In this article, we will explain how to set stop loss and take profit with Harmonic Pattern. For any professional trading strategy, there are ways to manage the trading risk. Fortunatley, Harmonic Pattern can have the easy and complete trading risk management with Pattern Completion Zone. Pattern Completion zone is not the rocket science. It is a rectangle box drawn at the point D of any Harmonic Pattern. It can be drawn for any Harmonic Patterns including Gartley Pattern, Butterfly Pattern, Bat Pattern, Crab Pattern, Cypher Pattern, 5-0 Pattern and so on.
You can consider the pattern completion zone as the trading zone simply speaking. If you are not sure what is the trading zone, then think it as just two price range, often used in the support resistance trading or supply demand trading or volume spread analysis or any other technical anlaysis. You can read more about the pattern completion zone and trading zone in Guide to Precision Harmonic Pattern Trading. However, if you have not read this book yet, then let us just assume it as two price around the point D in the Harmonic Pattern. Typically, the pattern completion zone will be provided with Harmonic Pattern Indicator or Scanner you are using for the purpose of the trading risk management. Pattern completion zone is very useful to visualize the price trajectory around the point D of the Harmonic Pattern. For example, price can have several trajectory inside or outside the pattern completion zone.
With the Pattern Completion Zone, you can observe that sometime price can reach outside the pattern completion zone. Sometimes, price might just make a good turning point within the Pattern Completion Zone. The implication of this is that we need to set the sensible stop loss when we trade with the turning point. What is important here is that the stop loss size and take profit size. We can this as the Reward/Risk ratio. This is really important quantity to understand if you want to become a profitable trader.
Stop loss size around the pattern completion zone can be changed. As long as you understand the pros and cons of using large stop loss, it is still fine to control your own stop loss size. It is best to express the stop loss size in terms of pattern completion zone. Likewise, it is best to express the take profit size in terms of the pattern completion zone too. It is because your Reward/Risk ratio is easily visualized in your chart without any additional calculation steps. For example, if the original stop loss size was equal to 1 x pattern completion zone, you can certainly use 1.5 x pattern completion interval or 2 x pattern completion interval. This will impact of your Reward/Risk ratio. Hence, you need to adjust your take profit target too. So there are some interactive element for trading. It is the safe and profitable way to trade as it helps to manage your trading risk in highly visual form and in quantified manner.
Another consideration is, if you can enter the market at the competitive price, then you can feel less guilty when you increase your stop loss size because you are still having the good Rewards/Risk ratio. On the other hands, if you have entered market at not so competitive price, then you might be cautious when you increase your stop loss size. Pattern Completionzon helps you to measure all these important price levels with just a simple box, also know as the trading zone.
All our Harmonic Pattern indicator comes with this pattern completion zone. Hence, Harmonic Pattern Plus, Harmonic Pattern Scenario Planner and X3 Chart Pattern Scanner come with the Pattern Completion Zone. This means that with these products, you can manage your trading risk like the professional trader does.
In addition, you can watch the YouTube Video titled feel what is the automated harmonic pattern indicator like. For your information, we provides two YouTube videos with title and links below.
YouTube “Harmonic Pattern Indicator”: https://youtu.be/CzYUwk5qeCk
YouTube “Non Repainting Non Lagging Harmonic Pattern Indicator”: https://youtu.be/uMlmMquefGQ
Below, we provide the landing page for Harmonic Pattern Plus, Harmonic Pattern Scenario Planner and X3 Chart Pattern Scanner for your information.
Harmonic Pattern Plus
One of the first automated Harmonic Pattern detection tool released in 2014. It can detect 11 most popular harmonic patterns with well-defined trading entries and stops. Pattern Completion Interval, Potential Reversal Zone and Potential Continuation Zone are supported. In addition, other dozens of powerful features are added like Japanese candlestick detection, etc. Because of affordable price, this harmonic pattern detection indicator is loved by many traders. Please note that this is repainting and non lagging harmonic pattern trading system.
Harmonic Pattern Scenario planner
It is an advanced Harmonic Pattern indicator. On top of the features of Harmonic Pattern Plus, you can also predict future harmonic patterns through simulation. This is the tactical harmonic pattern tool designed for Professional harmonic pattern trader. Because of affordable price, this harmonic pattern detection indicator is loved by many traders. Please note that this is repainting and non lagging harmonic pattern trading system.
X3 Chart Pattern Scanner
Both Harmonic pattern plus and Harmonic Pattern Scenario planner are the excellent trading system at affordable cost. However, if you do not like repainting Harmonic pattern indicator, then we also provide the non repainting and non lagging harmonic pattern trading. Indeed, the X3 Chart Pattern Scanner is the most advanced Harmonic Pattern and Elliott Wave pattern scanner. Beside, X3 Chart Pattern Scanner provides many other powerful features like the customizable option and advanced channel and so on