Harmonic patterns are one of a few tools that try to predict the future behavior of the price. They are based on the Fibonacci numbers and
Fibonacci retracement levels
that, on their own, are one of the fundamental tools of technical analysis. Harmonic patterns can help you better plan the buy/sell moments by identifying the possible turning points.
Check out our "What Are Harmonic Patterns?" article to learn more about them.
According to different sources, harmonic patterns have over 80% success rate. That's a lot for a technique that tries to predict the future price!
All that a harmonic pattern does is to calculate the differences between adjacent high/low points. If this ratio meets specific requirements, we have a harmonic pattern!
Since they are based on simple rules, they are easy to follow. When you identify a pattern, you buy/sell, set a stop loss, and wait until the price reaches the take profit levels.
TradingView is one of the best technical analysis platforms. It's browser-based (you can use it on any computer without installing any software), it has every kind of security you might need (stocks, commodities, forex, cryptocurrency), and it's actively developed with new features landing every week or two. It's also a social network for traders to publish their ideas, discuss them, and get inspiration from others. With plenty of drawing tools, aggregation of news and financial data, watchlists, and alerts, it's a preferred charting tool for thousands of traders (including us).
That's why all our tools and trading ideas revolve around this platform.
Searching for harmonic patterns on the charts takes time. Even with the drawing tools, you still have to draw the XABCD formation and compare the retracement levels for each pattern. After months of practice, you will probably develop a gut feeling where a pattern might appear.
But why waste time when you can automate this process? With our scripts, the whole process of searching and drawing a harmonic pattern happens automatically in a matter of seconds. Just add an indicator to the chart, and whenever there is a harmonic pattern, our scripts will draw for you.
And they can do much more than just drawing the existing patterns. The Harmonic Predictor predicts where a harmonic pattern might appear in the future. It's a great way to either increase your profits or prepare a trading strategy for when the pattern actually appears.
Here are the best TradingView indicators that we have created (or are currently working on).
You can find all our scripts on our TradingView profile.
Our standard scanner for detecting harmonic patterns. It can spot the Gartley, Butterfly, Bat, Alternate Bat, Crab, Deep Crab, Shark, and Cypher formations. Not sure what all those animal names mean? Check this article from Investopedia.
Unlike other harmonic pattern indicators we have seen, this one doesn't analyze only the last consecutive high/low points. It looks back up to the previous 100 points in history, trying to find formations that started long ago but are still valid.
This is a more advanced version of our standard Harmonic Scanner. While the Harmonic Scanner is a perfect tool for quickly detecting harmonic formations, Harmonic Scanner Pro is built for analyzing them and getting alerts when new ones appear. It lets you customize almost every parameter, check for harmonic patterns much further in the past, detect multiple patterns at once, and allows you to set up alerts for any new pattern. It's a great tool to see how specific security reacts to harmonic patterns (some stocks are a textbook example of harmonic patterns, others - not really).
See the video of how to use it, examples of some patterns that this script can find, and explanation of all the configuration options here.
It comes with a 2-week 100% money-back guarantee, you can cancel any time, and if you pay for a whole year, we offer a 25% discount!
How about we try to predict a future harmonic pattern? Take points X, A, B, and C points and try to determine where point D might show up. That way, we can profit on the way from point C to D, and then we can reverse the position in point D and profit even more!
It's riskier than trading on fully-formed formations but more profitable.
See the full list of features, examples of some patterns that this script can find, and explanation of all the configuration options here.
It comes with a 2-week 100% money-back guarantee, you can cancel any time, and if you pay for a whole year, we offer a 50% discount (yup, that's six months of access for free)!
AB=CD is the simplest harmonic pattern that uses only four points (A, B, C, D) to determine the possible price reversal zone. This script can help you easily spot it on your charts for free.