Harmonic Trading

PepsiCo stock (NYSE: PEP) is up 4% in a month, while it’s up 3% year-to-date.
The daily price of PepsiCo stock was bounced from Fibo level at 181.03 to below for the secondary correction within the primary bullish trend to be started with 171.01 possible Fibo target.

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Pattern recognition has always been a valuable tool for traders. Whether it's identifying unique combinations of candlesticks or drawing imaginary lines on a chart, these patterns have become an integral part of technical analysis. Humans have always excelled at finding and recognizing patterns—so much so that it is often said we sometimes see patterns where there are none. Therefore, it would benefit us to apply more objective techniques when identifying potentially profitable patterns in financial time series. In this article, we discuss the application of Dynamic Time Warping (DTW) as an objective technique for finding unique patterns in price data. We will explore its origins, how it works, and its application to financial time series analysis. Additionally, we will present the implementation of the algorithm in pure MQL5 and demonstrate its use through a practical example.

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In this article, we will dive into the world of William Gann's trading methods, starting with creating Gann Angles indicator in MQL5. We will go through the theory behind this tool and implement it step by step as a custom indicator for the MetaTrader 5 platform.

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Let's try to combine the most modern technologies and ancient knowledge. We will use the Python programming language, as well as the MetaTrader 5 platform to find the connection between astronomical phenomena and the movements of the EURUSD pair. We will cover the theoretical part of astrology in finance, and try ourselves in the practical part of developing a forecasting system.

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A finished Bearish gartley pattern on USDJPY 1 hour chart.

Speaking from my own trades, adding divergence helps filter weak patterns, especially during choppy sessions. Keeps me sharper than relying on shape recognition alone

We will explore the essential elements of some of the most well-known harmonic structures, including the Gartley, Bat, Butterfly, and Crab patterns, as well as the precise Fibonacci measurements that define them. Since even a slight divergence can render the setup invalid, it is important to understand these ratios. The next article will concentrate on using this knowledge to programmatically apply it to MQL5, allowing for the automatic identification of both bearish and bullish harmonic patterns.

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In our previous article (Part 29), we developed a Gartley Pattern system in MetaQuotes Language 5 (MQL5) that detected bullish and bearish Gartley harmonic patterns using precise Fibonacci ratios, automating trades with calculated entry, stop loss, and take-profit levels, and visualizing patterns with chart objects such as triangles and trendlines. In Part 30, we introduce an AB=CD Pattern system. While the Gartley system depends on detecting specific multi-leg harmonic structures defined by multiple Fibonacci levels, the AB=CD system specifically identifies patterns formed when two equivalent price segments (AB and CD) are found through pivot points and distinct retracement and extension ratios—resulting in simpler yet dynamic pattern identification. The AB=CD system executes trades using dynamic entries and multi-level take-profit targets, enhancing visualization with triangles, trendlines, and labels for clear pattern presentation.

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In our previous article (Part 30), we developed an AB=CD Pattern system in MetaQuotes Language 5 (MQL5) that detected bullish and bearish AB=CD harmonic patterns using Fibonacci ratios, automating trades with calculated entry, stop loss, and take-profit levels, visualized through chart objects like triangles and trendlines. In Part 31, we create a 3 Drives pattern system that identifies bullish and bearish 3 Drives harmonic patterns through pivot points and specific Fibonacci retracements and extensions. The system executes trades with customizable take-profit and stop-loss options, enhanced by visual triangles, trendlines, and labels for clear pattern representation.

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