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7/26/2019 Backtesting Potential Reversal Zone With Harmonic Pattern Plus_1_1
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ATI
ATI
ATI
ATI
ATI
aterials
manual Backtesting Potent
Harmonic Pattern
Harmonic Pattern
English
Harmonic Pattern,
Plus, Trading, Fore
Harmonic Pattern
10 May 2015
1.1 (27 March 201
m or any of our products (leave empty if you don’t us
MetaTrader 4 or M
Build 950
Harmonic Pattern
Pattern Scenario Pl
7.0, 7.0
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ial Reversal Zone with
Plus (or with
Scenario Planner)
Harmonic Pattern
x, Investment,
Scenario Planner
)
e)
etaTrader 5
Plus (7.0), Harmonic
lanner (7.0)
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Backtesting Potential
with Ha
Note this manual may contain
ed by trading community to help other traders through www.algo
Reversal Zone with Harmonic P
monic Pattern Scenario Planner
10 May 2015
s technical terms and this manual is intended for education
3
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ttern Plus (or
al purpose only.
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What is Potential Reversal Zon
Potential Reversal Zone (PRZ)
overlapping together. When se
each other, this area should be
support and resistance, this PRZ
probable breakout zone. In an
bounce back hard at this PRZ l
PRZ levels are not always pre
sometimes. So it is much mor
approach.
With some knowledge with har
success rate. In the picture bel
shown. Understanding the basi
purposes in your Harmonic Pa
harmonic Pattern. Also this PRZ
targets.
Figure 1: Potential Reversal Zon
ed by trading community to help other traders through www.algo
?
is an area where 3 or more Fibonacci Ret
eral layers of Fibonacci Retracement levels ar
treated very carefully for your trading. Using th
area can act as both highly probable trend reve
ther words, you will find that price can eith
vels with unusually high volatilities. It is impor
dicting the trend reversal. But it will predict
e practical to take PRZ levels in terms of su
onic pattern trading, this PRZ levels can help y
w, automatically identified PRZ lines by harm
characteristics of PRZ levels, you can use the
tern trading. PRZ can be used to confirm the
can be used to place your stop loss or trail you
for bullish Harmonic Pattern.
4
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acement levels are
stacked up near to
classic definition of
rsal zone or as highly
r penetrate hard or
ant to note that the
price breakout too
port and resistance
u to trade with high
nic pattern plus are
for many different
last point D in your
r stops or take profit
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The structure of PRZ Levels in H
Fibonacci Retracement is a po
Fibonacci Retracement manuall
lowest point in your chart. Th
23.6%, 38.2%, 50%, 61.8% and
your Fibonacci Retracement can
Figure 2: Fibonacci Retracement
PRZ levels in Harmonic Patter
detect more significant suppor
available Fibonacci Retraceme
pattern with XABCD notation, h
these four legs:
1. Internal Price Retrac
2. External Price Retrac
3. Correction Price Proj
4. Future Price projecti
ed by trading community to help other traders through www.algo
armonic Pattern Plus and Harmonic Pattern Sc
ular support and resistance identification tec
y, you may need to identify two peaks includi
n you can draw retracement level in Fibonac
00% etc. Depending on the order of highest p
be setup for both ascending and descending or
example drawn using two peaks in ascending o
Plus uses this Fibonacci Retracements idea
and resistance levels. Harmonic Pattern Plus
ts from the five points making up the patter
armonic pattern plus will calculate Fibonacci R
ment (XA)
ment (BC)
ction (AB or ABCD)
n (CD).
5
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nario Planner
nique. To draw this
g highest point and
ci number including
ak and lowest peak,
ers.
rder.
nd extend them to
will consider all the
n. For example, the
tracements from all
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For starters, the name of points
the most of patterns will start f
need to make entry decision.
Figure 3: Typical XABCD pattern
Some curious readers, we will s
one example bullish harmonic
below:
A. Draw Fibonacci retrace
B.
