Harmonic Patterns Explained -- with David Moadel
hey everybody welcome to looking at the markets with David Modell gonna talk
about harmonic patterns this is by request from somebody who emailed me and
there's no way I could possibly make a comprehensive quick and comprehensive
video about harmonic patterns it's just way too complicated you have to already
have a pretty good understanding of Fibonacci levels before you can even
really approach this but you've probably seen these before and I just want to let
you know at least what you're looking at what the heck those funny-looking shapes
are okay so here we go this is just an introduction really basic harmonic
patterns they're based on Fibonacci levels so again you have to understand
your FIPS before you even start to really want to approach this it's pretty
advanced stuff here but the basic patterns for harmonic patterns have five
points usually and the five points going from point X to point A to point B to
Point C to point D so X - a - B - C - D that's how it goes and you have four
lines that connect those five points either in the shape of a W or an M now
that that's the basic shape alright so you got a W or an M shape typically and
there are four major major patterns for harmonics the Gartley the butterfly the
crab and the bat and it's very interpretive and everybody's GART leaves
and crabs and bats and stuff they're all gonna look different and so you know
they're not always gonna work out perfectly alright these do not work 100%
of the time just want to let you know about that let's start with your typical
butterfly pattern here I just chose this one and it's oftentimes interestingly
used with Forex you know with currency pair trading for whatever reason but I
don't see why you couldn't try to apply this to stocks or come on
these crypto currencies whatever I've seen it in cryptocurrencies as well a
number of times and so this is a classic butterfly and these can all be bullish
or bearish and you can see it kind of looks like a butterfly and so you got X
a B C D all right you see the five points connected with four lines I mean
oftentimes they close it out with a couple lines here but the basic W is
here to here to here to here okay and the expectation if this works out again
doesn't always work out 100% of the time but for this classic butterfly pattern
and against by fib levels and so I there's no way I could possibly explain
all that in this quick introductory video but if you believe in the pattern
then you might believe that it's going to finish the pattern here after you've
drawn it and these are oftentimes drawn in trading view comm some people draw it
there and there are other places so you're going to have to probably get
some sort of software or a platform or website to draw this with so the
expectation oftentimes is that it's going to finish the pattern and so from
here it might be bullish but then a lot of times once it finishes the pattern
people oftentimes expect it to reverse and so is this bullish or bearish well
it could be bullish until it completes the pattern and then it could could
easily turn around and turn bearish alright so you know whether it's bullish
or bearish depends what phase you're in and how you view it and where you draw
your you know your fib lines and all that good stuff alright this is a bat
pattern just an example I'll give you a couple of bat patterns here you can see
it kind of looks like a bat sort of all right so X - a - B - C - D okay and then
it's a it's you know if this one was more of a W pattern then this would be
more of an M pattern okay from here to here to here to here kind of an M again
a lot of people expect and you can see the you know it's drawn on this chart
which is a crypto currency chart by the way and you can see the expectation is
that it's going to finish the pattern go down to the you know this
FIB line but then bounce off of it so you know whether it's bearish or bullish
depends on where you are in the pattern where the where the candles are give you
another example okay another bat here right can you see
the wings of the bat right this is the M here x2 A to B to C to D perhaps it
might finish the pattern and then bounce you know reverse course and retrace back
upwards next one is a crab all right and again X a B C D it's an M Krabs an M
pattern and the expectation is that it will actually extend quite a bit here
down to this fib level and then bounce off of it whether it does again not
guaranteed and then there's the Gartley funny name right the only one that's not
an animal or amphibian or reptile of some sort or crustacean so you know as
you can see it's a it's a W type of pattern and so the Gartley you know
expected to end here and actually it seems to be doing that and then
reversing course so whether it's bullish or bearish again depends on where it is
in the pattern okay is it only halfway up or did it just start or is it
completing it and then you're possibly expecting it to reverse course so you
know there's my really quick introduction I don't want to over
explain everything here this is just meant to be an introduction to tell you
exactly what you're looking at what those funny-looking animal patterns are
or w's an EM look and M lookin patterns are okay so you know it if you want more
assistance just generally with chart patterns and putting together a trading
or investing plan because you really need you know you should have a plan
otherwise you know you don't know where you're going or what you're doing I do
help people I coach people you can email me for coaching at David Modell at
gmail.com if you like this video please give it a thumbs up on YouTube and if
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I put out new videos excuse me thanks a lot for watching and
listening I'll talk to you again soon