All about harmonic models
Trading is a profession that consists of analyzing the stock market. To perform this analysis, several methods are used to determine the opportunities to enter the market. Among these methods is the analysis of harmonic patterns which allows to make quality trades. Through this post, discover the different types of harmonic patterns that exist in trading.
What are harmonic patterns ?
Harmonic patterns are used to identify stock market structures in order to discover entry opportunities presented by the market. Visit this site for more explanation. Still called harmonic patterns, these patterns are comparable to chartist patterns such as the "shoulder-head-shoulder" pattern. This is because they are based on a specific price pattern.
How to trade successfully with harmonic patterns ?
The use of harmonic patterns involves the use of Fibonacci tools that allow for reliable and accurate signals. The objective is to detect the different retracement zones of the market. In addition, the different harmonic figures encountered on the market are : ABCD, Gartley, Crab, Gartley, Bat, Butterfly, etc. In addition, these patterns are formed in bearish and bullish trends. Therefore, for a good use of harmonic patterns, it is important to master the different shapes that exist and to be able to identify them on the price chart. Then, to know how to use the Fibonacci and identify the targets of harmonic patterns.
How to identify potential harmonic patterns ?
The identification of a harmonic pattern is done through the observation of the stock market behavior and the price movement. Indeed, on the stock market, price patterns are presented in evocative and distinctive forms, allowing a good analysis of the graph. Once a harmonic pattern is detected, it is recommended to use the Fibonacci to evaluate the relationship between the reversal points. To do this, you should create a Fibonacci ratio graph based on the identified harmonic pattern. Then make a comparison of the measured ratios.