As a harmonics trader I particularly look for trade entry opportunities that offer a high probability of a reversal occurring.
Statistics show that most markets are actually in a trend only about 30% of the time. Which means markets must be in a range about 70% of the time.
The following chart (AUD-CAD Daily) is an example of a possible bearish pattern forming, with the CD leg in the process of being formed.
If the AB=CD completes at the 0.886 Fibonacci retracement of the XA leg, the resulting Bat Pattern will be a possible trade. (I drew on the yellow lines and the pale blue rectangle, just to show what the Bat pattern could look like. )
Being a daily chart - this pattern will take a few days to form, if in fact it makes a pattern at all. But that's ok, I would just wait to see how it works out. Meanwhile, there'll be plenty of other harmonic trade-entry opportunities to think about.
Channels are a kind of range too. And that's where I would look for Gartley Patterns to form. In fact, I don't trade Gartley patterns unless they are in a channel.
When entering the trade, stop-losses ideally need to be positioned the other side of the Support/Resistance line. However, bear in mind that orders tend to group around obvious Support/Resistance and popular Fibonacci levels. So it's best to place stops a bit wider - away from "the crowd".
Other recommended pages in this series on Harmonics Basics are:
Learn how Adaptive Position Sizing can grow your account balance - exponentially.
Real-time harmonic alerts to pc and email. Free harmonics education videos and harmonic software. Harmonic traders chat room.
Over 15 hours of educational lessons narrated and presented by the originator of Harmonic Trading, Scott Carney.