FOREX THEORY
The Animals
As time went by, the popularity of
the Gartley pattern grew and people eventually came up with their own
variations.
For some odd reason, the
discoverers of these variations decided to name them after animals (Maybe they
were part of PETA?).Without further ado, here comes the animal pack…
The Crab
In 2000, Scott Carney, a firm
believer in harmonic price patterns, discovered the “Crab”.
According to him, this is the most
accurate among all the harmonic patterns because of how extreme the Potential
Reversal Zone (sometimes called “price better reverse or imma gonna lose my
shirt” point) from move XA.
This pattern has a high
reward-to-risk ratio because you can put a very tight stop loss. The “perfect”
crab pattern must have the following aspects:
Move AB should be the .382 or .618
retracement of move XA.
Move BC can be either .382 or .886
retracement of move AB.
If the retracement of move BC is
.382 of move AB, then CD should be 2.24 of move BC. Consquently, if move BC is
.886 of move AB, then CD should be 3.618 extension of move BC.
CD should be 1.618 extension of
move XA.
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