In this article we’ll be discussing the Bat Pattern (click here for more on the ratios) and how it is effected over many different time frames.

The study below contains 50,311 patterns which is for the time frames of the following timeframes:

• 15M = 27,366, (54.4%)
• 30M = 13,713, (27.3%)
• 1H  = 7,239, (14.4%)
• 4H  = 1,710, (3.4%)  
• Daily = 283 (0.5%)

If we want to separate  this into bullish and bearish we are going to see this almost at 50/50 with bullish bat’s in at 25085 and the bearish bat’s at 25226 or just slightly more.   So clearly we can see that the most active time frame is the 15 minutes for trading bat patterns with each time frame above we can see the numbers dropping dramatically as the time frames increase in side.  This is also not a shocker since we know the larger the time frame, the longer it takes to construct the patterns.

Since we started logging the patterns, we can conclude as well that the average number of patterns per week is as follows for the Bat Pattern:

• 15M = 210 patterns/week
• 30M = 105 patterns/week
• 1H  = 56 patterns/week
• 4H  = 13 patterns/week  
• Daily = 2 patterns/week

If we want to calculate results of success we should also apply two rules into consideration which will increase our success rate, but every trader must do if they want to improve their pattern selection.

View The Rules:

• Rule #1

  Structure Analysis

  With the ability now to perform a consistent structure analysis (included in the tool set for all members - rating harmonic patterns via structure) of each harmonic pattern we know we can gain a 6X to 11X advantage in our trading.  We will use a structure rating of at least 70% for the pattern to qualify in our analysis.

• Rule #2
  • A reversal had to occur once price entered the PRZ, but not before price exceeded the furthest point of the PRZ. This would indicate a loss and not a successful pattern.
  • A successful reversal must reverse 15% from when price entered the PRZ to where it exited the PRZ. If it did not reverse 15% and stayed inside the PRZ, again this would be a failed pattern.
  • After a trade moves 15% we automatically move stops to preserve our capital. The breakeven trades are counted as successful for a few reasons: A) Any professional trader would agree that a free ride in the market without losing money is a success! B) With the way the forex brokers work, you get rebates based off the volume you trade. Thus because a trade is breakeven you probably still get a 1 pip rebate from your broker. If you don’t, I would consider finding one that would give you a rebate.
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After doing an analysis on over 50,000 bat patterns on the 15Minute or higher time frame, we can conclude:

• The patterns reversed 90.6% of the time
• The reversal did at least a 15% move of the CD leg
• The structure rating gave us a clear advantage

that when using the structure ratings and rules above 90.6% of the patterns hit the minimum of a 15% reversal.  More performance information on the Gartley Pattern.

The original works of HM Gartley indicated that the B point for a Gartley pattern can be a 0.382 retracement, through to a 0.618 retracement. Gartleys are one of the pairs that are not as favorable to trade as the Bat, Butterfly or Crab, chiefly because it prefers to set up in a channel rather than a range and channels may not appear as frequently as ranges. Plus it’s harder to get a decent risk versus reward when trading the Gartley pattern.

The success / failure for traders trading the forex or stock market relies on two approaches. One, the attitude of gambling or chance, that price will go the hopeful trader’s way. The other, where the trader takes an objective, statistically probable calculated approach, that price will go their way.

Patience plays a great part in determining which of these approaches one takes. Like playing cards, or when trading stocks or forex, it is generally better to observe the situation and strategically figure out what likelihood one has in getting a successful outcome.

For the novice playmaker to throw caution to the wind and bet on a pair of aces to beat a full house without knowing what cards have been thrown, is akin to watching an impatient news trader jump into the sea of writhing Japanese candlesticks that makes up the markets.

However, for those skilled in the art of counting cards, those card players have a distinct advantage in knowing the odds are higher of being right, if they have an ‘edge’ such as counting cards.

For traders who trade the forex or stock markets, harmonic patterns give these traders an ‘edge’. Like the avid gambler, traders who try to predict where price might go or who rely on a series of points where linear candlesticks cross or merge, have a more difficult time when trading, than the trader who takes notice of where price has been before by using harmonic patterns.

The probable points where humans have noted the change in attitude of the masses suddenly become clear when the trader uses the harmonic pattern points to measure their opportunity of taking a successful trade.

