Harmonic price patterns enable us to distinguish possible areas for a continuation of the overall trend. Six Harmonic Price Patterns There are six harmonic price patterns: The ABCD Pattern The Three-Drive Pattern The Gartley Pattern The Crab Pattern The Bat Pattern The Butterfly Pattern 3-Step Price Pattern Recognition Process The three basic steps in spotting harmonic price patterns are the following Step 1:…
As you may have guessed, profiting off Harmonic Price Patterns is all about being able to spot those “perfect” patterns and buying or selling on their completion. There are three basic steps in spotting Harmonic Price Patterns: Step 1: Locate a potential Harmonic Price Pattern Step 2: Measure the potential Harmonic Price Pattern Step 3: Buy or sell on the…
Once upon a time, there was this insanely smart trader dude named Harold McKinley Gartley. He had a stock market advisory service in the mid-1930s with a huge following. This service was one of the first to apply scientific and statistical methods to analyze the stock market behavior. According to Gartley, he was finally able…
The ABCD Let’s start this lesson with the simplest harmonic pattern. So what could be more basic than the good old ABCs? We’ll just pop in another letter at the end (because we’re cool like that), and we’ve got the ABCD chart pattern! That was easy! To spot this chart pattern, all you need are ultra-sharp…
Now that you’ve got the basic chart patterns down, it’s time to move on and add some more advanced tools to your forex trading arsenal. In this lesson, we’ll be looking at harmonic price patterns. These bad boys may be a little harder to grasp but once you spot these setups, it can lead to some very nice…
Here’s a summary of what we covered regarding the Elliott Wave Theory: Elliott Waves are fractals. Each wave can be split into parts, each of which is a very similar copy of the whole. Mathematicians like to call this property “self-similarity”. A trending market moves in a 5-3 wave pattern. The first 5-wave pattern is called impulse wave….
This is probably what you all have been waiting for – drumroll please – using the Elliott Wave Theory in forex trading! As an Elliott Wave trader, you will be spotting “wave counts.” This means that you will be labeling the waves to see how they conform to the Elliott Wave pattern, to try and anticipate future price movement….
As you may have guessed, the key to using the Elliott Wave Theory in trading is all about being able to correctly identify waves. By developing the right eye in recognizing what wave the market is in, you will be able to find out which side of the market to trade on, long or short. There are THREE…
Like we mentioned earlier, Elliott waves are fractals. Each wave is made of sub-waves. Huh? Let me show you another picture. Pictures are great, aren’t they? Yee-haw! Do you see how Waves 1, 3, and 5 are made up of a smaller 5-wave impulse pattern while Waves 2 and 4 are made up of smaller 3-wave…
The 5-wave trends are then corrected and reversed by 3-wave countertrends. Letters are used instead of numbers to track the correction. Check out this example of a smokin’ hot corrective 3-wave pattern! Just because we’ve been using a bull market as my primary example doesn’t mean the Elliott Wave Theory doesn’t work on bear markets. The same 5-3…