When getting serious about trading, you should learn and understand how to trade forex in harmonic patterns to maximize your potential profit. At first, you need to know how to read charts. Yes, charts will definitely be a useful analysis tool to identify your potential earning, along with minimizing potential risk.
Generally, traders can identify the standard chart pattern easily by glancing and spotting a certain moment. However, when it comes to advanced one with a harmonic pattern, it will require any other tools and information. So, you can identify it and monitor any price movement.
Specifically, a harmonic pattern provides incredible value to inform the trading plan. Of course, you need to make sure to choose the best forex trading platforms, like Didimax. It is one of the most trustable sites with a direct market access system, the fastest fund deposit and withdrawal, also the fastest execution in a millisecond.
Trade Forex in Harmonic Patterns with Fibonacci Levels
Generally, the main characteristic of a harmonious pattern is the chart movement appertains to Fibonacci levels. It comes from Fibonacci, an Italian mathematician in the 12th to 13th centuries. The most popular thing of his is the ‘golden ratio’ with number sequences that be used in trading. The most common Fibonacci figures are;
1. 11.4 %
2. 23.6 %
3. 38 %
4. 61.8 %
5. 70.7 %
6. 76.4 %
7. 88.6 %
8. 100 %
9. Sometimes 50 %
You can start to trade forex in harmonic patterns using these Fibonacci levels as a measurement. It includes expressed as ratios and mathematical markers to indicate potential lines and resistance. This pattern develops as soon as the price movements gain certain Fibonacci markers.
It can move up or down in extensions and retracements to foreshadow the price breakouts. By learning and understanding the retracement level, you can effortlessly reduce the risk. But you need to keep patience to minimize getting overconfidence where your prediction may go wrong and leads to loss.
To get a more specific thing about it, you can learn through Didimax forex broker. Didimax has worked tirelessly to give traders with numerous services, tools, and instruments you need. Just start trading now by opening a real account immediately. Or, you also can learn first using the demo version.
Advantages and Disadvantages
To trade forex in harmonic patterns using Fibonacci, there are several reasons. The most common cause is its easiness to use. Traders can immediately level through the displayed forex chart. Even beginners can monitor each movement before identifying and developing their strategies.
It is also helpful to embrace the current trend-trading strategy. Mostly it is because the numbers of Fibonacci are naturally designed to analyze, identify, also predict any trending movement. You should consider using resistance levels as the extensions to examine strong opportunities.
The most challenging part to trade forex in harmonic patterns with it is inherently subjective. The result can vary widely. People may interpret the results in different ways regarding their personal experiences and point of view.
However, some detractors keep arguing that it does not correlate with any
concrete economic and financial theory. Simply, traders see the tracking movements and see the ratios. Then, they start to anticipate the impact and end up making it relevant to price movements.
Other than that, Gartley is also widely known as the most essential harmonious pattern. It has been modified several times. Traders need plain charts without any indicator present except for Fibonacci lines. It requires 4 price movements switching direction each time.
When all parameters meet, traders definitely get Gartley. It is more complicated than analyzing standard patterns. But it provides clear rules to improve risk management and develop your ability to trade forex in harmonic patterns.