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12 January

By Amir El Araby

Category: Learn Forex

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What are the critical factors to be a successful harmonic trader?

When you decide to be a harmonic trader, the major rules of harmonic trading must be followed and I say “Must”.

** Some of the rules I use personally are seen in the following points:

*Longer time intervals should be clear and when you see a conflicting pattern or conflicting sigs avoid the instrument until things be clearer.

*Candlesticks and divergences are very important when price reaches the awaited potential reversal zones of a clear pattern(PRZ).

*Each harmonic pattern has its own price behavior. For instance, Gartley offers better chances in the middle of a stronger trend; whilst butterfly pattern should be avoided when the instrument moves inside an ideal classical channel.

*Prices mostly breaches through 23.6% Fibonacci of the CD leg of the pattern and it could be treated as a very soft target for the harmonic pattern.

*Think big! How? Try to gather good number of pips from the harmonic patterns you caught depending on the price actions around Fibonacci levels.

*If a reversal signal is seen on the small time frames, close the trade taken based on the bigger time interval.

*Extensions of the PRZ are there in the market, so be patient enough to see whether the market will reverse or not!

Amir El Araby

Financial advisor with 18 years’ experience in the technical analysis studies for FOREX, Commodities and Indices. Amir El-Araby worked as a mentor for many companies and institutes, where he presented new methods for trading in the financial market. Amir is a member of ESTA (Egyptian Society of Technical Analysts).