Bullish 5-0 harmonic chart pattern suggests a long entry upon completion of the pattern or confirming the D point of the pattern. This post explains the way to find or draw a Bullish 5-0 harmonic char pattern and the way to trade a Bullish 5-0 harmonic chart pattern.

**How to draw or find a Bullish 5-0 harmonic chart pattern on price chart?**

To draw or find a Bullish 5-0 harmonic chart pattern on price chart, first of all, we need to find the X and A points of the pattern. The X point is found at the bottom of a strong bearish trend, and the A point is found at the top of a pullback. Now we need to draw a fibonacci retracement tool from X to A to find the B point of the pattern. The B point should be within the 113%-161.8% fibonacci retracement of XA.

To find the B point without fibonacci retracement tool, we will use the formulas-

(IA) AB= (price at A point-price at X point) X 1.13

(IB) Price level at 113% of XA= (price at point A-result found from formula (IA))

(IIA) AB= (price at A point-price at X point) X 1.618

(IIB) Price level at 161.8% of XA= (price at point A-result found from formula (IIA))

In this case we can see, B point accurately satisfied the AB/XA= 1.13-1.618 condition of the pattern. See the illustration below.

(IA) AB= (price at A point-price at X point) X 1.13

(IB) Price level at 113% of XA= (price at point A-result found from formula (IA))

(IIA) AB= (price at A point-price at X point) X 1.618

(IIB) Price level at 161.8% of XA= (price at point A-result found from formula (IIA))

In this case we can see, B point accurately satisfied the AB/XA= 1.13-1.618 condition of the pattern. See the illustration below.

In next step, we will draw a fibonacci retracement tool from A to B to find the C point. The C point should be within the 161.8%-224% fibonacci retracement of AB.

To find the C point without fibonacci retracement tool, we will use the formulas-

(IA) BC= (price at A point-price at B point) X 1.618

(IB) Price level at 161.8% of AB= (price at point B+result found from formula (IA))

(IIA) BC= (price at A point-price at B point) X 2.24

(IIB) Price level at 224% of AB= (price at point B+result found from formula (IIA))

The C point of this pattern should lie within the price levels found from formula (IB) and (IIB). This satisfies the BC/AB=1.618-2.24 condition of the pattern. Look at the following illustration.

(IA) BC= (price at A point-price at B point) X 1.618

(IB) Price level at 161.8% of AB= (price at point B+result found from formula (IA))

(IIA) BC= (price at A point-price at B point) X 2.24

(IIB) Price level at 224% of AB= (price at point B+result found from formula (IIA))

The C point of this pattern should lie within the price levels found from formula (IB) and (IIB). This satisfies the BC/AB=1.618-2.24 condition of the pattern. Look at the following illustration.

In the final step, we will find the entry point, D point, of the bullish 5-0 harmonic chart pattern. To find the D point of the pattern, we will draw a fibonacci retracement tool from B to C. The D point should be at the 50% fibonacci retracement of BC.

To find the D point without fibonacci retracement tool, we will use the following formulas-

(IA) CD= (price at C point-price at B point) X 0.50

(IB) Price level at 50% of BC= (price at point C-result found from formula (IA))

The D point of this pattern should lie on the price level found from formula (IB). This satisfies the CD/BC=0.50 condition of the pattern. Look at the following illustration

(IA) CD= (price at C point-price at B point) X 0.50

(IB) Price level at 50% of BC= (price at point C-result found from formula (IA))

The D point of this pattern should lie on the price level found from formula (IB). This satisfies the CD/BC=0.50 condition of the pattern. Look at the following illustration

**How to trade the bullish 5-0 harmonic chart pattern?**

A long entry is suggested when the D point of the pattern is confirmed. The

**stop loss**for the order should be placed at the lower support level. The**profit target**for the order should be placed within the 50-88.6% fibonacci retracement of CD.
The C point can also be traded, if it is the D point of a bearish shark harmonic chart pattern. The B point can be traded, if the entries are confirmed by the other technical analysis tool(s).

**Dear Traders,**

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**Thank You and Good Luck.**

very very use full blog

ReplyDeletewhen i search how to trade with ABCD pattern accidentally see that page i could find more answer for problem i had about forex

Thank you Sapugoda !!!

ReplyDeleteAfter long entry at D what will be the target?

ReplyDeleteThanks for useful discussion.

I got the target. Thanks.

ReplyDelete