After accurately identifying a potential trade opportunity, theactual price level for the execution must be determined. Severalconsiderations must be assessed within a specific time period, asdefined by the potential opportunity. Primarily, the validity ofthe pattern must be determined and the final action of whether ornot to execute the trade or must be determined. Therefore,effective execution strategies can facilitate the process andoptimize trading results.
Why Trading Tactics?
The key to successful trading requires thorough preparation.Investing the time to identify Harmonic Trading opportunities isonly half of the battle. The other part that can be easilyoverlooked is the execution of the trade. Therefore, it isessential to create a set of rules in advance to resolve potentialproblems that may arise throughout the trading process.
Trading tactics are basic guidelines and strategies thatoptimize Harmonic Trading decisions. Such strategies provide rulesfor nearly every trading situation, attempting to maximize profitswhile limiting losses. Clearly, the Harmonic Trading techniquesprovide an accurate and
1. The market’s reaction to the harmonic area.
2. Your response to the price action in the PotentialReversal Zone (PRZ).
In this process, a variety of factors and potential tradingdecisions must be continually con- sidered to maximize the resultof the position. Since the same patterns yield different results,it can be difficult to try to “outguess the market” and know whichsetups will work. However, if a consistent set of rules is appliedthroughout the decision-making process, fewer mistakeswill
The critical factor in determining whether to execute a tradeinvolves an understanding of how price action should act, after ithas reversed from a harmonic area. Since a convergence of harmonicnumbers defines a critical area for potential turning points, priceaction that begins to reverse from that area should clearlycontinue in that direction. In fact, in my research of harmonicprice action, I have found that the stronger and quicker thereversal, the greater potential for a nice move. This is incrediblyimportant because sharp reversals from aPRZ
“You Can Only Profit…”
My good friend Bill Sourbey has repeated the following phrase tome in our discussions of the market through the years:
“You can only profit from that which you cananticipate.”
He continually has repeated this principle to me. It has immenserelevance to the execution philosophy of harmonic patterns. First,the anticipation of the completion of a pattern establish- es theaction to be taken. The PRZ defines the limits of the trade,including the execution point, the stop loss limit, and profittarget. If a price structure possesses the proper Fibonacci ratioalignment, the anticipation of its completion of the PRZ tovalidate the pattern creates an
The Action involves the preparation and understanding of all ofthe most pertinent and effective rules for each pattern tosuccessfully trade the opportunity. The Task involves executingpositions based upon the price action at the completion of thepattern, according to the system of Harmonic Trading rules thatdefines every possibility, in advance. Doesthe
These are all anticipatory events that have known possibleoutcomes. Hence, trading tactics within the execution processdefine a plan that outlines actions for all possible considerationsduring the trading process.
The Action of preparing and determining which positionsto execute follows a set of identification rules that quantifiespatterns, assesses price action, and defines the parameters of eachtrade, including the entry, the stop loss and the profit objective.Such preparation is critical to prevent execution mistakes and todetermine the optimal entry within the PRZ. Furthermore, thoroughpreparation is essential when faced with volatile real-timesituations,in particular.
Although anything can happen in the financial markets, athorough understanding of a potential trade’s critical technicallevels will reduce confusion. For example, extreme price actionthat clearly violates a PRZ will frequently provide signs of theimpending violation. A complete knowledge of the set up and thecritical harmonic price levels will reduce losses as patternfailures are spotted well in advance. These situations develop withexperience but the task of preparation is an essential part of thetrading process for every setup.
The Task of execution represents the actualization of thepreparation to determine the validity of the opportunity, asdefined by the rules of the Harmonic Trading approach. Although thedecision of whether or not to execute a trade may seem simple,there are many considerations that may affect the exact entry levelor negate the setup altogether. Therefore, the task of executionpresents many challenges.
The completion of a pattern creates a unique “technical window,”as the nature of price action following the entire test of aPotential Reversal Zone can indicate a great deal about the futureprice direction of the predominant trend. The action of defining asetup in advance helps to outline the numeric limits of the tradeand the technical window, as well. The price action shouldexperience some type of reaction in the PRZ as an early sign of apotential reversal. After a pattern completes, an execution shouldattempt to capitalize on these small but signifi- cantly indicativesignals. The ability to interpret a pattern’s validity within thistechnical window will improve with experience, as the same set ofcircumstances continually manifest traits of a valid reversal wellbefore the big move begins. Although the assessment of price actionwithin this technical window is one of the most challenging aspectsof the trading process, the completion of patterns will typicallyexhibit distinct evidence of whether or not they will fail.Therefore, it is essential to assess harmonic setups within thistechnical window to determine the task of execution.
