ON THE LARGER TIMEFRAME, GBPAUD MADE A SHIFT IN MOMENTUM FROM A CHANNEL PRICE HAS BEEN KIND OF CONSOLIDATING LOOK OUT FOR THESE ZONES FOR A BUY ON GBPAUD
So, based on your market research for bats, what is the probability of the pattern to hit targets drawn on your chart? And, please, mention the swing identification method you used in your tests so I (or anybody else) could confirm the statistics for the pattern. Because.... You know, different traders identify swings/waves different way that's why the results may vary radically. Waiting for your reply. Regards.
I take the targtets (which i believe you mean entry) as a zone. so i hope to see price come around the zone, reject and make a reversal.
i also do normal technical analysis not just harmonic patterns to weigh the feasibility of the pattern formed.
i majorly use the pattern to give myself an entry zone and also a speculation for how price could move.
Yes i know. The swing thing varies at times but i make use of the prior feasible swing. If its a larger corrective, i look to a much larger swing.
its also very possible you have overlay of different harmonic patterns giving you zones to watch out for. This is more the reason i do normal TA to know which is feasible.
i hope i answered your question. : )
Alexander_Nikitin
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@Bright_oladayo, Nope, you didn't unswer my question. Your answer should be like this: "I look for highest highs/lowest lows of past 12 bars to identify waves. With this swing identification method I tested bats finding at least 100 setups for one pair one timeframe. Totally I have analysed 10 000 bat patterns (which I suppose to be pretty reliable statistical number) and found 43% of them hitting the target and 57% of them hitting the stoploss if the execution was limit orders. I also did some test for candlestick execution and it helped to filter some losses. With candlesticks entries the probailiy of target was 52% and probability of stoploss was 48. But because of the delayed entry the risk to reward turned worse, that's why the candlestick entry didn't do any improvement"
Bright_oladayo
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@Alexander_Nikitin, I don't count the bars and i really can't give an average of how many bars are the bat patterns i have analysed. All i do is look for the prior swing low/swing high which will serve as X point. In a situation where i have a typical Elliot wave, wave 4-5 will be X-A. Although, i believe swing identification is one problem i find with harmonics; more the reason entries must be taken with caution.
About stop losses, candlesticks and hitting of targets, i have experienced this. I believe market execution is best for harmonic patterns; you really want to see market reverse in your favor before taking the trade. The risk to reward ratio is not always outrageous. I always enter @ the first retest after reversal from the harmonic entry zone. That way, my stop loss is set at prior highs and i also have a confirmation that price is moving in my favor.
Alexander_Nikitin
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@Bright_oladayo, Oh, I see you didn't do the market research because your answers don't look similar to the template I provided. If you don't know when the probabilities are in your favour you are gambling. Your identification of XA leg is subjective because "wave 4-5" can be applied almost to every market move. I don't care how you trade the patterns, I was asking if you did the tests.
You believe that bats are reliable patterns but you didn't do objective market research. This means you simply trust people who describe this pattern. So may I ask you few more questions...
1) Are you sure those people don't lie to you deliberately making the pattern look better than it really is? Look, they sell trading courses teaching these patterns. It is kinda natural for a seller to praise his products.
2) Have you ever talked personally to a creator of the pattern?
3) Have you ever seen the creator of the pattern providing the swing identification algorithm for objective identification of the legs?
4) Have you ever seen the creator of the pattern providing the excel spreadhsheets of his market research?
Simple four questions that should be asked "yes" or "no". Please be honest. Just 4 words, nothing else.
Bright_oladayo
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@Alexander_Nikitin, Also, i also take these patterns once i see corresponding fibonacci ratios.
Can i ask a question ?
Bright_oladayo
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@Bright_oladayo, I saw your analysis on GBPAUD which was a gartley pattern.
In comparison to the bat pattern, how were you able to tell which highs to pick as your A-B-C correction since the fibonacci ratio of the A-B-C retracement for the bat and gartley are both appropriate ?
Alexander_Nikitin
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@Bright_oladayo, This is not a gartley pattern. A gartley pattern is a harmonic pattern. The pattern I posted is a unified gartley. A unified gartley is not a harmonic pattern.
As for the ABC leg, it's not me who decides which extremes to take for A, B and C-points.... It's my swing identification methodology. That's why I never have a situation that can be interpreted several ways.