The Harmonic Analyzer ™
Last Updated February 8th 2003
The Harmonic Analyzer™ ,
HA™, the HA™ logo are trademarks or registered trademarks
of HarmonicTrader.com, L.L.C. in the United States and in other
All other trademarks are those
of their respective owners.
In terms of bug reporting or
questions on the software, please direct emails to HA_Support@HarmonicTrader.com as follows:
If the email is to report a bug
then, the subject line of the message should be prefixed with HA_BUG e.g.
If the email is a question or
comment then, the subject line of the message should be prefixed with HA_QUEST/HA_COMM e.g.
The Harmonic Analyzer (HA) is a
revolutionary new charting and analysis tool dedicated to the analysis
of Harmonic (fibonacci) price patterns. To learn more about Harmonic
Analysis visit the HarmonicTrader.com website: http://www.HarmonicTrader.com
Chart Example: Microsoft
screenshot of the HA ™ is shown below for Microsoft (MSFT)
showing two back to back Harmonic Pattern matches (a Butterfly followed
by a Gartley). Both matches resulted in significant reversals. This
guide will take you through all the features of the HA.
you can use the HA you will need some stock data to analyze. The
HA can download FREE end of day data from the Yahoo!™ Historical
Quotes website. The HA can also import end of day data from Worden
Brothers, Inc. TC2000®. If you intend importing data from
TC2000®, you will first need to install the software from
these vendors and subscribe to their data services. More information on
each of these data sources is provided below.
of day data is freely available from the Yahoo!™ finance website http://quote.yahoo.com/ The data
for the current day is available several hours after the market closes.
Worden Brothers, Inc.
Brothers, Inc. offers a software charting tool named TC2000® which also takes care of downloading and
maintaining their end of day data on your PC. The HA interacts with
TC2000® in order to import data into the HA. At the time of writing
this guide, TC2000® is available FREE and is obtained by requesting
a CD ROM via their website (the TC2000® CD also includes historical
data). The TC2000® end of day data service costs $29.95/mnth. For
more information refer to Worden Brothers, Inc. TC2000® website: http://www.tc2000.com/
Downloading/Importing Price Data
The first time you select TC2000®,
a dialog will popup which will install some additional software
required by the HA to import data from TC2000® program.
Press the green “Install
TC2KSVR”/”Install UASVR” button on the dialog and the
additional HA software will be installed.
you do select TC2000® as the data source, the Data
Downloader buttons change from saying “Download” to “Import”. In the remainder of this text “Download” has been used to identify the various
options but if you are using TC2000® then the dialog
will actually say “Import”.
the “Download New Price
Data For:” text box
type type the symbol for the stock that you wish to download data for.
In the example below, the symbol for Microsoft has been entered (MSFT). Set the “Download From:” date to specify how far back you wish
to download data from. For example, 01/01/1978. Generally speaking, the more data you have
the higher the probability there is of finding large (multi month/year)
harmonic pattern matches. Make sure you are connected to the internet
and then press the Download button or press the Enter key and the data
will be downloaded. As shown below, messages appear in the data
downloader dialog’s log window to keep you updated on the
progress of the download. Repeat this process until you have downloaded
data for all the stocks you are interested in.
you are going to be downloading data for a lot of stocks then consider
creating a stock group file as described HERE.
This feature allows you to specify a list of stocks you want to
download data for and the Data Dowloader will then be able to download
the data for all the stocks in one go.
NOTE: If the downloader log window reports that there were errors
during the download (as shown below) this may mean that the data server
was busy or currently off-line. You should try again later. If there
were only a small number of failures then you can press the Retry button (this button is
described in the Retry Updating Price
After each trading day you will
need to update the data for all the symbols in the HA Data folder.
on the “Update Existing Price
Data For:” button and
the symbol list will become active. If you leave the symbol list set at
SYMBOLS” then the price
data for all stocks you have data for will be updated. By default an incremental update will be performed. This means the
Harmonic Analyzer will only download enough data to bring each of your
stocks data up to date. To start the incremental download press the
“Download” button. The downloader dialog window
will display the status of the incremental download as it proceeds.
NOTE: Every couple of weeks or so, it is a good idea to do a FULL download formal SYMBOLS. The data vendor from time to
time may make corrections to the data and these corrections may be
missed if you do an incremental download. A FULL download ensures the
integrity of your data. Also, if the stock goes through a stock split,
a FULL download must be performed AFTER the split to ensure your data
reflects the split. A FULL download is achieved by selecting the “FULL Download From” setting rather than
the Incremental setting.
RETRY Updating Price Data
downloading data for multiple stocks some data may fail to download due
to the data server being busy or off-line. As shown below, out of the 8
downloads 2 failed.
Retry button allows you to attempt the FAILED downloads again. If you are downloading data
for a lot of stocks and you are getting a lot of failures (maybe the
data server is very busy) you can abort the entire download by pressing
the ABORT button. You can then try again later. As
shown below, pressing the Retry button results in the data for CSCO and IBM being downloaded again (this time
you see DATA MERGE FAILED messages (see screenshot below) then you must
do a FULL
these stocks instead of an incremental download.
can select a single stock from the list and only the data for that
stock will be updated. In this case Cisco (CSCO) has been selected. Once you have made the
appropriate selection press the “Download” button.
