This pattern is different. As we observed in the previously discussed patterns, the C point never extended beyond point A. But this pattern is formed when C point extends beyond A.
Rules:
1. X-A: A strong leg which ends at an important Support/Resistance level. 2. A-B: Point B should be between 38.2 to 61.8% of X-A leg 3. B-C: The leg which makes this pattern unique. Point C should be between 1.272 to 1.414 of A-X projection. Some authors also take 1.13 to 1.414 as reference points here. I personally favor the latter but the former is the most agreed levels of projection. 4. C-D: Point D should be 78.6% of 'X-C' leg.
Pattern completes at point D so it is the most important point in the pattern. If all the above conditions are valid, a reversal is expected from this point.
# In Bullish harmonic patterns an upward reversal is expected at point D, whereas in Bearish patterns a downward reversal is expected at point D. # Normally a buy/sell order is placed at point D, expecting some sort of reversal; and targets are placed at 38.2% and 61.8% of C-D retracement. # A complete reversal should not be expected at point D in any harmonic pattern . Only the further price can provide confirmations about trend reversal.
Refer the following post for learning how to trade harmonic patterns. All the other published patterns are also linked to this post.
Trade safe, be healthy Hit like/comment and follow if this information is useful.
Regards Bravetotrade
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Current Examples:
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you guys can also post your examples in the comment section. Enjoy.
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A very nice example of cypher pattern in today's market.