Are you into trading ? Have you ever heard of harmonic figures ? These are patterns that give you a huge advantage in your trading. They reflect the activity of traders. Discover in this article how harmonic patterns work in trading.
How do harmonic figures work ?
Harmonic figures are real patterns that will allow you to detect a trend reversal and give you a considerable statistical advantage. They are identified in the same way as a chartist pattern by looking at the shape of the graphs, which will announce trend changes in trading. If you want to know more, do not hesitate to consult this site https://patternswizard.com/technical-analysis/patterns/harmonic-patterns/. The difference here is that harmonic patterns are based on Fibonacci ratios and Elliott waves. They make conjunctions of several levels in order to determine the point which brings out a resistance or a support. Nevertheless, it should be noted that harmonic trading patterns do not work on breakouts, as on traditional chart patterns, but on existing supports determined by Fibonacci ratios, and this is the particularity of harmonic patterns. In a traditional pattern, you have the breakout and you have the signal. But the harmonic figure trading is done by guesswork. That is, it is based on Fibonacci retracements and Japanese candles.
Techniques that work with harmonic figures
Generally, harmonic figures or patterns work :
- On trend reversals, i.e. at the end of a bullish trend or at the end of a bearish trend ;
- On trend continuations, provided they are in the direction of tpatterns ;
- On contraindications such as false support/resistance breakouts or traditional chartist patterns ;
- In trading ranges provided it is wide enough and volatile.
But it should be remembered that harmonic patterns do not work on countertrend trading. And there, you have to be very careful, if for example you are in a downtrend and you see a bullish harmonic pattern. If you don’t have patience, you’ll lose 95% and you’ll find that the harmonic patterns don’t work. You should also avoid anticipating a trade, you should always wait for a strong reversal signal before taking a position. Because harmonic patterns work by guesswork and if you anticipate the trade, you will only make losing trades.