The log window of the dialog
will keep notified with the progress of the download.
Note: Once the Harmonic Analyzer has initialized and you have
downloaded all the data that you need, there is no need to stay
connected to the internet and you can go off-line if you wish.
you have downloaded some data you can open up the charts for these
stocks by pressing the open chart button
on the HA toolbar or typing CTRL-O. From
the resulting Open Chart dialog select the stock symbol from
the “Open Chart For:” drop down list or start to type the
symbol name in the Find: text box ().
the “Open Chart” button or press the Enter key. The
chart will be loaded and will appear in the chart window. The chart
will be automatically scaled to fit the chart window. You can move
around the chart using the horizontal/vertical scrollbars, zoom in
(SHIFT-I), zoom out
(SHIFT-O) and jump scroll to the most recent price
. You can also move around the chart by
dragging the mouse around the chart window (moving the mouse around the
chart window while the left mouse button is pressed). The chart will
scroll up/down/left/right as the mouse is dragged. As you move around
the chart the status bar at the bottom of the window shows the open,
high, low and close for the price action closest to the mouse. The
price action closest to the mouse is highlighted in the chart and in
the technical indicator window.
You can record notes about the
current chart in the NOTES text area to the left of the chart window.
This text area can be minimized by pressing the left pointing arrow at
the top of the vertical bar that divides the notes from the chart.
Pressing the right pointing arrow at the top of the vertical bar will
expand the notes again. The notes get saved with the chart and are
restored again when the chart is reloaded.
The horizontal splitter
separating the chart and technical indicator windows can be dragged up
or down to resize these windows. The vertical splitter separating the
chart and the NOTES section can be dragged left or right to
resize the notes/charts windows.
You can display the chart as a
candlestick, bar or line chart by selecting the appropriate option from
the View menu. The grid lines can be shown/hidden by
pressing the show/hide grid lines button
on the HA toolbar.
Press the gap button
or type CTRL-G to show/hide price gaps. This is explained
in more detail HERE.
All the colors used by the HA
are user definable and can be changed by selecting Color Settings ...from the Options menu. This is described in more detail HERE.
You can overlay Simple or
Exponential Moving Averages (SMA/EMA) onto the price chart by checking
the appropriate check boxes. The type of moving average, period and
color of the line used can be set by selecting Define Moving Averages
... from the Indicators menu. This is described in more detail HERE.
The HA supports a number of
customizable Technical Indicators and displays these in the Technical
Indicator window. This is described in more detail HERE.
Having made changes to a chart
e.g. drawn trendlines, added text annotations or changed indicator
parameters, you can save the chart by pressing the save button on the
or by typing CTRL-S.
number of the HA dialogs require you to specify a stock symbol name.
Common to all these dialogs is a drop down symbol list which lists all
the stock symbols that you have downloaded data for. To the right of
the symbol list is a Find text box.
If you click on the symbol list
the symbol list will expand and a vertical scrollbar will appear to the
right of the list allowing you to scroll through the symbols in the
If there are a large number of
symbols in the list you can type the first letter of the symbol name
that you are looking for and the list will jump to the first symbol
that starts with that letter. If you type the same letter again the
list will scroll to the next symbol that starts with that letter and so
As an alternative to scrolling
through the symbol list you can start to type the name of the symbol in
the Find text box. As you type the symbol name the
symbol list will dynamically scroll to the symbol that starts with the
letters typed so far. As soon as the symbol list shows the symbol you
are looking for you can stop typing. For example, you may only need to
type ‘C’ and then ‘S’ in the Find text box in order for the symbol list to
The HA Color Chooser
HA Color Chooser will appear whenever you press the Set Color button on
the HA toolbar (to the left of the Trash Can button) or when you click
on a color in the Color Settings Dialog (explained HERE)
or the Define Moving Averages dialog (explained HERE).
By default the HA Color Chooser will display a selection of Swatches
(small colored squares). You can click on any one of these squares to
select that color. Once you’ve made your selection press the OK
none of the swatches match the color you are looking for, select the
closest match and then press the HSB tab. The colored square in the center of the
dialog represents a range of shades for this color. Click on the white
circle and drag it around the shaded square until it is on top of the
shading you require.
the RGB tab provides a further alternative for
specifying the required color.
you’ve made your selection press the OK button.
all the colors used by the HA can be customized by the user. From the Options menu select the Color Settings ... menu item and a color table will be
table has two columns. The first column lists all the HA Color Labels associated with the user customizable HA
colors. The HA Color Labels are prefixed with either IndicatorChart_,
PriceChart_ or Notes_ to indicate what the color is associated
with. Clicking on a color in the right hand column next to a HA Color Label will bring up the color chooser dialog which
will allow you to change the color associated with that label. All your
color settings will be saved when you exit from the HA.
