Harmonic Theory

The Harmonic trading is a technique that uses the recognition of specific figures based on the Fibonacci ratios and applied on prices to determine the reversal points (potential reversal zone – PRZ) highly probable. As often in Chart analysis, the goal is to identify the figures, and the entry and exit of a position by the assumption that the price action in the past will happen again in the future.

One of the first references to Harmonic Trading can be found in the work of J. M. Hurst. It was developed and popularized by Scott M Carney, who  wrote several books about this subject, and few others, like for example Darren Oglesbee who discovered the Cypher pattern.

The important concept to understand is that the separate price movements of each other are actually related. In addition, the Fibonacci ratios and patterns on prices of their relationship provide a way to determine where the turning points will occur. When these points are identified correctly, trades are executed at a price level where the cycle is potentially changing.

These trades are executed “in harmony” with the market.

9 Patterns and Partial Patterns

It can detect ABCD / Bat / Butterfly / Crab / Cypher / Gartley / Shark / 5-0 / 3Drive patterns.

The indicator can also show the figures before they are 100% valid (displayed in dash lines). Since the apparition of the preceding PRZ point, it is possible to know the future configuration to trade and thus to anticipate the entry point at the PRZ.

You can also disable this option to only show the valid patterns.

The PRZ is an area where prices have a high probability of recovery. According to the harmonic theory, this zone is the optimal entry point to enter the initial movement with a low risk of failure. The indicator respects the theory, but it is possible to add a degree of freedom by allowing to exceed this area without compromising the validation of the pattern.

Similarly, it is possible to define a theoretical error margin around the exact level of each anchor of the pattern.

For each pattern, you can display the Guide lines and choose to display the Volumes.

Various Features

The Harmonic Indicator comes with various features such as :

• Partial Patterns and PRZ
• Audio alert: An audio alert indicates if there is a partial or complete pattern detected.
• Market Analyzer : it is possible to configure the Market Analyzer so that you can find harmonics patterns on different time frames and different instruments
• Exposed patterns in C#: this feature is for advanced programmers who want to program their own automatic strategies, backtests or derived indicators.
• Display options : for each figure, it is possible to view only its route, and/or its PRZ. Numeric price levels of the PRZ are displayed on the

Smart Toolbar

The toolbar allows you in only one-click to display or hide different chartist patterns detected. So you can focus on one type of pattern, or trade only the last pattern found by hiding the others and get the chart lighter.

The toolbar is also retractable or can be dettached in a separate window to avoid overloading the main toolbar.