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The similarity between harmonic and simple chart patterns is that for each of them the form and structure are key factors to recognize and confirm a particular pattern. The next price movement can thus be predicted, with the aim of converting these patterns into profits. One major difference, however, is that harmonic patterns are defined more precisely. These are 5-point inverse structures that contain combinations of well-defined, consecutive Fibonacci retracements and fibonacci extensions, leaving less room for flexible interpretations.

Harmonic patterns keep repeating itself, especially when consolidating markets. There are basically 2 types of patterns: 5 point retracement structures like the Gartley and the Bat and 5 point expansion patterns like the Butterfly and the Crab. Trading in harmonic patterns requires patience, because due to the accuracy of the relationships, patterns that appear harmonious may not be harmonious if they do not match the correct measurements.

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