Top 7 harmonic patterns every trader should know

What are harmonic patterns?

Harmonic patterns are geometric price structures defined by specific Fibonacci retracement and extension ratios between four or five pivot points, labelled with letters such as XABCD. 

Unlike classical chart patterns like triangles, or head and shoulders, which are identified largely by their shape, a valid harmonic pattern requires each leg to hit an exact Fibonacci ratio. 

In other words, a loose fit does not count. This precision is the whole point. 

Because the pattern is only valid when the ratios line up, it gives you an exact price zone where a reversal is statistically more likely to occur, known as the Potential Reversal Zone (PRZ), along with a natural place to position your stop. This is what makes harmonic patterns appealing — they turn a vague sense that a market ‘looks overextended’ into a scientific, rules-based entry with defined risk.

The trade-off (there’s always a trade-off) is difficulty. There are at least seven commonly used harmonic patterns, each with its own set of ratios, and identifying them accurately by eye is difficult. This is why most traders who use them rely on charting tools with a Fibonacci retracement function rather than measuring them manually.

Before you rely on any pattern, you should be confident performing your own technical analysis, and ideally combine it with fundamental analysis so you understand the wider market context around each setup.

A quick primer on Fibonacci ratios

Every harmonic pattern is built on Fibonacci ratios, so it’s essential you understand where they come from before you try to trade them.

If you’re new to this, you might consider starting with a Demo Account, so you can try your strategies out with virtual money before risking real capital.

For those of you who remember GCSE mathematics, the Fibonacci sequence is a series of numbers where each is the sum of the two before it — 0, 1, 1, 2, 3, 5, 8, 13, 21, and so on. Divide any number in the sequence by the one that follows it and you approach 0.618. Divide it by the number two places ahead and you approach 0.382. These ratios, along with 0.786, 0.886, 1.272, 1.618 and 2.618, appear repeatedly in the natural world, and they appear repeatedly in financial markets too.

As an aside, the concept was formally introduced to Western mathematics by Italian mathematician Leonardo of Pisa (who also went by Fibonacci) in 1202, who used it to solve a problem regarding rabbit population growth.

So why do markets still respect them? Obviously, there is no law of physics forcing a currency pair to reverse at a 61.8% retracement. However, many analysts believe that Fibonacci levels have become a self-fulfilling prophecy — enough traders believe in them, so they watch the same levels and place orders around them that the levels start to matter. 

When price retraces to 0.618 of a prior move, a cluster of buy or sell orders is often waiting there, and that concentration of orders can be enough to turn the market.

For harmonic trading, the key levels to know are the retracements (0.382, 0.50, 0.618, 0.786 and 0.886) and the extensions (1.272, 1.618, 2.24, 2.618 and 3.618). Every pattern below is just a different combination of these numbers.

Top 7 harmonic patterns

1. The ABCD pattern
2. The BAT pattern
3. The Gartley pattern
4. The butterfly pattern
5. The crab pattern
6. The deep crab pattern
7. The shark pattern

The ABCD pattern

The ABCD (or AB=CD) pattern is the foundation on which every other harmonic pattern is built, and the only place for beginners to start. It is composed of three movements and four points — an impulsive move (AB), a corrective move against it (BC), and a final impulsive move (CD) in the same direction as AB.

Two rules define it. 

Using the Fibonacci retracement tool on the AB leg, the BC leg should retrace to 0.618. The CD leg should then equal the length of AB, and ideally take a similar amount of time to form. When both conditions are met, point D marks the PRZ (potential reversal zone).

As an illustration, imagine EUR/USD rises from 1.0800 to 1.0900 (the AB leg). It then pulls back 61.8% to around 1.0838 (the BC leg). If it resumes falling and travels the same distance as AB, point D gives you a defined level to look for a reversal. Traders can either enter cautiously near point C or wait for the full pattern to complete at D before taking a position.

Open a live account to trade harmonic patterns today.

The BAT pattern

The BAT pattern, identified by Scott Carney in 2001, gets its name from its bat-like shape. It adds a fifth point, X, ahead of the ABCD structure, making it an XABCD pattern.

