Cypher

The Pattern

The Cypher, described by Darren Oglesbee, has a geometry of its own. The B point retraces 0.382 to 0.618 of XA, but then C pushes past A entirely, reaching 1.272 to 1.414 of the X-to-A leg. The completion at D is measured differently from the other patterns: it is a 0.786 retracement of the long X-to-C leg, not of XA or BC.

That single change, measuring the completion against XC, is what makes the Cypher distinct.

The Idea Behind It

The Cypher captures a structure that makes a higher high (or lower low) at C before reversing. Price runs past the prior swing, traps the breakout traders, then retraces a deep 0.786 of the whole expanded move. D is read as the point where that trap resolves.

When It Tends To Work

It works when C is a genuine false breakout: a push past A that fails and pulls back hard. The deep 0.786 completion gives the reversal room to develop, and the structure suits markets that punish breakouts.

When It Tends To Fail

If the push past A is a real breakout rather than a trap, the 0.786 retracement never completes and price simply trends away. The Cypher’s distinct measurement also means it can be mistaken for other patterns if the XC leg is mismeasured.

How This Strategy Trades It

On a completed Cypher, the strategy enters at the close of the confirming bar, targets a 0.618 retracement of the structure, and stops just beyond D. The shared logic is on the Harmonic Patterns family page.

What The Backtest Says

The Cypher’s results are mixed and instrument-dependent across the samples below, with some timeframes turning a profit and others not. It fires often enough to judge, and stands as one of the more interesting structures to study even though it shows no consistent standalone edge here.