XAU/USD Harmonic Deep Crab

2 ott 2019

“The Deep Crab pattern evolved from two patterns—invalid Bat patterns and a specific type of Crab pattern—that I developed as a further refinement of the basic structure. The Deep Crab is similar to the original Crab pattern, as it is a 5-point extension structure that utilizes exclusively a 1.618 XA projection for the defining level in the Potential Reversal Zone (PRZ).The difference can be found at the B point which must be an 0.886 retracement. In fact, the Deep Crab pattern usually possesses a B point that is beyond the 0.886 level but it does not violate the initial point (X). The 0.886 B point requirement is special to the Deep Crab. When the structure is in the midst of completing the CD leg, the violation of the B point AND the X point typically creates a situation of severe price action. In essence, the price action is violating two important prior support or resistance points. When this happens, the result is frequently a sharp move that quickly extends to the 1.618 XA projection. Another difference in the Deep Crab pattern is the AB=CD structure. The AB=CD pattern is a more important consideration in the Deep Crab, although the structure typically possesses the 1.27AB=CD alternate variation. However, it is common for these structures to possess equivalent AB=CD patterns in certain circumstances.”
Harmonic Trading: Volume One Page 136
(Copyright Scott M. Carney 2010 Financial Times Press)


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