Harmonic patterns: Gartley, Bat, Butterfly, Crab
Harmonic patterns are reversal structures consisting of five points called X-A-B-C-D, defined by the Fibonacci ratios between their legs. The potential reversal zone around point D is called PRZ.
On the chart above, you see a zigzag line passing over the price. This line connects five points in order: X, A, B, C, and D. The box around the last point is called ‘PRZ’: the potential reversal zone. The color tells you the direction of the pattern: green indicates an expected upward reversal, red indicates a downward reversal.
Harmonic patterns are the application of the ratios you learned in the Fibonacci lesson to multiple legs simultaneously. There is a move from X to A. From A to B, the price retraces a certain percentage of this move. From B to C, there is a reaction, and from C to D, the final leg extends. The name of the pattern comes from the ratios of these legs to each other.
Gartley is the most common type: point B forms at approximately 61.8% of the X–A move, and point D at 78.6%. Bat requires a deeper D; D approaches point X more closely. In Butterfly, D goes beyond point X; that is, the last leg exceeds the start of the initial move. Crab has the longest extension; D extends far beyond X. Since the ratios are close to each other, these structures can easily be confused; the system chooses which type best fits the ratios.
PRZ is a zone, not a line. A reaction is expected there because several different ratios converge in the same price range. But PRZ is not a buy or sell order; you need to look at the candles to see if the price will stop there. A harmonic pattern is not considered complete until the price reaches the PRZ.
Harmonics are the most open to interpretation among geometric patterns. Two people choosing different points on the same chart can see different patterns. Therefore, it is healthier to use them not as a sole source of decision, but as a sign of a zone that coincides with other evidence.
How to read it
- Follow the five points in order: X–A initial move, A–B retracement, B–C reaction, C–D final leg.
- Read the pattern name from the ratios: How close is D to X, or how far beyond it?
- Look for a second piece of evidence in the price reaching the PRZ, such as a reversal candle, divergence, or support/resistance.
- Place the stop on the other side of the PRZ; if the price crosses the zone with a close, the pattern is invalidated.
Trap
The biggest trap of harmonic patterns is the feeling of certainty: because the ratios seem mathematical, the result is also assumed to be certain. However, ratios only tell you where the price MIGHT stop, not that it WILL stop. The second trap is opening a trade before point D is reached: predicting the PRZ before the pattern is complete often means entering too early. Finally, not every zigzag is a harmonic; if the ratios don't match, there is no pattern.
Tip
If a harmonic PRZ and a support or resistance level fall into the same zone, two independent pieces of evidence are pointing to the same place. Look at which levels are next to the PRZ box on the evidence card.
Glossary
- XABCD
- The five reversal points that form a harmonic pattern; the ratios between the legs determine the type of pattern.
- PRZ
- Potential Reversal Zone; the price range where multiple ratios converge.
- Gartley
- A harmonic pattern where point D forms at approximately 78.6% of the X–A move.
- Butterfly
- A harmonic pattern where point D exceeds point X.
Mini quiz
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Examine the PRZ box in an analysis →For information only, not investment advice.