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Understanding Bearish and Bullish Bat Harmonic Patterns Understanding Bearish and Bullish Bat Harmonic Patterns: A Professional Guide for Traders In the dynamic world of trading, identifying potential reversal points is crucial for making informed decisions. Two powerful tools that professional traders often rely on are the Bearish and Bullish Bat Harmonic Patterns. These patterns, grounded in Fibonacci ratios, offer insights into market behavior and help in predicting price movements. This article delves into the intricacies of these patterns, providing a comprehensive guide for traders. __________________The Bearish Bat Harmonic Pattern_________________________ The Bearish Bat Harmonic Pattern is a reversal pattern that indicates a potential decline in price after an upward correction. Here's how to identify and interpret this pattern: X-A Leg: The initial move where the price falls from point X to point A. A-B Leg: The price then retraces upwards from point A to point B, typically reaching 38.2% to 50% of the X-A leg. B-C Leg: The price falls again from point B to point C, retracing 38.2% to 88.6% of the A-B leg. C-D Leg: The final leg sees the price rise from point C to point D. Point D is the critical point, expected at the 88.6% retracement level of the X-A leg and coinciding with the 161.8% extension of the B-C leg. Key Fibonacci Ratios: A-B: 38.2% to 50% retracement of X-A B-C: 38.2% to 88.6% retracement of A-B C-D: 88.6% retracement of X-A and 161.8% extension of B-C Trading Strategy: Traders should look for selling opportunities around point D, anticipating a downward move following the completion of the pattern. Entry, Stop-Loss (SL), and Take-Profit (TP) Criteria: Entry: Enter a short position at or near point D. Stop-Loss (SL): Place the stop-loss slightly above point X to account for any potential false breakouts. Take-Profit (TP): Set the first TP at the 61.8% retracement of the C-D leg and the second TP at the 100% retracement of the C-D leg. _________________________The Bullish Bat Harmonic Pattern_____________________ Conversely, the Bullish Bat Harmonic Pattern signals a potential rise in price after a downward correction. Here are the steps to identify and utilize this pattern: X-A Leg: The initial move where the price rises from point X to point A. A-B Leg: The price then retraces downwards from point A to point B, typically reaching 38.2% to 50% of the X-A leg. B-C Leg: The price rises again from point B to point C, retracing 38.2% to 88.6% of the A-B leg. C-D Leg: The final leg sees the price fall from point C to point D. Point D is the critical point, expected at the 88.6% retracement level of the X-A leg and coinciding with the 161.8% extension of the B-C leg. Key Fibonacci Ratios: A-B: 38.2% to 50% retracement of X-A B-C: 38.2% to 88.6% retracement of A-B C-D: 88.6% retracement of X-A and 161.8% extension of B-C Trading Strategy: Traders should look for buying opportunities around point D, anticipating an upward move following the completion of the pattern. Entry, Stop-Loss (SL), and Take-Profit (TP) Criteria: Entry: Enter a long position at or near point D. Stop-Loss (SL): Place the stop-loss slightly below point X to account for any potential false breakouts. Take-Profit (TP): Set the first TP at the 61.8% retracement of the C-D leg and the second TP at the 100% retracement of the C-D leg. ______________________Practical Application and Tips_______________________ To effectively utilize these patterns, traders should: Use Confirmation Indicators: Always combine harmonic patterns with other technical indicators, such as RSI or MACD, to confirm potential reversal points. Practice Patience: Wait for the pattern to fully develop and reach point D before taking action. Risk Management: Implement strict risk management strategies, including stop-loss orders, to protect against potential false signals. Conclusion: The Bearish and Bullish Bat Harmonic Patterns are powerful tools in a trader's arsenal, providing a structured approach to identifying potential market reversals. By understanding and applying these patterns, traders can enhance their decision-making process and improve their trading performance. Remember, like all technical analysis tools, these patterns are most effective when used in conjunction with other indicators and sound risk management practices. Happy trading!
