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The ABCD Pattern is the simplest harmonic pattern and the foundation of all harmonic trading. It consists of two equal measured legs (AB = CD) connected by a retracement (BC), forming a zigzag shape on the chart.
The pattern works in both directions — bullish ABCD forms at the end of downtrends (buy at D), bearish ABCD forms at the end of uptrends (sell at D). The key requirement is that the CD leg equals the AB leg in both price and time.
Every harmonic pattern (Gartley, Butterfly, Bat, Crab) contains an ABCD structure. Mastering this pattern first is essential before progressing to more complex harmonics.
Markets move in symmetrical waves. The AB leg represents an impulse move, BC is the correction, and CD is the second impulse. The symmetry occurs because similar forces drive both impulse legs.
At point D, the pattern is complete and a reversal is expected. This works because D represents a measured exhaustion point — the second leg has covered the same ground as the first, and momentum is spent.
The Fibonacci relationships add precision. BC typically retraces 61.8–78.6% of AB, and CD extends to 127.2–161.8% of BC. These ratios create the specific price level where D is expected to complete.
Enter at point D when price reaches the projected completion zone (AB = CD level) with a reversal candle confirmation.
Beyond point D by a buffer. For bullish ABCD, stop below D. For bearish, stop above D. The Fibonacci extension helps define exact invalidation.
First target: 38.2% retracement of AD. Second target: 61.8% of AD. Extended target: point A (full retracement).
Typically 1:2 or better when D completes at a precise Fibonacci level.
The ABCD is the building block of harmonic trading. If you can identify this pattern reliably, you have the foundation for all other harmonics.
Before learning any other harmonic, drill the ABCD. Every Gartley, Butterfly, and Bat contains an ABCD within it.
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