Harmonic patterns are often referred to as ‘advance patterns’. This article does not go into the historical basis or evidence for the foundations of their use. There have been numerous statistical analyses of how these patterns can predict price action. No evidence is supplied for the latter. It is for traders to direct themselves to find these things.
In this post the Harmonic Pattern Sifter is presented (without warranty). This tool is an algorithm that can be used to identify several important patterns. Needless to say – but we’ll say it anyway – those who use this algorithm must be comfortable in using Fibonacci ratios and in drawing Harmonic patterns on their trading platforms e.g. Tradingview.
The sifter starts from an important point of the B point retracement of the XA leg in an XABCD formation. It then takes the trader through various steps. Importantly accurate pattern identification is just the first of about six steps towards a successful Harmonic trade. This post does not go beyond the identification stage.
After locating the appropriate B point the algorithm assesses the XA projection or retracement of the XA leg to assist in focusing on a key pattern. Other criteria are then sifted.
The information provided herein is opinion only. Under no circumstances do any statements here represent a recommendation to buy or sell securities or make any kind of investment. You are responsible for your own due diligence. To summarise, we do not provide investment advice, nor do we make any claims or promises that any information here will lead to a profit, loss, or any other result. All materials are for educational purposes only. We are clear in our SYP.