For example, to change the background color used for the
price chart locate the PriceChart_Background HA Color Label and click on the color next
to it in the second column. The HA Color Chooser will be displayed
allowing you to select a new color for the chart background. When
you’ve made your selection press the OK button on the HA Color Chooser and the chart
background will change to the new color. Repeat
this process until you have set the HA colors the way you want
them. The HA color chooser dialog is described in more detail HERE.
under the Options menu are Default Colors and Color Variation 1 options. The Default Colors option resets all the HA colors back to
their defaults and the Color Variation 1 option sets the HA colors to a preset
tool starts up in normal mode which is denoted by the selected normal
. To switch to trendline mode simply press the
trend line drawing mode button
. Press the color chooser button (initially
blue) to select the color you wish to use for the line (the HA color
chooser dialog is described in more detail HERE).
Now move the mouse to the point where you want the trendline to start
and keep the left mouse button pressed while you move the mouse. The
trendline should then be drawn from the initial starting point to the
current location of the mouse. Trendlines can be drawn in both the
price chart window and the technical indicator window.
To reposition a trendline
switch back to normal mode by pressing the normal mode button
. Select the trendline by clicking and
releasing the left mouse button while the mouse is over the trendline.
Red dots will appear at either end of the trendline to indicate it has
been selected. Depress the left mouse button and drag either the center
or one end of the trendline to the desired location. Dragging the end
of the trendline will stretch the trendline in the direction of the
mouse movement whilst dragging the center of the trendline will move
the entire trendline without stretching it. Stretching and
repositioning a line is illustrated below:
To change the color of an
existing trendline simply select it by clicking and releasing the left
mouse button while the mouse is over the trendline. Then press the
color chooser button on the HA toolbar. Select a new color for the line
from the color chooser and press the OK button (the HA color chooser
dialog is described in more detail HERE).
To delete a trendline select it
and then press the delete button
. To delete ALL the trendlines on a chart click the right mouse
button in the chart window and from the popup menu select “Delete All Trendlines”.
All trendlines can be
shown/hidden by pressing the show/hide trendlines button on the HA
or by typing CTRL-T.
A trendline can be cloned by
first selecting the trendline and then typing CTRL-L.
The thickness of a trendline
can be varied by selecting the trendline and repeatedly pressing the
Increase Line Thickness button on the HA toolbar. This is illustrated
The style of a trendline can be
switched between solid and dashed by selecting the trendline and
pressing the Dashed Line button on the HA toolbar. This is illustrated
You can add your own text annotations to the
chart and these will be saved with the chart when the chart is saved.
To add a text annotation click on the add text button on the HA
and a text box will appear in the chart window
highlighted with a yellow border. The text box can be positioned
anywhere in the chart by clicking the left mouse button on the yellow
outline of the textbox and dragging the textbox to the desired location.
the text box is first added it contains the string “Some Text” which is in the current color. If you
wish to change the color of the text first click on the text so that
the yellow highlight box appears around the text and then click on the
color chooser button on the HA toolbar (the HA color chooser dialog is
described in more detail HERE).
Once you’ve chosen a new color the text will change to that color.
To type your own text into the text box or to
modify some existing text, simply click on the text so that the yellow
highlight box appears around the text and start typing your text. The
text can occupy multiple lines. Simply press the Enter key on your
keyboard at the end of the current line and the cursor will move onto
the new line. You can move the text cursor around the text box by using
the arrow keys on the keyboard or by clicking the mouse. The textbox
can be resized by dragging the lower right hand corner of the textbox
(shaded in red) inwards or outwards. The size of the font used for the
text can be increased by first clicking on the text so that the yellow
highlight box appears around the text and then repeatedly pressing the
Resize Text button on the HA toolbar
Printing a Chart
print out the current chart simply press the
button or type CTRL-P. A print dialog will appear which will allow
you to setup the print options for your printer. Only the visible
portion of the price and indicator charts will be printed so select the
appropriate zoom level to display what you want to print.
chart will be positioned on the paper so that the right hand side of
the chart is always printed (to ensure the price scale always fits on
the paper). Depending on the size of the paper you are using and the
printer options you have selected this may mean that some of the left
hand side of the chart may not fit on the paper. Again adjust the HA
zoom level to ensure that the portion of the chart that you wish to
print fits on the paper.
HA can overlay up to 5 moving averages on the price chart. The type of
moving average (simple or exponential) the period and the color of the
line are all customizable. From the Indicators menu select the “Define Moving Averages
...” menu item and the Define Moving Averages
dialog will popup.
each of the 5 moving averages the dialog allows you to select between
an exponential moving average (EMA) or a simple moving average (SMA).
In the text box type the period you require for the moving average.
Press the colored box to bring up the HA Color chooser to select the
color you wish to use for each moving average (the HA color chooser
dialog is described in more detail HERE).
the right of the moving average checkboxes on the toolbar is a checkbox
for overlaying Bollinger Bands on the chart 20 Day Simple Moving
Average with the bands plotted 2 standard deviations from this average.