Editors' picks
BINANCE:ADAUSDEducation
by trading_jupiter
9
Harmonic Bat Pattern for traders can apply on any time frameThe Bat is defined by the .886 retracement of move XA as Potential Reversal Zone. The Bat pattern has the following qualities: Move AB should be the .382 or .500 retracement of move XA. Move BC can be either .382 or .886 retracement of move AB. If the retracement of move BC is .382 of move AB, then CD should be 1.618 extension of move BC. Consequently, if move BC is .886 of move AB, then CD should be 2.618 extension of move BC. CD should be .886 retracement of move XA.
Education
by BasharatAliMaher
4
Bat Harmonic Pattern - Made Easy For Everyone !The BAT pattern gets its name from the bat-shaped end product. Identified by Scott Carney in 2001, the BAT pattern is made up of precise elements that identify PRZs. The bat harmonic pattern follows different Fibonacci ratios. One of the major ways to differentiate it from a Cypher pattern is the B point which, if it doesn’t go above the 50 percent Fibonacci retracement of the XA leg then it is a bat, otherwise it can turn into a cypher structure. The market strategy of the pattern is suitable for all time frames and all markets types. Traders have to keep in mind that on lower time frames using the bat pattern market strategy has some challenges because the pattern tends to appear on less frequent on lower time frames. How to Draw a Bat Pattern : As mentioned earlier, the bat harmonic pattern looks very similar to the Gartley pattern . It has four different legs marked as X-A, A-B, B-C, and C-D. X-A: In its bullish version, the first leg appears when the price sharply increases from point X to point A. This is the longest leg of the pattern. A-B: The A-B leg then sees the price switching direction and retracing 38.2 to 50 percent using the Fibonacci retracement of the distance covered by the X-A leg. Have it in mind that the A-B leg can never retrace beyond point X. But if it does, the pattern is considered invalid. As you can see, if the price with a spike reaches a point under 50% but with the body above, this will be Valid. The candle Body's important. B-C: Here, the price changes direction for a second time and moves back up, retracing anything from 38.2 to 88.6 percent of the distance covered by the A-B leg. If it retraces up above the high of point A, the pattern is considered invalid.As you can see, if the price with a spike reaches a point above 88.6% but with the body is below, this will be Valid. The candle Body's important. C-D: This is the last and most significant aspect of the pattern. As with the Gartley pattern , this is where the bat harmonic pattern ends and traders place their long (buy) trade at point D. ( PRZ Potential Reversal Zone ) The 88.6% percent retracement of the X-A leg is our Entry Point. D POINT or PRZ Before trying and trading the pattern, confirm from this checklist that the pattern is real. It should include these vital elements: A-B : 38.2 to 50% max percent using the Fibonacci retracement B-C : An 38.2 to 88.6% max percent Fibonacci retracement of the X-A leg C-D : The 88.6% percent retracement of the X-A Market strategy: Step 1: Drawing the pattern Begin by clicking on the XABCD pattern indicator that is found on the right-hand side toolbar of Tradingview Identify the beginning point X, which can be any swing high or low point on the chart. You should get 4 points or 4 swings high/low points that join and form the harmonic bat pattern strategy as explained Above Step 2: Trading the pattern The 88.6 percent Fibonacci ratio provides traders a more reliable risk/reward ratio which is why the market strategy of the bat pattern is such a very popular as a market strategy. The best entry point is the 88.6 percent Fibonacci retracement which is a very accurate market turning point. It is recommended that traders should enter as soon as they touch the 88.6 percent figure. Oftentimes the harmonic bat pattern strategy doesn’t go much above this level. Step 3: Placing a stop-loss Usually, traders should place their protective stop-loss lower than the point X of a harmonic bat pattern . That is the only logical location to hide the stop-loss because any break below will automatically invalidate the pattern.We use as manual the 113% Fibo of X-A as a picture below. Step 4: Take-profits There can be several ways to manage your trades, but the best target for this pattern should be to use a multiple-take profit formula. For this pattern strategy, take the first partial profit once you hit wave-B level and the remaining half wave-C. Once the price reaches the first target you should move the Stop Loss at BE ( breakeven - entry point ) or close the position in profit. By doing this you will accomplish two things: first, you’ll ensure that you accumulate profits and secondly, if the markets reverse, you ensure you’re stopped at BE and don’t lose any money. There are many ways to calculate the Take profits Target, this is one of the most used and we suggest starting in this way. Identical rules to draw and set parameters like stop loss and take profits are for the Bearish version. Nothing changed. Please note this is an introduction to the BAT pattern , for beginners. I tried to make it more easy and simple as I can.