Draw Fibonacci Retrace
C. Once you have drawn
identify PRZ levels by d
together.
Note that without final steps, t
chart extremely complicated to
must filter out many fuzzy Fibo
some patient traders doing all t
doing it for your trading. They w
this steps manually will take q
Pattern Scenario Planner can
backtest this PRZ levels for e
Harmonic Pattern Scenario Plan
ed by trading community to help other traders through www.algo
and each lags are shown in the figure below. F
om point X except ABCD pattern and few other
price trajectory for both bullish and bearish patt
how the steps of how to do such a complicated
attern. The steps can be broken down into 3 s
ent for XA and BC upwards legs.
ments for AB and CD downwards legs.
he Fibonacci Retracements from all these fou
etecting area where 3 or 4 Fibonacci Retracem
he Fibonacci Retracements levels from all four
interpret for your trading (Figure 6). Therefore,
acci Retracements levels from your charts (Fig
ese steps manually. Of course identification of
ill help you to make good profits for your tradin
uite good efforts and time. Harmonic Pattern
o tedious task automatically in less than 1 se
ach patterns on historical data with Harmon
ner. Learning how price reacts over these PRZ l
6
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r Harmonic Pattern,
s. At point D, traders
erns.
task manually using
b steps as shown in
r legs, then you will
ents are overlapping
legs can make your
as the final step, one
re 7). We have seen
PRZ levels are worth
. However doing all
Plus and Harmonic
cond. You can even
ic Pattern Plus and
vels can help you to
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master many profitable tradin
scientific way of developing you
Figure 4: Fibonacci Retracement
Figure 5: Fibonacci Retracement
ed by trading community to help other traders through www.algo
g strategies with harmonic patterns. This is
r profitable trading strategy.
from XA and BC upwards legs.
from AB and CD downward legs.
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really objective and
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Figure 6: Combined Fibonacci
Fibonacci Retracements are rea
to identify overlapping and sign
trading.
Figure 7: All fuzzy PRZ lines are
are shown from Harmonic Patt
harmonic patterns.
ed by trading community to help other traders through www.algo
Retracement from all XA, AB, BC and CD le
lly complex and not so much usable for your tr
ificant PRZ levels only among these complex li
automatically filtered out. Only clustered and
ern Plus. As you can see, it is much easier to
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s. These combined
ding. It is important
es for your practical
verlapping PRZ lines
spot the entry with
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In Harmonic Pattern Plus, ther
Those input settings are all und
levels from you charts if you p
other preferred setup. To do thi
The most important input in y
Overlapping distance. Human tr
algorithm requires some criter
Retracements in your chart. The
A. Potential Reversal Zone
B. Potential Reversal Zone
“Potential Reversal Zone Overl
distance in relative to the patt
bigger size patterns, we should
PRZ overlapping relative limit us
all the other fuzzy Fibonacci Re
for PRZ overlapping relative limi
see fewer PRZ levels in your ch
PRZ overlapping distance is to u
Potential Reversal Zone Overla
distance is smaller than 1 pip
Relative Limit and Absolute Limi
priority. To use absolute limit, ju
ed by trading community to help other traders through www.algo
e are many ways to control this PRZ identific
r the “PRZ option” of the input setting. You ca
refer to use different style of Harmonic Patte
s, you will need to set “Use Potential Reversal Zo
our PRZ option is to set the limit of the Pot
ader can detect the PRZ without too much co
ia to separate significant PRZ levels from all
two inputs to define the PRZ levels in your char
Overlapping Relative Limit
Overlapping Absolute Limit
apping Relative Limit” input control the limit
ern Size. This is in fact the preferred option b
allow larger overlapping distance between Fib
es fraction of the pattern size to separate signifi
racements. Normally you can use 1% (0.01), 2
t. 1% means tighter overlapping distance than 3
rt 1% limit in comparing to 3% limit. Another w
se absolute limit using just straight pip value. Fo
ping Absolute Limit = 1 pip, then the PRZ lev
will be shown in your chart. You can‘t use b
t at the same time. If both are on, then relativ
st set Potential Reversal Zone Overlapping Relat
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tion in your charts.
