Harmonic Patterns
Fibonacci-based precision patterns
Harmonic patterns use specific Fibonacci ratios to identify potential reversal zones with high accuracy.
Major patterns: 1. Gartley: XA retracement at 78.6% (conservative) 2. Bat: XA retracement at 88.6% (deeper) 3. Butterfly: XA extension to 127% (beyond X) 4. Crab: XA extension to 161.8% (most extreme) 5. Shark: Uses 88.6% and 113% (newer pattern)
The Potential Reversal Zone (PRZ) is where multiple Fibonacci levels converge — this is your entry area.
Trading harmonics: 1. Identify the XABCD points 2. Verify Fibonacci ratios match the pattern 3. Enter at PRZ with tight stop 4. Target Fibonacci levels of the pattern
Pro tip: Harmonic patterns at major daily support/resistance levels have the highest completion rates.
Common mistake: Forcing patterns that don't match exact Fibonacci ratios. Better: Strict ratio compliance is what makes harmonics work. If it doesn't fit, it's not the pattern..
Key takeaways
- Based on specific Fibonacci ratios
- PRZ = multiple Fib confluence (entry zone)
- Gartley 78.6%, Bat 88.6%, Butterfly 127%, Crab 161.8%
- High accuracy but rare occurrences
Quiz
- The Butterfly pattern has an XA extension of: Answer: 127%. Butterfly extends to 127% of the XA leg.
Educational content, not financial advice.