Education
by FOREXN1
24
Bat Harmonic Pattern - Made Easy For EveryoneThe BAT pattern gets its name from the bat-shaped end product. Identified by Scott Carney in 2001, the BAT pattern is made up of precise elements that identify PRZs. The bat harmonic pattern follows different Fibonacci ratios. One of the major ways to differentiate it from a Cypher pattern is the B point which, if it doesn’t go above the 50 percent Fibonacci retracement of the XA leg then it is a bat, otherwise it can turn into a cypher structure. The market strategy of the pattern is suitable for all time frames and all markets types. Traders have to keep in mind that on lower time frames using the bat pattern market strategy has some challenges because the pattern tends to appear on less frequent on lower time frames. How to Draw a Bat Pattern : As mentioned earlier, the bat harmonic pattern looks very similar to the Gartley pattern. It has four different legs marked as X-A, A-B, B-C, and C-D. X-A: In its bullish version, the first leg appears when the price sharply increases from point X to point A. This is the longest leg of the pattern. A-B: The A-B leg then sees the price switching direction and retracing 38.2 to 50 percent using the Fibonacci retracement of the distance covered by the X-A leg. Have it in mind that the A-B leg can never retrace beyond point X. But if it does, the pattern is considered invalid. As you can see, if the price with a spike reaches a point under 50% but with the body above, this will be Valid. The candle Body's important. B-C: Here, the price changes direction for a second time and moves back up, retracing anything from 38.2 to 88.6 percent of the distance covered by the A-B leg. If it retraces up above the high of point A, the pattern is considered invalid.As you can see, if the price with a spike reaches a point above 88.6% but with the body is below, this will be Valid. The candle Body's important. C-D: This is the last and most significant aspect of the pattern. As with the Gartley pattern, this is where the bat harmonic pattern ends and traders place their long (buy) trade at point D. ( PRZ Potential Reversal Zone ) The 88.6% percent retracement of the X-A leg is our Entry Point. D POINT or PRZ Before trying and trading the pattern, confirm from this checklist that the pattern is real. It should include these vital elements: A-B : 38.2 to 50% max percent using the Fibonacci retracement B-C : An 38.2 to 88.6% max percent Fibonacci retracement of the X-A leg C-D : The 88.6% percent retracement of the X-A Market strategy: Step 1: Drawing the pattern Begin by clicking on the XABCD pattern indicator that is found on the right-hand side toolbar of Tradingview Identify the beginning point X, which can be any swing high or low point on the chart. You should get 4 points or 4 swings high/low points that join and form the harmonic bat pattern strategy as explained Above Step 2: Trading the pattern The 88.6 percent Fibonacci ratio provides traders a more reliable risk/reward ratio which is why the market strategy of the bat pattern is such a very popular as a market strategy. The best entry point is the 88.6 percent Fibonacci retracement which is a very accurate market turning point. It is recommended that traders should enter as soon as they touch the 88.6 percent figure. Oftentimes the harmonic bat pattern strategy doesn’t go much above this level. Step 3: Placing a stop-loss Usually, traders should place their protective stop-loss lower than the point X of a harmonic bat pattern. That is the only logical location to hide the stop-loss because any break below will automatically invalidate the pattern.We use as manual the 113% Fibo of X-A as a picture below. Step 4: Take-profits There can be several ways to manage your trades, but the best target for this pattern should be to use a multiple-take profit formula. For this pattern strategy, take the first partial profit once you hit wave-B level and the remaining half wave-C. Once the price reaches the first target you should move the Stop Loss at BE ( breakeven - entry point ) or close the position in profit. By doing this you will accomplish two things: first, you’ll ensure that you accumulate profits and secondly, if the markets reverse, you ensure you’re stopped at BE and don’t lose any money. There are many ways to calculate the Take profits Target, this is one of the most used and we suggest starting in this way. Identical rules to draw and set parameters like stop loss and take profits are for the Bearish version. Nothing changed. Please note this is an introduction to the BAT pattern, for beginners. I tried to make it more easy and simple as I can.
