June 30 (Fri): Nikkei 225 vs. GOLD (Course: What is the probability of reversal in harmonic patterns?)

Good morning☀

In the PRZ, which is the reversal zone of the harmonic pattern, how likely is it to reverse?

Fxgroundworks Corporation, a Canadian company analyzing harmonic patterns(fxgroundworks.com) conducted 1,000,000 chart verifications and found thatthe probability of reversal after the harmonic pattern completes is about 90%, it is said.

(There is currently no data available…?)

Gartley pattern Profit 36,052 times Loss 4,288 times Win rate 89%
Butterfly pattern Profit 31,878 times Loss 3,684 times Win rate 90%
Crab pattern Profit 3,895 times Loss 355 times Win rate 92%
Bat pattern Profit 21,357 times Loss 2,100 times Win rate 91%

※We should have conducted 1,000,000 chart verifications, but the total of the four patterns above is only about 100,000.

This means the remaining ~900,000 cases are ones where the harmonic pattern had not completed,i.e., cases that reached up to 【C】but did not reach 【PRZ】.

In other words…

If the rate reaches 【PRZ】, there is about a 90% chance of a reversal.

I have not calculated probabilities using my actual trades, so do the above probabilities hold for reversals?

I cannot say definitively, but it certainly feels that once 【PRZ】 is reached, it tends to reverse more often than continuing beyond it.

Moreover, considering risk-reward, it’s a very profitable method, isn’t it?

Next week, we will also start a Harmonic newsletter

Using live charts, we will explore where and what harmonics can be drawn?

I plan to follow up, so if you’re interested, stay tuned?

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