Discussing the article: "Introduction to MQL5 (Part 20): Introduction to Harmonic Patterns"
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Check out the new article: Introduction to MQL5 (Part 20): Introduction to Harmonic Patterns.
In this article, we explore the fundamentals of harmonic patterns, their structures, and how they are applied in trading. You’ll learn about Fibonacci retracements, extensions, and how to implement harmonic pattern detection in MQL5, setting the foundation for building advanced trading tools and Expert Advisors.
You have to understand Fibonacci extension and Fibonacci retracement before we can discuss the concept of harmonic patterns. The Fibonacci Retracement and Fibonacci Extension objects are probably familiar to you from your MetaTrader 5 toolbox, but have you ever wondered about the mathematical formulas used to determine those levels?
If so, that's fantastic; this section will help you learn more. If not, don't worry; I'll take care of you. You will know exactly how these Fibonacci levels are determined and why they are crucial for recognizing harmonic patterns by the end of this discussion.
Fibonacci RetracementBoth Fibonacci retracement and extension work with percentages. Think of it like measuring how much of a move the market has “given back” or “extended beyond.” Let’s use a simple example. Imagine the market makes a clear swing, first a swing low, then a swing high.
To calculate Fibonacci retracement levels, we take the difference between these two points (the height of the move).
Author: Israel Pelumi Abioye