BITSTAMP:BTCUSDEducation
by FOREXN1
20
Bullish Bat Harmonic Tutorial on GBPAUD H4 (Come with Analysis)When Bullish Bat appears, it is more confident to Take Profit. TP1 is 0.382. TP2 will be 0.618. The early entry can be at the Bullish Engulfing at the bottom. Because of the trend has manage to break 0.618, it is successful to about making a new Bullish trend here. This tutorial come with Analysis. :) Look for Buy opportunity now. Let's ride this trend. Note: I am starting to care less about FA bit by bit. It stays fun to know. TA is much more. Harmonic Pattern is founded and detected by Mr. Scott Carney at year 2000. They are all already patented. Learn more about Harmonic Patterns from his website. I am still studying them. I like it. It is proven today. Combine with other technique to add more conviction. I really appreciate this knowledge. :) Like/Comment/Thumbs Up if this is any helpful. Thanks in advance.
GEducation
by lilybahari
Bat Harmonic Pattern - Advanced AnalysisIn this series of chart patterns, we have taken a look at the more traditional ones. However, we have not yet discussed harmonic patterns. Harmonic patterns form a part of the numerous chart patterns available for the identification of reversal points. The practice of trading using harmonic patterns is often defined as "Harmonic Trading". We felt like it was an appropriate time to discuss the popular bat harmonic pattern, defined as "The most accurate pattern in the entire harmonic trading arsenal" by Scott M. Carney (1). "Suspicions in thoughts are like bats among birds." - Translated from Francis Bacon. 1. Introduction Unlike most traditional chart patterns, these patterns do not require breakouts of the price to be traded and involve the usage of precise Fibonacci ratios (highlighted below) for the identification of harmonic patterns. This makes harmonic patterns less subjective and pretty spooky. Wow. 1.1 Fibonacci Ratios Fibonacci ratios are key components of harmonic patterns. Fibonacci ratios are obtained from the Fibonacci sequence, whose n th element is obtained by adding the two previous numbers of the sequence, that is: Fib(n) = Fib(n-1) + Fib(n-2) The sequence is as follows: 1, 1, 2, 3, 5, 8, 13, 21, 34, 55, 89, 144, 233..., and exhibits various characteristics. One characteristic of interest is given by the ratios between elements in the sequence. The ratio of one element in the sequence with the following one approximately equals 0.618, while the ratio of one element in the sequence with the previous one approximately equals 1.618. These two values are often defined as golden ratios, with 1.618 being denoted as "Phi" (upper-case P) and 0.618 as "phi" (lower-case p). The ratio between elements separated by two positions returns 0.382 and 2.618 respectively, calculating the ratio using a higher separation would return the series of Fibonacci ratios. These ratios are also given by raising the golden number with specific exponents. 0.618^4 = 0.146 0.618^3 = 0.236 0.618^2 = 0.382 0.618^0.5 = 0.786 0.618^0.25 = 0.886 0.618^0 = 1 The rationale behind the usage of Fibonacci ratios with harmonic patterns (and other methodologies in general) is given by the presence of the Fibonacci Sequence in nature and certain organisms and structures, but more importantly in human behavior. If security prices reflect investor behaviors, it seems logical to find a connection with Fibonacci numbers. This is a common rationale used by technical analysts to justify the usage of Fibonacci ratios. A few studies aimed to explain a potential connection between the Fibonacci sequence and financial markets and evidence obtained by Bhattacharya & Kumar provide further incisive research on this connection (2). 2. Harmonic Bat Patterns The bat harmonic pattern is built from 4 segments connecting points X, A, B, C, and D, each one located at a local maxima/minima of the price. The relative distance between the segments is used to determine the validity of a bat pattern; these rules are defined as follows: 1 - Segment AB retraces within 38.2% and 50% of the XA segment (some less strict conditions only require a retracement within 38.2% and 61.8%). 2 - Segment BC retraces within 38.2% and 88.6% of the AB segment. 3 - Segment CD retraces within 161.8% and 261.8% of the segment BC. 4 - Segment AD is approximately equal to 88.6% of segment XA. For the pattern to be valid, the vertex given by point C must be confirmed. It is also interesting to note that the bat pattern can possess an internal AB = CD pattern. A reversal is more likely to occur within the "potential reversal zone" (PRZ). Traders can have different methods for identification however Fibonacci retracements are commonly used, with an extremity of the PRZ located at 88.6% of the internal retracement of XA and another at 161.8% of BC. Another method identifies the PRZ within 78.6% and 100% of the internal retracement of XA. Some traders wait for additional confirmation before entering a position such as the occurrence of internal reversal patterns, oscillator divergences, or for the price to evolve outside the PRZ such that it implies that a reversal is occurring. 3. Stop Loss & Take Profits Various techniques exist to set take profits and stop-loss levels during the formation of a bat pattern. Some traders place the stop loss at or a few ticks below X, which can lead to reduced risk but a higher risk of a premature trigger of the stop-loss. The usage of a very tight stop loss is mentioned by Scott M. Carney. A take profit can be set at point A. Additional Fibonacci retracements might be used for partial exits. 4.Practical Examples Bearish Bat pattern on USDJPY15, we apply Fibonacci retracements to the segment XA and use the levels 0.5, 0.382, 0.236 as partial take profits while level 0 exits the entirety of a position. Bullish Bat pattern under completion on ERGOUSDT 4h, the price breaks the level situated at point B is a good sign for a potential of reach of the PRZ. 5. Observations Oscillator divergences occurring when the price is within the PRZ can be an additional confirmation of a potential reversal occurring. We found no studies proving data that the bat harmonic pattern is superior to other harmonic patterns. One study by Krzysztof Bednarz highlights the profitability of the bat pattern in a trading period of 27 days (3). Bulkowski shares statistics on how often price turns at point D (4). For Bullish Bats, the price reverses at point D 91% of the time, for Bearish Bat patterns the price reverses at point D 86% of the time. Super spooky... References (1) Carney, S. M. (2010). Harmonic Trading, Volume Two: Advanced Strategies for Profiting from the Natural Order of the Financial Markets. Pearson Education. (2) Bhattacharya, S., & Kumar, K. (2006). A computational exploration of the efficacy of Fibonacci Sequences in technical analysis and trading. Annals of Economics and Finance, 7(1), 185. (3) Bednarz, K. (2013). Taking investment decisions on the futures contracts market with the application of Bat harmonic pattern – the increased efficiency of investment. (4) Bulkowski, T. N. (2021). Encyclopedia of chart patterns. John Wiley & Sons.
