The Alternate Bullish Pattern-How to Identify it on The Chart

Today  we shall be identifying the Alternate Bat Pattern and promised in my last post. This pattern formation occurs frequently on the financial market…The alternate bat pattern is no different from the bat pattern formation.To make it clearer the Harmonic Bat Pattern is the precursor of the alternate bat pattern.

The Alternate Bullish Pattern:

This pattern as illustrated in the image below is more like an M-type formation that makes use of the 113% XA extension of the Fibonacci tool, as the defining support level in the Potential Reversal Zone{PRZ}.And the BC projection use an extreme harmonic ratio that is at least a 200% extension but more often appears as a 261.8% or 361.8%.

In the above image the 88.6% retracement is the minimum support level to help us define the completion of the Alternate Bat Pattern, while the meeting of the 113% extension of  XA leg and the extreme BC projections highlights the Potential Reversal Zone{PRZ}. And most importantly the 113% XA extension should not be exceeded, price can pierce it or in some cases a candle can close below it, but the next candle must close above it that way it is a still valid set-up.

You might want to read my post on A Cheat Sheet or a Quick Guide In Identifying Harmonic Patterns Easily 

   EurJpy:15Minute Alternate Bullish Bat Pattern:

In this example trade set-up below, the EurJpy possessed a distinct M-type structure that possessed a 50% mid-point(B) and the 113% extension of XA leg. The alignment established the structure as an Ideal Alternate Bat pattern instead of the standard version(Bat Pattern).

The structure took well over 20 hours to develop on the 15min. chart. The 113% extension marked the critical low of the bearish market. The convergence of the 113% XA leg and the 200% BC projection pinpointed the support level.we can see how price rallied after testing the potential reversal zone.

The Alternate Bearish Pattern:

This pattern as illustrated in the image below is more like a W-type formation that makes use of the 113% XA extension of the Fibonacci tool, as the defining support level in the Potential Reversal Zone{PRZ}.And the BC projection use an extreme harmonic ratio that is at least a 200% extension but more often appears as a 261.8% or 361.8%.

In the above image the 88.6% retracement is the minimum support level to help us define the completion of the Alternate Bat Pattern, while the meeting of the 113% extension of  XA leg and the extreme BC projections highlights the Potential Reversal Zone{PRZ}. And most importantly the 113% XA extension should not be exceeded, price can pierce it or in some cases a candle can close above it, but the next candle must close below it that way it is a still valid set-up.

UsdJpy:5Minute Alternate Bearish Bat Pattern:

In this example trade set-up below, the EurJpy possessed a distinct W-type structure that possessed a 50% mid-point(B) and the 113% extension of XA leg. The alignment established the structure as an Ideal Alternate Bat pattern instead of the standard version(Bat Pattern).

The structure took well over 4 hours to develop on the 5min. chart. The 113% extension marked the critical low of the bullish market. The convergence of the 113% XA leg and the 314% BC projection pinpointed the support level. We can see how price declined after testing the potential reversal zone.

The patterns identification continues on my next post..Use the comment box below to express yourself!