The Crab harmonic pattern is known for identifying extreme market reversals with exceptional accuracy. Recognized as one of the most advanced harmonic patterns, it offers explosive trade opportunities when properly identified.
🔑 Key Features:
✔ Extreme reversal signals (1.618 XA extension)
✔ Highest-probability D point among harmonic patterns
✔ Works across Forex, stocks, and cryptocurrencies
1. Discovery of the Crab Pattern
- Developer: Scott Carney (2000)
- Evolution: Enhanced version of the Butterfly pattern
- Unique Trait: Uses 1.618 XA extension for ultra-precise reversals
2. Crab Pattern Structure & Fibonacci Ratios
Pattern Points (X-A-B-C-D)
| Leg | Fibonacci Requirement |
|---|---|
| AB | 38.2% – 61.8% of XA |
| BC | 38.2% – 88.6% of AB |
| CD | 224% – 361.8% of BC (Must reach 1.618% of XA) |
Bullish vs. Bearish Crab
- Bullish Crab: Forms at extreme lows (Buy at D)
- Bearish Crab: Forms at extreme highs (Sell at D)
3. How to Trade the Crab Pattern (Step-by-Step)
Step 1: Identify XA Impulse Move
- Strong directional move (up/down)
Step 2: AB Retracement (38.2% – 61.8%)
- Must stay within Fibonacci range
Step 3: BC Retracement (38.2% – 88.6%)
- Should not exceed 88.6% of AB
Step 4: CD Extension (Critical!)
- 224% – 361.8% of BC
- Must reach 1.618% of XA
Step 5: Enter at Point D
- Buy (Bullish Crab) or Sell (Bearish Crab) with confirmation
4. Stop Loss & Take Profit Rules
Stop Loss Placement
- Bullish Crab: Below D (if long)
- Bearish Crab: Above D (if short)
Take Profit Targets
| Target | Fibonacci Level |
|---|---|
| TP1 | 38.2% of AD |
| TP2 | 61.8% of AD |
| TP3 | 100% of AD (XA point) |
5. Confirmation Signals (Boost Accuracy)
✔ Price Action: Pinbar/Engulfing at D
✔ RSI/MACD Divergence
✔ Volume Surge at Reversal
✔ Trendline/S/R Confluence
6. Crab vs. Butterfly Pattern
| Feature | Crab Pattern | Butterfly Pattern |
|---|---|---|
| CD Leg | 1.618 XA | 1.272 XA |
| Accuracy | Very High | Moderate |
| Risk/Reward | Extreme | Moderate |
7. Frequently Asked Questions (FAQs)
Q1: Why is the Crab pattern so accurate?
A: Its 1.618 XA extension creates an “extreme” reversal zone where traders aggressively enter.
Q2: Best timeframe for Crab pattern?
A: 4H/Daily charts for highest reliability.
Q3: How to avoid fake Crab patterns?
A: Require at least 2 confirmations (e.g., RSI divergence + bullish candle at D).
Q4: Crab vs. Bat pattern – which is better?
A: Crab has higher reward but lower frequency than Bat.
8. Pro Trading Tips
- Wait for D point confirmation – Don’t preempt!
- Combine with trend analysis (e.g., Crab + Downtrend = Strong sell signal)
- Use partial profit-taking (TP1 at 38.2%, move SL to breakeven)
9. Conclusion
The Crab harmonic pattern is a high-reward, low-frequency strategy ideal for spotting extreme reversals. Key takeaways:
✅ 1.618 XA extension is mandatory
✅ Requires multiple confirmations
✅ Works best on higher timeframes
✅ Always Be careful For Economic News .
🚀 For optimal results, practice identifying Crab patterns on historical charts before live trading.
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