Harmonic price patterns enable us to distinguish possible areas for a continuation of the overall trend.
There are six harmonic price patterns:
- The ABCD Pattern
- The Three-Drive Pattern
- The Gartley Pattern
- The Crab Pattern
- The Bat Pattern
- The Butterfly Pattern
The three basic steps in spotting harmonic price patterns are the following
- Step 1: Locate a potential harmonic price pattern
- Step 2: Measure the potential harmonic price pattern
- Step 3: Buy or sell on the completion of the harmonic price pattern
Again, harmonic price patterns are so perfect that they are very difficult to spot.
More than knowing the steps, you need to have hawk-like eyes to spot potential harmonic price patterns and a lot of patience to avoid jumping the gun and entering before the pattern is completed.
With enough practice and experience, trading using harmonic price patterns can yield a lot of pips!