Harmonic Trading: When a Harmonic Confirms, Add an SL Line and Adjust the TP Line

This is the process I follow when a new harmonic pattern confirms on a currency pair. Adopt as much or as little of it as you wish. My goal is to show you the visual setup I use for all currencies, commodities, and crypto. It is a simple one that can be set up on any charting software you use.¹

Recall that a harmonic passes through four stages in its lifecycle:

1. Emerging — The harmonic has appeared but its “D” vertex is still wandering. The Snapshot’s data box is yellow, shows a timeframe and direction (e.g., “H8 Bullish”), and shows a TP value, but it doesn’t show a value for SL or Pips Available yet.

2. Confirmed — This means at least one candle has closed without the “D” vertex moving. The data box is yellow and now shows an SL value and the number of Pips Available.

3. Maturing — Even though a harmonic has Confirmed, its “D” may still drift. When it does, the SL, TP, and Pip Available values change. The bottom half of the data box is yellow where these values are shown, but the timeframe and direction are not.

4. Fulfilled — The harmonic has either hit its 618, hit its SL, or morphed away. The data box is yellow and says, “Hit the 618,” “Stopped Out,” “Morphed Away,” or “Formed & Hit the 618.”

Let’s use last evening’s new harmonic pattern that formed on the EURGBP H8 timeframe. Its data box looked like this: