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Harmonic Patterns Suite

By TRN-Trading
Updated
Hello Traders!

This indicator takes the time-consuming search for harmonic patterns completely off your hands. TRN Harmonics utilizes a unique swing-based pattern recognition to pinpoint 14 different harmonic patterns in real-time with unparalleled precision.

snapshot

Pattern List (each pattern has a bullish and a bearish version)

  1. Gartley
  2. Bat
  3. Butterfly
  4. Crab
  5. Cypher
  6. Shark
  7. 5-0


Feature List

  1. Real-time harmonic pattern detection
  2. 7 different built-in breakout conditions
  3. Visualization of entry, stop-loss and take-profit levels
  4. Pattern performance statistics
  5. Calculation of risk-rewards ratio
  6. Risk Management
  7. Breakout alerts
  8. Customizable pattern size and accuracy
  9. Customizable look and feel


The value of this indicator is to support traders to easily identify harmonic patterns in an automated way. The special swing-based pattern recognition and the numerous built-in premium features make this indicator unique. The trader saves a lot of time scanning the markets for harmonic patterns, since everything is done automatically for the trader: Finding the pattern, looking and alerting for a breakout, computing the entry, stop loss and take profit levels as well as handling the risk management and computing the optimal order quantity.

How to Trade with the Harmonic Patterns Suite

  1. Identify the Pattern

    Add the Harmonic Patterns Suite to your chart and look for patterns on the asset and timeframe of your choice. The patterns are detected in real-time. If a pattern develops further in the next bars, then the indicator updates the pattern accordingly until a breakout is confirmed or the pattern becomes invalid.

    You can also use the built-in alerts to easily get notified when a pattern occurs. In the indicator settings in the "Alerts" section you can choose whether you want to get notified when a pattern is

    1. in the making (Pattern active),
    2. confirms an up breakout (B/O Up Confirmed)
    3. confirms a down breakout (B/O Down Confirmed)
    4. (Unconfirmed) in case a pattern breakout occurs, even if the pattern is not yet confirmed

    This allows you to stay informed about potential breakout opportunities that are still awaiting confirmation.

  2. Check Pattern Statisticssnapshot

    The pattern statistics make it easy for you to see how successful a pattern is on the asset and timeframe you are watching. You should always check the statistics before entering a trade. The chart displays the statistics in the upper right corner. These statistics are categorized into two sections: "long" for patterns with an upward breakout and "short" for patterns with a downward breakout.

    In the initial columns, labeled as "short" and "long", the identified breakouts are further divided based on the different harmonic patterns. The following columns represent the count of the events:


    1. Occ. (Occurrence) categorized according to the values of R from the first column
    2. TP1, TP2 (Take Profit) - targets 1 und 2
    3. SL (Stop Loss)
    4. T/O (Time Out) - neither stop loss or targets where hit in a certain amount of time


  3. Breakout – Entry, Stop Loss and Targets

    The indicator automatically displays the entry price line (EP) in grey at the point where the breakout got detected. Once a breakout has been confirmed, place a buy order near the EP level for a long position, or a sell order for a short position. Set your stop-loss at the price level of the red stop-loss line (SL) and set your take-profits at the price level of the green take-profit-lines (TP1, TP2).

    snapshot
  4. Risk Management

    The Harmonic Patterns Suite comes with a built-in risk management feature. Just go to the settings and scroll down to the section "Risk Management". Here you can enter your Account Size and the percentage you want to Risk when you enter a position after a pattern breakout.

    In the "Trade Management" section, you have the option to define the minimum accepted risk-reward ratio for confirmed harmonic patterns. This means that breakouts of patterns failing to meet the minimum risk-reward ratio will not be considered as confirmed signals. If a breakout gets confirmed, the indicator automatically calculates the position size (Quantity). You can read the quantity from the gray entry point line (EP), which is located to the right of the risk-reward ratio (R). Note that your risk-reward ratio (R) is calculated based on TP1.

  5. Customization and settings

    The indicator can scan for smaller and larger patterns at the same time. Adjust the harmonics size in the indicator settings to align them with your preferences. A larger size results in larger consolidations. Depending on the asset class, the market or the market phase, different sizes can be used for pattern detection.

    To detect more patterns, increase the tolerance level, even though it may result in lower accuracy. However, be mindful that a higher tolerance level may result in more patterns hitting their stop-loss. Look for a tolerance level that leads to favorable statistics and focus on trading patterns with a proven performance history.

