Turning Patterns into Profits with Harmonic Trading (Collection)

Chapter 4. Harmonic Patterns Relative to the Trend

Patterns with the Trend

When analyzing patterns within a defined trend, it is important to be mindful of the general principle that all patterns are primarily signposts of potential future price action. Regardless of what type of pattern may form, a complete structure represents some type of corrective price action within the context of the larger trend. Such patterns provide clear signals of continuation points that confirm the predominance of the existing trend. These formations are critical because they can indicate execution areas within well-established trends that otherwise might seem futile.

There are many situations where a well-established trend has persisted for such a long time that ...