- Harmonic Trader Platform for NT8
- HTP PRO for NT8
- Market Analyzer Templates
- Price Action Analyzer
- Momentum Indicators
- Moving Average PRO
- Ichimoku Kinko Hyo
- NinjaTrader 7 Tools
- Free Indicators and Education
- Quick References
- 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
Chapter 6: Example
Auto-Harmonic Pattern Finder Discussion
I want to talk about the Auto-Harmonic Pattern Finder tool (the icon to the far-right on the toolbar) and describe what it is and what it is not.
What it is Not…
It’s not a “scanner” where you have a list of symbols and time frames and it will alert you what patterns it sees.
What it Is…
The auto-pattern finder highlights the last bullish and last bearish patterns it sees on the current chart you have it running on.
For example, this AUDUSD (Daily) chart has the auto-pattern finder running.
(Note: the Bat and Butterfly patterns are in gray, since they don’t perfectly fit an ideal pattern. The “looseness” of finding patterns is customizable.)
The Recommended Way
However, I think of all pattern finders as a form of “training wheels”, which is why the main goal of the Harmonic Trader Platform centers around the manual Harmonic Pattern Analyzer™ tool (the “H” icon on the toolbar). This tool allows you to manually analyze potential patterns by simply drawing one line.
For example, on the same chart as above (with current price action enlarged), I drew this pattern by simply drawing the line from point C to point X (highlighted by the blue arrow) and the tool did the rest.
Why didn’t the auto-pattern finder draw this pattern?
The limitation of all pattern finders is the definition of what you tell it a “swing” is. On all these example charts, the ZigZag (the thin, blue lines) is highlighting what it sees as “swings” based on the settings provided.
Based on the current settings, it considers this whole move a single swing (highlighted by the arrow). The ABC portion of the pattern is not identified using these settings (which I highlighted with the labels).
If I adjust the ZigZag settings from a time span of “5” down to a “3”, it now sees these swings.
When I turn the auto-pattern finder back on, as expected, it now sees the Bat and Alt Bat patterns I manually drew above. (As well as an older, bearish Butterfly pattern.)
(Note: The pattern colors found by the auto-pattern finder and the manually drawn patterns are intentionally different. This helps to differentiate them. These colors are customizable.)
So, why not always have the ZigZag set to “3” (or some low value) to expose as many swings as possible?
While this may expose the smaller patterns, it will have a much more difficult time finding the larger patterns. It’s important to adjust the ZigZag for the symbol and time frame you are focusing on. However, understand that it’s a chicken-and-the-egg situation and a more balanced setting is recommended.
While the auto-harmonic pattern finder can be useful, it shouldn’t be the only way you find patterns.
It’s important to understand that the market is not always to-the-tick perfect as well. When you manually use the Harmonic Pattern Analyzer™ tool, you can quickly adjust which swings you are analyzing and where you want X to be.
Question? Comment? Contact us!
Missed Our Latest Webinar?
Live Chat and Skype
By using our indicators and visiting this site, you agree to these terms and conditions.
Trading contains risk of loss and is not for all investors. The information on this site is meant for educational purposes only. There is no guarantee that you will profit from the information contained herein. Past performance is not necessarily indicative of future results. The information contained on this site is meant to be used as just another tool to assist you in arriving at your trading decisions.
Hypothetical Results Disclosure: Past performance is not necessarily indicative of future results. Hypothetical performance results have many inherent limitations. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown.
Due to the difficult nature of trading, we have a no refunds policy. We urge all traders to review our material on the website and on YouTube, ask us questions, or to take a trial before purchasing.
All visible symbols and logos are Trademarks and Copyrights of neoHarmonics.com ©TM and UppDnn, LLC 2017 All Rights Reserved.