Shark Harmonic Pattern: Rules, Ratios and How to Trade It

The shark harmonic pattern is a five-point reversal pattern, labeled X, A, B, C and D, in which point C goes beyond A and point D completes at 0.886 to 1.13 of the whole move from X to C. Traders buy or sell at D, depending on the direction of the pattern, and the classic plan takes profits early, at the 0.50 and 0.618 retracements of CD.

This guide gives the exact rules, a worked example with numbers, the entry, exit and targets, how the pattern differs from the Cypher, and an honest answer to the question: does it work? We give our own test results, on every market, next to the choices the test required.

What is the shark harmonic pattern?

The shark pattern was discovered by Scott Carney in 2011, and he detailed it in Harmonic Trading, Volume Three: Reaction vs. Reversal (2016). He labels its points 0, X, A, B and C; this page uses the common labels X to D. It belongs to the same family of harmonic patterns as the Gartley, the Bat, the Butterfly and the Crab, but it breaks one of their rules: C makes a new high above A (or a new low below A).

Each move between two points is a price wave, and each wave must respect specific Fibonacci ratios. Like other harmonic patterns, it is a tool of technical analysis: it gives a price level calculated in advance, not a forecast.

Defining the structural components

X and A set the first wave; the table gives the rule B, C and D must meet and the wave each one is measured on.

The Fibonacci measures for D form the potential reversal zone (PRZ). At 0.886, D stays inside the range; at 1.13, it ends beyond X, which is why X is not always a natural exit.

A worked example with numbers

Illustrative values, not a real chart. For a long setup, X is at 100, A at 150 and B at 125. C rises to 155: the third wave is 30, or 1.2 times AB, inside the 1.13 to 1.618 range. XC is 55, so D at 0.886 is 155 minus 48.7, which is 106.3. The last wave is then 48.7, or 1.62 times the third one, inside the 1.618 to 2.24 range. The 1.13 level of XC sits at 92.9, below X.

Bullish vs. bearish shark patterns

A bullish shark pattern looks like this: X is a low, A a high, B a pullback, C a higher high above A, and D a deep drop back toward X. You buy at D. In this bullish pattern, the rise to C runs out of buyers and price drops back toward X.

The bearish pattern is the mirror image: X is a high, C a lower low below A, and D a rally back toward X, where you sell. Mirrored, the example gives X at 200, A at 150, B at 175, C at 145 and a sell order at 193.7. The ratios are the same in bullish and bearish patterns, so a bearish shark follows the same checklist as a bullish shark pattern.

How to identify the shark pattern on your charts

1. Mark a clear swing low (X) and the peak that follows (A).
2. Mark the pullback (B). Its depth has no fixed rule.
3. Check that C goes beyond A, at 1.13 to 1.618 of AB. Above 1.618, the pattern is invalid.
4. Draw a Fibonacci retracement from X to C: the 0.886 and 1.13 levels bound D.
5. Check that the last wave is 1.618 to 2.24 times the third one. Where the two measures meet, the zone is tighter.

Swing points chosen by eye are the weak part: two traders can draw a different pattern on the same chart at the same time.

Step-by-step shark pattern trading strategy

Pinpointing the optimal entry point

Setting stop loss and take profit targets

Our bench tests one standardized version of this trade, with the same entry and target rules for every harmonic pattern so that results can be compared, and this pattern's own stop: no limit order, but an entry at the close of the first bar that reaches the reversal zone, a stop at the 1.13 level of XC and a target at twice the risk. The 0.618 retracement of CD is measured separately.

Position sizing is the core of risk management: size each position on the distance to your exit, and put only a small, fixed share of your money at risk each time.

Shark pattern vs. cypher pattern: key differences

Both have a point C beyond A. In the Cypher, C reaches 1.272 to 1.414 of XA and D completes at 0.786 of XC, so the pattern stays inside the range with a natural exit at X. In the shark pattern, D completes deeper, at 0.886 to 1.13 of XC, and can end beyond X.

Its creator also links it to the 5-0: the 0.50 target of CD is where that structure would complete. Our XABCD guide covers the common frame of these patterns.

