Harmonic Patterns
Trade precise Fibonacci-based geometric structures. Learn the defining ratios, identification steps, entry zones, and invalidation criteria for each major harmonic pattern.
6 free comprehensive guides
What Are Harmonic Patterns?
Harmonic patterns are geometric price structures defined by specific Fibonacci ratio relationships between their legs. Developed by H.M. Gartley in 1935 and expanded by Scott Carney, Larry Pesavento, and others, harmonics provide some of the most precise entry and exit levels in technical analysis.
Each pattern consists of four or five price points (labelled X, A, B, C, D) connected by distinct legs. The ratios between these legs must fall within defined Fibonacci ranges for the pattern to be valid. The completion point (D) becomes the Potential Reversal Zone (PRZ) — the area where traders enter with a tight stop-loss just beyond the PRZ.
Harmonic trading is inherently rules-based. Either the Fibonacci ratios validate the pattern or they do not — there is little subjectivity once you know the required measurements. This makes harmonics appealing to systematic traders who prefer objective criteria over discretionary judgement.
Key Principles
Every harmonic pattern relies on precise Fibonacci ratios. The most important ratios are 0.382, 0.500, 0.618, 0.786, 0.886, 1.13, 1.272, and 1.618. Different patterns require different ratio combinations, which is what gives each its unique structure and predictive quality.
The Potential Reversal Zone (PRZ) is where the D point completes. This is not a single price — it is a zone where multiple Fibonacci measurements converge, creating a high-probability reversal area.
How to Trade Them
Wait for the pattern to reach the D point (PRZ). Enter when price shows a reversal signal at the PRZ — a pin bar, engulfing candle, or momentum divergence. Place the stop-loss just beyond the PRZ boundary.
Take-profit targets typically use the Fibonacci retracements of the CD leg: 38.2% for the first target and 61.8% for the second. Some traders also target the B and A points of the pattern for extended moves.
Tip: Start with the Gartley pattern — it is the foundation of all harmonics. Once you can identify and trade the Gartley consistently, the other patterns are variations with different ratio requirements.
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