Applied Harmonics

Gaurav Bissa
AVP – Technicals & Derivatives
LKP Securities Ltd

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Harmonic Patterns
 Harmonic studies involves identifying setups which
have a combination of Fibonacci ratios
 However, these setups work on fixed set of ratios
although some degree of tolerance is allowed
 Scott Carney is perhaps most well known individual
credit with identifying many of the popular harmonic
patterns
 Harmonic patterns work on all time frames and all
asset classes like equity, forex and commodities.

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Commonly used Harmonic Patterns
 Harmonic Gartley Pattern
 Harmonic Bat Pattern
 Harmonic AB=CD Pattern
 Harmonic Shark Pattern
 Harmonic Butterfly Pattern
 Harmonic Crab Pattern
 Harmonic Cypher Pattern
 Harmonic Three Drives Pattern
 Harmonic 5-o Pattern
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Commonly used terms
 PRZ : Short for potential reversal zone. This is the level
where the pattern gets triggered with expectation of
reversal. It can also be formed by combination of more
than one Fibonacci ratio
 Alt Patterns : These are manifestations of existing
patterns which are seen in some of the harmonic
patterns. These are extension patterns. The are seen in
bat and shark patterns

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Spotting a Harmonic

Cypher & Altshark

Gartley & Bat

Butterfly & Crab

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Identifying Harmonic Patterns
Bullish Setup Bearish Setup
A X
C D

B
C
D
A
X

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Identifying Harmonic Patterns
Bullish Setup Bearish Setup
C
A X
D

D
A
X C

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Harmonic Gartley Pattern
Criteria:
1- XB ratio should be 61.8%
A of XA
0.38-0.88 2-AC ratio should be
C
between 38%-88% of AB
3-BD ratio should be
between 127%-161% of BC
0.618 B 1.27-1.61 4-XD ratio should be
D 78.6% of XA
0.786 5-Stoploss can be
X 88.6% of XA
6-Target can be 38%-61% of
CD
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Adanient (Daily)

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Nifty Midcap50 (Daily)

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HUL (Daily)

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Harmonic Gartley Pattern
Criteria:
X 1- XB ratio should be 61.8%
0.786 of XA
D
2-AC ratio should be
1.27-1.61 between 38%-88% of AB
B
3-BD ratio should be
0.618 between 127%-161% of BC
4-XD ratio should be
78.6% of XA
0.38-0.88 C
5-Stoploss can be
A 88.6% of XA
6-Target can be 38%-61% of
CD
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Bank Nifty Future (Hourly)

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Equitas (Weekly)

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SBI Life (Weekly) Failed

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Harmonic Bat Pattern
Criteria:
1- XB ratio should be 38%-
A 50% of XA
0.38-0.88 2-AC ratio should be
C
between 38%-88% of AB
3-BD ratio should be
between 161%-261% of BC
0.38-0.5 B
1.61-2.61 4-XD ratio should be
D 88.6% of XA
0.886 5-Stoploss can be
X 100% of XA
6-Target can be 38%-61% of
CD
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L&T (Daily)

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EUR/JPY (Daily)

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PEL (Daily)

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Bank Nifty (Daily)

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Harmonic Bat Pattern
Criteria:
X 1- XB ratio should be 38%-50%
0.886 D of XA
2-AC ratio should be
1.61-2.61 between 38%-88% of AB
B
3-BD ratio should be
0.38-0.5 between 161%-261% of BC
4-XD ratio should be
88.6% of XA
0.38-0.88 C
5-Stoploss can be
A 100% of XA
6-Target can be 38%-61% of
CD
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Banknifty Future (Hourly)

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Nifty (Hourly)

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Nikel (Daily)

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WTI (Daily)

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Siemens (Weekly) Failed

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Harmonic Alt Bat Pattern
Criteria:
1- XB ratio should be 38%
A of XA
0.38-0.88 2-AC ratio should be
C
between 38%-88% of AB
3-BD ratio should be
between 200%-361% of BC
0.38 B 2.0-3.61 4-XD ratio should be
113% of XA
1.13 5-Stoploss can be
X 127% of XA
D 6-Target can be 38%-61% of
CD
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RBL Bank (Daily)

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Harmonic Alt Bat Pattern
Criteria:
D
X 1.13 1- XB ratio should be 38%
of XA
2-AC ratio should be
2.0-3.61 between 38%-88% of AB
B
3-BD ratio should be
0.38 between 200%-361% of BC
4-XD ratio should be
113% of XA
0.38-0.88 C
5-Stoploss can be
A 127% of XA
6-Target can be 38%-61% of
CD
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Bata (Daily)

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Harmonic Butterfly Pattern
Criteria:
1- XB ratio should be 78%
A of XA
0.38-0.88 2-AC ratio should be
C
between 38%-88% of AB
3-BD ratio should be
between 161%-224% of BC
B 1.61-2.24 4-XD ratio should be
0.78 127% of XA
5-Stoploss can be
1.27
X 141% of XA
6-Target can be 38%-61% of
D CD
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M&M Fin (Weekly)

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Nifty 11000CE (Hourly)