Editors' picks
BITSTAMP:BTCUSDEducation
by LuxAlgo
43
Bat harmonic patternHow to trade when you see the Bat pattern? Before trying and trading the pattern, confirm from this checklist that the pattern is real. It should include these vital elements: An AB=CD pattern or an extension of this pattern An 88.6 percent Fibonacci retracement of the X-A leg A 161.8 to 261.8 percent Fibonacci extension of the B-C leg Next will be to look at how traders can trade using the bat pattern. We will make use of the bullish bat pattern as an example. For a bearish bat pattern, simply do the opposite for your orders. The first thing to look for when looking for this pattern is the impulsive leg or the XA leg. We are trying to identify a strong move up or down depending if we either have a bullish bat or a bearish bat pattern. The next thing that needs to be satisfied for an authentic bat pattern structure is a minimum 0.382 Fibonacci retracement of the XA leg and it can go as deep as 0.50 Fibonacci retracement of the XA leg, but it cannot break below the 0.618. This will form the B leg of the pattern. The next thing traders should do is to look for a retracement of the AB leg up to at least 38.2 percent Fibonacci ratios, but it cannot exceed the 88.6 percent, and this will form the third point C of the pattern strategy. The last thing to do is to establish is the D point, and to get to the D point, find the 0.886 Fibonacci ratios of the impulsive XA leg, which will lead to a deep CD leg, and finally, it will complete the entire structure of the pattern. Market strategy The market strategy of the pattern has been tested across various classes of assets (commodities, currencies, stocks, and cryptocurrencies). It is recommended that traders should take the time and back-test the bat harmonic patterns strategy before using this advanced pattern for trading. Step 1: Drawing the pattern Begin by clicking on the bat pattern indicator that is found on the right-hand side toolbar Identify the beginning point X, which can be any swing high or low point on the chart After identifying the first swing high/low point, simply follow the market swing wave movements You should get 4 points or 4 swings high/low points that join and form the harmonic bat pattern strategy Step 2: Trading the pattern The 88.6 percent Fibonacci ratio provides traders a more reliable risk/reward ratio which is why the market strategy of the bat pattern is such a very popular as a market strategy. The best entry point is the 88.6 percent Fibonacci retracement which is a very accurate market turning point. It is recommended that traders should enter as soon as they touch the 88.6 percent figure. Oftentimes the harmonic bat pattern strategy doesn’t go much above this level. Step 3: Placing a stop-loss Usually, traders should place their protective stop-loss lower than the point X of a harmonic bat pattern. That is the only logical location to hide the stop-loss because any break below will automatically invalidate the pattern. Step 4: Take-profit margin There can be several ways to manage your trades, but the best target for this pattern should be to use a multiple take profit formula. For this pattern strategy, take the first partial profit once you hit wave-C level and the remaining half once we break above wave-A. By doing this you will accomplish two things: first, you’ll ensure that you accumulate profits, and secondly if the markets reverse, you ensure you’re stopped at BE and don’t lose any money.
FTSEMYX:FBMKLCIEducation
by manjoiboyz
Alternate Bat harmonic patternWhat is the Alternate Bat harmonic pattern? The alternate bat pattern is a variation of the Gartley pattern. Scott Carney developed it in 2003. It is popular for incorporating the 1.13XA retracement as the defining element in the Potential Reversal Zone (PRZ). The alternate bat harmonic pattern is one of the most precise trading patterns that works exceptionally great in the relative strength index (RSI) BAMM set up. How to identify the Alternate Bat harmonic pattern? The alternate bat is a unique trading pattern that involves certain precise measurements. Those measures are crucial in order to identify the alternate bat. A pattern must meet the following conditions to be an alternate bat pattern: The first important factor is the B point retracement that must be 0.382 retracements or it must be less of the XA leg. The alternate bat only utilizes 2.0 BC projections or greater than that. The AB = CD pattern within the alternate bat pattern always extends requiring a 1.618 AB = CD calculations. Generally, the best structures use 50% retracement at the midpoint.
FTSEMYX:FBMKLCIEducation
by manjoiboyz
The Bat Pattern, Tutorial (Basic)The Bat Pattern, is a precise harmonic pattern discovered by Scott Carney in 2001 The pattern incorporates the 0.886XA retracement, as the defining element in the Potential Reversal Zone (PRZ). The B point retracement must be less than a 0.618, preferably a 0.50 or 0.382 of the XA leg. The Bat utilizes a minimum 1.618BC projection. In addition, the AB=CD pattern within the Bat pattern is extended and usually requires a 1.27 AB=CD calculation. It is an incredibly accurate pattern and requires a smaller stop loss than most patterns.
