![\"\"](\"https:\/\/trade-malaysia-option.com\/wp-content\/uploads\/2020\/04\/iqoption.png\")
<\/a><\/h2>\n<\/p>\n
Therefore, if you mainly trade in the lower time frames, do not miss the opportunity to read the Simple 6-Step Stochastic Trading Strategy Strategy.\u00a0Lately, this article has received a lot of attention from our readers.<\/p>\n
In an effort to help you trade Harmonic patterns, we will provide the tools and information needed to succeed.\u00a0In this case, we will have a series of strategies that can trade other Harmikon patterns such as:<\/p>\n
- \n
- ABC Bullish \/ Bearish<\/li>\n
- AB = CD Bullish \/ Bearish<\/li>\n
- 3-Drives Bullish \/ Bearish<\/li>\n
- Gartley Bullish \/ Bearish<\/li>\n
- Butterfly Bullish \/ Bearish<\/li>\n
- Bat Bullish \/ Bearish<\/li>\n
- Crab Bullish \/ Bearish<\/li>\n
- Shark Bullish \/ Bearish<\/li>\n<\/ul>\n
Before we begin, let’s review the indicators needed to successfully manage the Cypher Pattern Trading Strategy.<\/p>\n
To better recognize forex cypher patterns and be able to draw cypher patterns, you need to use the Harmonic Pattern Indicator (see Figure below).\u00a0You can find the Harmonic Pattern Indicator on the most popular Forex trading platforms (TradingView and MT4) in the indicator section.<\/p>\n
![\"\"](\"https:\/\/trade-malaysia-option.com\/wp-content\/uploads\/2020\/04\/Copy-of-Copy-of-harmonic-patterns-cover.png\")
<\/p>\nDon’t forget you need to draw your own Cypher forex pattern.\u00a0Be sure to check if it matches the Fibonacci rule.\u00a0In the next few paragraphs, we will discuss it in more detail.\u00a0Also, read my personal trading plan reviewed by Kim Krompass.<\/p>\n
Now, let’s move forward and define the Cypher forex pattern.<\/p>\n
What is a Forex Cypher pattern?<\/h2>\n
In the world of harmonic patterns, the Cypher forex pattern is a four-legged reversal pattern.\u00a0Patterns follow certain Fibonacci ratios.\u00a0Forex forex patterns appear less frequently than other harmonic patterns.\u00a0This is because it is difficult for the market price to satisfy the rigid Fibonacci ratio.\u00a0Forex forex patterns need to meet the following Fibonacci rules:<\/p>\n
- \n
- AB = 0.382 to 0.618 swing leg displacement XA;<\/li>\n
- BC = extended to a minimum of 1.272 and a maximum of 1.414 feet swing XA;<\/li>\n
- \u00a0CD = track back to 0.786 feet XC swing;<\/li>\n<\/ul>\n
![\"\"](\"https:\/\/trade-malaysia-option.com\/wp-content\/uploads\/2020\/04\/Figure-2-Bullish-Cypher.png\")
<\/p>\nSetting Strategy<\/h2>\n
The first rule of the Forex Cypher pattern is the pullback from X to A has gone down.\u00a0It should have touched the 0.382 Fibonacci ratio, but could not close below the 0.618 Fibonacci ratio.\u00a0Between 0.382 and 0.618 of the XA swing-leg Fibonacci retracement, we have the third point of the Cypher forex pattern labeled \u201cB.\u201d<\/p>\n
The next rule for forex pattern forex is the Fibonacci extension of the XA leg.\u00a0It comes in 1.27, but does not exceed 1.414 Fibonacci ratio.\u00a0This moving point is labeled \u201cC\u201d and completes the BC swing leg of the Cypher forex pattern.\u00a0The last leg of the Cypher pattern, where our order will be executed, is at the ending point D. Point D is located at 0.786 Fibonacci retracement of the whole step starting from X to C.<\/p>\n
![\"\"](\"https:\/\/trade-malaysia-option.com\/wp-content\/uploads\/2020\/04\/Figure-1-Bearish-Cypher.png\")
<\/p>\nCypher Pattern Trading Strategy<\/h2>\n
Now, you will learn how to sell Cypher Patterns with a very simple set of rules.\u00a0They will try to minimize risk and maximize profit.\u00a0However, there is one more important step to learn before deciding on a Cypher pattern trading strategy method.\u00a0First, we will give you instructions on how to apply the Harmonic pattern indicator.<\/p>\n
Step # 1 How to draw a cypher pattern<\/strong><\/p>\n
I will walk you through this process step by step.\u00a0You need to follow this simple guide and see the picture below to understand the process better.<\/p>\n
- \n
- First, click on the harmonic pattern indicator.\u00a0This indicator is located on the right side toolbar of the TradingView platform.\u00a0In the MT4 terminal, you can find the harmonic pattern indicator in the Indicators library.<\/li>\n
- Identify the starting point X on the chart, which can be any swing angle or low on the chart.<\/li>\n
- Once you are at your first swing high\/low, you need to follow the movement of the market swing wave.<\/li>\n
- You need to have 4 points or 4 high points \/ low points that bind and form a Forex harmonic pattern.\u00a0Each swing leg needs to be verified and adhere to the forex Fibonacci forex pattern shown above.<\/li>\n<\/ul>\n
![\"\"](\"https:\/\/trade-malaysia-option.com\/wp-content\/uploads\/2020\/04\/CypherHarmonic-1-1024x497-1.jpg\")
<\/p>\nNow, we will review the rules of the Cypher pattern trading strategy.<\/p>\n
<\/p>\n
<\/a><\/h2>\n<\/p>\n
Step #2 Buy Entry: Buy once the CD swing leg reaches 0.786 retracement of the XC swing leg.<\/p>\n
From a risk management point of view, the Cypher pattern is perhaps the most interesting harmonic pattern.\u00a0This is because it has the highest winning rate.\u00a0Our backtesting results continue to prove the forex cypher pattern is a very reliable harmonic pattern.<\/p>\n
