Traders use several chart patterns to predict the direction of the market price. But very few are as profitable as the harmonic patterns, particularly the Navarro 200 harmonic pattern. And that is because it uses the Fibonacci to predict the turning point.
What is a Harmonic Pattern?
Generally, harmonic trading stipulates that market trends are harmonic occurrences. These patterns are split into larger and small waves that help predict the direction of the market price.
The only problem is that they’re rare and hard to identify, particularly by beginners. So you can use an auto harmonic pattern script.
How to Use Navarro 200 Harmonic Pattern?
All harmonic patterns can come in handy when looking for the pricing trend and new trading opportunities. But if you know what you’re looking for and how to plot them correctly, then you can benefit from these patterns.
Navarro 200 follows the XABCD pattern and can help predict a bearish or bullish move. For instance, in a bearish harmonic market, the pattern forms a “W” pattern with wave A not exceeding wave B in most cases.
When you notice the Navarro 200 harmonic pattern, then you should plot your Fibonacci numbers with wave D between 0.886 and 1.128. Wait for the reversal and then ride the change in trend for maximum profits.
Navarro 200 Harmonic Pattern Rules
Like the other harmonic patterns, the Navarro 200 must follow certain rules for better results. Some of these rules include the following:
- The retracement of wave B should be between 0.382 and 0.786 of XA.
- Retracement of wave D should be about 0.886 and 1.128 of XA.
- Point C can serve as the take-profit target in a bearish Navarro 200 pattern.
- Retracement of C is between 0.886 and 1.128 of AB.
Example of a Navarro 200 Harmonic Pattern
A great example of a Navarro harmonic pattern is a W pattern composed of XABCD. When you plot this pattern, point B should retrace beyond 78.6% of XA. Wave D should be a maximum of 112.8% of XA.
This means that wave D should exceed point X in most cases, and when this happens, then you should look for an entry between 0.886 and 1.128 retracement points.