n switch off this PRZ
n Trading with your
ne = false”.
ntial Reversal Zone
plex rules. However
the fuzzy Fibonacci
include:
of PRZ overlapping
ecause for relatively
nacci Retracements.
cant PRZ levels from
(0.02) or 3% (0.03)
. Therefore you will
ay of controlling the
r example, if you set
els with overlapping
th PRZ Overlapping
limit will be used in
ive Limit = 0.0.
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Figure 9: Input setting for PRZ o
To backtest these PRZ levels o
Harmonic pattern Plus will show
your trading strategy with large
pattern search”. “Amount of Ba
input setting.
More practical consideration of
As you can see from the scree
levels identified by many overl
below are very clear (Figure 10
PRZ levels. However, sometime
11. The reason behind this is in
matching to the ideal patterns
harmonic pattern.). In this case,
you may apply more strict criter
your Potential Reversal Zone Ov
you may apply Potential Revers
ed by trading community to help other traders through www.algo
tion.
er many different patterns, click “<< “or “>>”
next patterns on your charts with PRZ levels. If
samples of Harmonic Patterns, increase “Amou
rs to scan for pattern search” is located under “
PRZ levels
shot below, PRZ levels are very important su
apping Fibonacci Retracements. The PRZ level
and you can definitely play your tactics with f
, the detected PRZ lines are not clear for tradin
general because the detected harmonic patter
eaning that it has higher MAPE (if MAPE = 0.0,
you may skip your trading for this harmonic pat
ia to detect PRZ levels from your chart. For exa
erlapping Relative limit from 0.03 (3%) to 0.02 (
l Zone Overlapping Absolute Limit instead of Rel
10
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on your chart. Then
you need to develop
t of Bars to scan for
User Option” of your
port and resistance
in the screenshots
ull advantage of this
g as shown in Figure
s are less accurately
then it is the perfect
tern. Or alternatively
ple, you can reduce
2%). Or alternatively
lative limit.
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Figure 10: Bearish Harmonic Pa
limit = 0.03). PRZ levels are nicel
Figure 11: Bullish Harmonic Palimit = 0.03). PRZ levels are little
ed by trading community to help other traders through www.algo
ttern with PRZ levels (Potential Reversal Zone
y placed on the chart for your trading.
tern with PRZ levels (Potential Reversal Zonebit unclear for trading.
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Relative Overlapping
elative Overlapping
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Figure 12: Bullish Harmonic Pa
limit = 0.02). All the unclear PRZ
Successful trading requires hig
and to think ahead before mark
as the harmonic pattern is dete
as stops and take profits. You c
you can mark these important p
With Harmonic Pattern Scenar
Indeed harmonic Pattern Scen
However, predicting future is
more difficult. Therefore, it is n
term forecasting, you can alwa
access to future information.
ed by trading community to help other traders through www.algo
tern with PRZ levels (Potential Reversal Zone
levels are filtered again leaving only clear PRZ le
ly efficient operations meaning that it is impo
t. Therefore, you should identify these importa
cted. Your entry level can be calculated using t
n always lock the patterns with PRZ together in
rice levels to monitor throughout your trading s
io Planner, you can even predict future patte
rio Planner is an amazing tool designed for s
uch more difficult and especially predicting f
ted that you should make short term prediction
s take advantage using your early planning o
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elative Overlapping
vels.
tant for you to plan
nt PRZ levels as soon
is PRZ levels as well
your chart. This way
ssion.
rns with PRZ levels.
phisticated traders.
rther future is even
if possible. For short
er others who can’t
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Figure 13: Future Predicted Ha
levels.
ed by trading community to help other traders through www.algo
rmonic Pattern using Harmonic Pattern Scena
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io Planner with PRZ