Crab Pattern Harmonic Trading Strategy – Presentation #9

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The Crab Harmonic pattern experiences extremely volatile and sharp pricing action frequently. This is why it is crucial to anticipate high volatility at the time of executing trades as and when the pattern reaches its point of completion.

Thanks to advanced technology as well as the presence of a wide range of trading platforms, identify the bullish Harmonic Crab pattern has become quite simple and easy. In fact, there are several platforms that feature in-built auto indicators which automatically draw the pattern and enable traders to better visualize the crab pattern, while ensuring that it follows the Fibonacci level exactly in accordance with the rules.

Trading the Crab Pattern

The Crab pattern must fulfill the below mentioned Fibonacci Retracement rules:

  • AB=should retrace in the range of 0.382-0.618 Fibonacci of the XA.
  • BC=Must be minimum 38.2% as well as maximum 88.6 percent Fibonacci of the AB.
  • CD=Poses target in the range of 2.24-3.618 Fibonacci extension of the AB or a typical target point of 1.618 of the XA.

It must be noted that the Crab pattern draws similarity with Butterfly pattern. Hence, trading Crab pattern is not very easy since the pricing action moves very fast towards the completion point of the pattern or the likely reversal area.

The first step to trading the Crab pattern is to draw it on the chart. Next, you must trade near the D point. Since, the extent to which D would go is difficult to control traders must go short the moment it reaches the minimum point of a potential reversal area. Hence, the D point of Crab must satisfy the needs of CD=2.24-3.618 of AB.

It is equally important to place your stop loss order while trading the Crab Harmonic pattern. Typically, you should place your stop loss order right above 3.618 Fibonacci extension level.

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