Harmonic Trading. The Bat Pattern
The Bat pattern is a highly precise harmonic pattern that was discovered in 2001. It is considered to be the most accurate pattern in Harmonic Trading. It consists of several distinct elements that define an excellent Potential Reversal Zone (PRZ).
Patter description
Generally, the pattern represents a deep retest of support or resistance that can often be quite sharp, resulting in quick reversals from Bat pattern PRZs. Valid reversals from Bat patterns usually exhibit extreme price action.
The defining element in the PRZ is the powerful 0.886 XA retracement, and the B-point retracement must be less than 0.618, preferably 0.50 or 0.382 of the XA leg.
The most ideal B-point alignment is the 50% retracement of the XA leg. If the B point aligns at 0.50 of the XA leg, it is likely to be a Bat pattern.
The Bat utilizes a BC projection of at least 1.618, which can be as much as 2.618. However, the most ideal BC projections in a Bat pattern are 1.618 or 2.0.
It is important to note that the BC projection must not be a 1.27, as anything less than a 1.618 BC projection invalidates the structure.
The AB=CD pattern within the Bat distinguishes the structure as well. This pattern is usually extended and ideally possesses a 1.27 AB=CD calculation in the Bat structure.
However, the equivalent AB=CD pattern serves as a minimum requirement for any Bat pattern to be a valid setup. The Bat is an incredibly accurate pattern that requires a smaller stop-loss than most patterns. The 0.886 retracement is the most crucial number in the PRZ.
Bat pattern elements
- B point at a less than 0.618 retracement of XA, preferably a distinct 50% or 38.2% retracement.
- BC projection must be at least 1.618.
- AB=CD pattern is usually extended.
- 0.886 XA retracement.
- C point with a range between 0.382 and 0.886.
The perfect Bat pattern
The Bat pattern is a unique structure that involves a specific arrangement of Fibonacci numbers. It is identified by a narrow range of three numbers that make up the Potential Reversal Zone (PRZ). The middle point is determined by a precise 0.50% retracement at point B.
For the pattern to be complete, the Alternate 1.27 AB=CD and 2.0 BC projection must be close to the 0.886 retracements, which is considered the most crucial number in the pattern.
Perfect Bat pattern includes:
- Mandatory 50% B point retracement of the XA leg.
- Precise 0.886 D point retracement of the XA leg as the defining limit within the PRZ.
- BC projection.
- Alternate 1.27 AB=CD pattern required.
- C point should be in the 50–61.8% range.
Summary
The Bat pattern is a highly precise harmonic pattern that often leads to sharp and exact reversals. It serves as a strong signal for corrections and identifies great trading opportunities that involve retesting important levels of support and resistance. The ideal Bat structures are easily distinguishable and have a precise alignment of Fibonacci ratios, which confirms the pattern’s validity.
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