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The Cypher Pattern is a harmonic reversal pattern developed by Darren Oglesbee. It differs from Carney's patterns in its structure: point C extends beyond point A, and point D completes at the 78.6% retracement of XC (the full range from X to C).
The Cypher is popular among harmonic traders because of its frequency — it appears more often than Gartleys or Butterflies. The 78.6% of XC completion provides a precise reversal zone.
Unlike other harmonics where D relates back to XA, the Cypher measures D against XC, making the geometry distinct and the trading levels unique.
The Cypher identifies a specific type of overextension and retracement. Point C extending beyond A shows strong momentum. The subsequent correction to 78.6% of the full XC range is where momentum exhausts.
The 78.6% retracement of XC is psychologically significant because it represents a nearly complete give-back of the C extension. Traders who bought the C breakout are now deeply underwater, and their capitulation fuels the reversal.
Cyphers work well because the C extension beyond A creates a clear structure that traders anchor to. When D retraces to 78.6% of that structure, the correction feels "complete" to market participants.
Enter at point D when price reaches 78.6% of XC with a reversal signal. Limit orders at the precise level work well.
Below point X (bullish) or above point X (bearish). If D breaks X, the pattern has failed.
T1: Point A. T2: Point C. Extended: 38.2% of XC above C. Cyphers can produce strong reversals.
Typically 1:2 to 1:3 depending on the D-to-X distance.
The Cypher is a good second harmonic to learn after the ABCD and Gartley. Its higher frequency means more trading opportunities but requires disciplined ratio verification.
The Cypher appears more frequently than most harmonics. Use this to your advantage — more patterns means more data for refining your harmonic trading edge.
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