After you have mastered the basic patterns of forex trading, allow me to bring you good news that there is still room for you to diversify as you grasp more of the interesting patterns that will advance your ride through the forex market.
Let me start by asking you this question, if you can tell your mind not to see heads and shoulders, tops and bottoms, flags and any of the basic patterns we have talked about, which kind of patterns do you see? Don’t be surprised when someone tells you I see a butterfly,a crab, a bat or any kind of animal.
It can be a monster or any thing you may call it. But as long as it can earn you profit, that’s great. In case you haven’t discovered any, just watch out so that you don’t miss any!
It’s really getting more interesting to trade, what do you think?
I present to you, butterflies, crabs, bats,hens, zebras etc…….Some am not yet documented for example Hens and Zebras or may be you could be the one to discover these!
Ok ok, the big deal is that these patterns will help you to spot possible retracements of recent trends and tell areas of continuations of the overall trend when combined with other tools like Fibonacci Retracements and extensions. The harmonic patterns use Fibonacci numbers to define accurate trading points.
At the end of this topic, you will be able to tell how these patterns work, their strength and weakness and how to trade these forex harmonic patterns.
They may be a little hard to grasp at start but once you put one of these forex harmonic patterns on your finger tips, you will become an expert, know when to trade it on certain pairs and know the best time to trade it and you will be able to profit consistently.
These are some of the basic forex harmonic pattern.
- A-B-C-D pattern
- Three drive pattern
- Gartley pattern
- Butterfly pattern
- Crab pattern
- Bat pattern
We will first go through the A-B-C-D and the three drive patterns in the next lesson before we take you to the animals.
We trade these patterns like we do for any other patterns like head and shoulder, double tops and bottoms, the most important thing is to wait for the completion of the pattern before your entry.
The harmonic pattern indicators such as the price action pin bar and Fibonacci figures/levels will allow you identify market turning points with a high level of accuracy.
You will be able to understand how all these things work when combined together as we take you through the next topics.