There are a number of things to consider when using this analytical technique. Read on to find out how to identify deep crab harmonic pattern
What is a Deep Crab Pattern?
A variation of the original Crab pattern, the Deep Crab pattern focuses on deep retracement levels. It allows traders to identify potential price reversals in the trading market. The potential price reveal points are calculated based on Fibonacci retracement levels. We’ll discuss more on how this works later in the article.
What is a Bullish and Bearish Deep Crab Pattern?
When reading the Deep Crab Pattern rules, what you’re trying to figure out is whether a bearish or bull market is emerging. A bearish Deep Crab Harmonic Pattern indicates that a bearish price reversal is happening.
On the other hand, a bullish harmonic crab pattern shows a bullish price reduction. These reversal patterns help investors plot Deep Crab Harmonic Pattern target points in order to minimize losses.
How To Identify a Deep Crab Pattern?
The best way to know what is deep crab harmonic pattern is to be able to identify it. There are four price swings (XA, AB, BC, and CD). As well as a series of specific Fibonacci retracement levels (0.382, 0.618, 2.618, and 0.886) to take note of.
- A sharp move from 0.382 to 0.618 of the AB swing is a BC swing.
- The CD swing should reach 2.618 of the BC swing.
- Then the last is the D point, which is at 0.886. This is where traders make the decision to enter a long position in their investments.
Example of a Deep Crab Pattern
Now that you know the basic Deep Crab Harmonic Pattern rules, let’s elaborate with an example.
On the chart below, taken from the TradingView Version of our Auto Hamronic Pattern Trading Indicator, We See the D Pivot completing right at the Auto Completion Zone. When any of our Harmonic Patterns complete in this aone, the result trade is high probabiltiy. Notice how the price action comes back up to test the zone again, before going down. The xBrat Software colours in the label for the Harmonic Pattern and the pattern itself in the colour for the resulting trade. In this case a Bearish trade. Check out all the trading platforms our xBrat Auto Harmonics Trading Indicator HERE