Premium Members Harmonic Trading Chart for HG_F


Copper Futures (HGZ13) has an opportunity to complete both opposing Harmonic Patterns.  This occurs when the completion of one pattern is within the opposing patterns guidelines to remain valid.


 The day chart shows price is going sideways, currently holding inside 3.4285 and 3.0145, this is prime setup for opposing Harmonic Patterns to emerge.  That this does is offer significant support and resistance levels, as well as risk parameters and targets with a break of the sideways range.  Let’s break it down.


10-13-2013 HG D MTS


 The scenario of completing both opposing patterns does have a requisite, the green Bullish Bat must complete first, the ideal situation for this Harmonic Pattern story is the Bullish Bat completes, begins retracement, taking price above the range resistance level 3.4285 and shoots for the completion of a double bearish PRZ.  This means the PRZ (Potential Reversal Zone aka completion target zone for Harmonic Pattern) has two different Harmonic Patterns that have a similar completion target, this gives higher significance as a resistance level.


 Here’s one example, using multiple units (3 in this case) of trading a Harmonic Pattern that offers risk parameters, scaling points and ideal exit target.


 Currently price is stalling at a GRZ (Golden Ratio Zone comprised of 38.2% to 61.8% fibs).  A hold above 3.2422 offers a long entry opportunity.  The ideal risk is below 3.1988, a more conservative risk level is below 3.2422.  the initial scaling point for 1 unit is determined by the personality of the trader, so either the previous high around 3.185 or the significant level 3.3813, a hold above there has next scaling point at 3.4285.  At this juncture, it is considered a risk free trade by moving the last unit stop to either break even or lock in profits by moving to below significant level 3.3813.  This is where the trader can trail a stop with upside continuation or just place the target at 3.6844.


 If you know me, you know I also like to be prepared for the opposite scenario (if you don’t know me, the reason is it helps me be fluid with the market or instrument).  So let’s say the price holds below 3.2422 … an aggressive short opportunity occurs there, a more conservative entry is a close and hold below 3.1988.  The initial scaling target then is the bottom of the GRZ at 3.1553, then 3.0565.  A hold below 3.0145 offers the trailing stop for the last unit to the target 2.7868.


 Completion of the Harmonic Patterns offer a reversal trading opportunity.  It’s normal for a PRZ to be breached, but for the PRZ to create a turnaround implies that the PRZ was a target en-route to complete a larger or extended Harmonic Pattern.