Harmonic price patterns enable us to distinguish possible areas for a continuation of the overall trend.
Sic Harmonic Price Patterns
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
3-Step Price Pattern Recognition Process
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
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!