Today, Brother 7 will deeply analyze the core logic and practical skills of harmonic patterns, helping you quickly understand and master this high win-rate, high accuracy trading rule! 👇👇👇

1⃣ What are harmonic patterns?

Harmonic trading is a technical analysis method based on specific price patterns and Fibonacci ratio relationships, emphasizing the symmetry and periodicity of price fluctuations in the market. This method believes that market behavior exhibits predictable and harmonious patterns; by identifying these patterns, traders can look for high-probability buying or selling opportunities.

2️⃣ Using harmonic trading, a representative financial historical expert

🏂 Richard Dennis (Chicago)

• Achievement: Famous inventor of the 'Turtle Trading Method', trained a group of inexperienced individuals into top traders.

• Style: Systematic trend trading, contrasting with the counter-trend trading style of harmonics, but its discipline and modeling ideas have far-reaching influence.

🎈 Paul Tudor Jones (Founder of Tudor, Wall Street trader in the USA)

• Achievement: Successfully predicted and shorted the 1987 stock market crash.

• Style: Primarily technical analysis, with extremely strict risk control.

• Influence: Provided a high-level practical paradigm for quantitative and graphical trading

Core characteristics of harmonic trading:

• Predict market reversal points in advance

• Provides high win-rate trading signals

• Applicable to various markets

Main Fibonacci ratios

🧵 Bat pattern (Bat) Deep retracement but does not break new lows/highs, 0.886 retracement point of XA is D

🧵 Crab pattern (Crab) Extreme extension, XA extends to 1.618 as D

🧵 Butterfly pattern (Butterfly) Point D breaks through XA, with XA extending to 1.272 or 1.618

🧵 Gartley pattern (Gartley) The most classic pattern, point B is a 0.618 retracement of XA

🧵 Deep Crab (Deep Crab) Similar to the crab shape, but point B retracement is deeper, 0.886 retracement of XA to 2.24 extension

🔸 Three-drives pattern

Rare and efficient, relying on the symmetry of price and time, it is a favored strategy among advanced traders.

🌍 How to use harmonic patterns for trading?

1. Learn the theory: Familiarize yourself with the definitions and key ratios of each pattern, such as Fibonacci retracement and extension levels.

2. Determine strategy: Bullish patterns are suitable for going long, bearish patterns are suitable for going short

3. Set stop-loss and take-profit: Precise order placement in the PRZ area while avoiding blind risks.

🎈 Why do harmonic patterns have a high win rate?

✅ 1. Accurately identify reversal zones based on Fibonacci ratios

Harmonic trading utilizes the Fibonacci ratios (such as 0.618, 1.618) widely found in nature to identify potential reversal zones (PRZ) in the market, where these positions are often areas of convergence of market sentiment and order density.

✅ 2. High risk-reward ratio, precise stop-loss

Completion point (D point) has a small stop-loss range and clear targets (like point C or point A), with most strategies having a risk-reward ratio of 1:2 to 1:5, leading to stable long-term profits.

✅ 3. Market behavior driven, strong self-fulfilling effect
Harmonic structures are widely recognized, attracting numerous algorithmic and manual traders to participate at structural points, forming collective expectations, enhancing the probability of reversals.
✅ 4. Adaptable to various market conditions, convenient for strategy integration
Whether in trending, oscillating, or retracing phases, harmonic structures can be applied and can be combined with other indicators (such as MACD, candlestick patterns, volume) to improve win rates and strategy robustness.

🎈 Practical suggestions for learning harmonic patterns:

✅ Focus on ABCD patterns and bat patterns, suitable for beginners.

✅ Use professional tools (like TradingView) to draw Fibonacci retracement ratios and quickly identify patterns.

✅ Combine with market trends to avoid relying solely on pattern signals.

（For a more systematic study of harmonic trading, you can refer to Brother 7's profile, which has complete harmonic trading materials）