Education
by Cryptsyxalt
22
BANKNIFTY - Another Harmonic in place.This chart looks quite clumsy displaying so many levels, but option sometimes, hence bear with me... In yesterday's post, I talked about banknifty had crab pattern on intra charts and if it sustains above 21400, it can move towards 21550 and index would trend only above 21560. What happened today: Index opened above our second level, i.e 21550, above which we had expected it to trend, and it did and made high around 21934. Price Action Learning: when the market opens above one level up and sustains the second level, chances of moving in gap direction becomes higher. For tomorrow: Intra chart now has another harmonic pattern in place and its prz aligns with prz of crab pattern. Bat pattern prz is quite precise i.e 21300 and crab last prz level is at 21200. Thus 21300-21200 becomes an important zone, which will decide the further trend in the market. Now sustaining above these levels, the index can test 21675 levels or today's session high, and any move above it may bring back the trending move. On the flipside below 21200, the index may slip further, immediate support comes around 20800 levels. Note: The market will be very volatile
NSE:BANKNIFTYEducation
by manuagarwal21
SBI CARD - Time to take pauseSBI Card Formed Bat Pattern on the daily chart with a precise prz in the area of 740 . This Pattern possessed three levels in tight zone of 735 - 742. The Bat is the most common and precise pattern and requires a smaller stop loss than other patterns.The 0.886 XA retracement is the most critical level in the Bearish Bat pattern. I Always wait for the entire PRZ range to be tested to validate the completion of the pattern, though it delays the execution process, but the trade you take then won't test much of your patience. Note : BC swing slightly exceeded the A Point , so its not a perfect Bat pattern, but i am considering it as a Bat pattern, because of the close alignment of various Fibonacci ratios in the prz area..So Slight adjustment/leeway is allowed in the real trading world.
NSE:SBICARDEducation
by manuagarwal21
1
Euro/ Pound Scott Carney's/ Divergence Software Harmonic Scanner---Possible Product Review--- Okay, I have some serious mixed feelings today. I dont typically trade on mondays as today is the shake up of the market from the weekend and people's emotions from the market. So, I thought I would buy Scott Carney's harmonic scanner for trading view. the software was very pricey and i honestly had i very high hopes for the software. i wanted to use the software for the smaller time frames like the 1 minute and 5 minute interval as it takes a while to chart the patterns properly just so i could add a few more trading oppritunities to my day. here we have the pattern software pick up a bat pattern on the euro pound. Im very picky about my patterns, especially my anchor legs as those are going to be the frame for the patterns backbone to build off (the abcd pattern). i like my anchor legs to be significant swing high/ low points as they provide great areas of S/R levels as well. the swing points printed on the screen are 27 and 88. that means 13 or 44 candles must print either lower highs or higher lows prior to the swing point and the same after in inverse order as they happened coming up to the swing point. the softwares algorithm is picking up XA points in some random spots which i think is causing alot of the patterns to be invalid before the pattern is even completed. Now, I understand this is Scott Carney's lifes work, trading career wise, and im a self taught student of his teachings straight from his books. i just bought the 3rd volume and it answered a ton of questions i had and filled in a lot of gaps. i wish i had the old patterns i had drawn up previously when i first encountered his work and tried to mimick it on my profile so you can see the progression. so, no way am i saying this stuff is wrong im just saying it seems the software is printing in random spots that seem to fit a coding argument. So, now the pattern. here is a bat pattern with the anchor leg coming off the bottom of brief consilidation period and bit of a over reaching wick For a bat pattern even with the +/- 5% spill over (introduced in his 3rd book) for the "B" point but PA closes above the 50 which is something i started to consider in my trading and was calling those spill over patterns "Dirty," becasue in his previous boks the measurements were to be precise; however, through my own analysis i noticed the patterns i did not chart but later did were successful. So much so it could not be chalked up to randmoization but not freuent enough to be considered a pattern revision. The "C" point is also a bit odd in placement. as you can see in my pattern i chose the higher swing point which in turn when drawing the abc extension it will cast a 1.27 (an alternate abcd pattern ratio) closer to the xa 886 which is also closer to a major support area which could and has served as a great area for PA to rest and rebound off. Overall in the future i will post patterns printed by the software, but only the ones i feel like meet my stringent criteria. Again in scotts older books and videos he strictly says not to trade every pattern, and only trade the best ones and what im going to post are only the best ones on the 60m and higher. I cant post lower than the 15, and i probably wouldnt if i could, because hey i need to keep a little for myslef :P long post im sorry but i hope it was helpful!
Education
by ARegularGuy
2