BEARISH BAT FORMATION IN 1 Hr chart ,
The Bat pattern is in the same family of Gartley's 5-point corrective patterns, but has distinct harmonic ratios.
Bat pattern incorporates a precise harmonic ratio (0.886 of XA swing).
It also demands that the B (center) retracement should be less than 0.618 of XA swing. The B retracement
differentiates between the Gartley and Bat patterns. The Gartley pattern must have a 61.8%
retracement of XA swing, and in Bat patterns have the same XA swing retracement below
61.8% at "B".
The Bat pattern's Potential Reversal Zone (PRZ) is defined by 1.27AB=CD pattern, 1.62BC,
0.886 XA retracement levels. In bullish or bearish Bat patterns, a reversal from PRZ is
anticipated for a potential long and short entry trades.
Trade: Once the Bat pattern is completed, wait for a higher-high bar or wide range bar to give
a signal to enter a long trade. Enter a "long" trade one tick above the high of the confirmation
(higher-high or wide range) bar. For bearish patterns, enter a "short" trade one tick below the
low of the lower-low or wide-range bar.
Target: The target for the Bat patterns is similar to the Gartley patterns. First targets may be
set at A level or 1.27 of XA swing. The secondary targets could be 1.62 to 2.0 of XA swing
level.
Stop: The Bat pattern fails if price trades below the X level. Place a stop order one tick below
X level.
Bat pattern incorporates a precise harmonic ratio (0.886 of XA swing).
It also demands that the B (center) retracement should be less than 0.618 of XA swing. The B retracement
differentiates between the Gartley and Bat patterns. The Gartley pattern must have a 61.8%
retracement of XA swing, and in Bat patterns have the same XA swing retracement below
61.8% at "B".
The Bat pattern's Potential Reversal Zone (PRZ) is defined by 1.27AB=CD pattern, 1.62BC,
0.886 XA retracement levels. In bullish or bearish Bat patterns, a reversal from PRZ is
anticipated for a potential long and short entry trades.
Trade: Once the Bat pattern is completed, wait for a higher-high bar or wide range bar to give
a signal to enter a long trade. Enter a "long" trade one tick above the high of the confirmation
(higher-high or wide range) bar. For bearish patterns, enter a "short" trade one tick below the
low of the lower-low or wide-range bar.
Target: The target for the Bat patterns is similar to the Gartley patterns. First targets may be
set at A level or 1.27 of XA swing. The secondary targets could be 1.62 to 2.0 of XA swing
level.
Stop: The Bat pattern fails if price trades below the X level. Place a stop order one tick below
X level.
Trade closed: stop reached