Educational post
Bullish and Bearish Alternate Bat Harmonic Pattern
The origin of the alternate Bat pattern resulted from many frustrated and failed trades of the standard framework. The standard Bat pattern is defined by the B point that is less than a 0.618 retracement of the XA leg. Typically, the best structures employ a 50 percent retracement at the midpoint. Although there’s room for interpretation and other ratios in the standard Bat pattern, I began the notice a peculiarity in those M and W-type structures that possessed a 0.382 retracement or less at the mid-point frequently resulted in an eventual completion that was slightly beyond the expected 0.886 retracement in the standard framework. In many cases before I became aware of this alternate alignment, I would execute trades at the 0.886 retracement within the standard Bat pattern only to close the trade for a loss due to the lack of a reversal in the projected harmonic area. After slightly exceeding the initial point at X for the pattern and triggering my stop loss, many of these reversals would reverse shortly thereafter, usually at the 1.13 extension of the structure. Again, the defining element of these situations was directly attributed to those M and W-type structures that possessed a retracement that was a 0.382 or less at the midpoint. It took some time to differentiate the structures but the more I was “whipsawed” by these patterns the more I realized that further differentiation was required in these cases. Although the special situations for this pattern will be covered in greater detail later in this material, it is important to understand that such specification is required to differentiate the similar structures. It can be very frustrating to try to trade these two types of patterns without differentiating their structures.”
Harmonic Trading: Volume Two Page 110 (Copyright Scott M. Carney 2004 HarmonicTrader Press, 2nd ed. 2010 Financial Times Press)
The Alternate Bat Pattern™, is a precise harmonic pattern™ discovered by Scott Carney in 2003.
The pattern incorporates the 1.13XA retracement, as the defining element in the Potential Reversal Zone (PRZ).
The B point retracement must be a 0.382 retracement or less of the XA leg. The Alternate Bat pattern™ utilizes a minimum 2.0BC projection. In addition, the AB=CD pattern™ within the Alternate Bat is always extended and usually requires a 1.618 AB=CD calculation.
The Alternate Bat pattern™ is an incredibly accurate pattern that works exceptionally well in the RSI BAMM divergence setup.
