GBPJPY is one of the most volatile currency pairs in the forex industry. Trader love to trade this pair due to high range of “pip movement.” Since its average pip move is relatively higher than another currency pair trading these pair is not so easy with ordinary technique. The trader uses harmonic pattern to enter into the trade .Even though there are many different harmonic patterns, the best suited harmonic pattern for “GBPJPY” is “the Gartley Harmonic Pattern.” Harmonic pattern trading is a unique trading strategy which gives extremely high and reliable trading signal.
Let’s look at an example of bullish and bear gargle pattern formation
Figure: Gartley Harmonic price pattern in GBPJPY
In the above figure, we can see the bullish Gartley harmonic pattern in GBPJPY. These harmonic pattern helps us to identify the best possible trade in the forex market. “Thanks to the advance coder for helping with an amazing indicator which will draw us this unique harmonic pattern automatically.”
Trading condition and entry signal
The patterns are formed with a certain ratio measurement. The move of AB is generally 61.8 of XA and the move of BC is extended up to 38.2% of AB. Now come the final move CD which is extended up to 161.8 % of BC. If any pattern forms with following this expansion ratio then it’s called a Gartley pattern.
Trader waits for price action confirmation signal at the point D or can use the Elliot wave theory to calculate the end length of the wave to take the trade. Generally, “this type of pattern is found at the end of any long-term trade.”
Stop loss and take profit
The best thing about trading Gartley pattern is the relative tight stop loss used compared to its potential profit. Traders put their stop loss just below the last final move of the wave (Point D for uptrend) and ride the whole trend until it find significant resistance area in the new uptrend.