It is important to emphasize that the rules within the HarmonicTrading plan are designed to anticipate all possible technicalevents that have known outcomes. Hence, such trading tactics withinthe execution process define a plan that addresses all possibleactions for
The Price of Technical Information
The price of technical information essentially comes down to thenext tick. Depending upon the position, the next tick can make thedifference between entering or exiting. If an entry is beingprepared, each tick that transpires brings the potentialopportunity that much closer (or farther) from the actualrealization of the execution. As price action approaches a PRZ, thevalidity of the pattern must be assessed relative to the currenttrading behavior. Since the validity of a harmonic pattern dependsupon the price action in the PRZ, each price bar that follows theinitial test of the PRZ can provide more information regarding thefuture potential of the existing opportunity. However, a delayedexecution in waiting for confirmation of the next tick can oftenresult in missed opportunities.
Every position faces these assessments throughout the entiretrading process. It is a type of opportunity cost for thatposition. If the next tick goes in my favor, I have risked losingone tick during the time of the next decision.
The price of the next tick is best related to reversalsituations where a profit target has been attained. For example,let’s say you have a profit in a long position but you areconsidering sell- ing because your targets have been achieved. Dueto the profitable positions, greed or fear may stall exitstrategies to see “how high will it go?.” So, each tick is relatedin that the next set of data will confirm or deny the currentposition.
Although it is common to give back some of the reversal to allowbreathing room for the price action to assert itself and todetermine the extent of the move, the price of technicalinformation must be assessed in comparison with the parameters ofthe trade. Although this concept will be covered thoroughly inChapter 11, it is important to understandthe
Execution in the Potential Reversal Zone (PRZ)
The essence of Harmonic Trading is executing in the PRZ. As itrelates to pattern completions, it is within this “harmonic window”that a great deal of information can be obtained. Remember,harmonic patterns define specific zones that can act as a signpostof potential future price action. If a PRZ of a distinct patternpossesses several numbers in a distinct area, the price rangeshould be considered very harmonic. If the price action reversesfrom this area, the PRZ could be considered as an important turningpoint. If the price action does not reverse, it would indicate thatthe predominant trend is quite strong. The ability to interpret andto decipher the price action within these “harmonic windows” is thedetermining factor in turning patterns into profits!
Reversal Possibilities
Effective execution requires the discipline to examine a precisePRZ and understand in advance all reversal possibilities.
After executing a position at the completion of a pattern, theprice action can do one of three things:
1. Exceed the PRZ into the Stop Loss Zone.
2. Reverse slightly off the PRZ and consolidate.
3. Reverse off the PRZ and provide a nice cushion within arelatively short period of time.
Let’s consider the possibilities:
1. The price action moves into the Stop Loss Zone and requiresthat the loss be taken— next trade. Although this may not be thedesired goal, stop losses are a part of the business of trading.Therefore, it is important to remember that all setups are notgoing to work out. But, if this approach is implementedconsistently over the course of many trades, these setups willdefine a majority of favorable trades.
2. Harmonic setups typically provide some type of initialreaction at a minimum after testing a distinct PRZ. However, allsetups are not the same. In this case, when the price actionbriefly reverses and continues in the predominant trend, it iscritical to secure the quick profit before the trade becomes aloss.
3. Price action that reverses for a brief period after testing aPRZ frequently provides a “profit cushion” that provides enoughtime for the extent of the reversal to be determined. After a smallprofit is achieved, the trade management techniques are employed tomaximize profits and effectively handle the position.
Although this may seem oversimplified, the execution of a tradecan result in a profit, loss, or scratch (break even). After avalid harmonic pattern has been identified, the final judgment ofwhether to pull the trigger can come down to a few price bars.Utilizing the PRZ as the ideal pivot area, the extent of thepattern’s validity depends upon specific reversal action withinthis defined range.
One critical factor in gauging price action in the PRZ candepend upon which numbers are the most important. A convergence ofa pattern’s projections can be peculiar because in a reversal zonethat contains several harmonic calculations, it is difficult toknow which point will end the trend. Although these rules aregeneralized, I believe that they serve as important guidelines toaccurately ascertain a priority order of importance to themultitude the harmonic numbers that may comprise a pattern’sPRZ.
