Harmonic Pattern Indicator List for MetaTrader 5
Harmonic Pattern Indicator provide a mean of detecting the turning point in the Forex and Stock market through the chart pattern analysis. Harmonic Pattern recognition is one way to solve the puzzle of market geometry, which is often not solvable with technical indicators. If the harmonic pattern detection can be done automatically, I think that is very good start for any harmonic pattern trading.
Two main elements of Harmonic pattern trading are the pattern recognition and the market timing. Between those two elements, the pattern recognition is the prior task before the market timing. Mostly harmonic patterns consist of five points except few patterns. The five points are often denoted as XABCD conventionally. When we want to detect harmonic pattern manually, the Peak Trough analysis can be very helpful. For example, trader can apply the Peak Trough analysis on their chart to find the five points of the harmonic pattern. With the Peak Trough analysis, traders can get rid of a lot of alternative possibility for the pattern detection. Since the Zig Zag indicator produces the least number of peaks and troughs to work with, it is easier to work with the Zig Zag indicator. However, if you do not like the false peaks and troughs of the Zig Zag indicator, then you can use the modified Fractal indicator alternatively. With the modified Fractal indicator, you will work with more number of peaks and troughs in your chart. However, this will not stop traders to detect harmonic patterns. With the help of the Peak Trough analysis, we can identify five probable points for the patterns. In first attempt, you might be wrong in selecting the five probably points. With more practice, you will become good at it. Once you have selected five probable points, next you have to measure the ratios between legs to check if the pattern is the qualified Gartley pattern. For example, for Gartley pattern, you can expect to have the following Fibonacci ratio relationship between legs:
- AB/XA = 0.618 or 0.786
- BC/AB = 0.618,
- CD/BC = 1.272 or 1.618 and
- CD/XA = 0.786.
When you detect the patterns manually, it is important to use high and low price of the candle bar for the five probable points. In the past, I have met some traders connecting the five points with close price or open price. Sometimes, they use two or three points with high and low price from the candle bar, then they use close price for the rest of points. The pattern detection process must have some consistent logic. The best ways to practice the pattern detection is to select the important peaks and troughs using the Peak Trough analysis. Using close price or open price is not recommended practice in general.
Harmonic Pattern trading is the typical mean reversion trading strategy. It assumes that the market will change direction, for example, from buy to sell or from sell to buy. In fact, the harmonic pattern detection is equivalent to detecting the turning point in the market. Recognizing the trading direction is simple with harmonic patterns. If the final point D show up above point C, then the pattern tells you the bearish turning point. If the final point D show up below point C, then the pattern is the bullish turning point.
Harmonic pattern can be used to spot the turning point for both continuation and reversal of the long-term trend. For trading, the differentiation must be made between these two cases because trading preparation for the two cases can be different. This type of scenario is often found when the harmonic pattern appears during the correction phase of the long-term trend. For example, the correction phase started after the Peak A, then harmonic pattern told us to be ready for buy since the correction phase would end at the point D. To improve your trading decision, you can do some background check before your trading. For example, you can measure the Fibonacci ratio of AD in regards to some important peaks found before the harmonic pattern. If the harmonic pattern is corresponding well to the correction phase, then the leg AD must have some meaningful Fibonacci relationship with some important peaks found before the harmonic patterns. We can found that the point D of our harmonic pattern was corresponding to the trough at 50% retracement level from one of the peaks. In addition, the turning point during the continuation of the long-term trend, the price will likely make further small correction before the main buy trend show up.
For the case of the reversal against the established long-term trend, the harmonic pattern can still serve its purpose by detecting turning point. Unlike the case of continuation, we make our trading decision against the established long-term trend. This might make the typical momentum trader uncomfortable because they think they are trading against the trend. Spotting the turning point against long-term trend is harder statistically. At the same time, it offers greater advantage to trade. So your risk is greater as well as your reward. When you can enter at the very start of the trend, you can have the maximum profitable range for the trend. Typically, for the momentum based trading strategy, their entry comes much after the harmonic pattern signal. In this case, the background check is not useful. Therefore, traders must use other secondary confirmation techniques. Several confirmation techniques can be used to support your trading decision. Mostly we recommend using the secondary confirmation techniques suitable for mean reversion trading. For example, Bollinger bands, Divergence indicator and Oscillator in higher timeframe might be good candidates to confirm your entry. Since we want to confirm your entry against long term established trend, you need to use greater indicator period for the secondary indicators. For Bollinger bands, it is recommended using the moving average period greater than 50 at least. For Oscillators like RSI and CCI, it is recommended using the indicator reading from higher timeframe. For example, if you have detected Harmonic Pattern from H1 timeframe, then you might use RSI or CCI reading from D1 or H4 timeframe to confirm your entry.
Here is the list of Harmonic Pattern Indicator for your MetaTrader 5 platform, the most popular forex trading platform in the world. These harmonic pattern indicators are not only detecting harmonic pattern but they also provide the additional features to support you to win in your trading. These listed Harmonic pattern indicators here will provide the best value for the money probably.
1. Harmonic Pattern Plus for MetaTrader 5
Harmonic Pattern Plus is the harmonic pattern scanner. It can detect harmonic patterns with predefined trading entries and stops. Pattern Completion Interval, Potential Reversal Zone and Potential Continuation Zone are supported. In addition, other dozens of powerful features are added like Japanese candlestick detection, automatic channel, etc. Please visit the product page about more information.
https://www.mql5.com/en/market/product/4475
https://algotrading-investment.com/portfolio-item/harmonic-pattern-plus/
2. X3 Chart Pattern Scanner for MetaTrader 5
X3 Chart Pattern Scanner is non repainting and non lagging pattern scanner for Harmonic Pattern, Elliott Wave pattern and X3 patterns. It is the most advanced but user friendly harmonic pattern indicator. As a bonus, this tool can detect around 52 bearish and bullish Japanese candlestick patterns + advanced Channel features. This is the most advanced Harmonic and Elliott wave pattern scanner in the market.
https://www.mql5.com/en/market/product/41992
https://algotrading-investment.com/portfolio-item/profitable-pattern-scanner/
3. Harmonic Pattern Scenario Planner for MetaTrader 5
With additional features of predicting future harmonic patterns, this is the tactical harmonic pattern indicator with advanced simulation capability on top of many powerful features of harmonic pattern plus. Try this tactical harmonic pattern indicator then you will know its power.
https://www.mql5.com/en/market/product/6101
https://algotrading-investment.com/portfolio-item/harmonic-pattern-scenario-planner/
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