A UI for changing the moving average period and deviations will be
provided in a later release.
Interactive Price Gap
Press the gap button
or type CTRL-G to show/hide price gaps. Up gaps are shaded
and down gaps are
shaded in red. In both cases the shading starts from where
the gap was opened and extends to where the gap was filled. Unfilled
gaps result in the shading extending across the chart to the current
price action. Filled gaps are shaded in a darker red/green than those
for unfilled gaps.
In addition to automatically scanning for
various retracement/projection levels during a Harmonic Analysis
the HA allows you to manually add retracement levels to the chart.
First you need to identify the beginning and the end of the move you
wish to see the retracement/projection levels for. To achieve this move
the mouse over the price action which represents the beginning of the
move (the start of either an upward or downward leg) so that the price
action is highlighted (in red). Now type CTRL-B or press the right mouse button and select
the ‘Mark Move Begin’ menu item from the popup menu to mark
the beginning of the move. The price action should change color (cyan).
If it doesn’t, make sure that the show retracement lines
is depressed. Now move the mouse over the
price action which represents the end of the move (the end of either an
upward or downward leg) so that the price action is highlighted (red).
Now type CTRL-E or press the right mouse button and select the
Move End’ menu item
from the popup menu to mark the end of the move. The price action
should change color (cyan) and the Retracement Levels dialog will pop up.
change the default colors used for the retracement level lines refer to
the Customizing HA Chart Colors (explained HERE)
section and in the HA color table locate the HA color labels named PriceChart_Retrace_0.382 to PriceChart_Retrace_3.140.
the retracement levels associated with this move are treated as a
group. Pressing the
button on the Retracement Levels dialog will lengthen the entire
group of retracement level lines. Pressing the
button on the Retracement Levels dialog will shorten the entire group
of retracement level lines and pressing the
button on the Retracement Levels dialog will return the entire group
of retracement level lines back to their default lengths. Any number of
groups of retracement levels can be added to the chart by marking the
begin/end of multiple moves.
at a later date you wish to change which levels are being displayed in
a particular group of retracement levels you should first select one of
the retracement level lines on the chart. With the retracement level
line selected, click the right mouse button and select ‘Show Retracement Level
Menu’ from the popup
dialog and the Retracement Levels
Dialog will open up with the
checkboxes set according to the retracement level lines being displayed
for that group. You can then select/deselect checkboxes on the dialog
to alter which retracement levels should be visible.
well as manipulating the retracement level lines as a group, the
retracement level lines can be manipulated individually. Start by
clicking on a retracement line to select it. When the line has been
selected you can drag either end of the retracement line to make it
longer or shorter. If you drag the Retracement line from its midpoint
the whole line can be moved to the left or right. The color of the line
can be changed by pressing the Color chooser button on the toolbar and
selecting the desired color.
All the retracement level lines
on the chart can be deleted by right clicking in the chart and
selecting Delete All Retracement
Lines from the popup menu.
The lower chart window displays
the technical indicators. One technical indicator can be displayed in
this window at a time. As you move the mouse around the price chart the
indicators will display their current values.
When a chart is loaded you can
display a technical indicator by pressing the appropriate
technical indicator button on the toolbar. For example, press
button and the MACD indicator will be
displayed in the indicator window. The following key combinations offer
yet another way to scroll to the required indicator:
parameters used for the indicators (e.g. the MACD defaults to 26-12-9)
can be changed in the indicator parameter dialog displayed when you
button. The indicator parameters can be set
differently for daily and weekly charts. The indicator settings will be
saved with the chart when you press the save char button
or type CTRL-S.
you wish to increase the size of the indicator window simply grab the
central divider. This tool divides the
price chart from the technical indicator chart and drag it upwards. The
indicator window can be completely minimized by pressing the downward
pointing triangle just above the settings button
more information on the derivation and use of these technical
indicators refer to the excellent education material on the
StockCharts.com website http://www.stockcharts.com/
Technical Indicator Analyzer
HA can analyze all the technical indicators for all the stocks that you
have data for and present the results in a number of sortable
tables. These tables allow you to quickly find
“interesting” technical developments in stocks e.g. biggest
price gainers/loosers, biggest volume movers, crosses above/below key
EMA/SMA levels etc. etc. To perform the analysis press the Analyze...
button on the HA toolbar
to and the Technical Indicator Analyzer dialog
the “Analyze Indicators For:” drop down list select “ALL SYMBOLS” to analyze the technical indicators
for all the stocks you have data for. or alternatively select a group.
Although you can specify a single symbol, it makes more sense to
specify a group or ALL SYMBOLS. Press the “Perform Analysis” button on the dialog to run the
Technical Indicator Analyzer. As the analysis progresses the status
will be displayed in the title bar of the dialog. When the analysis is
complete a dialog will popup which consists of 4 tables. In the
resulting tables, clicking on a table column header will sort the rows
based on the data in that column.
By default the tables are
sorted by symbol name.
