This is a short post about the history of harmonic trading and patterns. Why do these patterns appear and why are they so popular? Well, its a question like why do the pyramids exist and why would someone build such massive structures, and who did build them in the first place? In the same context, it does not matter, really…
H.M.Gartley had first referred one of these patterns (later would be named after his name) on page 222 in his book “Profits in the Stock Market.” Believe it or not this book was published in 1935. Later in 1997 Larry Pesavento discoevered the “Gartley 222” pattern.
In late 90’s Bryce Gilmore in his books, used X-ABCD patterns which are based around market geometry and fibonacci lavels.
Later, many more of these patterns would be added to the harmonic database. Scott Carney 1998-2001 added the all famous “The Bat” and “The Crab.” He also went onto define the ratios and standardize the harmonic patterns that existed by then, including the Gartley and the Butterfly pattern.
Harmonics is not a trading methodology developed by one person or a trader per se. Its a collective development by professional traders time to time, thus other popular patterns such as the Cypher, Shark and so forth were added to the list at regular intervals.
However, all these patterns that may be called by different names are various derivatives of complex X-ABCD patterns. Harmonic patterns are a brilliant way of projecting key turning points based on price structure and Fibonacci ratios.