Cypher harmonic pattern drawing tool

Application

The Cypher pattern is an advanced harmonic chart pattern used by technical analysts to identify potential market reversal zones. It is a 5-point structure consisting of points X, A, B, C, and D. Like other harmonic patterns, the Cypher relies on specific Fibonacci measurements for each leg of the formation to validate the pattern and determine the final completion point (Point D), where a trader might look for a reversal.

For a pattern to be considered a valid Cypher, it must adhere to the following Fibonacci rules:

• Point B: Must retrace between 0.382 and 0.618 of the XA leg.
• Point C: Must be an extension of the XA leg, reaching a minimum of 1.13 and a maximum of 1.414.
• Point D: Must be a 0.786 retracement of the entire XC leg.

However, these levels can fluctuate and are more likely a recommendation.

To draw a Cypher pattern on your chart, select the tool from the drawing panel. You will need to click five separate points on the chart (X, A, B, C, and D) to define the consecutive highs and lows of the structure. As you place the points, the tool automatically draws the connecting borders, shades the interior, and displays the calculated Fibonacci ratios between the legs.

Style

In the Style properties dialog, it is possible to change the visual appearance and configuration of the Cypher pattern tool.

• Label: Allows you to change the text color and font size for the ratio labels. You can also choose to apply bold and/or italic formatting to the text.
• Border: Allows you to change the color of the pattern's connecting boundary lines, as well as their thickness and line style.
• Background: Toggles the visibility of the shaded background fill within the pattern's boundaries. You can use the adjacent color picker to adjust the color and opacity level.

Coordinates

In the Coordinates properties dialog, you can set precisely the position of the pattern's five anchor points on the price scale (by setting the price) and the time axis (by setting the bar number).

• Price 1: Allows for the precise placement of the pattern's first point (Point X) using a bar number and price.
• Price 2: Allows for the precise placement of the pattern's second point (Point A) using a bar number and price.
• Price 3: Allows for the precise placement of the pattern's third point (Point B) using a bar number and price.
• Price 4: Allows for the precise placement of the pattern's fourth point (Point C) using a bar number and price.
• Price 5: Allows for the precise placement of the pattern's fifth and final point (Point D) using a bar number and price.

Visibility

In the Visibility properties dialog, you can switch the Cypher pattern tool displaying on charts of different chart intervals.