|surangasanje ||Aug 14, 2019 1:18am | Post# 47164 |
I`m also a lover of harmonic patterns. Once we study them thoroughly definitely the profitability factor will increase heavily. I found some interesting concept to trade harmonics while i was trading harmonic patterns eagerly but having few loses. I stopped trading for a day and looked onto my chart to find what I am doing wrong when drawing those Gartley and its mutants.Suddenly i found my mistake after spending few hours (around 14) scrolling back and forth my charts.This incident happened around 3 years ago. Since then i am using the concept i found when i`m trading forex and the accuracy is about 95%.(sometimes this may be a years old concept i didn`t get through in my early stages of trading and had to find it myself (after 2 years since i started forex trading) ,as mistake is a mysterious teacher that teaches us the path for success)
Gartley and mutants does not work much efficiently for both bullish and bearish directions on the same time frame. Trading these harmonic patterns with the trend is the best thing that will improve your profitability immensely, as "the trend is your friend".First we should understand the market structure and the direction of the market using any time frame that you favor(If the market is making higher highs and higher lows your trend is bullish and if the chart is making lower lows and lower highs your friend is bearish- this is basics for novice traders). But there are so many instances that one chart having bearish structure will suddenly create a higher high implying that it will go up in future but at the next moment it will create a lower low again and continue to be bearish and vice versa for bullish flash bearish continuations. To avoid this kind of heartbreaking incidents i`m normally checking two adjacent time frames to see where my friend is going because i want to follow him(trend). Usually my entry time frame will be H4 or sometimes H1 time frame. One can see these Gartley and mutants(harmonics) as deformations of well known double top and double bottom patterns. If we think very simply out of the above 2 patterns i.e double top and double bottom the the pattern which we want to see in a bullish continuation market is the double bottom pattern or "W" pattern.So most valid patterns in a strong bullish market is the inverted harmonic patterns or "W"shaped patterns which will extend there point "D" (out of all the points XABCD )to the upside , and in a bearish market point D should be to the downside because in a harmonic pattern the points X, A, B, C shows consolidation and point D shows breakout leg and the breakout should be in the direction of the trend in order to get a strong continuation market (there is no use of trading weak markets).
This simple concept which i developed to eliminate my loses really worked for me in a time that i was about to quit trading forex 3 years ago. So if there is any trader reading this , and having an account only of loses and thinking of giving up trading or having a greater enthusiasm and dedication thinking i will never give up trading and some day some how I am going to be a successful trader , learn the Gartley and its mutant patterns and follow the trend of two higher confluence time frames, you will be a successful trader in a considerable time.
watch the below screenshots of my mt4. weekly chart having lower lows and lower highs structure and the daily chart too follows that order. So this is a bearish trend confluence. Then i go to the H4 chart and watch for a pattern with "M" shape. There we can see a butterfly (one of mutants of Gatley pattern) pattern and its XABC points have already created.Then take the fibonacci retracement tool and draw 161.8 level as the ultimate target for butterfly D point.
Note that patterns are just some probability of possibility . They are not laws or must happen things. Patterns always have 50% accuracy for you. But with confluence we can increase winning probability to 95%. But remember you still have 5% of bad luck too. But don`t pray for your luck. Luck does n`t do any thing in forex. Only the knowledge wins.So run behind the knowledge.The man who pursue knowledge will definitely be a winner