Generally prices for stocks or forex will move with news events or at times where emotions are high, making risk much greater. Conversely in slow moving markets it is foolhardy to risk large portions of money on a position that is just not in our favor.

So is the art of trading just that – an art, or is it just blind luck? In our opinion it must come down to an art; a technical, consistent systematic technique and a way of measuring and calculating our method – rather than a hit-and-miss approach that doesn’t give us good odds of succeeding.

Coupled with managing risk, harmonic pattern trading now becomes an attractive trading approach. Get educated with FXGroundworks.com.

Study breaks down Gartley patterns using raw data, risk vs reward settings and pattern structure ratings. The largest database of harmonic pattern results as they happen, view the data now.

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Take these five solid trades with structure ranking the only criteria measured; see how rewarding they are; see their clarity and their promise. That’s how worthwhile trading highly ranked, well-structured patterns can be.

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First, we would go on a diet – stop eating or drinking things that don’t do much for our mental and physical fitness or well-being.  Would we have the determination to do that?  Particularly around Christmas and Thanksgiving?  I think not.

It goes without saying that being successful as a swimmer involves many hours of training.  Education about which style of swimming, what water aerodynamics are in play (including the style of kicking, body position in the water) and mental preparation are just a couple of things that are paramount to success as a swimmer.

Phelps won 18 Gold Olympic Medals; 26 Gold World Championship Medals.  A phenomenal feat.  Did he win those by watching others train or expecting the medals to come to him without doing the hard yards?

No sane person would think that they could emulate Michael Phelps’ success within a few months, let alone a few years.

Yet we think that as traders, we should be able to be successful harmonic pattern traders almost overnight.  We think that we will find the Holy Grail of trading (and pay little or nothing for it) and become so well off that we never have to work a regular job again.  If it were that easy, there would be many more retired traders who have already made their millions, than there would be people who were still learning the craft.

So how do we go about learning to become a successful harmonic pattern trader in the least amount of time?  How long does it take to become a decent trader?

First let’s start with the mental preparation.  It must take exceptional concentration and determination to succeed for Michael Phelps to be able to work so hard at what he does and to prevent the emotional and mental fatigue that could prevent him from winning his next race.  How long will it take us to get this type of mental preparation to become a decent trader?  Well, we can’t learn that in a month or two.  That takes a minimum of six months and even then, we’ll only be able to do that with study and concentration.

Then there’s the education.  How long did it take Michael Phelps to get to the point where he won his first gold medal?  That was years of hard work.  So can we expect to get to the point of being a successful trader in 30 days, or should we expect it to be a longer time frame than that?

And finally the training – practice builds a skill set that we need to really concentrate on obtaining.  If we’ve already traded for a few years and haven’t been wildly successful, then how do we expect to be wildly successful with a new method – unless we’re prepared to put the work in?  The harmonic pattern trading method is by far the easiest to see and understand.  It relates to patterns in nature and once we understand the correlation, we understand the power behind the patterns.

In a lot of ways, trading is akin to training for the Olympic Games Swim team.  We’re up against other athletes (in this case professional traders) who are just as determined as we are, to succeed.  They’ve put many hours of study in, and yes, practiced until they’re blue in the face, to become the successful traders they are today.

And along we come, thinking that by good luck and by chance, we will be able to make our fortune in no time flat.

The bad news is that there is no holy grail.  The good news is, we can become good harmonic pattern traders with a determination to succeed, by putting in the time to become educated and with training by taking trades and following the rules of harmonic pattern trading.

This system boasts a 70% success rate over a period of trades.  We might take several winners in a row or we might take several losers in a row, but the final result, as long as we keep our risk versus reward in check, keep our losers small and let our winners run, is that we will be successful.  We must realize that losing is a part of winning – we can’t be afraid of losing and we can’t expect to take more winners than losers, but we can expect that our losers will be much smaller than our winners.

How successful we are will depend on how well we can stick to the rules and not let our emotions get the better of us.  Easier said than done – but with FXGroundworks’ training and education, very achievable within six months.  So that’s how long it should take us to be reasonably successful traders.  Six months.  Achievable?  Absolutely – put the time and effort in, spend the money – change your life in six months.

Research, education, training and development is crucial to success – that makes trading effortless.

And then practice, practice, practice.  Successful traders are hard workers.  Are you prepared to put the work in?