    Finally, you have the flexibility to customize various visual elements, such as the color of the pattern and whether to display values like price, target, or risk-reward ratio on your chart. You can also choose where these values appear.


Breakout Conditions

Identifying breakout conditions is paramount for successfully recognizing and capitalizing on chart patterns. Trading tools equipped with diverse breakout conditions offer traders a comprehensive approach to deciphering market trends and making informed decisions.

This section delves into the set of breakout conditions built within TRN Harmonics, exploring their functionalities, applications, and the benefits they provide in the realm of chart pattern recognition.

  • TRN Bars Signal + Trend
    The Harmonics Pattern Suite includes also the TRN Bars algorithm. It is designed to spot bullish and bearish trends and reversals. The trend analysis is based on a new algorithm that weights several different inputs:


    1. classical and advanced bar patterns and their statistical frequency
    2. probability distributions of price expansions after certain bar patterns
    3. bar information such as wick length in %, overlapping of the previous bar in % and many more
    4. historical trend and consolidation analysis


    If you use this breakout condition, the breakout is determined by the next signal (reversal, continuation, breakout) or trend change of the TRN bars after one of the harmonic patterns has been completed. These Breakout conditions give you the accurate trend recognition of the TRN Bars to find the perfect entry.

  • TRN Bars Signal
    If a harmonic pattern gets completed and you use this breakout condition, the breakout will be determined by the next confirmed signal (reversal, continuation, breakout) of the TRN Bars. These Breakout Condition delivers signals with reenforced reliability, but they occur not as often as other breakout conditions.

  • RSI Crossing
    With this breakout condition, a breakout for a long position gets determined, when the RSI line crosses above the RSI moving average (MA) after one of the harmonic patterns has been completed. A bearish breakout after a completed harmonic pattern gets determined, when the RSI line crosses below the RSI MA.

    You can choose your preferred RSI and MA length in the indicator settings under the “Trade Management” section.

  • MACD Crossing
    If a harmonic pattern gets completed and you use this breakout condition, the breakout gets determined, when the MACD line crosses above the signal line (bullish MACD crossover) for a bullish breakout. Conversely, when the MACD line crosses below the signal line (bearish MACD crossover), a bearish breakout gets determined after a harmonic pattern was completed.

    You can choose your preferred MACD length in the indicator settings under the “Trade Management” section.

  • Swing Flip
    Use this breakout condition, if you want a breakout to get determined when the next swing after point D gets detected by the build in swing detection algorithm of TRN Harmonics.

  • Close Below/Above Last 2 Lows/Highs
    With this breakout condition, a breakout for a short position gets determined, if a close below the lows of the last 2 bars gets detected. For a long position, the breakout gets determined if a close above the highs of the last 2 bars gets detected.

  • Close Below/Above Last 3 Lows/Highs
    In this scenario, a short position breakout is confirmed if the price closes below the lows of the previous 3 bars. Conversely, a long position breakout is confirmed if the price closes above the highs of the last 3 bars.

  • How To Setup Breakout Conditions
    Go to indicator settings and choose one of our built-in breakout conditions under the section "Trade Management" of the menu item "Inputs", like for example TRN Bars Signal + Trend. A selection of 7 distinct breakout conditions is at your disposal.

    If you use the default settings of the Harmonic Patterns Suite, TRN Bars Signal + Trend will be the breakout condition for the detected harmonic patterns.


Computation Details

The real-time detection of the harmonic patterns utilizes a unique swing-based pattern recognition. The difference to other swing-based computations is that the pivot points are identified without a look-ahead value. The result is a faster and better real-time detection. Furthermore, the detection of the ratios between the single swings is based on a dynamic volatility measurement similar to the ATR. The tolerance level unites several internal parameters into one and results in a user-friendly setting.

Risk Disclaimer

The content, tools, scripts, articles, and educational resources offered by TRN Trading are intended solely for informational and educational purposes. Remember, past performance does not ensure future outcomes.
Release Notes
The following updates have been made:

The Settings UI and UX has been improved.
Default settings has been updated.
breakoutsignalbreakouttradingChart patternschartpatterntradingharmonicforexHarmonic Patternsharmonicsignalsharmonictraderspatternpatterntradingtrn-trading

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