In this article, we want to give you a “heads up” on the Gold.
The instrument has formed a BULLISH SHARK pattern on a daily chart.
The Harmonic Shark pattern is a relatively new trading pattern that was discovered in 2011 by Scott Carney. The shark pattern is somewhat similar to the crab pattern identified by the overextended swing/pivot point C.
Rules for the Shark pattern
Before you try and trade the pattern, make sure that the following rules are met:
The Shark pattern has the following ratios.
- CD leg extends XA leg between 113% – 161.8%
- BC leg extends beyond X by 113% of the OX leg
- CD leg is also an extension of AB by 161.8% – 224%
Unlike other harmonic patterns, the trades are entered as follows:
- Entry is at 88.6% of XA leg with stops coming in at point D
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Targets can be 61.8% of CD
How to trade this pattern? Since the pair has reached almost 1.618% Fibonacci extension of the AB leg this is the zone for the market entry as it is shown on the chart. The stop loss should be below the point D 1150 level. The take profit target should be at least 50% Fibonacci retracement of the 1372-1156 C-D range.
By using our top-down trading technical analysis we have identified the key levels which will be triggers for the entry and exit, based on the present market conditions of the instrument. This analysis has been brought to you by the Motive Wave platform.
Happy trading! (click on the chart to enlarge it)
