Harmonic patterns (Gartley, Bat, Butterfly, Crab)

What it is

Harmonic patterns are five-point swings (X, A, B, C, D) where each leg must retrace or extend the previous one by set Fibonacci ratios. H.M. Gartley described the first in 1935; Scott Carney and others named and refined the rest. The point D, where the pattern completes, is the potential reversal zone (PRZ).

The main ones differ by how far D goes relative to the XA leg: Gartley, D at 0.786 of XA (B near 0.618); Bat, D at 0.886 of XA (B 0.382–0.5); Butterfly, D beyond X at 1.27–1.618 of XA (B 0.786); Crab, D at 1.618 of XA. The Cypher measures D as 0.786 of XC instead (some scanners use XA, so check yours). The simpler AB=CD has two equal legs.

How to spot it

• Find a clear XA leg, then check each later swing against the pattern's ratios.
• Allow a little tolerance; exact ratios are rare.

How to use it

• Look for a reversal entry in the PRZ at D, ideally with a candle or structure confirmation, and the stop beyond the PRZ (or beyond X for the Gartley and Bat).
• Common targets are the 0.382 and 0.618 retracements of the AD leg.

Common mistakes

• Forcing ratios to fit a pattern you want to see.
• Entering at D with no confirmation in a strong trend.

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