Price patterns have always been a favorite tool for traders because of their simplicity and effectiveness. You probably already know about the butterfly and the bat pattern, but today I will introduce a method to trade these two patterns effectively.

The Butterfly pattern and the Bat pattern are two of the Harmonic patterns. Harmonic sounds noble, noble, complicated, confusing, ... but if you spend just a little time, you will surely be more addicted to it than price action. Because after the harmonic patterns, the price will go with a very long trend, you can eat the next wave if you catch the right harmonic pattern.

For those who do not understand anything about Harmonic patterns, please comment below so I can explain more. Today's article is more about the application part, so I will not define Harmonic for the time being.

Of course, these patterns do not always cause the trend to reverse, sometimes a little wrong. But this number is small. I will share with you the signs that you can sit out when faced with such situations.

The butterfly pattern (referred to as the butterfly) and the bat pattern (referred to as the bat) are both trend reversal patterns. When the price forms a pattern that looks like a butterfly, it is called a butterfly, and so is the bat. But for the butterfly or the bat, it doesn't matter, as long as the price forms the patterns in accordance with the Fibonacci ratio prescribed by the Harmonic waves, it is ok.

We have another, more important, more practical task, which is to find the right entry point, not sit there arguing if this is a butterfly or a bat.

Experience has shown that the bat pattern often appears at the bottom of a downtrend, while a butterfly usually forms at the top of an uptrend. So the bat will look like the letter M, and the butterfly will look like the letter W. This information is quite important, please note it.

 For example:

Do you see the letter W at the top of the trend? It's the butterfly pattern (butterfly flies five or three times, you sit and watch)

Another butterfly, this one is bigger:

Did you see that after the butterfly formed, the downtrend was very strong? Our mission is to eat that trend.

And here is the bat pattern, appearing at the bottom of the downtrend, after the bat, the price rose beautifully


First of all, you must ask, how to see the butterfly with the bat first. This already has an indicator, you can search online, when added, it will draw you Harmonic patterns when it detects it. And if it hasn't seen it, it won't draw

So the part about finding butterflies and finding bats is ok.

The second question is how to trade? There are traders who advise us to enter the trade as soon as the butterfly has formed.

And the truth has proven, when choosing such entry points, the price often goes up to hit the stop loss. We can't trade like this.

As you know, every pattern has resistance, support, and harmonic patterns like bats and butterflies too. Therefore, we will wait for the price to break out to enter the order. This is the heart of this method. As follows

The above example assumes that we have seen the butterfly, but it is still flying high, no need to rush to catch it. You will draw a support line from the two bottoms of the pattern. Of course the price will drop after the butterfly appears, but we will wait for it to drop to support and break out.

At that time, we will enter a SELL order, placing the stop loss on the top of the breakout candle. Takeprofit does not need to be set, because for Harmonic once the price has gone, it goes very far.

Another example:

For the bat case, we will draw resistance from the two tops of the pattern, wait for the price to break out and enter a BUY order.

One more example:

Above is how you can effectively apply Harmonic waves to make profits. Before I end this article, I would like to have a few notes for you

1. In addition to these two patterns, you can apply this method to other patterns in Harmonic (shark, crab, something,...)

2. There will be times when the pattern is wrong, the method is wrong. The reason is simple: no holy grail exists here.

3. Some of you will wonder: wait until the price breaks out of resistance / support, then it's out of trend. But rest assured. After the Harmonic patterns, the price will form a new trend, and of course when it is called a new trend, it is not easily weakened by a small resistance / support.

4. Incorporating tight capital management.