Harmonic Patterns offer high accuracy trading signals with the potential to gain significant profits. The trading signal will show potential trend reversal to buy when the price is at the oversold point or sell when the price is overbought. To know how to trade using these Harmonic Patterns, we have previously studied the basic harmonic patterns, among others; pattern AB = CD, Butterfly, Gartley, Crab, and Bat. The Cypher Harmonic Pattern is a price pattern on the chart that indicates a potential trend reversal. Trading signals can be confirmed when the terms of the Cypher Harmonic Pattern are met. The Cypher Harmonic Pattern is unique when compared to other XABCD Harmonic Patterns (Butterfly, Gartley, Bat, and Crab) due to the position of the upside-down legs. Generally, the position of the first wing is sharper than the second wing. However, the Cypher Harmonic Pattern is precisely the second wing’s position sharper. Learn fully about trading with our binary options winning strategies, as we currently even provide services that will make you win trading strategies.
In the bullish version, the second wing (point C) is higher than the first wing (point A). Likewise, on the bearish version, the wings are both more protruding than the first wing. Point C is sharper than point An as an indication that the swing on the XA legs will be turned back with relatively equal strength, although it has retired on the AB line. That is the reason why prices will go back to the XA foot trend after prices are retraced back on the CD line. Because of this uniqueness, Cypher Harmonic Patterns are relatively less common than other XABCD Harmonic Patterns. However, according to the inventor, Darren Oglesbee, the highest level of accuracy is claimed.
The Cypher Harmonic Pattern can be applied to all timeframes and all types of Forex pairs. It’s just that beginner traders better learn to recognize this Harmonic Pattern on the middle timeframe like H4 or Daily first before applying it to a lower timeframe. The goal is that the signal accuracy is high enough and avoid the risk of false signals. On the GBP / USD (H4) chart above, the Cypher Harmonic Pattern managed to indicate a bullish reversal (reversal of the price from descending to ascend), even though the legs are not perfectly qualified. However, at least characteristic of this pattern where point C (second wing) is higher than the first wing at point A, is fulfilled. Generally, you can utilize the trading signal of the Cypher Harmonic Pattern to open a position when the price approaches retracement 0.786 from XC. In the picture above, the price turned out to be reversed before reaching the last retracement of the foot. This is still natural because the market moves not on the pattern in your chart, but the dynamics of demand and supply.