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Nifty Metal (Daily) Failed

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Harmonic Butterfly Pattern
Criteria:
1.27
X D 1- XB ratio should be 78%
1.61-2.24
of XA
2-AC ratio should be
B between 38%-88% of AB
0.78 3-BD ratio should be
between 161%-224% of BC
4-XD ratio should be
127% of XA
0.38-0.88 C
5-Stoploss can be
A 141% of XA
6-Target can be 38%-61% of
CD
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ICICI Bank (Weekly)

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Marico (Daily)

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Nifty (Hourly)

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Harmonic Crab Pattern
Criteria:
A 1- XB ratio should be 38%-61%
0.38-0.88 of XA
C 2-AC ratio should be
between 38%-88% of AB
B 3-BD ratio should be
between 224%-361% of BC
0.38-0.61 2.24-3.61 4-XD ratio should be
161% of XA
X 5-Stoploss can be
1.61 190% of XA
6-Target can be 38%-61% of
D
CD
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Colpal (Daily)

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Harmonic Crab Pattern
D Criteria:
1- XB ratio should be 38-61%
1.61
of XA
X 2.24-3.61 2-AC ratio should be
between 38%-88% of AB
3-BD ratio should be
B between 224%-361% of BC
4-XD ratio should be
0.38-0.61 161% of XA
5-Stoploss can be
190% of XA
0.38-0.88 C 6-Target can be 38%-61% of
CD
A
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SRF (Weekly)

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Harmonic Deep Crab Pattern
Criteria:
A 1- XB ratio should be 88%
0.38-0.88 of XA
C 2-AC ratio should be
between 38%-88% of AB
3-BD ratio should be
between 224%-361% of BC
0.88 2.0-3.61 4-XD ratio should be
B 161% of XA
X 5-Stoploss can be
1.61 190% of XA
6-Target can be 38%-61% of
D
CD
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Vedanta (Daily)

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Bankindia (Daily)

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Harmonic Deep Crab Pattern
D Criteria:
1- XB ratio should be 88%
1.61
2.0-3.61 of XA
X 2-AC ratio should be
B
between 38%-88% of AB
3-BD ratio should be
between 224%-361% of BC
4-XD ratio should be
0.88 161% of XA
5-Stoploss can be
190% of XA
0.38-0.88 C 6-Target can be 38%-61% of
CD
A
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Syndicate Bank (Daily)

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Gold (Weekly)

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Harmonic Cypher Pattern
Criteria:
1.27-1.41 C
1- XB ratio should be 38%-
A 61.8% of XA
2-AC ratio should be
between 127-141% of AB
B 3-BD ratio should be
between 127%-161% of BC
0.38-0.618 1.27-1.61 4-XD ratio should be
D 78.6% of XA
0.786 5-Stoploss can be
X 88.6% of XA
6-Target can be 38%-61% of
CD
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Lic Hsg Cypher (Daily)

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Bank Nifty (Cypher)

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Nifty (Daily)

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Wheat (Daily)

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Harmonic Cypher Pattern
Criteria:
X 1- XB ratio should be 38%-
0.786 61.8% of XA
D
2-AC ratio should be
1.27-1.61 between 127-141% of AB
B
3-BD ratio should be
0.38-0.618 between 127%-161% of BC
4-XD ratio should be
78.6% of XA
5-Stoploss can be
A 88.6% of XA
1.27-1.41 6-Target can be 38%-61% of
C
CD
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Nifty Future (Hourly)

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Indigo (Weekly)

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Harmonic Shark(Alt) Pattern
Criteria:
1.13-1.61 C
1- XB ratio should be 38%-
A 61.8% of XA
2-AC ratio should be
between 113-161% of AB
B 3-BD ratio should be
between 161%-224% of BC
0.38-0.618 1.61-2.24 4-XD ratio should be
88.6% of XA
0.886
D 5-Stoploss can be
X 1.13 100% -127% of XA
6-Target can be 38%-61% of
CD
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Raymond (Daily)

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Banknifty 28100CE (Hourly)

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Grasim (Daily)

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Brent (Daily)

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USD/CHF (Weekly)

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Banknifty Future (30mins)

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Coal India (Weekly) Failed

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Harmonic Shark(Alt) Pattern
Criteria:
X 1.13 1- XB ratio should be 38%-
D 61.8% of XA
0.886
2-AC ratio should be
1.27-1.61 between 113-161% of AB
B
3-BD ratio should be
0.38-0.618 between 161%-224% of BC
4-XD ratio should be
88.6% of XA
5-Stoploss can be 100%-
A 127% of XA
1.13-1.61 6-Target can be 38%-61% of
C
CD
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TCS (Daily)

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Summary
 Harmonic patterns are reversal in nature so people
tend to get biased at times
 While the time is not the most important part the
patterns need to have some time balance
 Harmonics work on all time frames and all asset
classes
 Never preempt the patterns
 If a reversal doesn’t happen in 5-7 candles then exit the
position
 Some degree of tolerance allowed in ratios

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Key Takeaways
 There are 2 major patterns with XD at 0.78 – cypher
and gartley, however AC can differentiate between the
two
 There are 2 major patterns where A<C – shark and
cypher
 XB at 0.78 happens only in butterfly
 XD at 1.61 happens only in crab/deep crab
 XB at 0.88 happens only in deep crab
 XB at 0.38 and A>C can lead to formation of bat

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Thank You

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