# The Crab Pattern

The Crab pattern was discovered by Scott Carney in 2000. Carney describes the this pattern as one of the most precise of all Harmonic Patterns.

The Crab is one of the extension patterns, (the other one being the Butterfly Pattern), so, the D point exceeds the X point.

Systematic tests by FxGroundworks showed Butterfly pattern success rates to be 82.86%-90.7%.

#### Crab Pattern Structure

Key features to watch out for:

• D point defined by a 1.618 Fibonacci extension of the XA
• A deep BC Fibonacci extension between 2.24-3.618.
• B point retracement to be .618 or less

This pattern can display rapid price action movement, often resulting in fast reversals at the PRZ.

The 1.618 of the XA leg and the BC extension (anywhere between 2.24-3.618) should form a reasonably tight cluster in the PRZ.

Get Started with Harmonics. After you've browsed through these pages and got to know more about harmonic trading, you'll probably feel like giving them a try. Just go to "Get Started with Harmonics" for a step-by-step guide. It tells you precisely what to do - and how to do it, so you don't waste any time setting up and getting started.

In this example the 2.618 of the BC leg and the 1.618 of the XA leg are just 47 pips from each other. Price crossed through the 2.618 of the BC leg and got within 10-11 pips of the 1.618 of the XA leg, before reversing.

I always look for the PRZ to form near a significant Support or Resistance Area. And then use it if possible to place a Stop, which should also be the other side of the 1.618 of the XA leg.

In this example, there happens to be a significant Resistance level (not drawn on the chart above) at the 3.618 of the BC leg - 70 pips above current price - which would be a reasonable place to put a stop, if it fits with your trading rules for risk, of course.

Using a scaling-in entry strategy I would place limit orders in the PRZ, either side of the 1.618 with Stops 8-11 pips on the the other side of Resistance at the 3.618 extension level of the BC leg.

In this example, risk would be 72 for a reward of 200 - just under 1:3 risk/reward ratio.

I recommend the following pages for further details on harmonic patterns.

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