Forex glossary
Harmonic Pattern
A harmonic pattern describes price swings whose legs satisfy specified ratios, usually associated with Fibonacci measurements. The family includes four-point AB=CD and five-point structures such as Gartley, Bat and Crab. Converging measurements identify a potential reaction zone rather than a guaranteed reversal point.
Illustrative example
How does it work in practice?
Assume a candidate Gartley has B at a 61.8% XA retracement and D at 78.6%. Agreement with two ratios is only part of identification; the remaining legs and swing-selection rules still require checking.
A case to work through
A tolerance changed after measurement
Hypothetically, the plan allows a 2-percentage-point deviation, but the measured ratio deviates by 4.
- The candidate fails the original limit.
- Increasing the limit to 5 afterward changes the assessment rule rather than improving the data.
What follows? Keep the original result and assess the revised methodology separately.
Example boundary: The selected limit is an assumption, not a universal standard or effectiveness evidence.
Consistent ratio checks
Text description of the diagram
- Rules first: Define swings, variant and tolerances.
- Measure legs: Keep the appropriate anchors for each ratio.
- Check the whole: Test every condition rather than only a matching D.
A useful distinction
Harmonic Pattern / Elliott Wave
Harmonic patterns check swing ratios; Elliott uses wave hierarchy and structural rules.
Check your understanding
Recognize rule changes made to force a pattern fit.
Show the answer and explanation
A methodology change requiring separate assessment
It cannot be presented as satisfying the old rule.
Anchors, ratios and rules
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Related terms
Sources and documentation
- Harmonic Trader – pattern family
Named harmonic structures and distinct point/ratio requirements, not measured predictive effectiveness.
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