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    The document discusses the 5-0 harmonic pattern, a reversal pattern consisting of 5 points (X, A, B, C, D) plus an additional 0 point. It provides rules for identifying the pattern, including allowable retracement percentages between points. The pattern suggests the current trend is ending and provides trading opportunities. Bullish and bearish 5-0 patterns are described, with the bullish (bearish) pattern looking for reversals in downtrends (uptrends). When the pattern is identified, traders can look for an entry at the D point and use the C point as an initial profit target.

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    5-0 Harmonic Pattern

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    The document discusses the 5-0 harmonic pattern, a reversal pattern consisting of 5 points (X, A, B, C, D) plus an additional 0 point. It provides rules for identifying the pattern, including allowable retracement percentages between points. The pattern suggests the current trend is ending and provides trading opportunities. Bullish and bearish 5-0 patterns are described, with the bullish (bearish) pattern looking for reversals in downtrends (uptrends). When the pattern is identified, traders can look for an entry at the D point and use the C point as an initial profit target.

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    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
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    Download as pdf or txt
    111 views5 pages

    5-0 Harmonic Pattern

    Uploaded by

    knsmadness
    The document discusses the 5-0 harmonic pattern, a reversal pattern consisting of 5 points (X, A, B, C, D) plus an additional 0 point. It provides rules for identifying the pattern, including allowable retracement percentages between points. The pattern suggests the current trend is ending and provides trading opportunities. Bullish and bearish 5-0 patterns are described, with the bullish (bearish) pattern looking for reversals in downtrends (uptrends). When the pattern is identified, traders can look for an entry at the D point and use the C point as an initial profit target.

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    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
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    of 5

    5-0 Harmonic Pattern | The

    Most Powerful Harmonics


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    The 5.0 harmonic pattern is a XABCD pattern with an additional 0 point which
    suggests trend reversal by having B point as a last point in the trend direction.

    5.0 pattern is modified Shark pattern where you need first to find Shark pattern and
    then check the 5.0 pattern rules to verify where the potential reversal zone is.

    5-0 Pattern Rules

    The 5-0 harmonic pattern in Forex appears in the trend, uptrend or downtrend,
    which is coming to an end.

    Here are the rules you need to follow when drawing the pattern:

    ● A-B leg has to be 1.13 to 1.618 retracement of X-A leg


    ● B-C leg has to be 1.618 to 2.24 retracement of an A-B leg
    ● C-D leg should to be 0.5 retracements of B-C leg
    ● C point should be between 0.886 – 1.13 of 0-X leg
    When making a harmonic pattern you need to pay attention to the B-C leg because
    it is one of the most important parts of the 5-0 pattern. It is the longest leg and it
    must comply with Fibonnaci ratios of A-B leg.

    Then the D point will be in the potential reversal zone which is 50% retracement of
    B-C leg.

    As you can see on the chart A-B leg is the same length as C-D so this is also a
    confirmation of 5-0 success formation.

    If you want to read more about the 5-0 pattern which was invented by Scott Carney
    in his harmonic trading book.

    Bearish 5-0 Harmonic Pattern

    Bearish 5-0 pattern should be formed, not necessarily mandatory, in the uptrend so
    it can have a much higher success rate.

    Bearish 5-0 is drawn as Shark pattern, but with additional C-D leg. That means you
    can first have the Shark pattern on the chart and then wait until C-D retracement
    happens.

    B-C leg have two Fibonnaci rules so you can watch two bearish scenarios. The final
    difference will be in your profit target because the C point has two different lengths.

    You need to watch out that the A-B leg is reciprocal to C-D leg, AB=CD, to pattern
    be valid.
    Bullish 5-0 Harmonic Pattern

    Bullish 5-0 pattern should be formed, not necessarily mandatory, in the downtrend
    so it can have a much higher success rate.

    Bullish 5-0 is drawn as Shark pattern, but with additional C-D leg. That means you
    can first have the Shark pattern on the chart and then wait until C-D retracement
    happens.

    B-C leg have two Fibonnaci rules so you can watch two bullish scenarios. The final
    difference will be in your profit target because the C point has two different lengths.
    You need to watch out that the A-B leg is reciprocal to C-D leg, AB=CD, to pattern
    be valid.

    Trading 5-0 Pattern

    Look for uptrend or downtrend because that is the first step in trading 5-0 pattern.
    Then you need to wait until the 5-0 pattern appears, but it must be reversal pattern.

    That means in the uptrend you need to look for a bearish 5-0 pattern.

    In the downtrend you need to look for a bullish 5-0 pattern to have a high chance of
    success.
    When you find the 5-0 pattern which is drawn by the 5-0 pattern rules you can look
    for D point as an entry point.

    If you have bullish 5-0 pattern you can set stop loss below D point because the
    price should move down.

    In the case of bearish 5-0 pattern you can set stop loss above D point.

    Profit target is not simply defined by you can look for the first target at the C point.
    Because the pattern suggests the previous trend ends, this means you are targeting
    a new trend.

    So, it is not easy to say where the new trend will have first resistance.

    Because of that you can use C point as a first profit target and then at least break
    even in case the market changes the direction and returns back to D point.

    Conclusion

    5-0 harmonic pattern is one of its kind. It is a combination of Shark pattern and
    ABCD pattern and 0 point which defines the starting point.

    It is a reversal pattern which tells you the trend has come to an end.

    The 5-0 pattern has a bearish and bullish type so you can trade it in bearish and
    bullish market.

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