Stop loss in Harmonic Pattern trading is a method of protecting your capital from unexpected price movements in Forex and Stock Market. Harmonic Patterns are the chart patterns that use Fibonacci ratios to identify potential reversal zone in Forex and Stock trading. By placing a stop loss at a certain level, you can exit the trade if the price goes beyond the expected reversal zone.
There are different methods of setting a stop loss with Harmonic Patterns, depending on the type of Harmonic pattern and your risk tolerance. Some simple but sysmetic methods include to use the Pattern Completion Zone (= Pattern Completion Interval) generated at the Point X of the Harmonic Pattern. Using the Pattern Completion Zone (= Pattern Completion Interval) you can manage your risk to reward ratio sysmemtically. With the Pattern Completion Zone, you can set up your order using both methods.
Market Order and Risk Management
Pending Order and Risk Management
Setting up the sensible stop loss can be tricky for harmonic patterns. Managing your stop loss and profit target is one of the most important aspect of Forex trading. This is a short simple article showing how to resize your stop loss and take profit with harmonic patterns. The main point is that the trading zone helps you to manage your stop loss and profit target for Forex trading. The same principle can be applied to the all the harmonic patterns including BAT, Gartley, Butterfly, Shark Pattern, Three drives, 5 to 0, etc.
Likewise, managing stop loss and take profit target is so much easier with this automated Harmonic Pattern Scanner including Harmonic Pattern Plus and Harmonic Pattern Scenario Planner. Both Harmonic Pattern Plus and Harmonic Pattern Scenario Planner are available in MetaTrader 4 and MetaTrader 5.
Below is the landing page for Harmonic Pattern Plus with Japanese Candlestick Pattern Features.