Here's a video on how to identify Harmonic Alternative Bat Patterns. This runs through the pattern recognition process, trade setup and trade management for all conventional Harmonic Alternative Bat Patterns. OTSoftware identifies all Advanced and Harmonic Patterns automatically and objectively.It also enables you to create up to three of your own patterns. This has changed my trading success dramatically and maximised profitability.
Once the X and A points have been identified the market forms the B point by fulfilling a precise 38.2% retracement of the XA leg. So if the retracement is 1 pip less than 44.1% then it is treated as 38.2%, if it is 1 pip more than 44.1% then it is treated as 50% and the pattern is invalidated. Therefore, it must retrace by at least 38.2% and no more than 44.1%.
The C point is valid if it touches at least a 38.2% retracement of the AB and it does not exceed the A point (100% AB).
The Potential Reversal Zone (PRZ) is calculated as a combination of the 113.0% extension of the XA leg, 2.0AB=CD movement level (so the same distance as 200% of the A-B leg but this should be copied across and measured from the C point) and finally, the corresponding BC extensions:
361.8% of the BC if the C-point is precise 38.2% of the AB,
361.8% of the BC if the C-point is precise 50%% of the AB,
314.0% of the BC if the C-point is precise 61.8% of the AB,
261.8% of the BC if the C-point is precise 70.7% of the AB,
261.8% of the BC if the C-point is precise 78.6% of the AB,
224.0% of the BC if the C-point is precise 88.6% of the AB.
None of the levels should extend past 127.2% of XA.
Harmonic Alternative Bat Target 1: 38.2% retracement of the AD leg.
Harmonic Alternative Bat Target 2: 61.8% retracement of the AD leg.
Harmonic Alternative Bat Stops: 130.2% extension of the XA.
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