonacci Retracement and Extensions tools. For the more inclined, there are also several 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, and the Crab pattern. The Gartley pattern was introduced by H. M Gartley in his book, Profits in the Stock Market, The Gartley pattern is sometimes referred to as Gartley 222, and because 222 is the exact page in the book where the Gartley pattern is revealed. So the Gartley pattern is the oldest recognized harmonic pattern and all the other harmonic patterns are a modification of the Gartley pattern. XA: This could be any move on the chart and there are no specific requirements for this move in order to be part of a harmonic pattern. AB: This move is opposite to the XA move and it should be about 61. BC: This price move should be opposite to the AB move and it should be 38.
CD: The last price move is opposite to BC and it should be 127. BC move if BC is 38. AB, then CD should be 161. AD: The overall price move between A and D should be 78. The black lines on the image above show the four price moves of the chart patterns. The blue lines and the percentage values show the retracement relation between each of these levels.