# Chapter 17, Part II. Harmonic Numbers and AB=CD pattern. Page 4

Discussion in 'Complete Trading Education- Forex Military School' started by Sive Morten, Dec 21, 2013.

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1. ### Sive Morten Special Consultant to the FPA

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Multipliers based on market environment

Here are some additional numbers appear as multipliers. The same numbers could be applied with time frame multipliers. Later we will show how it could be done.

Since the market in contraction mode shows retracements, that usually means that swings are shorter than expansion moves, we should apply some multipliers that are less than 1, and here they are:

1. 0.382 or 0.618;

2. 1.272 and 1.618;

3. 2, 3, 4, 5…etc.

So, we know that 60-min harmonic number on EUR/USD 37-40 pips. As we know, market usually moves as some initial move and retracement from it. Retracement will be smaller than move itself, hence we should apply multipliers that less than 1. If market accelerates then it could pass 1, 2, 3 or even 4 harmonic swings.

Here is how it looks like on hourly EUR/USD:

Chart #3 | EUR/USD Hourly

Here we use 40 pips harmonic number, although I still prefer 35-37 pips, but 40 is safer for stop loss placement. So, you see that in expansion mode market move up at 4 or 5 multiples of the harmonic swing, while in contracting with 2.5-3 multiplier. Please note, by the way that if we will divide 3 into 5, we will get 0.6, as 2.5/4 will give us 0.625. Both are almost 0.618.

Pipruit: This is incredible. But looks like market rarely moves precisely to 40 pips… Sometimes it’s a bit greater, sometimes smaller…​

Commander in Pips: You’re absolutely right. This is not the math – this is the live market. So, we should treat harmonic number more as an area rather than a precise number.