The defining feature is a shallow point B — the retracement of the XA leg to point B should be between 0.382 and 0.50. From there, the BC leg retraces 0.382 to 0.886 of AB, and the CD leg extends 1.618 to 2.618 of BC. Crucially, point D sits at a 0.886 retracement of the entire XA leg, and it must not exceed point X.

If D breaks beyond X, the pattern is invalid, and it can make sense to exit the trade.

Because point D sits so close to X, the BAT pattern allows for a tight stop just beyond X, which is what gives it arguably one of the more favourable risk-to-reward profiles of any harmonic pattern. It’s a deep retest of support (in a bullish BAT) or resistance (in a bearish BAT).

The Gartley pattern

Created by HM Gartley and described in his 1935 book, the Gartley is the oldest and most widely recognised harmonic pattern. It forms a ‘W’ shape in a bullish setup and an ‘M’ shape in a bearish one.

It has two strict rules — point B must be a 0.618 retracement of the XA leg, and point D must be a 0.786 retracement of XA. The BC leg retraces 0.382 to 0.886 of AB, and CD extends 1.272 to 1.618 of BC. 

Like the BAT, point D must not exceed point X.

Traders typically position their stop-loss just beyond point X, with initial profit targets at point C and then point B. The Gartley's long track record and relatively conservative structure, with point D inside the XA range, make it a popular starting point for traders getting used to harmonics.

The butterfly pattern

Discovered by Bryce Gilmore, the butterfly differs from the Gartley and BAT in one important way — point D extends beyond point X, letting you enter at a fresh extreme rather than within the prior range.

The defining ratio is a 0.786 retracement of the XA leg at point B. BC retraces 0.382 to 0.886 of AB, and CD extends 1.618 to 2.24 of BC, placing point D at roughly a 1.272 extension of XA. Because D forms at a new high or low, the butterfly is well suited to catching exhaustion moves where a trend has pushed too far, too fast (meaning buyers might step in to catch the dip, or sellers arrive to take profits).

The crab pattern

Another Scott Carney discovery, the crab is regarded by Carney himself an exact and effective harmonic patterns. Like the butterfly, it lets traders enter at extreme highs or lows.

Its signature is a dramatic 1.618 extension of the XA leg, which determines the PRZ at point D, far beyond point X. 

In a bullish crab, price rises sharply from X to A, the AB leg retraces 38.2% to 61.8% of XA, and BC then projects a large 2.618 to 3.618 extension. Because D sits so far out, the crab often offers an exceptional risk-to-reward ratio, but the extreme projection also means it requires patience and a wider mental buffer to trade well.

Like any trade, it’s not bulletproof, and should only be one indicator used before placing a trade.

The deep crab pattern

The deep crab is a variation on the standard crab. The single difference is a deeper point B — an 0.886 retracement of the XA leg, rather than the 0.382 to 0.618 of the standard crab, without exceeding point X. The BC projection ranges from 2.24 to 3.618.

This deeper B retracement effectively combines characteristics of the crab and the BAT, and it tends to produce an even more extreme point D. It’s best treated as a specialist variant for more advanced traders once you are already comfortable with the standard crab.

The shark pattern

Also discovered by Scott Carney, the shark is a more recent and more aggressive five-leg pattern, with points labelled O, X, A, B and C. It uses the 0.886 and 1.13 ratios that give it a distinctive structure.

A valid shark requires the AB leg to retrace between 1.13 and 1.618 of the XA leg, the BC leg to reach 113% of the OX leg, and the CD leg to target a 50% retracement of BC. Trades are taken at point C, with point D used as a pre-defined profit target. 

The shark is fast-moving and less forgiving than the older patterns, and again is generally better suited to more experienced harmonic traders. A shark can often evolve into a crab pattern, and some traders use it as an early warning of a developing crab.

It’s important to remember that technical analysis is based on past chart performance, and past performance is not a guarantee of future results. Additionally, some of these harmonic patterns are more complex to learn than others — it’s arguably better for beginners to start with the basics before moving onto the more complex variations.

How reliable are harmonic patterns?

This is where you should apply some healthy scepticism. You will often see claims that harmonic patterns have success rates of 80% to 95%, with the BAT pattern in particular quoted at 89% to 95%. 

These figures circulate widely on social media, but many of them originate from unscrupulous individuals selling harmonic pattern software or courses, rather than from independent, peer-reviewed research. Treat them as marketing, not established fact. If they always enjoyed a 95% success rate, those who used them would all be millionaires.