Potential Reversal Zone (PRZ) Tips
· Look for an area of convergence. History has proventhat a convergence of Fibonacci ratio projections, especiallyspecific harmonic price patterns, can identify critical techni- calareas of support and resistance. When a distinct pattern possessesa congregation of ratio projections in a defined price range, it ispossible to determine the potential future direction of thetrend.
· Look for where the greatest group of calculationsconverges. The key to utilizing these harmonic measures whenanalyzing a price chart is to determine the area where the greatestgroup of patterns complete and important ratio calculationsconverge.
· The bigger the number the more significant the harmonicarea. The Fibonacci number that is calculated from the largestprice leg is usually the most significant at a pattern’s completionpoint. This principle applies to both time and price. For example,a pattern that develops on a weekly chart will be more significantthan a setup on a daily basis. Also, if there is a smaller patternwithin a larger pattern, the larger pattern usually will be moresignificant.
· The amount of numbers within the PRZ. The number ofratio projections and pattern completions within a specific areawill dictate the significance of a particular price level.
· The proximity of numbers within the PRZ. If a PRZpossesses several numbers, the ideal area for a pattern’scompletion and ultimate reversal will likely occur where themajority of the zone’s numbers complete.
The proper identification and interpretation of the price actionin the PRZ at the completion of a pattern is the defining elementfor success. The preparation and discipline required to “execute inthe zone” is no small task. The determination of a pattern’scompletion requires patience and practice. The ability tocapitalize on the reactive first test of the Potential ReversalZone is critical in turning patterns into profits. As a patterncompletes, the price action can react sharply, requiring a quickassessment and decision of the execution. The key is to be preparedas the price action enters the zone on the initial test.
Entering the PRZ: The Initial Test
A well-defined PRZ usually provides some type of initialreaction on the first test of most harmonic patterns. At a minimum,it has been my experience that distinct PRZs frequently can providesome nominal yet tradable reaction, regardless of the eventualvalidity of the pattern. Although the extent of the reversal canvary, it is important for the initial reaction to clearly reversefrom the entire range of harmonic numbers to validate thepattern.
A common sign of a failed setup is price action that merelyconsolidates in the PRZ before resuming in the direction of thepredominant trend. Although the determination of valid patternsrequires some experience to consistently differentiate the winnersfrom the losers, the initial
The initial test can occur quickly, and it is not uncommon tomiss great pattern completions on the first test due to thevolatility of the price action. The best advice I can offer is tobe pre- pared and track a group of potential patterns as tradingcandidates. Preparation is essential to capitalize on the initialtest of distinct pattern completions, as these setups typicallyoffer a reactive yet profitable move.
Many reversal situations experience sharp price action thatoccurs within a small window of opportunity. For example, it iscommon for significant long-term patterns to reverse from a PRZwithin a day or two after initially testing the zone. This can befrustrating, as a slight distraction could cause the entire tradeto be missed. I have encountered many instances where I’ve missedan anticipated completion of a major intra-day pattern in the indexfutures like the S&P
Remember, the “harmonic window of opportunity,” as defined bythe PRZ, is a very precise area that represents the culmination aseveral significant price movements. The initial testof
The Persimmon Effect
J. M. Hurst, in his profound book The Profit Magic of StockTransaction Timing, eloquently discussed the problem of hesitationor what he called the Persimmon Effect:
“The ideal time to buy a stock is exactly when it looks theleast interesting! Similarly: The ideal time to sell a stock shortis when it looks as though it will never stop going up!
You will put a stock in your stable and patientlytrack it for a buy signal. The price continues to drop and theamount of daily or weekly variation dries up along with thevolume.
Your cyclic (harmonic) analysis tells you to expectthis, but it certainly looks as though all investor interest hascompletely vanished.
At such a time it is very difficult indeed to convinceyourself that you should actually take action when that buy signalcomes along.”
(J. M. Hurst, The Profit Magic of Stock Transaction Timing
[Greenville, SC: Traders Press, 1970], 163.)
When it comes to trading harmonic patterns, this frequently canhappen, especially in the early learning stages. Such hesitation isproblematic, although thorough preparation helps to define tradingdecisions in advance.
Within the Harmonic Trading approach, the problem arises at thecompletion of patterns, where the “harmonic signal” generated—thatis, the test of the PRZ—does not stimulate the appropriate tradingaction.
