Bullish 5-0 Harmonic Pattern
Characteristics:
1. Pattern Structure:
- The pattern starts with the initial leg (OX), followed by a retracement.
- The price retraces between 113% to 161.8% of the OX leg.
- The AB leg is retraced between 161.8% to 224%.
- The BC leg retraces 50%.
2. Entry Point:
- Buy at D: Traders typically enter a long position at point D, which is after the retracement of the BC leg.
3. Take Profit:
- The take profit level is usually set at the 113% to 161.8% retracement of the OX leg. This is where the price is expected to reverse or continue in the direction of the initial trend.
4. Stop Loss:
- The stop loss is generally placed just below the entry point (point D) to minimize potential losses if the trade goes against the expected direction.
Bearish 5-0 Harmonic Pattern
Characteristics:
1. Pattern Structure:
- The pattern starts with the initial leg (OX), followed by a retracement.
- The price retraces between 113% to 161.8% of the OX leg.
- The AB leg is retraced between 161.8% to 224%.
- The BC leg retraces 50%.
2. Entry Point:
- Sell at D: Traders typically enter a short position at point D, which is after the retracement of the BC leg.
3. Take Profit:
- The take profit level is usually set at the 113% to 161.8% retracement of the OX leg. This is where the price is expected to reverse or continue in the direction of the initial trend.
4. Stop Loss:
- The stop loss is generally placed just above the entry point (point D) to minimize potential losses if the trade goes against the expected direction.
