The Crab is another harmonic pattern that is derived from the Gartley pattern. The special thing about it is the long XA and CD swings. The point D is far away and lies beyond the starting point X. This is what differentiates the Crab from other harmonic patterns.
Here are the key parameters of a Crab pattern:
- Point B is at the 38.2-61.8% retracement of XA.
- Point C can be at the 38.2%-88.6% retracement of AB.
- Point D can be found at the 224%-316% extension of AB or at the 161.8% extension of XA. The closer D is to the 161.8% extension of X, the stronger is the signal of this pattern.
How to trade Crab pattern
- The entry is at the point D. Always wait for the market to reverse from CD before opening your trade.
- Take Profit may be at 61.8% of CD (TP1), and 127.2% of CD (TP2).
- Put a Stop Loss in line with your rules of risk management.
Let's see how a Crab pattern may look on the chart. The point B is at the 61.8% retracement of XA. The point D is near the 161.8% extension of the XA.
2020-03-20 • Updated
Other articles in this section
- Fibonacci Ratios and Impulse Waves
- Guidelines of Alternation
- What is a triangle?
- Double Three and Triple Three patterns
- Double Zigzag
- Zigzag and Flat patterns
- Advanced techniques of position sizing
- What does ‘truncation’ mean?
- What is an extension?
- Ending Diagonal Pattern
- How to trade gaps
- Leading diagonal pattern
- Wolfe waves pattern
- Three drives pattern
- Harmonic patterns
- What is an impulse wave?
- Motive and corrective waves. Wave degrees
- Intoduction to Elliott Wave analysis
- How to trade breakouts
- Trading Forex news
- How to place a Take Profit order?
- Risk management
- How to place a Stop Loss order?
- Technical indicators: trading divergences