Double click on any column
header to sort the table based on the values in that column. In the
screen shot below the PriceGain% column was double clicked to sort the table
according to the highest percentage price gains for that day. In this
case hal was the biggest gainer with a rise of 6.776%.
down the shift key and double click on any column header to reverse
sort the table based on the values in that column. In the screen shot
below the shift key was held down while the PriceGain% column was double clicked. This did a
reverse sort of the table according to the highest percentage price
gains for that day. In this case BVSN was the biggest looser with a fall of
The Daily/Weekly Analysis column headers are defined as follows:
daily/weekly alerts are triggered when the current closing price is
above/below its moving averages. An alert is also triggered if the HVR
drops below 50% (low volatility - possible big move on the cards). When
an alert is triggered the checkbox for the alert will be checked.
Alert column headers are
defined as follows:
Harmonic Pattern Recognition
The HA has the revolutionary
and unique capability of being able to analyze the harmonics of a set
of stocks. The results of the harmonic analysis are presented in a
filterable match list which also allows you to display the matches in
the chart window. To learn more about Harmonic Analysis visit the
HarmonicTrader.com website: http://www.harmonictrader.com/
The following patterns are
currently supported by the HA:
0.382/0.414/0.5/0.618/0.707/0.786/0.886 + user defined levels
1.27/1.618/2.24/2.618/3.14/3.618 + user defined levels
AB=CD’s and AB=CD(ab=cd)
Gartley’s, Butterflies, Bat’s and Crab’s which may
contain extended AB=CD’s e.g. 1.27AB=CD
The HA does not currently
support the Three Drives pattern. There is however no technical reason
for not supporting this patterns and support will be added in a future
Press the Analyze Harmonics
on the HA toobar and the following dialog will
The “Analyze Harmonics For” pulldown allows you to select which
stocks to analyze. It defaults to “ALL SYMBOLS” meaning all stocks that you have data
for will be analyzed. You can specify different groups of stocks to
analyze by creating stock group files as described HERE.
The “Show Matches
pulldowns allow you to specify the date from which the matches should
complete. In this case all matches completing in 1st January
2002 onwards will be
displayed. The reason why the date is needed here is because the number
of matches can become very large when analyzing the harmonics for a
large number of stocks over a long period of price history.
Press the “Perform New Analysis” button and the HA will analyze the
harmonics of the stock or all stocks you have selected. This may take
some time if you are analyzing a lot of stocks. For example, to analyze
the harmonics of 70 stocks takes around 15 minutes on a 350MHz PII with
The title bar of the dialog
will display the status of the analysis as the analysis progresses. At
any time during a Harmonic Analysis, you can press the “Abort Analysis” button and the HA will abort the
current analysis. The “Abort Analysis” button may take a little time to
respond because the Harmonic Analysis process will be dominating your
The “Load Existing Analysis” button allows you to load a previous
After the harmonics have been
analyzed a harmonic match dialog will popup. The dialog consists of 2
tabbed panels. The first panel entitled “Matches” contains a scrollable list of all the
harmonic pattern matches and the second panel entitled “Filters” contains a tabbed panel used for
filtering the match list.
By default the harmonic pattern
matches are listed with the most recent largest matches first (for an
alternative match list ordering see the section on Sorting the Match
List described HERE).
The matches are color coded to show whether they arebullish or bearish. Each match shows the stock symbol of the
match, whether it is a Daily or Weekly pattern, the completion date of the match, the width of the match in days and how many of the
numbers have been hit in the potential reversal zone (PRZ). The text in the dialog can be resized by pressing
. The following diagram shows a typical match
in the match list and identifies the information that makes up the
match text. The significance of these fields will become clearer when
the match list filters are discussed HERE.
Selecting one or more matches
from the list for the same stock will result in each match being
displayed in the chart.
The match will be labeled and
horizontal lines are drawn at the ideal pattern reversal points B, C
and D - these are useful for determining how ideal the pattern is and
in identifying the potential reversal zone.
The buttons at the top of the match list dialog turn
on/off the labels of the last selected match which is
highlighted in yellow in the match list. The
button turns on/off the leg projection
button turns on/off the PRZ labeling and
button turns on/off the fib timelines. The
effect of these buttons is shown below.
fibonacci time lines are the vertical colored lines drawn in the chart
above. These lines are formed by multiplying the number of days between
the start of a pattern and its midpoint by the popular fibonacci
numbers. Point B on any pattern is considered the midpoint. For
example, if there are 20 days between the start of the pattern and the
midpoint then the 0.382 fib timeline will be 20 * 0.382 = 7.64 days
after B. If the stock is close to completing in the PRZ and it is close
to a fibonacci time line then this is considered to be a significant
harmonic confirmation. In the screenshot above the stock reversed out
of the PRZ very close to the 0.5 fibonacci time line (red).
match is prefixed with an ‘i’ e.g. iAB=CD, if the
numbers in the potential reversal zone (PRZ) are in the ideal
order for that pattern. A match is prefixed with a ‘p’ e.g. pGartley, if the
reversal points (B and C) occurred very near the perfect reversal
levels. In theory an ipGartley match should be a better match
than a simple Gartley match. However, visual inspection is
essential to determine the validity of any match.