Jim Kane of KaneTrading.com and I have discussed the PersimmonEffect extensively in many discussions regarding trade execution.On one particular day, we were looking at a few intra-day patternsin the index futures in the HarmonicTrader.com Chat Room. We weretrying to determine if we would get an opportunity to see thesepatterns complete.
I responded by saying:
“WE will always get OUR chance as long as WE give itto
Within the Harmonic Trading approach, the opportunity to executepatterns, especially in the PRZ, requires patience and a firmbelief in these methods. Although such confidence requires time tomaintain the proper perspective, it is essential to realize that wemust define our own trading opportunities.
The market will provide the necessary signals that can identifypotential trading situations. It’s the trader’s responsibility tolearn what these signals mean and to utilize this technicalinformation to define profitable opportunities. Although otherconsiderations can affect an execution, the degree of success isdependent upon consistently applying the Harmonic Tradingtechniques to identify opportunities and to turn patterns intoprofits. The measurement strategies and pattern rules quantifypotential opportunities quite effectively. The Harmonic Tradingidentification techniques consistently pinpoint the optimal pricelevel for a trade execution. However, the physical task of pullingthe trigger can present its own set of problems.
Despite these inherent challenges throughout the decision-makingprocess, the ultimate step of executing the trade still requires acorrect and timely assessment of the price action. Therefore,issues related with trade executions such as hesitation—a.k.a. thePersimmon Effect—should
The hesitation issue also fits well within the Action/TaskTrading Process Model. As I mentioned previously, theAction is defined through the identification and preparationrequired to define a Harmonic Trading opportunity. The Taskinvolves executing positions based upon the general trademanagement rules that define every possibility, in advance. Inessence, hesitation is just the failure to execute the Task.
Although the Persimmon Effect can prevent a trade execution, thesolution to the problem can be overcome through a process oflearning and emotional conditioning. First, it is important torealize that not all trades are to be taken, even if theopportunity is a distinct harmonic pat- tern. In fact, in the earlyapplication of the Harmonic Trading techniques, it is essential toallow
In my experience, thorough preparation helps to “slow down” theprice action in the PRZ. When all trade parameters are defined inadvance, the decision process is clear. The “anticipated” tradeshould act in a specific manner if it is going to be a validopportunity. Otherwise, the price action is indicating that thepattern is potentially flawed.
This concept of the PRZ as a window of opportunity is incrediblysignificant. The specific range is the critical “make-or-break”level that determines the validity of a potential pattern. Althoughthere are a variety of confirmation signals to be considered, thebasic parameters of the trade as defined by the price points of thepattern elucidate the execution by clearly defining all numericlimits and outlining the make-or-break range for a reversal.
Trade Journal
A trade journal is an effective means of preparation to trackpotential setups. A trade journal should include the type ofpattern, the completion point of the AB=CD, and the Fibonacciretracements within the reversal zone. Also, a written journal ishelpful in recording your personal thoughts regarding the relativeprice action within a reversal zone.
It is important, especially in the early stages of learningthese techniques, to keep track of your thoughts. The questionsthat arise and the ideas generated during the trade executionprocess are your personal signals that help gauge the price action.It is important to record these feelings and expectations relativeto the current price action as a template for comparing what wasexpected versus what happened. The key to trade execution ofharmonic setups still requires the accurate analysis of the priceaction within the reversal zone. Achieving this “feel for thenumbers” requires an understanding of your own personal signals. Atrade journal will record your mental processes and tradingbehavior. It is only through such study that you will improve yourexecutions and become a more successful trader.
I have included a sample of my own journal that shows how Iapproach trade setups. I line the various setups in “my sights” andwait for them to materialize. If they don’t work out the way that Ihave projected, I move on to the next trade. If I do see a setupthat comes together, I gauge the price action. After theopportunity is over, I summarize the events and my response to theopportunity. If I accept a trade, I will record my thoughts andfeelings throughout the entire experience until I am out.
October 8th
· SP500 Mini-Contract (ES_Z9) = AB=CD @ 1032.75; Down 5in the pre-market; major
· Microsoft (MSFT) = Retesting Bullish Gartley. Look for0.618 retracement off pattern at $26.
