http://www.fxgroundworks.com/blogs/results-performance/bat-pattern-statistics-and-performance-results/
The Results:
If we want to calculate results of success we should also apply
two rules into consideration which will increase our success rate, but
every trader must do if they want to improve their pattern selection.
View The Rules:
Structure Analysis
With the ability now to perform a consistent structure analysis (included in the tool set for all members -
rating harmonic patterns via structure)
of each harmonic pattern we know we can gain a 6X to 11X advantage in
our trading. We will use a structure rating of at least 70% for the
pattern to qualify in our analysis.
Rule 2 – The PRZ
-
A
reversal had to occur once price entered the PRZ, but not before price
exceeded the furthest point of the PRZ. This would indicate a loss and
not a successful pattern.
-
A
successful reversal must reverse 15% from when price entered the PRZ to
where it exited the PRZ. If it did not reverse 15% and stayed inside
the PRZ, again this would be a failed pattern.
-
After
a trade moves 15% we automatically move stops to preserve our capital.
The breakeven trades are counted as successful for a few reasons: A) Any
professional trader would agree that a free ride in the market without
losing money is a success! B) With the way the forex brokers work, you
get rebates based off the volume you trade. Thus because a trade is
breakeven you probably still get a 1 pip rebate from your broker. If you
don’t, I would consider finding one that would give you a rebate.
Conclusion:
After doing an analysis on over 50,000 bat patterns on the 15Minute or higher time frame, we can conclude:
-
The patterns reversed 90.6% of the time (this is just a reversal, not to the targets)
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The reversal did at least a 15% move of the CD leg
-
The structure rating gave us a clear advantage
When using the structure ratings and rules above 90.6% of the
patterns hit the minimum of a 15% reversal. Targets are different as
they drop down to the 71% – numbers are still being collected -) More
performance information on the Gartley Pattern.
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