Harmonic Pattern Detection Indicator – Trading Systems – 22 January 2022

A trading indicator is an investigation of a particular theory, trading strategy, or trading ideas for trading in the real world. There is always a gap between theory (i.e. ideas or strategy) and practice. This is the same for trading the harmonic pattern as well.

Thus, not all harmonic pattern detection indicators are the same. The main differences of harmonic pattern indicators can be categorized as the following four types. Users must understand the pros and cons of each shape to increase their trading performance using harmonic patterns.

Type 1: Not lag (quick reference) but repainting

Option to enter from tipping point. The indicator does not show the failed pattern in the chart and the last pattern can be redrawn. This is roughly considered as a standard indicator of the harmonic pattern. Even if they repaint, the harmonic pattern trader accepts it as is. 99% of the time, this is the harmonic model product that you will get from the market whether it is free or paid. You can trade directly with these indicators but historical patterns cannot be used to fine-tune your strategy.

Type 2: Lagging (slow signal) but not repainting

There is no option to enter at the turning point (no early signal). This type of indicator makes the harmonic pattern indicator slow like a moving average crossover. It may not be a very attractive option for your trading. The indicator does not show the failed pattern. Hence, you cannot use historical patterns to fine-tune your strategy but the last pattern does not repaint. You can trade directly with these indicators but historical patterns cannot be used to fine-tune your strategy. It is possible that about 1% of the indicators of the harmonic pattern will be of this type.

Type 3: Pattern detection at point C but repainting

Option to enter at a turning point. The indicator detects the pattern very early and you have to wait some time for the price to move near point D. In fact, the price may not move near point D. You may waste your time waiting for the pattern. The indicator does not show the failed pattern and the last pattern can be redrawn. You can trade directly with these indicators but historical patterns cannot be used to fine-tune your strategy. It is possible that about 1% of the indicators of the harmonic pattern will be of this type.

Type 4: No delay (fast signal) and no repainting

Option to enter from tipping point. At the same time, the pattern is not redrawn. This is a hybrid of all the above three systems and can be considered as the strongest indicator of the harmonic pattern. You can trade directly with these indicators and you can also use historical patterns to fine-tune your strategy. With this indicator, you fully adhere to the phrase “trade what you see”.

To get this post done, you can read the full blog article on Harmonic Pattern Indicator Types from the link below.

https://algotrading-investment.com/2019/03/03/harmonic-pattern-indicator-explained/

Additionally, you can watch a YouTube video to get a feel of what an automated harmonic pattern indicator looks like. For your information, we provide two YouTube videos with the title and links below.

Youtube Harmonic Pattern Indicator: https://youtu.be/CzYUwk5qeCk

YouTube “Non-Repaint, Non-Lagging Harmonic Pattern Indicator”: https://youtu.be/uMlmMquefGQ

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