There are many patterns on the market. But harmonic patterns are popular because they provide very accurate and profitable patterns. Essentially, harmonic patterns use the Fibonacci proportions of a geometric formation to identify areas of interest—pivot and continuation points that offer good buy and sell signals. You can use the Harmonic Pattern Finder for the MT5 indicator to predict price action.
However, identifying this pattern with the naked eye is a difficult task. Besides, drawing patterns is hard work. You must be precise when drawing the Fibonacci level. The pattern may seem similar, but different Fibonacci levels form it. This is where the Harmonic Pattern Finder indicator comes in. It scans the chart and identifies patterns. Then he depicts the name on the right side.
Unlike other indicators, the Harmonic Pattern Finder predicts stop loss and captures profit points. You can use the indicator to trade both long-term and short-term positions.
How to Identify Trade
The indicator uses the vital Fibonacci numbers to determine the pattern. It identifies and draws various patterns on the chart, including;
- Bat models
- Butterfly patterns
- Crab models
- ABCD patterns
- Gartley Templates
Example of trading with the Harmonic Pattern Finder
The chart shows the change in the price of the euro against the US dollar over 4 hours. The indicator identifies the shark pattern and highlights it in blue. The indicator gives excellent trading signals after the patterns are fully formed, as shown in the figure.
You should wait for the pattern to form and enter at the right time. Once the pattern is mature and fully formed, jump into the trade. Notice how the market moved over 300 pips after the pattern appeared.
However, you can still trade when the pattern is still in the making. Because harmonic patterns use exact Fibonacci values, you can trade in different areas to catch small ups and downs.
Harmonic patterns are one of the most profitable patterns in Forex trading. However, drawing a pattern is quite an exciting activity, especially considering they are uncommon. This means that Fibonacci must accurately draw the pattern, ensuring that the Fibonacci ratios are accurate. Thanks, the indicator identifies patterns. You only need to wait for the pattern to form and fully enter the trend reversal direction.