Benefits of the Harmonic Scanner
Fibonacci’s Measurement Algorithm
The Fibonacci retracements pattern can be useful for swing traders to identify reversals on a stock chart. On this page, we will look at the Fibonacci sequence and show some examples of how you can identify this pattern.
Fibonacci numbers were developed by Leonardo Fibonacci, and it is simply a series of numbers that when you add the previous two numbers, you come up with the next number in the sequence. Here is an example:
1, 2, 3, 5, 8, 13, 21, 34, 55
See how when you add 1 and 2 you get 3? Now add 2 and 3, and you get 5, and so on. So how does this sequence help you as a swing trader?
Well, the relationship between these numbers is what gives us the common Fibonacci retracements pattern in technical analysis.
The Harmonic Scanner
For some odd reason, many new traders have fallen victim to false information regarding the Harmonic Scanner. Just like every other indicator, its use is not intended for solely basing your trades on. As with any indicator, the Harmonic Scanner provides information that is invisible to the naked eye. This information gives the trader an additional indication of how the market is acting at any given time and could potentially help figure out where the market is going.
The discovery of Harmonics is credited to evolution; it’s a concept that has been improved upon over time.
Today, traders are using it for accurately identifying and predicting major market trends and reversals. The pattern recognition software can theoretically predict all the key harmonic patterns that innovators like Scott Carney and Larry Presevento have been studying for the past 20+ years. Couple this with strict Fibonacci ratios, and the idea of trading becomes easier. However, no single indicator is your “end-all-be-all.”