# Harmonic Pattern Crab

We continue with the harmonic patterns, which usually indicate potential reversal zones in the market price, although as always, ideally it is better to confirm their signals with other technical tools. Today we will see the Crab pattern. It could be said that within the harmonic patterns is one of the favorites among investors due to its effectiveness or reliability in detecting possible changes in market trends.

In 2001, Scott Carney discovered this pattern that which like other similar price formations must comply with a series of basic principles. It is actually a pattern very similar to the Butterfly harmonic pattern, but the difference lies in that while the Butterfly pattern ends at a point representing a Fibonacci extension of 127% of the initial XA movement, the Crab pattern ends at a point representing a Fibonacci extension even more extensive of 161.8% of the XA movement.
This trend change pattern consists of four sections: X-A, A-B, B-C and C-D. It provides price turns with close proximity to what Fibonacci indicates, which means a market turn in the minimum or maximum of the price in the bullish or bearish movement that precedes it.

We can say that its main characteristics are that at point X the price performs a setback to point B equal to or less than 0.618 of the X-A segment. The extension of B-C to point D (the potential turning area) is high (from 2.24 to 3.618). The D point is also an extension equal to 1,618 of the X-A movement.

### Crab pattern with their theorical features

The following image shows an example of an ideal bullish crab pattern and an ideal bearish crab pattern with their respective theoretical proportions:
 Bullish and bearish Crab patterns with their proportions
As with the other harmonic patterns, in the Crab pattern we open positions when the D point (traditional approach) is completed, providing the best opportunities with the lowest risk. It is always assumed that at the completion of point D the price will begin to move in the opposite direction to the movement from C to D.

The stop loss can be placed below the D point (Bullish crab) or above the D point (Bullish Crab). Profit-taking objectives can also be determined using Fibonacci.

More aggressive approaches seek to enter the market before the pattern is completed, but the risk is greater.