Harmonic trading is a trading method that uses defined patterns in an attempt to predict a price reversal of a financial instrument.
The actual patterns are generated by previous price reversals at certain fibonacci levels. The assumption is that these patterns when repeated offer a high probability of a successful trade.
The patterns are not 100% successful but research has shown us that they have a 70-90 % chance of offering us good opportunities.
Once a pattern is found it also gives us a place for our stop loss , as I said previously the patterns are generated by fibonacci retracements so if the last point of the pattern exceeds a certain fibo number then the pattern becomes invalid.
Lets take a look at a Bat Pattern and its construction :
NZDUSD Chart
A pattern can be contructed on this chart :
NZDUSD Bearish Bat
So there is the pattern all we have to do next is find where the price has to take the D point to invalidate the pattern , hence above this point is where our stop loss could be placed.
NZDUSD Pattern with Stop Loss Point
Harmonic Pattern trading is not that difficult, once you master the patterns you will be able to “see” them on the charts and even spot them before they have completed.
The way we trade here is using an automated system, patterns are detected all day long automatically , these are sent to the members part of the website.
Trade orders are set automatically by the system using these alerts . Not all alerts are sent out as trades, we have filtering in place to ensure that only the highest probability patterns are actually sent out as trade signals. These trades and patterns are discussed in our live daily trading room.
Harmonic trading is a beautiful way to trade , as a member here you wont have to be chart watching all day long or trying to jump into a trend that may very well already be finished.
You get the specific entries , stops and trade instructions in the website and by email and if your unsure then you can just ask in the trading room .
Is this the Holy Grail of trading ? Nope , sorry it doesnt exist, Harmonic trading does get us pretty close though !