Bats are five point chart patterns that can point towards either a bullish or bearish breakout. They are quite similar in appearance to the butterfly and crab but with slightly different ratios. Point D in the bat makes a shallower reversal than the other patterns and should make a retracement of about 88% of the distance XA.
What is a bat pattern?
The Bat pattern is a retracement and continuation pattern that occurs when a trend temporarily reverses its direction but then continues on its original course. It can give you the opportunity to enter the market at a good price, just as the pattern ends and the trend resumes, and has a bullish and bearish version. What is the Bat pattern?
How do I trade using the bat pattern?
We will now look at how you can trade using the Bat pattern. We will use the bullish Bat pattern as an example. For a bearish Bat pattern (a short/sell trade), simply invert the pattern and your orders. Identify where the pattern will complete at point D – this will be at the 88.6% retracement of the X-A leg.
Is a bat a cypher or a harmonic pattern?
The bat harmonic pattern follows different Fibonacci ratios. One of the major ways to differentiate it from a Cypher pattern is the B point which, if it doesn’t go above the 50 percent Fibonacci retracement of the XA leg then it is a bat, otherwise it can turn into a cypher structure.
