I tried using a popular harmonic pattern detection indicator
Recently, harmonic-pattern indicators and e-books have become popular.I recently introduced them in a newsletter as well, and among them I would like to deliver a report using the Harmonic Pattern Detection Indicator, released by developer Daisuke on June 10, 2016, which has continued to be popular.
Daisuke's IndicatorHarmonic Pattern Detection Indicator was first displayed on MT4 following the manual.
Then, a red-looking harmonic pattern appeared immediately.
When the red shape appears, it indicates a sell entry, and the blue shape indicates a buy entry.
Daisuke, as one would expect from an engineer, has attached a detailed web manual that also introduces harmonic-pattern literature to the indicator, so let's introduce what is written there.
Harmonic patterns are a Fibonacci-based waveform analysis method developed by GrandWorks Co. (https://www.fxgroundworks.com/) in Canada.
Statistics have shown that when a chart displays certain waveforms, they tend to indicate reversal points with high probability, and this is what is shown on actual charts.
The basic idea of harmonic patterns is as follows.
We name the high/low points X, A, B, C.
Point D represents the entry point for a reversal; the values between points are ratio values.
In the above diagram, the ratio values follow these rules.
XB 0.581 Relative to AX (A=0, X=1), the height of AB is 0.581
AC 1.442 Relative to BA (B=0, A=1), the height of BC is 1.442
BD 0.887 Relative to CB (C=0, B=1), the height of CD is 0.887
XD 0.486 Relative to AX (A=0, X=1), the height of AD is 0.486
The above ratios, when they fall within a certain range, are detected as harmonic patterns, and the Harmonic Pattern Detection Indicator draws them on MT4.
Basically, it does not look at timeframes, so it compares heights rather than edge lengths.
There are many such numerical pattern combinations, and those who are proficient in harmonic patterns can look at a chart and know that a harmonic pattern is appearing, then place reversal entries.
Now, harmonic patterns are closely related to Fibonacci in technical analysis, but according to Daisuke, Fibonacci often creates a resistance line at 61.8% and price movement pauses before moving again; because many investors watching the market are aware of Fibonacci 61.8%, such price action occurs near 61.8%, but it is not a frequency that always happens—it's occasional.
In Daisuke's web manual, the four basic types are Bat, Alt Bat, Gartley, and Butterfly, and we have displayed a subset of them for now.
We displayed them on the EURUSD 1-hour chart, where harmonic patterns are well suited.
Open the Harmonic Control screen and click the “×HARM CTL” shown in the upper-left corner of the chart.
Hide all display shapes.
Click the “All OFF” button to hide everything for now.
Display the four basic shapes.
Click the four buttons: “BAT” (Bat), “ABT” (Alt Bat), “GRT” (Gartley), and “BTT” (Butterfly).
Finally, if the colors of the four buttons have changed, you are done with the operation.
If you click the “×HARM CTL” button again, the control screen will disappear.
From here, wait patiently until a harmonic is detected.
Below, we would like to present Daisuke’s harmonic detection results.
Because it is blue, a buy entry is expected—the harmonic has been detected!
In reality, it often falls even further.
Harmonic Pattern Detection Indicator displays 0.127 as the entry line (green line) for reference.
If you go beyond the entry line, you enter a buy trade.This is the area circled by the yellow ellipse on the chart.
The stop setup is represented by the red line. It is the area enclosed by the red box on the chart. Here, AX1.414 and AX1.618 are shown as candidates.
This time, by using the Harmonic Pattern Detection Indicator, which can detect harmonic patterns, I thought it would be an attractive indicator for investors who want to use harmonic patterns in FX trading.Harmonic Pattern Detection Indicator wouldn't it be an attractive indicator for traders who want to use harmonic patterns in FX trading?
In addition, GogoJungle offers other harmonic-pattern indicators such as the following.
Harmonic Pattern MT4 Indicator!
“Harmonic Analytics” discretionary PRZ analysis tool
https://www.gogojungle.co.jp/tools/indicators/20781
Developer: Eiku
Number of sellers: Medium
Reviews: Not yet rated
Pre-Harmonic Display Indicator
https://www.gogojungle.co.jp/tools/indicators/11525
Developer: Daisuke
Number of sellers: Many
Reviews: 4.5 stars
Multi-Currency Harmonic Monitoring Indicator
https://www.gogojungle.co.jp/tools/indicators/11763
Developer: Daisuke
Number of sellers: Medium
Reviews: Not yet rated
Harmonic Pattern Indicator
https://www.gogojungle.co.jp/tools/indicators/17394
Developer: Peanuts Butter
Number of sellers: Medium
Reviews: 4 stars
90% Market Reversal Probability: How to Further Improve the Accuracy of Harmonic Patterns
https://www.gogojungle.co.jp/tools/ebooks/14503
Developer: ASP Investment Research Association, Ai Kiyura
Number of sellers: Medium
Reviews: 5 stars
