he bullish AB=CD is a measured move down chart pattern except that the turns are located using Fibonacci ratios.The pattern correctly predicts point D 57% of the time. By using the next higher Fibonacci ratio in the measure rule, you can boost the accuracy somewhat, to 65%. What Is an ABCD Pattern? Reflects the common, rhythmic style in which the market moves. A visual, geometric price/time pattern comprised of 3 consecutive price swings, or trends—it looks like a lightning bolt on price chart. A leading indicator that helps determine where & when to enter and exit a trade.Why is the ABCD Pattern important? include the U.S. Dollar (USD). Helps identify trading opportunities in any market (forex, stocks, futures , etc.), on any timeframe (intraday, swing, position), and in any market condition ( bullish , bearish , or range-bound markets) All other patterns are based on (include) the ABCD pattern . Highest probability trade entry is at completion of the pattern (point D). Helps to determine the risk vs. reward prior to placing a trade. Convergence of several patterns—within the same timeframe, or across multiple timeframes--provide a stronger trade signal.
Step 1: Find AB Point A is a significant high Point B is a significant low In the move from A to B there can be no highs above point A, and no lows below B
Step 2: AB, then find BC Point C must be lower than point A In the move from B up to C there can be no lows below point B, and no highs above point C Point C will ideally be 61.8% or 78.6% of AB In strongly trending markets, BC may only be 38.2% or 50% of AB
Sept 3: BC, then draw CD Point D must be lower than point B (market successfully achieves a new low) In the move from C down to D there can be no highs above point C, and no lows below point D Determine where D may complete (price) ---insert fib & abcd tool tutorial link CD may equal AB in price CD may be 127.2% or 161.8% of AB in price CD may be 127.2% or 161.8% of BC in price
Step 4: Determine when point D may complete (time) for additional confirmation –insert fib time tool link CD may equal AB in time CD may be 61.8% or 78.6% time of AB CD may be 127.2% or 161.8% time of AB