## Sunday, 24 November 2019

Getting to know the Harmonic Pattern Technique in Forex Trading

In trading there are many techniques and strategies that can be used by traders, one of which is Harmonic Pattern. This technique can even be called a high level technical analysis technique because it is often used by professional traders

What is Harmonic Pattern?

Harmonic patterns are geometric patterns drawn on financial market asset price charts by benchmarking Fibonacci numbers. Harmonic pattern trading techniques are used to predict price movements. In addition, harmonic patterns can also help in determining the exact reversal points to open and close positions. This technique is very popular and is often used by forex and CFD traders or Contract for Difference.

This technique can also be done in various timeframes and is considered more accurate when compared to the use of technical indicators in general. This trading strategy with harmonic pattern is based on premise, that is, price patterns that have formed in the price history will always be repeated. This methodology comes from the golden ration of 0.618 or 1,618 and its derivatives of 0.382 and 3,618

Golden ration itself can be found in almost all structures of natural phenomena, architectural masterpieces and art. This is known because Fibonacci levels taken from the development of the Golden Ration apparently can explain the trail of price movements on financial assets including forex. The point of this harmonic patter trading technique was born because of this concept

Harmonic pattern trading strategy was developed by Scott Carney through his book entitled "Harmonic Trading". Even so the price patterns that are currently referred to as Harmonic Patterns have actually been discussed beforehand by HM Gartley in a book entitled "Profits in the Stick Market". This topic has also been discussed by Larry Pesavento in his book entitled "Fibonacci Ratio With Pattern Recognition. Even this trading strategy has also been discussed by a number of other trading experts.

How to draw Harmonic Patterns
Before applying into trading, of course you must know how to draw the correct harmonic pattern. Check out the following steps huh ..

First, open the trading platform that you are using.
Select one chart of the currency pair you want.
Set your trading timeframe on the H4 or D1 timeframe. But you can also do it in other timeframes as you wish. Even so, most traders will usually use one of these H4 or D1 time frames, so it would be better for you if you want to use both timeframes, instead of having to try another time frame and not necessarily the results.
Observe your trading chart carefully. There you can determine whether there is a potential for a particular harmonic pattern to form. If there is, then draw a Fibanocci retracement with a swing from point to point.
Based on the pattern, Harmonic Pattern itself consists of several types, namely Gartley pattern, Butterfly pattern, Bat pattern, Cyper pattern, Shark pattern and Crab pattern.

Why do traders like to use this technique?
The reason why so many traders like this technique is because of their extraordinary ability to identify points of price reversal. In addition this technique also has a very reliable ability to predict how long a trend will last. Even so it does not mean this technique has no weaknesses. Harmonic pattern trading techniques require precision and accuracy. So if you make even a few mistakes, the consequences can be fatal for your trading positions.

The aim of the accuracy and accuracy demanded by the Harmonic Technique pattern itself is to be able to examine price movements that have formed certain patterns but have not yet reached the required Fibonacci level.

If that happens, then the pattern that will emerge may not necessarily be called a harmonic pattern. Even that pattern can make you wrong target. The following are things that must be met in using the Harmonic Pattern technique:

Sufficient understanding of the concept of timeframes in trading
Having a strong, mature and proven money management result.
Having accuracy and patience in waiting for the formation of the harmonic pattern, because the formation of the pattern requires a lot of time.
Have sufficient and qualified knowledge about Fibanocci
There is a trading platform that is comfortable for traders to use to illustrate many Fibo Retracements and extensions simultaneously.
Hopefully the information above is useful for you ...

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