A Cheat Sheet or a Quick Guide In Identifying Harmonic Patterns

Welcome guys once again, our tutorial today ought to have been identifying the Alternate Bat Pattern and as promised in my last post, but sorry to disappoint you all because, I am going to digress a bit and start with the pattern proper on my next post. 

This pattern formation occurs frequently on the financial market…Before we go into the meat of today’s topic, let me give you guys a cheat sheet or a quick guide that would act like a map in identifying this patterns, using the Fibonacci tool to find certain zones/retracement and extensions that distinguishes one pattern from the other…refer to the image below and try to familiarize yourself with those zones as outlined on the it:

The above image color coded represents zones and possible retracement areas to look out for on your chart as price retraces or pullback…like I explained in my previous post-  Types of Harmonic Patterns and How to Trade Them ,you might want to read it again if you’ve forgotten. 

The B point or AB leg is the most critical point to look for because this point will tell us in advance what potential harmonic pattern formation we should expect, so take note of this…Now a brief explanation of color coded zones:

The Red Zone: When price starts retracing and stalls between the 38% - 50% retracement level, then we should expect a likely Harmonic Bat pattern formation.

The Blue Zone: When price retraces and stops between 50% - 61.8% Fib retracement level, we should anticipate a potential Gartley or Crab Harmonic pattern.

The Pink Zone: When you see price pullback to the zone between the 61.8% - 78.6% level, we should expect a likely Gartley or Butterfly Harmonic pattern.

The Yellow Zone: As price retraces and stalls at the 88.6% level we should expect nothing short of the Deep Crap Harmonic Pattern .

Try and familiarize yourself with those zones, I’ll stop here for now and start with the patterns proper on my next tutorial….Use the comment box below to express yourself  and ask the any question