What Is The Bat Pattern & How To Trade With It

Bat Pattern

The Harmonic Bat pattern is a type of Gartley pattern that signals a potential reversal. Developed by Scott Carney in 2001, the Bat is considered one of the most accurate Harmonic patterns by some traders.

What is the Bat pattern?

Like other Harmonic patterns, the Bat consists of five points (X, A, B, C, and D), that are known as the legs.

To identify the pattern, these points are drawn with the help of Fibonacci numbers and ratios. Fibonacci is a sequence of numbers that forms by adding the two previous numbers (0, 1, 1, 2, 3, 5, 8, 13, 22). And Fibonacci ratios are obtained by dividing Fibonacci numbers.

You can check how to calculate Fibonacci ratios in detail by following the link here.

The Fibonacci numbers and ratios combined with the five legs form the Bat pattern.

This is how the pattern appears on the chart:

Bat pattern on a chart
Bat pattern on a chart

There are certain peculiarities which a trader needs to understand before finding the Bat pattern.

  • From the leg X to A, there is a random upward or downward movement.
  • From leg A to B, the retracement is between 38.2% to 50% of XA.
  • From leg B to C, the retracement lies between 38.2% to 88.6% of AB.
  • The leg C to D has a retracement of 88.6% of XA or between 161.8% to 261.8% extension of the AB.

The highs and lows of these Fib levels with five legs, validate the occurrence of the Bat.

When drawing an analogy between the Bat and Gartley, the difference lies in their Fibonacci measurements.

How to use the Bat pattern?

The Bat pattern comes in bullish and bearish variations.

a. Bullish Bat

The bullish Bat occurs in a downtrend and signals a potential reversal. The pattern looks like M.

Bullish Bat Pattern
Bullish Bat Pattern

b. Bearish Bat

The bearish Bat appears in an uptrend and identifies a downward movement. The pattern resembles W.

Bearish Bat Pattern
Bearish Bat Pattern

In the bullish pattern, the X leg is at a low level. For going long, traders take their positions at the point D. They place a stop-loss below the point D.

Conversely, in the bearish variation, the X leg is at a high level. Those who wish to go short take their positions at the point D, and set a stop-loss near its high.

A key note to remember is, a trader may wish to wait for the Bat pattern to fully appear. Because sometimes the Bat pattern can give false signals. For example, even the pattern is present on the chart, the price is moving in another direction. In this scenario, traders may avoid entering the trade.

A helpful way to solve this problem is combining the Bat with other technical indicators, for the confirmation of the trend.

Another approach trader can take, to not enter at point D but above or below it.

Bat pattern trading strategy

To implement the pattern, traders can look for the Bat on any timeframe according to their own personal trading preferences.

Bat pattern buy strategy

  • Locate the pattern in a downtrend.
  • Wait for the rice bar to go bullish before entering.
  • Enter the trade at point D.
  • Place a stop-loss near the recent low from point D.
  • Exit the trade before the price drops.

Bat pattern sell strategy

  • Find the pattern in an uptrend.
  • Wait for the price bar to go bearish before entering.
  • Enter the trade at point D.
  • Place a stop-loss near the recent low from point D.
  • Exit the trade before the price rises.

Bat pattern conclusion

The Bat Pattern can be used on your trading platform charts to help filter potential trading signals as part of an overall trading strategy.