Sorting the Match List
default the harmonic pattern matches are listed with the most recent
largest matches first. An example match list is shown below.
Pressing the sort button
on the match list will sort the list by symbol
name, then date and then match size. You will see from the screenshot
below this makes finding convergences easier.
If you press the sort button
again the match list will go back to be being
sorted by date and then match size.
Displaying Harmonic Matches
the left of each match is a checkbox. Initially all the match
checkboxes are deselected. By selecting a checkbox the price data for
that stock will be loaded, the chart will be displayed as either daily or weekly (depends on the match type) and the match will be
displayed in the chart window. Even with the match dialog open, you are
free to use the full features of the Harmonic Analyzer to look at the
chart and technical indicators e.g. zoom in/out or scroll around the
a checkbox for a different stock is selected, the previous checkbox
will be deselected and the chart for the newly selected stock will be
loaded and that match will be displayed.
you select a checkbox for the same stock but for a different time scale
instead of WEEKLY then the previous checkbox will be deselected
and the chart window will switch to displaying the DAILY/WEEKLY chart
for that match.
true power of this dialog becomes apparent when you select multiple
checkboxes for the same stock and time scale e.g. all selected
checkboxes are for the same stock and represent DAILY matches. In this
case all matches will be displayed in the chart window at the same
time. Scott Carney says that multiple pattern matches converging in the
same harmonic area are very significant and this feature allows you to
see what the combined PRZ for all these matches looks like.
On the main HA toolbar, you can
button to show/hide the harmonic patterns
displayed in the chart window.
It is important
that you visually inspect all harmonic matches to gauge their validity
and to watch the price action in the PRZ. Just because the HA has found
a bullish Gartley does not mean that the Gartley is valid and that the
price will reverse.
Selecting the “Filters” tab on the Match List dialog will reveal a range of filters which
can be used to reduce the number of matches displayed in the match
list. The filters allow you to specify the characteristics of the
patterns that you are interested in and this will filter out the
patterns that do not have those characteristics.
The following diagram shows a
typical match in the match list and identifies the information that
makes up the match text. Each match list filter will filter the match
list based on the value of one of these fields of information.
you run a harmonic analysis on multiple stocks it can sometimes be
helpful to concentrate on the matches for a specific stock within the
match list rather than looking at matches for all stocks at the same
time. The stock symbol name is highlighted in the sample match list
you select the “Symbol” filter tab you will be able to
specify the stock symbol name on which the match list should be
filtered on. The symbol name defaults to ALL SYMBOLS and this means matches for all stocks will
be displayed in the list. By selecting an individual stock symbol from
the drop down symbol list the match list will be filtered and only show
matches for this stock (refer to the HA
Symbol Chooser section for more information on how to use the
symbol list/Find text box).
on your trading style, you may prefer to trade short term swings or
take more longer term position trades. By default the match list
displays DAILY and WEEKLY matches together as shown below.
Timescale filter tab allows you to filter the match
list to show DAILY and/or WEEKLY matches. For short term swing trades you
could check the DAILY checkbox and uncheck the WEEKLY checkbox. For longer term position trades
you could uncheck the DAILY checkbox and check the WEEKLY checkbox. Once you have checked/unchecked
the checkboxes press the “Apply Filter” button to refilter the match list.
matches typically mark major harmonic support/resistance levels. It is
important to consider the direction of the WEEKLY move when looking at DAILY matches since the DAILY matches may be a counter trend move in a
larger WEEKLY move.
“Bullish/Bearish” filter allows you to filter the list
to show bearish and/or bullish patterns.
Match Type Filter
Type” filter allows you
to filter the match listed based on the type of pattern that you are
interested in looking for. For greater flexibility, each type of
pattern has a number of variations that can be selected. For example,
this allows you to either filter for all variations of Gartley (by
checking all the Gartley checkboxes) or filtering for very specific
Gartley’s e.g. where B(0.618), AB=CD(0.618/1.618), D(0.786). Once
you have set the checkboxes appropriately, press the “Apply Filter” button to refilter the match list.
most frequently occurring matches are those for
retracements/projections and these are the basic building blocks of
AB=CD’s, Gartley’s etc etc. Once the initial match list has
been displayed you may find it beneficial to temporarily uncheck all
the retracement/projection checkboxes and refilter the match list to
just show AB=CD’s, Gartley’s etc etc. If you find a match
that looks interesting you can recheck the retracement/projection
checkboxes to see if any of those compliment the pattern that you are
The “Min Match Width” filter allows you to specify the
minimum width in days for a pattern to be listed in the match list.
Note: the match widths are shown in days for DAILY and WEEKLY matches and are measured from the start to
the end of the pattern.
on your trading style, you may prefer to trade short term swings or
take more longer term position trades. Patterns suitable for short term
swing trades will typically have smaller match widths than those
suitable for longer term position trades. Slide the slider until the
appropriate minimum number of days is selected and then press the
Filter” button to
refilter the match list.
