Harmonic patterns cheat sheet for stock market - Part 2

Harmonic patterns cheat sheet for the stock market - Part 2

There are 8 different types of harmonic patterns. The harmonic pattern is derived from the mathematics and Fibonacci number. These harmonic patterns help us to identify the reversal point in the market. In this blog, we will discuss the second harmonic pattern called butterfly harmonic pattern

Bearish Butterfly harmonic pattern

Bearish butterfly Harmonic patterns work on 5 points these are critical and important points in bearish harmonic pattern these points are X-A-B-C-D all these points are interconnected to each other and depended to each other to form this pattern

Bearish Butterfly harmonic pattern Identification

1. Bearish butterfly pattern starts when stock is in bull phase 
2. X is the point where the pattern starts 
3. In the bearish bat harmonic pattern, AB leg can retrace 78.6% of XA
4. BC leg can retrace 38.2% of AB
5. CD can retrace 161.8% of BC
6. Short sell the stock when it reaches the D point
7. The first target for this pattern is point B
8. The Second target for this pattern is the point C
9. The final target for this pattern is 161.8% from Point D

Bullish Butterfly harmonic pattern Identification

1. Bullish butterfly harmonic pattern starts when stock is in the bear phase
2. X is the point where the pattern starts 
3. In the bearish bat harmonic pattern, AB leg can retrace 78.6% of XA
4. BC leg can retrace 38.6 or 88.6% of AB
5. CD can retrace 161.8% of BC
6. Buy the stock when it reaches the D point
7. Place the stop loss after calculating the volatility of the stock
8. The first target for this pattern is point C
9. The Second target for this pattern is the point A
10. The final target for this pattern is 161.8% from Point D

Learn Harmonic pattern cheat sheet for the stock market - Part 3
Learn Harmonic patterns cheat sheet for the stock market - Part 1
Learn Nifty 50 - Why Option Chain Analysis fails?
Calculate Option Chain Probability - Implied Volatility Excel Sheet

We will update the remaining patterns in our nex blog. we provide the updates daily

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