Is the shark pattern reliable?

Detecting a harmonic pattern without judgment requires choices, and we set ours from chart reviews, never from results. Turning points are swings of 2, 4 or 8 times the average true range, and published ranges are used as is. X must be a real turning point: over a stretch as long as XA before it, price never went more than 10% of XA beyond X. C must go beyond A, with BC at 1.13 to 1.618 times AB; B has no fixed ratio. Once C is confirmed, the reversal zone is where the 0.886 to 1.13 retracement of XC overlaps the 1.618 to 2.24 projection of BC. The signal is the first bar that trades into the zone without trading beyond the 1.13 level of XC. Because that level is also the stop, a bar that crosses the whole zone counts as a failed pattern, not a trade.

On 3,185 bullish setups on daily charts (3,159 closed trades), all markets together, the 2:1 trade reached its target 34.4% of the time, against 35.5% for the same trade on random dates. On 3,552 bearish setups (3,535 closed trades), it was 27.5% against 27.3%. Neither gap is measurable. The 0.618 retracement of CD was reached before the stop, within 100 bars, in 29.1% of bullish daily setups and 21.0% of bearish ones. These results depend on the detection choices described above: each choice changes the result, and trying many versions until one looks good would produce a number that means nothing. Before trusting a success rate quoted elsewhere, check how the patterns were detected, on which markets, and whether the result is compared with chance.

What the bench measured

Every occurrence our rule finds on full price history, in crypto, forex, US stocks, ETFs, indices and commodities, compared with the same trade placed on random dates on the same assets.

Read each row in pairs: the pattern against the same trade placed on random dates. All markets together, the shark showed no difference from chance that survives our correction on any timeframe; the only gap that passes a simple test, on hourly bullish trades, is below chance. On daily US stock charts, bearish setups did a little better than random dates while still losing money on average, and the difference does not pass even a simple statistical test. That does not prove the shark fails, but it is a reason to test it on your own market before you trust it. The method is published in our methodology.

Tips, tools and common mistakes

• Do not force the ratios: a C below A makes it another pattern, with another exit.
• Do not move your exit: once price passes the 1.13 level, the pattern is invalid.
• Read the trend: in the classical reading, buying under a falling 200-day moving average fights the larger trend. On our daily bullish setups, all markets together, those below the average reached the target 33.4% of the time against 37.9% above it, but averaged +0.09 R per trade against +0.08 R: no clear penalty, in a descriptive split that does not measure the slope of the average. Technical indicators such as the RSI are possible filters; we have not tested them.
• Tools: TradingView includes an XABCD drawing tool (on MetaTrader it takes a third-party indicator), and free community scripts detect the pattern. Check which parameters each script uses: two scripts can mark a different pattern on the same chart. Test any paid scanner on past data before paying.
• Keep a record of every pattern you would have traded, in forex, stocks or crypto, not only the winners.

Frequently asked questions

Summary

• C beyond A, at 1.13 to 1.618 of AB; D at 0.886 to 1.13 of XC, with CD at 1.618 to 2.24 of BC.
• Entry at D, exit beyond the 1.13 level, targets at the 0.50 and 0.618 retracements of CD.
• The deeper D separates it from the Cypher, which completes at 0.786 of XC.
• Tested on our bench with a fixed rule: no difference from chance that survives our correction on any timeframe, all markets together.

This guide is general information about technical analysis and trading, not financial or investment advice. Trading carries a risk of loss: never trade money you cannot afford to lose.

About the author and the data. Written by Amaury, founder of PatternsWizard, who is passionate about finance, quantitative trading and data analysis. He built the PatternsWizard test bench, which detects each pattern with fixed, published rules on full market history: crypto, forex, US stocks, ETFs, indices and commodities. Trades and win rates are compared with random bars on the same assets, excess returns with the rest of the market, with error margins and a correction for multiple testing, and the whole pipeline is checked on random-walk prices, where nothing can be predicted. The shark rule (swings of 2, 4 or 8 times the average true range, published ranges used as is) was set from chart reviews, never tuned on results. Statistics on this page were generated on November 5, 2026. The full methodology explains every step.