In the article Harmonic Price Patterns and Fibonacci Numbers for Crypto Trading, we promised to expand upon harmonic price patterns and what to look for when analyzing the crypto markets for profitable trading.
A Brief History
H.M. Gartley, wrote about a 5-point pattern (known as Gartley) in his book Profits in the Stock Market, which promoted revolutionary thinking as far as market analysis and predictions. Later improved by Larry Pesavento by using Fibonacci ratios to establish patterns, Scott Carney is credited with additional pattern theories like “ABCD”, “Three Drive”, “Crab”, and “Bat”, among others.
While running his stock market advisory service in the mid-1930s, Harold McKinley discovered the Gartley pattern. Because of their early success using these models, his service was among the early adopters of statistical and scientific methods towards analyzing the behavior of the stock market.
It wasn’t long before other traders realized that the pattern was found in other markets like the FX market, and it stands to reason that the harmonic patterns would also help in the analysis within the cryptocurrency markets as well.
Let’s examine some of the most popular harmonic patterns.