Harmonic Trading Patterns

#1

Do harmonic trading patterns work in trading?

#2

I assume you mean the ABCD pattern. There are about 40 others but there is only one worth anything. The Gartley butterfly is the only one worth it. Read tommy Obrien’s book “timing the Markets” if you want to learn more or any of Larry Pessavetos stuff. They are on the network where I have my radio show.

Also this relies a lot on fibs I know 3 traders who do well with them. The have been trading for 30-40 years. and they trade longer time frames and this is very stylistic (its not as automated as some programs try to pitch it as)

Every chart i have ever seen i got the same pattern and a better entry and better exit using the apex pattern with the Elite/MVP rules, filters, and stops. Not trying to sell here as you know just saying Ive literally seen 0 edge and lots of headaches and I talk to the guys who literally wrote the current books on them.

My main issue is you are literally going counter trend before any kind of confirmed momentum reversal.

Second main issue is WHY why would it work… what is the market theory behind it…Ive yet to get a great answer on this.

#3

I personally thought the market theory behind this is purely psychological. You talked about how the market movers move the markets to where the orders are. It makes sense that the orders would be at fib levels. Of course the pattern can’t work all the time for the market mover to book a profit but for the most part, I believe they play out as a self fulfilling prophecy.

#4

A fib level is a mathematical level. The more traders use them the more orders will be there. But the fib itself has no power. So a fib when combined with other confirmation levels like support/resistance, Implied statistical deviation levels, expected moves, volume analysis etc… So yes they can be a self fulfilling prophecy but in my experience traders with large pockets at best, have done well with them as most can not suffer the losses that come by using harmonics alone.