The more honest position is that harmonic patterns are a useful tool for identifying high-probability reversal zones, but no chart pattern has a reliable, fixed win rate across all markets and conditions. 

Real-world results depend heavily on how strictly you validate the ratios, which timeframe you trade, how you confirm entries, and how you manage risk. A trader following an 85%-accurate pattern can still lose money overall with poor risk management, and many experienced harmonic traders report personal win rates closer to 60% to 75%, which is still enough to be profitable when paired with a sound risk-to-reward ratio.

A few practical observations that are widely agreed upon — higher timeframes (the four-hour and daily charts) tend to produce cleaner, more reliable structures than lower ones; the Gartley and BAT, with point D contained inside the XA range, are generally considered more conservative than the crab or shark, which enter at extremes; and every pattern becomes far more trustworthy when it lines up with other evidence, which brings us to confirmation.

Confirmation signals: never trade a pattern alone

The single most important habit in harmonic trading is refusing to enter on the pattern alone. Reaching the PRZ tells you a reversal is possible, not that it has begun. Experienced traders wait for the market to confirm the turn before committing.

Common confirmation signals include a candlestick reversal pattern forming inside the PRZ, such as a pin bar, engulfing candle or doji, which shows momentum is actually shifting. Many traders also watch for RSI divergence (where price makes a new extreme but the Relative Strength Index does not), signalling the trend is running out of steam. 

A shift in volume, or price reclaiming a short-term moving average, can serve the same purpose. But the overarching principle is simple — the harmonic pattern identifies where to look, and the confirmation signal tells you when to act.

Waiting for confirmation means you will occasionally enter a little later and give up some of the initial move. That’s arguably a price worth paying to filter out the patterns that reach the PRZ and simply carry straight on through it.

Common mistakes to avoid

• Entering before the PRZ is confirmed — The most frequent error is jumping in the moment price approaches point D, before any reversal signal appears. Patterns fail, and an unconfirmed PRZ is not a signal, it is an alert to pay attention.
• Being too loose with the ratios — Harmonic patterns only work because the ratios are precise. A common convention is to allow a tolerance of around three percentage points on each leg; if a leg falls outside that, the setup is not valid and should be skipped. Forcing a pattern onto a chart that does not quite fit is a recipe for losses.
• Ignoring point X — For the Gartley, BAT and deep crab, point D must not exceed point X. If it does, the pattern is invalidated, and traders who ignore this end up holding a position with no structural basis. This is exactly why the stop-loss usually sits just beyond X.
• Trading against the higher-timeframe trend — A bullish reversal pattern in the middle of a strong downtrend is a lower-probability trade. Checking the trend on a higher timeframe before acting filters out many weak setups.
• Neglecting risk management — Even a high-probability pattern will fail regularly. Sizing positions sensibly and setting a stop on every trade matters far more to long-term results than pattern selection. 

For more, see our guide to risk management.

How to trade harmonic patterns with us

With us, you can trade harmonic patterns across more than 15,000 markets, including  forex, shares, indices and commodities, using spread bets or CFDs. Because both let you go long or short with equal ease, they suit harmonic strategies well: you can trade a bullish pattern and a bearish one using exactly the same tools.

Our platform includes the Fibonacci retracement and extension tools you need to plot and validate patterns directly on the chart, so you can measure each leg precisely rather than by eye. You can attach stops and limits when you open a position, making it straightforward to place a stop just beyond point X and a profit target at point C or B in line with the pattern you are trading.

To see how the risk-to-reward maths works in practice, take a bullish BAT: with point D at the 0.886 XA retracement and your stop just below point X, your risk is the small distance between D and X, while your first target at point B is often several times that distance away, which is what gives the BAT its attractive risk-to-reward profile.

If you are still learning to spot these patterns, our demo account lets you practise identifying and trading them with £10,000 in virtual funds before you risk real capital.

Harmonic patterns reward precision and punish impatience. Learn the ratios, wait for confirmation at the PRZ, respect point X, and manage your risk on every trade. You can practise identifying patterns risk-free on an IG demo account, or open a live account to trade them across forex, shares, indices and commodities. For related strategy reading, see our guides to  technical vs fundamental analysis and risk management.