Fibonacci, fractals, RSI, CCI, Pitchfork Tool, Volume, Gap And Scalping Trading Tips And Tricks
The Bat pattern is a Fibonacci pattern that resembles the Gartley pattern except in specific price structures that distant it a bit from other Fibonacci patterns.
Indeed, technical traders who master the price-action denial market principleare avid Bat pattern traders. One is more likely to spot the Bat pattern on every time frame, but I prefer to look for it on the 15M, 1H, 4H, weekly and monthly charts. Surely, hedge funds jump up anytime they spot it on the quarterly and yearly charts.
Remember to combine the technical trading and fundamental analysis when dealing with the Bat pattern on time frames higher than the monthly chart. For those technical traders that are trading on the lower time frames, be sure to check the first corresponding higher time frame to validate the trading signals.
For example, anyone that is trading the hourly chart Bat pattern will check daily chart, and 4H chart Bat pattern has something to do with the weekly chart.
Bat Pattern Formation
Like other Fibonacci patterns, a viable Bat pattern takes place only and only if a prior trend or impulse wave has been corrected by XA without cancelling it. Those conditions must be completed otherwise one will be calling something else a Bat pattern by mistake.
The first component of a Bat pattern is AB. AB is the price move that retraces XA between 38.2% and 50% Fibonacci retracements. The first thing that comes into mind is that AB is a shallow retracement of XA in comparison to the Gartley pattern.
The next Bat's component is BC. BC does the same thing like for the other Fibonacci patterns. For all Fibonacci patterns including the Bat pattern, BC retraces AB between 38.2% and 88.6% Fibonacci retracements.
Finally,CD is the price action that stops exactly in the zone of 88.6% Fibonacci retracements of XA. So the possible reversal point D contrary to the Gartley pattern is not at 78.6% but at 88.6% Fibonacci retracements of XA.
How To Trade Bat Pattern
One will trade the Bat pattern the same way one trades Gartley pattern. That is it. I do not want to repeat myself one more time. Traders must check our web page titled Gartley pattern to understand more.