Harmonic Pattern Signals Confirmed by Williams %R

Summary

This strategy pairs simplified harmonic-pattern detection with Williams %R. It uses pivot highs and lows to approximate bullish or bearish formations, then looks for confirmation from an oversold or overbought WPR reading. Long entries combine a bullish pattern with WPR below the oversold level; shorts combine a bearish pattern with WPR above the overbought level. Stops are placed beyond recent lows or highs with a percentage buffer, while profit targets are derived from a risk-reward setting.

The document lists Gartley, Bat, Crab, and Butterfly patterns as examples, but the supplied implementation does not validate their characteristic harmonic ratios; its pivot-based rules are explicitly simplified. A BTC/USDT futures backtest configuration is given for a one-week, one-minute period, but no results are reported. Pattern misclassification, parameter sensitivity, signal lag, and poor fit in volatile or ranging markets are cited as risks. Trend or volatility filters and volatility-based position sizing are suggested for further testing.

Key ideas

• The system combines pivot-based pattern approximations with Williams %R overbought and oversold readings.
• Longs pair bullish patterns with oversold readings, while shorts pair bearish patterns with overbought readings.
• Stops use recent swing levels with a buffer, and targets depend on a risk-reward parameter.
• The implementation does not verify harmonic Fibonacci ratios, limiting how literally its pattern labels should be interpreted.
• The BTC/USDT futures test setup has no accompanying performance results.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.