This article is designed to help you understand crab pattern trading, how to use it and what it means.
What is a Crab Pattern?
A crab pattern is a harmonic pattern seen in charts for financial markets.
Structure: The Crab pattern is a five-point pattern labeled as X-A-B-C-D.
Specific Fibonacci Ratios:
- XA Leg: The initial movement in the market, setting the stage for the pattern.
- AB Retracement: The AB leg should typically retrace 38.2% to 61.8% of the XA leg.
- BC Retracement: The BC leg should retrace 38.2% to 88.6% of the AB leg.
- CD Extension: The defining feature of the Crab pattern is the CD leg, which is an extended move and typically reaches 161.8% to 224% of the BC leg or even beyond.
D Point: The D point is where the pattern completes and is considered the potential reversal zone (PRZ). This is where traders look for entry opportunities. The D point usually aligns with a 161.8% Fibonacci extension of the XA leg.
Find Patterns Easily
Patterns can be a bit complex to decipher on your own and in the live markets when things are running hot!
This tool helps traders find patterns in forex markets, index markets and commodities like gold and silver. There are frequent patterns coming up across timeframes ranging from 5 minute to daily and weekly, so you could expect pattern notifications every 30 minutes or so generally.
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