Pattern Completion Zone versus Potential Reversal Zone
In addition, Pattern Completion Zone provides you the direct numerical description corresponding to the size of the Harmonic Pattern. Therefore, the size of symmetrical trading zone around the Pattern Completion Zone is a sensible measurement for your stop loss and take profit for each Harmonic Pattern. Especially, once you have mastered the Pattern Completion Zone for your trading, you can gauge your Reward/Risk Ratio with real time market data without the need of any other additional tools. You can expand this with limit and stop order for better managing your order and risk. Overall, Patter
Pattern Completion Zone versus Potential Reversal Zone
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Presentation Transcript
/ / / Pattern Completion Zone versus Potential Reversal Zone Pattern Completion Zone versus Potential Reversal Zone In previous chapter, we have described the Pattern Completion Zone (a.k.a Pattern Completion Interval) in details. Now many harmonic pattern trader can be curious how the Pattern Completion Zone (PCZ) is di?erent from the Potential Reversal Zone (PRZ). In ?rst place, as the PCZ and PRZ are derived from di?erent process, they are di?erent tool to trader. Having said that, the deriving process for PCZ and PRZ might be too complicated causing some traders to confuse the concept of each other. For this reason, we will clarify the di?erence by directly comparing PCZ and PRZ look. Let us look at the Potential Reversal Zone. So what is Potential Reversal Zone? Simply speaking potential Reversal zone is the area where three or four Fibonacci levels are converging together. Potential Reversal Zone can be used to detect the ?nal Point D of the Harmonic Pattern by projecting several Fibonacci retracements respectively from the point X, A, B and C. The area of the Potential Reversal Zone can be de?ned by the top and the bottom projected levels in the all projected levels as shown in Figure 5-1. The main di?erence between PCZ and PRZ is that Pattern Completion Zone forms the strict Symmetrical Trading Zone around the ideal Point D (Figure 5-3 and Figure 5-4). The Potential Reversal Zone (PRZ) does not form the symmetrical zone. However, the PRZ area formation is dependent on the location of each Fibonacci level projections as shown in Figure 5-1 and Figure 5- 2. Sometime PRZ area can form the symmetrical trading zone but it is only by chance. Most of time, Potential Reversal Zone will not form the symmetrical trading zone. On the other hands, Pattern Completion Zone will strictly form symmetrical trading zone for every harmonic pattern. Due to this symmetrical property of the Pattern Completion Zone (= Pattern Completion Interval), trader can use many di?erent trading strategies around the symmetrical trading zone beyond the classic harmonic pattern trading setup. With Pattern completion Zone, you can expand your classic trend reversal entry to hedging and breakout trading by setting identical but opposite trading. For example, for bullish Harmonic Pattern formation, you are able to setup the buy and sell hedging positions or straddle breakout setup around the Pattern Completion Zone. This is possible because the Pattern Completion Zone provides the median open price, which can be mirrored around the Ideal Point D. In addition, Pattern Completion Zone provides you the direct numerical description corresponding to the size of the Harmonic Pattern. Therefore, the size of symmetrical trading zone around the Pattern Completion Zone is a sensible measurement for your stop loss and take pro?t for each Harmonic Pattern. Especially, once you have mastered the Pattern Completion Zone for your trading, you can gauge your Reward/Risk Ratio with real time market data without the need of any other additional tools. You can expand this with limit and stop order for better managing your order and risk. Overall, Pattern Completion Zone can provide you precise and fast decision-making
process for your Harmonic Pattern Trading. In next chapter, we will continue to show you how the symmetrical trading zone works to manage your order and risk in details. https://algotrading-investment.com/portfolio-item/harmonic-pattern-plus/ https://www.mql5.com/en/market/product/4488 https://www.mql5.com/en/market/product/4475 You can read Guide to Precision Harmonic Pattern Trading to understand more about the Harmonic Pattern Strategy. https://algotrading-investment.com/portfolio-item/guide-precision-harmonic-pattern-trading/ Related Products Equilibrium Fractal Wave Analytics Volume Spread Pattern Detector Excessive Momentum Indicator Advanced Price Pattern Scanner
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