 | |  | | 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 approximately where & when to enter and exit a trade.
Why is the ABCD pattern important?
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.
So how do I find an ABCD pattern?
Each pattern has both a bullish and bearish version. Bullish patterns help identify higher probability opportunities to buy, or go “long.” Bearish patterns help signal opportunities to “short,” or sell. Each turning point (A, B, C, and D) represents a significant high or significant low on a price chart. These points define three consecutive price swings, or trends, which make up each of the three pattern “legs.” These are referred to as the AB leg, the BC leg, and the CD leg. |  |  |  |  |
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