The BAT Harmonic Pattern



                                         -A Forex Trader’s Perspective-

As explained in our introduction to Harmonic Patterns, the Gartley and Butterfly, Harmonic Pattern enable the trader to determine turning points with precision 80% of the time - according to expert traders.

As is the case with all Harmonic patterns, the BAT harmonic pattern has five points - namely, “XABCD”. 
The market will always provide  points “XA”, which is the impulse move and the longest leg in this pattern. And as usual, the trader is required to find the remaining “BCD” points.

Therefore using the Fibonacci-retracement levels, the trader is required to identify BCD points, guided by the following measurement Criteria: -

>Point ‘B’ is 38.2 to 50.0 retracement of leg “XA”.

>Point ‘C’ is between 38.2 and 88.6 retracement of leg “AB”.

>Point ‘D’ is 88.6 retracement of leg “XA”

It is important to note that; Point “D” is also referred to as; Potential Reversal Zone (PRZ).

On placing Stop Loss (SL), Bat Harmonic pattern rule recommends that; SL should be placed a few pips below point ‘X’.

As for Take Profit (TP), it is recommended that:
The first TP should be placed at point 38.2.
The second TP should be placed at point 61.8.

NB:
§      All legs of the BAT harmonic pattern should complete within the measurements provided.
For instance, ‘AB’ leg should not retrace beyond point ‘X’. If it does, then the pattern is no longer valid as a BAT Harmonic pattern.

§     The Bat Harmonic Pattern is a retracement and continuation pattern, which means; it forms when market trend temporarily reverses then continue on its original direction.

§  The retracement (temporary trend-reversal) enables a trader to enter the market and take trades at good/lower price before the trend continues on its original bullish or bearish direction.
§   
    It is extremely vital that a Trader knows:
-At What point to Enter,
-Where to place a Stop loss and –
-When to Take profit.
OJ Mwale – Sani Global Forex
Images: Courtesy of BabyPips & TradingStrategyGuides

Comments

  1. kacepackerMarch 3, 2022 at 9:32 PM

    Mgm Casino app Archives - KT Hub
    How to register your Mgm account? · You can use your Mgm account with any of 광주광역 출장샵 the following methods: · 제주 출장샵 Go to Mgm account 영주 출장안마 and 논산 출장안마 sign 나주 출장마사지 up using the My Account. · Click the

    ReplyDelete

Post a Comment

Popular posts from this blog

Harmonic Patterns

Image
Harmonic Patterns – A Forex Market Trader’s Perspective – Harmonic patterns are formations on forex charts, created by price movements in the market. These patterns assist the trader to: – Analyze the forex market and forecast its price movement with precision therefore Determine potential trend-retracement areas (entry and exist points) with the highest possible accuracy. In other words ; Harmonic patterns use Fibonacci retracement levels to geometrically draw patterns that depict potential trend-reversal zones, thereby assisting the trader to precisely highlight the best trade entry/exit points. Due to their proven accuracy in pin-pointing potential trend-reversal zones in forex market, Harmonic Patterns are key (advanced) tools in the trader’s box. Harmonic Patterns are usually characterized by “M” (Uptrend) and W” (downtrend) shapes and can be categorized into Seven basic patterns: Gartley , Butterfly , Crab , Bat , Shark , Cypher and Deep Crab
Read more

The Butterfly-Harmonic Pattern

Image
The Butterfly-Harmonic Pattern - Forex Trader’s Perspective - As explained in our introduction , Harmonic Patterns use Fibonacci retracement tool, to enable the trader determine turning points (trend reversal zones) with nearest accuracy. All Harmonic Patterns are shaped in a zigzag formation, “M” shape depicting an uptrend and a “W” depicting a downtrend. The Butterfly like all Harmonic patterns, has five points - namely, “XABCD”. As always, the market will provide the “XA” leg – being the impulse leg or move. The trader therefore is expected to identify the remaining “BCD” points. Therefore, using the Fibonacci retracement tool, you can measure and identify “BCD” points based on the following measurement guidelines or Criteria : - Plot the Fibonacci from peak of to the lowest point on the chart, then identify: - 1) Point B: Which should be at around level 78.6, retracement of leg “XA”. 2) Point C: Which should be between 38.2 and 88.6, retr
Read more