The Cypher pattern is a four-leg reversal pattern that follows precise Fibonacci ratios, this type of pattern appears less frequent than other harmonic patterns as it is hard for the market price to satisfy such strict Fibonacci ratios.
The main elements of the cTrader Cypher pattern start with the X and A points, a perfect formation is where Point B retraces to the 0.382 – 0.618 Fibonacci level of the leg XA and Point C is formed when the price extends the XA leg by at least 1.272
The chart above shows a Bullish Cypher pattern created by the Harmonic Pattern Scanning Software that formed at Point D on the 30.10.2019 used together with the Polynomial Regression Channel indicator and you can see where the price retraced from the lower inner channel to the upper inner channel. This simple trade setup can be used on all symbols.
Want To Learn More?
We have a harmonic pattern trading academy to help you learn more about other patterns.