Harmonic Trading, Volume Two: Advanced Strategies for Profiting from the Natural Order of the Financial Markets
by Scott M. Carney
Overview
Published in 2010 by FT Press, Volume Two advances the Harmonic Trading methodology established in Volume One. Building on the foundational patterns and Fibonacci techniques, this book introduces new patterns, confirmation methods, and strategies for adapting harmonic analysis to different market contexts.
Contemporary Case Studies
Chapter 1 applies harmonic analysis to real-time market situations from major indices, individual stocks, and forex pairs, demonstrating pattern identification, PRZ calculation, trade execution, and management in live conditions.
Harmonic Impulse Waves
Chapter 2 extends the methodology to impulse wave structures, showing how harmonic ratios govern not just reversal patterns but also the proportional structure of trending moves.
New Harmonic Patterns
Chapter 3 introduces patterns discovered after Volume One, expanding the toolkit for identifying high-probability reversal zones. These include variations on existing patterns and entirely new structures with unique Fibonacci ratio requirements.
Patterns Relative to the Trend
Chapter 4 addresses a critical practical issue: how to interpret harmonic patterns within the context of the prevailing trend, distinguishing between continuation setups (patterns completing in the direction of the larger trend) and reversal setups (counter-trend patterns).
BAMM Theory
Chapter 5 introduces the Bat Action Magnet Move (BAMM), a proprietary concept that anticipates the price trajectory following completion of a Bat pattern, providing early entry opportunities before the full pattern completes.
RSI BAMM
Chapter 6 -- the longest in the book -- presents a sophisticated confirmation technique that combines harmonic pattern analysis with RSI (Relative Strength Index) divergence signals. The RSI BAMM identifies situations where momentum confirmation aligns with price pattern completion, improving trade probability.
