Harmonic Patterns + Fib [CRT Trader]

Overview

The Harmonic Patterns Fibonacci indicator is an advanced technical analysis tool designed to automatically detect and visualize Fibonacci-based harmonic patterns on financial charts. This indicator helps traders identify high-probability reversal zones and potential entry/exit points based on precise mathematical relationships.


Supported Patterns

5-Point Patterns (X-A-B-C-D Structure)

Gartley Pattern: The most common harmonic pattern with reliable reversal signals
AB/XA = 0.618, BC/AB = 0.618, CD/BC = 1.272, AD/XA = 0.786

Butterfly Pattern: Strong reversal pattern indicating potential trend changes
AB/XA = 0.786, BC/AB = 0.618, CD/BC = 1.618, AD/XA = 1.270

Bat Pattern: Medium-term reversal pattern with high accuracy
AB/XA = 0.382, BC/AB = 0.886, CD/BC = 1.618, AD/XA = 0.886

Crab Pattern: Aggressive reversal pattern with extended D point
AB/XA = 0.618, BC/AB = 0.886, CD/BC = 2.240, AD/XA = 1.618

Shark Pattern: Trend continuation or reversal pattern
AB/XA = 0.618, BC/AB = 1.130, CD/BC = 1.618, AD/XA = 0.886


4-Point Pattern (A-B-C-D Structure)

ABCD Pattern: Basic harmonic structure forming the foundation of all patterns
BC/AB = 0.382-0.886, CD/BC = 1.130-2.618


Key Features

Fibonacci Validation

• Each pattern is validated against precise Fibonacci ratios with customizable tolerance
  
• Mathematical accuracy ensures reliable pattern recognition
  
• Eliminates false signals through strict ratio requirements
  

Performance Optimization

• Pivot Detection: Automatically identifies significant highs and lows
  
• Scan Frequency Control: Adjustable scanning intervals to optimize performance
  
• Early Exit Algorithms: Efficient computation to reduce processing load
  
• Pattern Limit: Control maximum number of patterns displayed
  

Visual Elements

• Pattern Lines: Clear visualization of pattern structure with colored lines
  
• Fill Areas: Highlighted zones between pattern legs
  
• Point Labels: X, A, B, C, D markers for easy identification
  
• Fibonacci Levels: Optional Fibonacci retracement/extension levels
  
• Bullish/Bearish Colors: Green for bullish, red for bearish patterns
  

Customizable Settings

• Pattern Selection: Enable/disable specific pattern types
  
• Tolerance Adjustment: Fine-tune pattern recognition sensitivity (5-30%)
  
• Color Customization: Personalize visual appearance
  
• Information Table: Optional statistics display
  

Trading Applications

Entry Signals

• Reversal Zones: Identify high-probability reversal areas at pattern completion
  
• Confluence Trading: Combine with other technical indicators for confirmation
  
• Risk Management: Use pattern structure to define stop-loss levels
  

Market Analysis

• Support/Resistance: Pattern points often act as future S/R levels
  
• Price Targets: Fibonacci extensions provide potential profit targets
  
• Market Structure: Understand underlying market geometry and rhythm
  

Strategy Integration

• Swing Trading: Ideal for medium-term position entries
  
• Position Trading: Long-term trend reversal identification
  
• Day Trading: Intraday reversal patterns on lower timeframes
  

How to Use

• Add to Chart: Apply the indicator to any timeframe and instrument
  
• Configure Settings: Adjust tolerance, colors, and pattern types as needed
  
• Wait for Completion: Patterns are valid only when D point is formed
  
• Confirm with Volume: Look for volume confirmation at pattern completion
  
• Set Stop Loss: Place stops beyond X point for 5-point patterns, or A point for ABCD
  
• Target Levels: Use Fibonacci extensions for profit targets
  

Important Notes

• Pattern Completion: Wait for full pattern formation before taking action
  
• Market Context: Consider overall market trend and conditions
  
• Risk Management: Always use appropriate position sizing and stops
  
• Backtesting: Test the indicator on historical data before live trading
  
• Multiple Timeframes: Analyze patterns across different timeframes for confirmation
  

Technical Requirements

• Lookback Period: Adjustable pivot detection sensitivity
  
• Depth Setting: Controls how far back the algorithm searches for patterns
  
• Memory Efficient: Optimized for real-time performance without lag
  

This indicator is suitable for all experience levels, from beginners learning harmonic patterns to advanced traders seeking automated pattern recognition. The combination of mathematical precision and visual clarity makes it an essential tool for harmonic trading strategies.