Chapter 3. Pattern Identification
What Is a Harmonic Pattern?
Harmonic patterns are defined by specific price structures quantified by Fibonacci calculations. Essentially, these patterns are price structures that contain combinations of distinct and consecutive Fibonacci retracements and projections. By calculating the various Fibonacci aspects of a specific price structure, harmonic patterns can indicate a specific area to examine for potential turning points in price action.
Specific Price Structures
Harmonic Trading techniques are similar to standard technical price patterns, such as the Head and Shoulders or wedge formations, since the focus on a particular shape of price action is the key validation factor. However, harmonic patterns ...