Are you conversant with different trading patterns? If you know
about a few trading patterns, you may be aware of the harmonic patterns or
harmonic trading. It is an approach to trading the markets. As with most
traders, you may be allured by the trading approach, as it enables you to
predict turning points in the market. You would have a good risk to reward
ration and draw beautiful patterns suitable for your specific needs. However, you may come across a few trading problems in harmonic
trading. Let us delve into them. • Subjective harmonic trading Do you consider trading as a business and not a hobby? Consider
looking for a plan for everything. It would be pertinent not to make subjective
decisions, as it would hamper your thought process. The foremost problem faced
with harmonics trading would be subjectivity. Drawing harmonic patterns need
you to identify the impulse leg. Rest assured that it is essential for all
harmonic patterns. It would be for the trader to decide. What would you do? A possible solution would be to consider choosing
the impulse leg coinciding with resistance or structural support. Due to more
confluence, you would have a higher probability of your trade. • Making the market look at your patterns Rest assured that the market has repeated patterns. Therefore, the
question to ponder upon would be how to develop your trading strategy. It would
be pertinent to mention here that patterns could be in higher highs and lows,
range-bound markets, and consolidation before breaking. Therefore, to trade
profitably, you should be confident of your trading strategy for extracting an
edge in the markets. The trading strategy would be required to make sense to me
before you use it. • Missing on big trends You may be looking forward to capturing big moves in the market at
the cost of a lower winning percentage. However, harmonic patterns would be
more prominent in range markets because of the way it is created. It would
cause the traders to miss the chance in trending markets. Moreover, harmonic patterns
would appear in trending markets against the trend. When you trade harmonic
patterns in such a situation, you would find yourself losing the trades several
times. With the harmonic trading performing poorly in the trending markets, it
would be in your best interest to avoid trading harmonic patterns in the
trending market. • The range markets A range market would entail the price contained between resistance
and support. It would not be wrong to suggest that the range market would work
in the favor of harmonics trading, as the
patterns are more prevalent in the market condition. There may be situations
whereby the harmonic patterns may not be present in a range market. It would
cause you to miss trading opportunities. • Stop-loss hunted When you attend trading courses or read trading books, you would
learn to place your stops below the support or above the resistance. It would
help you find stops below the low of candlewicks and high of candlewicks.
As
a trader, you should be aware of the pros and cons of trading and apply proper
risk management.