🌟 Capital Market Chronicles – Episode 274: TECHNICAL ANALYSIS – HARMONIC PATTERNS (Part IV) 📐📊
“The deeper the retracement, the sharper the reversal.” 🦀📉
Welcome to advanced harmonic territory —
where patterns get deeper, emotions get louder, and mistakes get expensive 😅.
These formations usually appear after strong trends, when price stretches too far and traders start confusing momentum with immortality.
🦋 Butterfly Pattern – When Trends Run Out of Breath
The Butterfly pattern is designed to spot trend exhaustion.
📌 Key Feature:
👉 Point D extends beyond point X
Translation:
Price overshoots.
Late buyers panic-buy.
Early sellers get greedy.
And then… reality shows up uninvited 🚪📉.
This pattern is especially useful for:
✔ Exhaustion trades
✔ Counter-trend setups
✔ Fast, sharp reversals
But remember — butterflies look beautiful 🦋
until they trap impatient traders 😄.
🦀 Crab Pattern – Precision with Claws
The Crab pattern is famous (and feared) for its accuracy.
📌 Key Highlight:
👉 Point D ≈ 161.8% extension of XA
This deep extension signals extreme price stretch — often right before a violent reversal.
Why traders respect the Crab:
✔ Tight and logical stop-loss placement 🛑
✔ High reward-to-risk potential 🎯
✔ Explosive reversals when the structure is correct 💥
Miss the ratio though…
and the Crab pinches back 🦀😬.
🦞 Deep Crab Pattern – Maximum Stretch, Minimum Patience
The Deep Crab takes everything the Crab does…
and pushes it further.
📌 Key Feature:
👉 B ≈ 88.6% retracement of XA
This pattern basically whispers (sometimes shouts):
🗣️ “The trend is tired… but it’s not done hurting traders yet.”
Accuracy here is non-negotiable.
A sloppy Deep Crab is not a setup — it’s a lesson 😅.
🧠 Final Thought
Advanced harmonic patterns reward discipline and patience —
and punish hope, haste, and “close enough” thinking.
Respect the ratios.
Wait for completion.
Let price come to you.
📖 Next Episode:
How to actually trade harmonics — without worshipping them 🙏📊
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