Understand harmonic patterns from "summary" of The Ultimate Guide to Chart Patterns by Atanas Matov,Steve Burns

Harmonic patterns provide traders with great insight into market reversals but require patience and discipline in order to benefit from their signals.

By understanding harmonic patterns, traders can use the repetition of similar cycles in different price ranges across different markets in order to make predictions and take advantage of certain trading opportunities.

Trading with harmonic patterns can be a very profitable approach because they often result in powerful reversal formations when found in consolidating markets.

Harmonic patterns consist of a series of Fibonacci retracements and projections used to identify key concentrations of support and resistance.

To properly utilize harmonic patterns, you must first learn to recognize them accurately in any given chart.

It is important to note there are several types of harmonic patterns such as Gartley, Butterfly, and Crab, each one having unique characteristics that provide additional insight into possible market turns.

These patterns offer an excellent way for traders to anticipate future price movements by making assumptions about how far the price will move, and also where buyers and sellers may become active in the market.

Understanding harmonic patterns is an excellent tool for real-time analysis that can assist traders in identifying trades with higher probabilities of success.

Once these patterns are identified and understood, you can then begin to apply appropriate strategies such as entries, stops, and targets based on the levels of support or resistance within the pattern.

In order to do this successfully, it's important to understand the Fibonacci ratios involved in harmonic pattern calculations so you know what to look for and trust its accuracy.