Harmonic Pattern trading is the identification of patterns based on Fibonacci ratios. These patterns are specific aspects of Fibonacci ratios in terms of price structures that allow the trader to find the most likely place for the price to return. In this way, it is assumed that price patterns, like other patterns and life cycles, are constantly repeated. In this method, the main goal of the trader is to identify patterns and trade from the most probable return levels.
Evidence for harmonic patterns can be seen in the price charts. The price chart is nothing more than a set of buying and selling records over time. Patterns formed in a particular period represent technical signals that indicate the probable state of future price movements. In addition, such situations have been proven throughout history to be repeated, and it has also been shown that such situations provide good trading opportunities in terms of the ratio of loss to profit.
In teaching harmonic patterns, we have tried to discuss the basics of “trading in the style of harmonic patterns” in the form of paragraph 1 and present the practical principles of these patterns in the Forex market. It will take some time after learning the basics of each structure so that you can distinguish tradable price patterns from other price patterns. Although the price structure may differ from Fibonacci’s ratios, trading techniques are similar to harmonic patterns.
Harmonic Pattern trading uses a diverse set of Fibonacci ratios to define patterns. However, trading in the style of harmonic patterns does not end with just defining and recognizing price patterns. Although it is important to identify potential trading opportunities and specific rules in the first place in order to optimize the management of the trading position, other aspects of trading and managing the trading position are equally important. Here are some things to look for when selecting yours:
Trading Detection: No matter what type of trading system you use, the first step is to find possible trading opportunities. Harmonic trading techniques use repetitive pricing patterns that have been proven in the past to indicate sales saturation and saturation ranges. Understanding the differences between different harmonic patterns is essential to optimize specific trading opportunities.
Transaction execution: After determining the most probable trading opportunity, the main transaction must be determined. Many cases need to be evaluated over a period of time. The validity of the pattern must be determined and the final decision in the execution of the transaction must be considered.
Trading Management: After deciding to trade, there are other general issues that need to be considered during the transaction process. If the transaction is executed, the transaction position should be managed according to specific rules to optimize the profit and risk of the transaction.
These three steps are very important. The general process of trading in the style of Harmonic Pattern is these three steps. In any trading system, there should always be potential trading opportunities, transaction execution and transaction management until the close is under the direct supervision of the trader.
If the above is new to you, it is recommended that you read and understand the harmonic patterns thoroughly before entering the transaction. The most important factor in trading in the style of harmonic patterns is the ability to identify price structures based on Fibonacci ratios. That’s why a deep understanding of specific price patterns is the first step in trading these types of trading opportunities. Other effective trading skills are just as important as the execution and management of the transaction, and one of the most important features in the continuous acquisition of profits in this trading approach.
Trading in the style of harmonic patterns uses Fibonacci’s best strategies and pattern recognition techniques to find opportunities to trade, execute, and manage. These techniques are very precise and create a trading system that requires special conditions to execute each trading order. It can almost be said that the determination of return ranges by harmonic patterns is very unique. Special calculations and assignments of price points will surprise you with the accuracy of the patterns.
If this trading style is new to you, we have to say that this style will open a new window in front of you that will give you many effective strategies to determine the future price movements of the market. If you have gained enough experience in using these strategies, the content of this course will improve your understanding of specific situations and provide you with many pattern-based techniques, which will definitely improve your trading performance.