· Semiconductor Index ($SOX) = Retesting major BearishAB=CD. Look to buy calls
· NASDAQ 100 Tracking Stock (QQQ): Setting up BullishCrab on 60-minute chart in the
As you can see by my journal entries, I have identified severaltrade setups listed as potential opportunities. It is not uncommonfor me to follow a potential trade for quite some time, especiallywhen I am tracking price action after a nice harmonic setup.
Trade journals are an effective means to learn a great dealabout price action and harmonic set-ups. Most important, a tradejournal can teach many lessons about personal insights andperceptions regarding these opportunities. It is even moreessential in the beginning stages of your study because eachperson’s trade executions are unique. Although two people mayutilize these harmonic methods and calculate the same reversalzone, their execution prices will not
Over time, the trading journal will help you gauge your ownpersonal signals to interpret the market action. You will develop afeel for what “should be happening.” For example, let’s say thatyou have identified a valid harmonic set-up with several numberswithin a very tight zone. Specifically, you have identified a greatBullish Bat pattern. You are looking to buy but the price actionsuggests a potentially failed setup because of an extreme pricerange, tail close, or gap. You might record in the journal that thepattern looks great but the price action at the reversal point istoo strong or has a warning signal, so you avoid the trade. Also,you might record
During this time, it is important to record the reasons why orwhy not you accepted the trade, and the emotions that wereassociated with your actions. Also, after the opportunity hasabated, it is important to record how the trade turned out and howyou responded to the
Although not all harmonic setups are ideal, developing certainstandards of price action helps create a framework to gauge thereversal zone. A trading journal that records these experiences isthe key to developing your intuition. Each person’s response toprice action is unique. So, it is imperative to learn the signalsthat you generate during the execution process to improve futuretrades.
Trading Checklist
At this point, the identification techniques utilized to defineharmonic patterns should be com- mon knowledge. There is a simplechecklist of requirements that all valid setups must possess.
1. Is there a pattern?
2. What is it?
3. Is there an AB=CD?
4. Where does it complete?
5. Are there three or more numbers converging in thePRZ?
6. What are they?
7. What are the time cycles (symmetry) suggesting?
8. Are there any warning signs?
9. At what point is the PRZ no longer valid? (StopLoss)
10. How much must I risk? Am I willing to risk it?
The guidelines in this section are the result of years ofharmonic research. The Harmonic Trading Checklist summaries acomplex process of measurement considerations into a conciseformat. Furthermore, this checklist optimizes trade executions byclearly defining all of the numeric limits of the setup, inadvance.
Trade Execution Considerations
When it comes down to the actual execution, severalconsiderations can influence trading behavior. In essence, tradingharmonic patterns versus just analyzing harmonic patterns are twodifferent endeavors. The trade execution in the PRZ is frequently ashort window of
I would like to take a moment to discuss the distinction betweenactual trading and simple pattern identification. I trade thesepatterns almost everyday, and I must emphasize the disciplinerequired to actively trade this methodology. In fact, patternidentification is merely the first step in the process. The degreeof trading success requires an ability to identify distinctpatterns, to execute trades in the PRZ and to manage positionswithin the rules of
20/20 Hindsight
For these reasons, Harmonic Trading frequently looks better inthe past than it does in the present or the future. It is easy toidentify past patterns in price charts and lay claim to what couldhave been. Unfortunately, the uncertainties involved with real-timeexecutions frequently alter the true outcome. Furthermore, it canbe difficult to know exactly which setups will yield validreversals. It would be great if “conditional” orders could beexecuted the day after a valid reversal is confirmed and executetrades exactly at the reversal points. Although such hindsighttrading would be immensely profitable, it is possible to interpretthe price action at certain harmonic price zones to determine thevalidity of a reversal.
The problem arises when price action does not act as anticipatedor reverse ideally. This can lead to missed trades and createuncertainty about future set-ups. Although these realitiesare
1. Prepare in advance. It is critical to maintain a listof prospective trades that are approaching their PRZ. Settingsoftware alerts and monitoring setups as they get close to theirentry point will improve executions.
2. Trades will be missed. Although certain situations maypossess seemingly perfect patterns, it is important to note thatnot all trades should be taken. Extreme price action can warn aboutinvalid setups. Sometimes, setups still reverse in the desireddirection, despite these indications.
3. Use 20/20 hindsight. The keys to correcting mistakesand developing more effective trading strategies can only bediscovered through reviewing prior trades.
