Recently, many trading friends have asked me how to view harmonic pattern trading, so I’ve organized my years of experience into a summary. To be honest, those who master this method can indeed catch quite a few good reversal opportunities, with an average win rate said to exceed 70%, but the premise is that you truly understand these patterns thoroughly.

Let’s start with the most commonly used ones. The ABCD pattern is beginner level, consisting of three waves and four points. The logic is straightforward: push, retrace, then push again, following this rhythm. Using Fibonacci retracement tools on the BC segment, it usually precisely hits the 0.618 level. The length of CD is the same as AB, and the time should also be comparable. I often place tentative orders near point C, or wait until the pattern completes and then build a position from point D.

The bat pattern is a bit more complex. Defined by Scott Carney in 2001, this pattern adds an X point and an additional wave. The key is that the retracement at point B must be at 50% of XA, and the extension of CD should reach at least 1.618 times BC, sometimes even up to 2.618. I don’t use this pattern very often, but once confirmed, the probability of reversal is quite high.

The butterfly pattern was discovered by Bryce Gilmore, using a different combination of Fibonacci ratios. The most important is the 0.786 retracement of the XA segment, which helps you accurately locate point B. As a reversal pattern, if the four waves are well coordinated, the reversal zone will be very clear.

The crab pattern is also a masterpiece by Scott Carney. Its special feature is the 1.618 extension of XA, which directly determines the potential reversal zone. The bullish crab involves a sharp rise from X to A, then the AB retracement is between 38.2% and 61.8%. The projection of BC (2.618-3.14-3.618) marks the completion zone. The bearish logic is the reverse. There’s also a variant called the deep sea crab, where point B retraces to 0.886, and the BC projection zone is between 2.24 and 3.618.

The Gartley pattern has two strict rules: point B must be at 0.618 of XA, and point D must be at 0.786 of XA. This pattern is somewhat similar to the bat, but the B point retracement must be precisely at 0.618. I usually set the stop loss at X and take profit at C.

The shark pattern is a five-wave reversal pattern with three Fibonacci rules to satisfy: the AB retracement should be between 1.13 and 1.618 of XA, the BC segment is 113% of OX, and the CD target is the 50% retracement of BC. This pattern is less common, but once it appears, it’s important to pay attention.

The three-drive pattern is very rare because it requires perfect symmetry in both price and time. It consists of five points, three drives, and two retracements. The key is that the second and third drives are extensions of 127.2% or 161.8%, with retracements usually at 61.8% or 78.6%. Time symmetry is critical; if there are gaps or asymmetry on the chart, I recommend abandoning it—don’t force it.

In practical trading, the logic for bullish and bearish setups is symmetrical. When a bullish signal appears, go long; when a bearish signal appears, go short. The most important thing is to spend time learning the theory first, then gradually develop a feel through live trading. The harmonic pattern method can indeed help you pinpoint reversals more accurately, but don’t blindly chase perfect patterns—markets don’t always follow textbooks.

I personally trade these patterns on Gate.io because its market data is clear, and the candlesticks are relatively stable, suitable for detailed analysis. If you want to try this method, start with demo trading, memorize the features of various harmonic patterns, then gradually enter small positions. Let’s work together!