% PRZ Spread” filter
allows you to specify how “tight” the numbers in a patterns
PRZ the harmonic numbers should be. If the numbers in the PRZ are very
close to one another then the % PRZ spread will be low whereas if the
numbers in the PRZ are spread apart then the % PRZ spread will be high.
The “tightness” of the numbers in the PRZ is a good
indicator of how good a match the match is. Patterns with good
price/time symmetry typically have tight PRZ’s.
% PRZ Spread” filter
defaults to 50% so that all matches are listed in the match list.
Reducing the maximum down to say 5% and pressing the “Apply Filter” button will result in a match list
where all the matches listed have tight PRZ’s.
“PRZ” filter allows you to filter the match
list based on the number of numbers that have been “tested”
in the PRZ and where the current price is relative to the PRZ. Typical
PRZ information is shown in the example match list below:
refer to how many numbers have been “tested” in the PRZ for
particular patterns. For a bullish pattern, a number in the PRZ
is said to have been tested if a low for a price bar has
touched or dropped below that number. For a bearish
pattern, a number in the PRZ is said to have been tested if a high
for a price bar has touched or moved above that number.
0/1 and 1/1
have just 1 number in the PRZ which is simply the
retracement/projection level e.g. 0.618. So for a bullish
retracement/projection, the PRZ label in the match list will say 1/1 if
the price bar low has touched or dropped below this
level or 0/1 if it has not.
0/2, ½ and 2/2
and Crab’s have 2 numbers in the PRZ i.e. the AB=CD point and the
projection of the BC leg e.g. 1.618BC. For a bullish AB=CD the PRZ
label in the match list will say 0/2 if the price bar low has
not yet touched or dropped below the AB=CD or BC projection.
The label will say ½ if the price bar low has touched or
dropped below the AB=CD or BC projection. Finally the label
will say 2/2 if the price bar low has touched or dropped below
the AB=CD and the BC projection.
1/3, 2/3 and 3/3
Butterflies, Bat’s and Crab’s have 3 numbers in the PRZ
i.e. the AB=CD point, the projection of the BC leg e.g. 1.618BC and the
XA projection e.g. 0.786XA. For a bullish Gartley/Butterfly/Bat/Crab
the PRZ label in the match list will say 0/3 if the price bar low
has not yet touched or dropped below the
AB=CD, BC or XA projection. The label will say 1/3 if the price bar low
has touched or dropped below either the AB=CD or the BC
projection or the XA projection. The label will say 2/3 if the price
bar low has touched or dropped below 2 of the 3 numbers
in the PRZ. Finally the label will say 3/3 if the price bar low
has touched or dropped below the AB=CD, BC projection and the
following diagram illustrates the PRZ completeness numbers for a bullish
pattern that has 3 numbers in its PRZ e.g. a
Gartley/Butterfly/Bat/Crab. As the stock declines into the PRZ it will
hit the PRZ numbers and the PRZ labeling will reflect how many numbers
have been hit i.e. 0/3 ... 3/3.
The following diagram illustrates the PRZ
completeness numbers for a bearish pattern that has 3 numbers
in its PRZ e.g. a Gartley/Butterfly/Bat/Crab. As the stock advances
into the PRZ it will hit the PRZ numbers and the labeling will reflect
how many numbers have been hit i.e. 0/3 ... 3/3.
ABOVE PRZ, BELOW PRZ and IN
PRZ” filters simply
refer to where the current price is relative to the PRZ
of the pattern. This information is only relevant to the most recent
patterns where the date of the current price is close in time to the
pattern completion date. If the PRZ for a bullish pattern shows 3/3 of
the numbers have been tested in the PRZ and the current price is ABOVE
PRZ then you can deduce that the stock has reversed off the PRZ and is
currently still above the PRZ. However, it is still wise to
manually to view the match to confirm this. If you run a scan and look
for patterns that have recently completed and have tested all the
numbers in the PRZ and the current prize has not crashed through the
PRZ then there may still be time to go long or short the stock if the
pattern is still valid.
pattern is said to converge with another pattern if both patterns are
for the same stock and have the same match date
in the match list. The greater the number of convergences the
more harmonic the area ... In the partial screenshot of a match list
for AMAT shown below, you will see that AMAT has 7 converging bearish WEEKLY matches on the 11-Jan-02 and 8 converging
bearish DAILY matches on the 9-Jan-02.
If a match in the list
converges with another in the list then a colored square is drawn next
to the match to make the convergence easier to identify. Above you will
clearly see the 7 green boxes and the 8 brown boxes. If you have
analyzed a lot of stocks in a scan then, it may be difficult to
distinguish these colored boxes from one another and you may find it
beneficial to filter the match list on each individual symbol in the
list by using the Symbol
# Convergences” filter
allows you to specify the minimum number of convergences a pattern
should have. Slide the slider until the appropriate minimum number of
convergences is selected and then press the “Apply Filter” button to refilter the match list.