Harmonic Trading Psychology
There are numerous books on trading psychology that can outlinea variety of techniques to improve the mental aspects of trading. Ibelieve it is an important area of the market to study. But, Iwould like to offer a few ideas to improve your tradingpsychology:
· Keep it simple. Although there is a definite advantageto learning as much as you can about the markets, overanalysis ofpotential opportunities can create confusion and second-guessing.It is important to incorporate only those techniques that haveclearly proven to be effective tools. Yes, certain indicators canbe reliable, but it is ridiculous to try to incorporate everytechnical measure when assessing a trade.
· Stick to a winning plan. They key ingredient inpreventing this confusion is to create and stick to a winningtrading plan. Although I may consider extraneous variables whenassessing a potential trade, Harmonic Trading techniques as definedin my trading plan are the fundamental basis for entering aposition.
W. D. Gann discussed the importance of a trading plan in many ofhis writings:
“Have a well-defined plan before you start trading, thenfollow that plan, as the architect does in building a house, or theengineer in constructing a bridge or driving a tunnel.
The man who changes his ideas or his plan, which are based onsome- thing practical, for no other reason than that he hopes orfears the market will do something different, will never make asuccess.”
(Truth of the Stock Tape [Pomeroy, WA: Lambert-Gann Publishing,1923]).
· Full-time trading is not a full-time job. One of themost common reasons for lacking a clear mental perspective is thesimple fact that many traders trade too much. Could you stoptrading for more than a week? A month? A year even? Or do you haveto trade? If you have to trade, you might as well go to Las Vegasbecause you have just entered the world of a gambling addict. It isimportant to take a break after a certain period of time and paceyour trading efforts.
· Study the masters. In my desire to learn the mostpertinent information on the market, I discovered many books thatwere more than 50 years old that contained incredible marketinsights that remain valid to this day. Today’s “pop trading” bookshave been penned by high-profile market celebrities. Unfortunately,many of these people are not active traders. In fact, at the firstonline trade show that I attended I met with several notableauthors. It was amazing that many of these people were not activetraders, and many stated that they have not traded for years.Authors such as W. D. Gann, J. M. Hurst, and R. N. Elliott containpertinent insights into past markets that are as effective as theywere 100 years ago.
· Review your work. The only way to overcome your tradingerrors is to study your trades. Although losses are a part of thebusiness of trading, it essential to review those trades and themistakes that caused the faulty judgment to prevent repeating thesame mistakes. If you must pay tuition at the University of WallStreet to learn how to trade successfully, you have to do yourhomework and review your mistakes. Otherwise, you will be doomed torepeat them.
· Don’t care. The proper psychology required in theexecution of any trade should entail an almost careless attitude.After defining all trade parameters (entry, exit, stop loss) inadvance, the pure execution of the trade should be nearlyemotionless. Such an attitude can be difficult because the moneyrisked in each trade can stimulate fear or greed. However, the keyis to focus on the price action before, during and after a patternhas completed. Any other thoughts, emotions or considerationsoutside the realm of the
Trading Questionnaire
This list of questions is an excellent means to review youroverall trading goals. A personal assessment review is effective inthat it can outline your personal beliefs and basic expectations oftrading in general. I recommend writing answers to these questionsand incorporating these guidelines into your overall tradingplan:
1. Why do you want to trade?
2. When was the first time you realized you wanted to trade?Why?
3. What was your first trade?
4. What was your last trade?
5. What was your best trade ever?
6. What was your worst?
7. What is your preferred time frame for trading?(Day/Position/Investor)
8. What is your greatest benefit of trading outside of themoney?
9. What is your greatest fear associated withtrading?
10. How do you know when to buy/short a stock?
11. How do you know when to cover that position?
12. What is your greatest strength in your trading?
13. What is your greatest weakness?
14. What areas of trading do you think you need to learn moreabout?
15. Do you review your past trades?
16. What do you expect to get out of trading? (List threeaccomplishments.)
17. What will your trading be like within each of thefollowing time periods?
· Six months
· One year
· Five years
Effective trade execution requires discipline and preparation.Although a variety of mental aspects are involved in thedecision-making process, the rules that define harmonic setups mustserve as the foundation for all trading behavior. Executing in thePRZ and identifying patterns with three harmonic numbers in aspecific area are examples of the types of basic rules that must beconsistently followed if success is to be achieved. These questionsshould be reviewed from time to time, as a follow-up to yourtrading progress.
