Harmonic Patterns: Gartley, Bat, Butterfly, Crab
Harmonic patterns use Fibonacci ratios to identify potential reversal zones. Learn the four most common patterns for CFD trading. Gartley, bat, butterfly and.
What Are Harmonic Patterns?
Harmonic patterns are geometric price formations that use specific Fibonacci ratios to identify potential reversal points. Discovered by H.M. Gartley and refined by Scott Carney, these patterns provide precise entry, stop, and target levels.
The Four Main Patterns
- Gartley: XA leg, AB=61.8% retracement, BC=38.2-88.6%, CD=78.6% of XA — most reliable pattern
- Bat: AB=38.2-50%, BC=38.2-88.6%, CD=88.6% of XA — deep retrace entry
- Butterfly: AB=78.6%, BC=38.2-88.6%, CD=161.8-261.8% extension — extreme reversal
- Crab: AB=38.2-61.8%, BC=38.2-88.6%, CD=161.8% extension — very precise entry zone
Trading Harmonic Patterns
The key to harmonic patterns is the Potential Reversal Zone (PRZ) — the area where CD completes at the required Fibonacci level. Enter when price shows reversal action in the PRZ (candlestick confirmation, RSI divergence). Stop loss goes beyond the PRZ; target is the 38.2% retracement of the entire pattern.
Limitations
Harmonic patterns are complex and subjective. Identifying them in real-time is difficult — they're much easier to see in hindsight. Use them on higher timeframes (4H, Daily) where Fibonacci ratios are more reliable. Always wait for confirmation before entering.
Disclaimer: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 70-80% of retail investor accounts lose money when trading CFDs. Backtesting does not guarantee future results. Always consider whether you can afford the potential loss of your capital.