Next, buy with a market order on the opening candle before the completion of point D at 0.786 Fibonacci retracement on leg XC.\u00a0Once the market touches the 0.786 level, we assume wave D is in place, as we cannot control how far the market will go.\u00a0We are only concerned with fulfilling the Fibonacci ratio.<\/p>\n
![\"\"](\"https:\/\/trade-malaysia-option.com\/wp-content\/uploads\/2020\/04\/CypherHarmonic-4-1024x464-1.jpg\")
<\/p>\nWe can observe that the price has only a small deviation below the 0.786 Fibonacci ratio \u2013 our entry point.<\/p>\n
The next important thing we need to determine is to place our protective stop.<\/p>\n
See below\u2026<\/p>\n
<\/a><\/h2>\n<\/p>\n
Step #3 \u2013 Stop Loss: Place a Protective Stop Below the X wave.<\/strong><\/p>\n
For Cypher Bullish Forex patterns, you usually want to place your protective stop loss below point X. That is the logical place to hide your stop loss.\u00a0This is because any breakout below will automatically cancel the trade.<\/p>\n
![\"success](\"https:\/\/tradingstrategyguides.com\/wp-content\/uploads\/2017\/06\/CypherHarmonic-4-1024x464.jpg\")
<\/p>\nWe need to establish the most logical place to take our profits in the Cypher pattern trading strategy.<\/p>\n
See below\u2026<\/p>\n
Step # 4 Bullish Cypher Pattern Forex \u2013 Take Profit: Take profit as soon as we reach point A<\/strong><\/p>\n
The Cypher pattern trading strategy is a reversal strategy.\u00a0We want to make sure we capture as much of this new trend as possible.\u00a0If you are not a fan of reversal strategies, and you prefer trend following strategies, we encourage you to follow MACD Trend Following Strategy \u2013 Easy to learn Trading Strategy.\u00a0This strategy has attracted a lot of interest from the Forex trading community.<\/p>\n
Cypher patterns have conservative profit targets.\u00a0We want to take profit as soon as we hit point A of the pattern.<\/p>\n
Why, do we take advantage so early?<\/p>\n
For the majority of harmonic patterns, it is best to lock in profits as soon as possible.\u00a0Since the Cypher pattern is one of the most profitable harmonic patterns, we are able to give more room for price action to breathe.\u00a0We have a chance to at least see a test of wave A.<\/p>\n
Note ** Above is an example of a BUY trade using the Bullish Cypher pattern trading strategy.\u00a0Use the same rules for SELL trades.\u00a0In the picture below, you can see an example of a real SELL trade.<\/p>\n
Take a look:
![\"\"](\"https:\/\/trade-malaysia-option.com\/wp-content\/uploads\/2020\/04\/CypherHarmonic-6-1024x464-1.jpg\")
<\/p>\nThe conclusion<\/h2>\n
The rules of the Cypher pattern trading strategy are quite simple.\u00a0However, although it has a greater winning ratio than other harmonic patterns, the Harmonic Cypher structure can be seen very rarely on charts.\u00a0We need to take full advantage of the situation that arises.<\/p>\n
We hope the Cypher trading strategy strategy is clear and concise.\u00a0If you still have questions, please leave them in the comments section below.\u00a0Also, please give this strategy 5 stars if you enjoy!<\/p>\n
Like this Strategy?\u00a0Get a Free Strategy Report that includes other useful information, such as more details, chart images, and many more examples of this strategy in action!<\/p>\n
<\/p>\n
<\/a><\/h2>\n<\/p>\n","protected":false},"excerpt":{"rendered":"
Cypher Pattern Trading Strategy will teach you how to correctly chart and draw cypher patterns.\u00a0You can use your own cypher harmonic pattern and have a profitable Forex trading strategy. It is no mystery that geometric […]<\/p>\n","protected":false},"author":1,"featured_media":3790,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[100],"tags":[],"class_list":["post-4019","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-strategi-en"],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/trade-malaysia-option.com\/en\/wp-json\/wp\/v2\/posts\/4019"}],"collection":[{"href":"https:\/\/trade-malaysia-option.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/trade-malaysia-option.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/trade-malaysia-option.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/trade-malaysia-option.com\/en\/wp-json\/wp\/v2\/comments?post=4019"}],"version-history":[{"count":3,"href":"https:\/\/trade-malaysia-option.com\/en\/wp-json\/wp\/v2\/posts\/4019\/revisions"}],"predecessor-version":[{"id":4022,"href":"https:\/\/trade-malaysia-option.com\/en\/wp-json\/wp\/v2\/posts\/4019\/revisions\/4022"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/trade-malaysia-option.com\/en\/wp-json\/wp\/v2\/media\/3790"}],"wp:attachment":[{"href":"https:\/\/trade-malaysia-option.com\/en\/wp-json\/wp\/v2\/media?parent=4019"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/trade-malaysia-option.com\/en\/wp-json\/wp\/v2\/categories?post=4019"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/trade-malaysia-option.com\/en\/wp-json\/wp\/v2\/tags?post=4019"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}