Saving the Match List
The save button at the top of
the match list dialog allows you to save the entire “state”
of the match dialog (the “state” of the dialog includes the
match list, your filter settings and any selected matches). Enter a
file name in the
“File name” text field and press the Save button.
The match dialog can be
reloaded by pressing the “Load Existing Analysis” button on the initial harmonic analysis
the HA each day after updating the price data for the stocks that you
follow. When the analysis is complete and the dialog appears, scan down
the top of the list looking at the patterns that complete at the end of
the last trading day. Start by turning off the basic retracements and
projections matches in the match filter so to concentrate on AB=CD, Gartley, Bats, Crabs and Butterfly patterns. Look at the match widths looking for any matches greater than say 15+ days (A
filter button to allow you to specify the min match width will be added
in a later release). If you find one for a particular stock, click on
the Symbol tab in the filter and select that stocks
symbol to show only the matches for that stock. Then turn back on the
retracement and projection matches and start looking for multiple
convergences of patterns (look for patterns with the same date).
default the HA will scan for all types of retracement, projection,
AB=CD, Gartley, Bat, Butterfly and Crab pattern. This can take a lot of
time if you are analyzing a lot of stocks and/or looking for matches
that completed weeks/months/years ago. Additionally, you may find that
only a subset of the match types work best for your style of trading.
To reduce the analysis time and/or perform a more targeted scan, the HA
can be configured to scan for a subset of all the patterns. This subset
may also represent the match types that work best for your style of
Harmonic Analyzer dialog has a “Settings ...” button (as can be seen from the
If you press the “Settings ...” button the Harmonic Analyzer Settings
dialog will appear. This dialog contains filters that are almost
identical to the filters for the match list. By setting up the filters
on this dialog you are telling the HA what to scan for.
The Harmonic Analyzer Settings
dialog has a two extra settings that are not present on the match list
filters namely the Max # Matches filter and the Retracement Level
Settings button (next to the Select All/Deselect All buttons).
purpose of the Max # Matches filter is to keep the match list size
under control. The match list can grow very large if you are scanning a
lot of stocks and/or looking for matches that completed
weeks/months/years ago. Depending on your PC’s memory size, the
match list can grow to the point where your PC runs out of memory. By
default the Max # Matches is set to 5000. If the HA reports an out of
memory error after an analysis, amongst other things it will
suggest that you reduce this setting.
the Retracement Level Settings button will result in the Define
Retracement Levels dialog appearing. This dialog allows you to specify
additional retracement/projection levels to scan for. It is recommended
that you add levels to this list but do not remove any. Once you have
made your additions press the OK button. When you click on the Match
Type tab and look at the retracement/projection level checkboxes you
will see your additional levels listed there too.
Defining Stock Groups
A stock group is simply a text
file containing a list of stocks that you wish to analyze or download
data for. You can create as many stock groups that you wish and a stock
can appear in more than one group. Stocks in a group may be
related by sector or any other relationship that you require. The stock
group text files can be created using Windows Notepad or any other text editor. You will find
Windows Notepad by pressing the Windows Start button
(lower left hand corner of your screen). From
the resulting menu select “Programs” and then from the sub-menu select
“Accessories”. You should then see Notepad in the resulting menu.
Each file needs to
be given a name in the following format: ‘groupName.grp’. e.g. semis.grp, bios.grp,
banks.grp, software.grp etc
etc. The .grp file extension is essential for the HA to
recognize it as a file containing a group of stocks.
Each file should
contain a list of the stock symbols in that group. One stock symbol on
each line. For example, you might create semis.grp like this:
When adding symbols
to these files make sure you type the symbol name correctly and that
you have downloaded data for that symbol. Also when saving the file in
Notepad make sure you don’t accidentally save the file with a
.txt extension e.g semis.txt or semis.grp.txt
These files need to
be placed in your haData folder.
To find out where
folder is you can load a
chart into the HA and look at the title of the HA window. On a single
user Win98 PC it will say something like C:\Windows\haData\csco.ta This
means your haData folder is C:\Windows\haData. Copy all your group files into that folder.
Now when you press
the load chart button or Analyze Harmonics button and press on the
symbol list the groups will be listed along with all the other stocks:
If you select a
group from the list then all the stocks in that group will be analyzed.
An added bonus of
this scheme comes in the Data Downloader in that you can specify a group of
stocks that you currently don’t have any data for. If you select
the “Update Existing Data
For” option and select
the group from the list it will download the data for all these stocks.
This saves you the trouble of entering them one by one in the “Download New Price
Data For:” field.
You can delete old
groups from the haData folder and the HA will no longer list these
groups in the list of symbols.
The following list summarizes
the HA commands and how they are invoked via toolbar buttons, keyboard
accelerators or menu mnuemonics.
Make sure you click the mouse in the HA window before typing any of
these commands otherwise the command will go to the web browser instead
and a web browser dialog will most likely popup.