Shark

The Pattern

The Shark, defined by Scott Carney, is labeled across five points O, X, A, B, C rather than the usual XABCD. It is built from extensions rather than retracements: the X-to-A leg is a retracement of the opening O-to-X leg, then A to B and B to C are two strong extensions that drive price into the C reaction point. The exact ratios vary across sources; this strategy uses a consistent definition of a retracement followed by two extensions of 1.13 to 1.618 and 1.618 to 2.24.

The Idea Behind It

The Shark catches a market that is extending hard in one direction and is due for a reaction. C is the reaction point, where the second extension is expected to stall.

When It Tends To Work

In theory it works when the two extensions overshoot into a level and reverse. A clean reaction off C can be the start of a larger swing back.

When It Tends To Fail

A structure made of extensions is, by definition, a strong trend. Fading the C point means betting against momentum that is still building, and a Shark that does not react simply continues. Because the definition is loose, the shape also appears often, which means many low-quality signals.

How This Strategy Trades It

On a completed Shark, the strategy enters at the close of the confirming bar against the extension, targets a 0.618 retracement of the structure, and stops just beyond C. See the Harmonic Patterns family page for the shared mechanics.

What The Backtest Says

The Shark is the cautionary tale of the family. It fires very often, several hundred times per instrument, and loses consistently across every sample below. Fading strong extensions mechanically is a losing proposition in this test. The page is here for completeness and as a clear example of a recognizable shape that does not translate into an edge.