The Bat Pattern-How to Identify it on the chart

Identifying the Bat Pattern is pretty simple. This pattern formation occurs frequently on the financial market just like the Alternate Bat Pattern.What differentiates the Bat pattern from the alternate bat pattern is the 88.6% retracement of XA leg as it the defined PRZ and the 113% extension of the XA leg that the alternate Bat pattern, other than this every other area remains the same.

The Bearish Bat Pattern:

This pattern as illustrated in the image below is more like an W-type formation that makes use of the 88% XA leg retracement 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 161.8% extension.

In the above image the 88.6% retracement is the minimum resistance level to help us define the completion of the Bat Pattern, while the meeting of the 88.6% retracement of   XA leg and the extreme BC projections of 161.8% highlights the Potential Reversal Zone{PRZ}.

You might want to read my post on The Alternate Bullish Pattern-How to Identify it on The Chart

 AudUsd:5Minute Bearish Bat Pattern:

In this example trade set-up below, the AudUsd possessed a distinct W-type structure that possessed a 50% mid-point(B) and the 88.6% retracement of XA leg. The alignment established the structure as an Ideal Bat pattern.

The structure took well over 3 hours to develop on the 5min. chart. The 113% extension marked the critical low of the bearish market. The convergence of the 88.6% XA leg and the 161.8% BC projection pinpointed the resistance level. We can see how price declined after testing the potential reversal zone.

The Bullish Bat Pattern:

This pattern as illustrated in the image below is more like an M-type formation that makes use of the 88% XA leg retracement 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 161.8% extension.

In the above image the 88.6% retracement is the minimum support level to help us define the completion of the Bat Pattern, while the meeting of the 88.6% retracement of   XA leg and the extreme BC projections of 161.8% highlights the Potential Reversal Zone{PRZ}.

NzdUsd:15Minute Bullish 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 88.6% retracement of XA leg. The alignment established the structure as an Ideal Bat pattern.

The structure took well over 20 hours to develop on the 15min. chart. The 88.6% extension marked the critical low of the bullish market. The convergence of the 88.6% XA leg and the 161.8% BC projection pinpointed the support level. Price did broke the 88.6% level and tested the 113% level before reversing Wish still makes it a valid set-up.

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