wheelspolt.blogg.se - Abcd trading pattern

I was waiting the price to touch and close in the 161.8 fib extension and I took a call which was ITM.The price made a big reversal and after that we had the beginning of a new up trend as you can see in the screenshot.Now, let’s talk about the confirmation I had. The second pair B-C is a small up trend and a 78.6 fibonacci retracement of the leg A-B.It could be also 38.2 or 50 or 61.8 fib retracement but nothing over 78.6 fib retracement.Now,look at C-D leg which is a small down trend.If we have these retracements in the first two legs we should expect a reversal in letter D (which could be a 127 or 161.8 fib extension of the leg B-C) and the beginning of a new up trend.This is a ”bullish ABCD pattern”. The first pair A-B is a small down trend. We have three pairs of letters,A-B, B-C and C-D. The yellow lines are fibonacci levels.I know there is a confusion but I will explain everything.Look at the four letters in the screenshot.

Now let’s go to the first screenshot of the day which is my trade in EUR/JPY. For my introductory article on harmonic patterns please click here. In this article I will explain this pattern and the reasons I took my today trade and moreover I will talk about another harmonic pattern, the Gartley. It was an ITM call based on an effective pattern, ABCD pattern. Only one trade for me today cause I had some work to do.

… you would approach a downtrending market with a bullish (buy) trade at point D in exactly the same way – the pattern and your trading orders will simply be reversed.I hope you had a profitable day.

… Drawing a new Fibonacci retracement from point A to D of the completed pattern and a take profit at the point where the price will have retraced 61.8% of the distance between A and D.

… place your stop loss a few pips above point D.

… once you have decided where you think the pattern will complete (point D), you should place a sell order at this point and look to profit from a price reversal.

… the price then continues its original uptrend, forming a C-D leg that should be the same length as the A-B leg.

… at point B, the price switches direction and retraces down sharply to form the B-C leg – ideally a 61.8% or 78.6% retracement of the price increase between points A and B.… when a market is trending upwards, the first leg (A-B) is formed as the price rises from A to B.… it can be used in any financial market and on any time frame.… the pattern consists of three legs, with two equal legs labelled AB and CD, together they form a zig-zag shape – hence its nickname, the 'lightning bolt'.… the AB=CD pattern helps you identify when a price is about to change direction so that you can buy when prices are low and sell when they are high.Take profit option 3 at the 61.8% Fibonacci retracement.įrom this lesson, you have learned that ….Take profit option 2 at the 50.0% Fibonacci retracement.Take profit option 1 at the 38.2% Fibonacci retracement.The chart below shows where you would place your sell order, your stop loss and your profit target: If the price struggles to break through any one of them, then you can close your trade down and take profit early. If you are unsure of which one to place your take profit at, then you can simply place the profit target at the 61.8% level, but watch closely how the price reacts around the levels.

You can place your take profit order at the 38.2%, 50.0% and 61.8% levels. Note that you can only do this once the D point has already been reached and the original pattern has completed. One way of deciding where to take profits is by drawing a new Fibonacci retracement from point A to D of the pattern.