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- Ch 1: Trading Basics
- Ch 2: Fibs / Harmonics
- Ch 3: Identify Pattern
- Ch 4: The Toolkit
- Ch 5: Setup Anatomy
- Ch 6: Examples
- Ch 7: Trading Plan
Harmonic Pattern Analyzer™ NT8
Part of the Harmonic Trader Platform
Harmonic Pattern Analyzer™ Drawing Tool for NT8
Allows you to quickly analyze harmonic patterns by simply drawing a line from point C to point X.
All other points and measurements are automatically calculated and the Potential Reversal Zone (PRZ) is outputted (if any).
Supports Gartley, Butterfly, Crab, Deep Crab, Bat, Alt Bat, Shark patterns
Other features include:
- Automatically add AB=CD to the Harmonic Pattern
- Optionally output Fibonacci values for the parts of the pattern
- Highlight Time Targets within Reversal Zone
- Show suggestions for X
- Different Potential Reversal Zone appearance options
Different Classes of Patterns
Before getting into how to use the Harmonic Pattern Analyzer™ Drawing Tool (“H” on the neoHarmonics toolbar), it’s important to understand how the patterns are shaped and how we classify them into two main classes of patterns.
For a list and overview of the patterns, please visit chapter 2 of our Learning Guide. Once you understand what you are looking for, however, the neoHarmonics tools takes the details of the actual Fibonacci levels and makes them incredibly fast and simple to analyze!
The Harmonic Pattern Analyzer™ (“H”) puts the patterns into two main classes, one where point C exceeds point A and one where it does not. For example, the Gartley, Butterfly, Bat, Alt Bat, Crab, and Deep Crab all have point C as a retracement of the A to B leg. We’ll call this “Class 1“.
To illustrate, here is a picture of a Gartley pattern. Note the position of C in relation to the A to B leg (inside the range from point A to point B). Again, think of this as “Class 1“.
What we call “Class 2” patterns are ones where point C goes beyond point A (either higher or lower, depending on the direction of the pattern). “Class 2” patterns are the Shark patterns. Below is an example of a. Note the location of C in relation to the A to B leg.
The reason we put the patterns into two classes, is you use the tool in two distinct ways depending on the class of pattern. These methods are outlined below.
Harmonic Pattern Analyzer Basics
How to Use the Harmonic Pattern Analyzer™
(“Class 1” patterns – Gartley, Butterfly, Bat, Alt Bat, Crab, and Deep Crab)
Step 1: Look for ABC (a higher low)
After a significant high or low is put in, visually look for the ABC portion of the pattern.
Step 2: Analyze the Pattern
If this market continues to rally from point C, where may it terminate and start going down?
Using the Harmonic Pattern Analyzer Drawing Tool, drag from the low at point C to the left of point A (as illustrated by the red arrow in the chart below).
Keeping in mind where you expect points A, B, and C to fall (from step 1, above), it’s important to drag X to the left of point A to make sure the tool correctly identifies points A, B, and C. Also, it’s important to note that if point C is a “low”, then point X will be a “high” point above point B (and vice versa). Continue to step 3 for a screenshot of the tool finding these swings.
Step 3: Choose Point X
Below is the tool in action!
After you click on point C, drag to where you want point “X” to be (see section on “Finding X” for detailed examples).
In the screenshot, the gray, dot-dash line between C and X is the line you actually draw, the tool will add the connecting lines, the labels, and the target area for D. This example finds a “Bat” pattern and outputs the target area for D with a line at the Bat Price. The price of this line is what you want to pay the most attention to! As you can see, there was a lot of resistance at this area.
Easy to Use!
The Harmonic Pattern Analyzer Drawing Tool acts like any other built in NinjaTrader Drawing Tool. You can access it from the Drawing Tool drop down or from the Harmonic Trader Platform Toolbar. You can even set up Hot Keys!
A shortcut is easily accessible from via the icon on the Harmonic Trader Platform Toolbar.
A high is put in, then a lower high is put in (noted by the blue lines). Where may this fall reverse?
Drawing from “point C” to point X, we see a “suggested X” price (noted by the little, blue arrow (blue line added for explanation purposes)). Using this price as X (making sure X is to the left of A), we get a target area with two overlapping patterns (a Butterfly and a Deep Crab). Paying the most attention to these horizontal, dotted lines in the rectangle, this gave a great entry area for the long. (In this example, the two dotted lines are only 8 pips apart.)
On the same chart, another long presented itself earlier (chart below). They’re everywhere!
Using the Harmonic Pattern Analyzer™
(“Class 2” patterns – Shark)
Step 2: Analyze the Pattern
Analyzing this class of pattern is slightly different than the “class 1” patterns. Instead of drawing the tool from point C and going left, you go from point A and go right (as indicated by the red arrow on the chart below). Make sure you drag to the right of “C” to allow the tool to correctly identify the A,B,C points. Also, it’s important to note that if point A is a “high” point, then point X will be a “low” point below point B (and vice versa). See step 3 for a screenshot of the tool finding these swings.
Step 3: Choose Point X
This method may seem a little awkward at first, but once you understand what it’s doing, it’s very simple. As you drag downward, point X is chosen to the left of A at the same price that you drag down to. In the screenshot, the gray line originating at point A and sloping down to the right is the line you actually draw, the tool will add the connecting lines, the labels, and the potential reversal zone (point D). In this example, it found a potential pattern and the support area this pattern creates. Note, this class of pattern does not have a “suggested X” feature and typically a major swing is the best choice for point X.
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