Recently, someone asked me about harmonic patterns, so I decided to organize my trading insights from the past few years. Honestly, not many traders truly master harmonic patterns, but once used correctly, the accuracy of identifying reversal points can reach up to 78.7%. That’s already a pretty good win rate in technical trading.

The core of harmonic patterns is using Fibonacci ratios to find potential reversal zones. I commonly use eight types, and today I’ll highlight a few key ones.

The simplest is the ABCD pattern, which is a combination of three waves and four points. AB is the impulsive wave, BC is a correction, and CD is another impulsive wave. The key is that the BC retracement should precisely reach the 0.618 level of AB, and the length of CD should equal that of AB. I usually place orders near point C or wait until the pattern is fully formed before entering at point D.

The Bat pattern adds an extra wave and an X point beyond ABCD. This was established by Scott Carney in 2001. The B point retraces to 50% of XA, and the extension of CD should reach at least 1.618 times BC. I use this pattern quite frequently because the Potential Reversal Zone (PRZ) signals are fairly clear.

The Crab pattern was also discovered by Carney. Its key feature is that the extension of XA to 1.618 determines the reversal zone. In a bullish Crab pattern, AB retraces between 38.2% and 61.8% of XA, and the BC segment has an extreme projection (2.618 to 3.618). This pattern is suitable for traders who want to enter at extreme high or low levels.

The Gartley pattern has very clear rules: B must be at 61.8% of XA, and D must be at 78.6%. Stop-loss is usually placed at X, and take-profit at C. The Butterfly pattern emphasizes the 0.786 retracement of XA, which is critical for pinpointing B.

I use the Shark pattern less often because it involves five waves and stricter conditions. AB should be between 1.13 and 1.618 of XA, BC is 113% of OX, and the target for CD is a 50% retracement of BC. Basically, it’s traded based on point C, with D as the take-profit.

The Three Drives pattern is the hardest to spot because it requires perfect symmetry in price and time. It consists of five points forming three drives and two retracements. Drives 2 and 3 should be extensions of 127.2% or 161.8% of A and C retracements, which are usually 61.8% or 78.6% of previous swings. This pattern is very rare; my advice is not to force it—if the chart isn’t symmetrical enough, just skip it.

Using harmonic patterns generally involves these steps: first, spend time understanding the logic behind these patterns; second, determine whether the market is bullish or bearish; third, find the corresponding pattern on the chart and enter the trade. A bullish pattern indicates the market will rise, and vice versa.

From my experience, learning harmonic patterns is indeed challenging, but once mastered, you can position yourself ahead of many traders at reversal points where they’re still hesitating. The key is not to force patterns onto the chart but to wait for clear signals from the market. If you want to start trading with harmonic patterns, you can first pick a familiar coin on Gate, find a few typical patterns to practice. Gradually, as you gain experience, you’ll find this method quite practical.