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Abcdchartpattern

📊 Harmonic Patterns Cheat SheetHarmonic Patterns use the identification of quantified chart price action structures that have specific and consecutive Fibonacci ratio alignments that form the visual structures. Harmonic patterns calculate the Fibonacci levels of the price patterns to identify high probability reversal points on the charts. This method believes that harmonic patterns or cycles repeat on charts in cycles repeatedly. The key to using this strategy is to identify these patterns and to use them for creating good risk/reward ratio entries and to exit when a profit target is reached. Positions are taken based upon the odds that the same historic patterns will repeat after entry. 🔹 Butterfly The structure of the Butterfly pattern requires a specific alignment of Fibonacci measurements at each point within the structure. Most important, a mandatory 0.786 retracement of the XA leg as the B point is the defining element of an Ideal Butterfly Pattern and it acts as the primary measuring point to define a specific Potential Reversal Zone. In many ways, the Ideal Butterfly Pattern is like the Gartley Pattern because it requires a specific B point retracement and possesses a tighter array of Fibonacci ratios within the structure. Specifically, the Butterfly incorporates a 1.27 XA projection with a “tame” BC projection, which is usually only a 1.618. In addition, the Butterfly usually possesses an equivalent AB=CD pattern or an alternate 1.27AB=CD pattern. Although the equivalent AB=CD is a minimum requirement, valid Butterfly structures rarely exceed the alternate 1.27 AB=CD completion point. 🔹 Shark The Shark Pattern is dependent upon the powerful 88.6% retracement and the 113% Reciprocal Ratio, works extremely well retesting prior support/resistance points (0.886/1.13) as a strong counter-trend reaction. Represents a temporary extreme structure that seeks to capitalize on the extended nature of the Extreme Harmonic Impulse Wave. Demands immediate change in price action character immediately following pattern completion. Extreme Harmonic Impulse Wave utilized depends upon location of 88.6% level – these are minimum requirements. Requires an active management strategy to capture high probability profit segments. 🔹 Gartley The important features of the Gartley are the specific location of the various points: X,A,B,C and D. The X-A leg is the largest price move in the pattern. It is followed by a counter move of A to B. The first leg, A to B, sets up the potential AB=CD, which is crucial to the completion of the pattern and to the indication of the reversal zone. After a brief and smaller B to C retracement, the C to D leg is established. A precise calculation of the AB=CD will provide a significant potential reversal point. Ideal Gartley The ideal Gartley set-up will be defined by specific Fibonacci retracements. One of the most important numbers in the pattern is the completion of point D at the 0.786 of XA. Although the price action might exceed this number slightly, it should not exceed point X. The pattern is a nice set-up, especially with the convergence of an AB=CD. 🔹 Bat The Bat pattern is probably the most accurate pattern in the entire Harmonic Trading arsenal. The pattern possesses many distinct elements that define an excellent Potential Reversal Zone. The pattern typically represents a deep retest of support or resistance that can frequently be quite sharp. Quick reversals from Bat pattern PRZs are quite common. In fact, valid reversals from Bat patterns frequently possess price action that is quite extreme. The pattern incorporates the powerful 0.886XA retracement, as the defining element in the Potential Reversal Zone. The B point retracement must be less than a 0.618, preferably a 0.50 or 0.382 of the XA leg. The most ideal B point alignment is the 50% retracement of the XA leg. The B point is one of the primary ways to differentiate a Bat from a Gartley pattern. If a pattern is forming and the B point aligns at a 0.50 of the XA leg, it is likely to be a Bat. 🔹 Three Drive The three drives pattern consists of a series of higher highs or higher lows. It is similar to the ABCD pattern. The difference is that a Three drives pattern is made of 5 legs, while an ABCD pattern has only 4. Three-Drives is a reversal pattern, so it signals an upcoming change in a trend. Point A is at the 61.8% retracement of the drive 1. Point B is at the 61.8% retracement of the drive 2. Drive 2 is at the 127.2%-161.8% extension of A. Drive 3 is at the 127.2%-161.8% extension of B. You can enter the market when you are sure that the market has formed the point B (buy in a bearish Three-Drive and sell in a bullish Three Drive). Take Profit should be around the 127.2%-161.8% extension of B. 🔹 Cypher The Cypher pattern, which can be either bullish or bearish, has five points (X, A, B, C, and D) and four legs (XA, AB, BC, and CD). Like any other harmonic pattern, the theory behind the Cypher chart pattern is that there is a strong correlation between Fibonacci ratios and price movements. Eventually, the market is expected to reverse from point D after the four market swing wave movements – X to A, A to B, B to C, and C to D. B point retracement of the primary XA leg ranges between 38.2% to 61.8% Fibonacci levels. C point is an extension leg with a Fibonacci ratio that should be between 127.2% to 141.4% of the primary XA leg. D point should break the 78.6 retracement level of XC. 🔹 AB=CD In this pattern, the A to B leg is the first price move. After a brief retracement from point B to point C, the pattern will complete the C to D leg, which is the same length as AB. Simply, after the AB and BC legs have been established, you project the AB length from point C… Although the price action will not always be exactly equivalent, the AB=CD legs usually will be close enough to determine the reversal points. Sometimes, this pattern will be exact but I usually wait for the CD leg to at least equal the AB leg. The Fibonacci numbers in the pattern must occur at specific points. In an ideal AB=CD Pattern, the C point must retrace to either a 38.2% at a minimum to validate the structure. The maximum retracement of the AB leg is an 88.6% level that defines a less extreme AB=CD pattern formation but still valid. 🔹 Crab The Crab is a distinct 5-point extension structure that utilizes a 1.618 projection of the XA leg exclusively. This is the most critical aspect of the pattern and the defining level in the Potential Reversal Zone (PRZ). The extreme (2.618, 3.14, 3.618) projection of the BC compliments the 1.618 XA extension. In addition, the Crab primarily utilizes an alternate AB=CD to compliment the PRZ. Although a minimum AB=CD completion is necessary for a valid structure, the alternate 1.27 or 1.618 calculation are the most frequent cases. The 1.618 AB=CD pattern is the most common alternate calculation utilized in the structure. It is important to note that the alternate AB=CD pattern within the Crab is the least important number in the PRZ. 👤 @AlgoBuddy 📅 Daily Ideas about market update, psychology & indicators ❤️ If you appreciate our work, please like, comment and follow ❤️
Education
by QuantVue
6
LINKUSDT Exiting Ending Diagonal from the last impulsive wavePrice action, based on Elliot Waves principles, is falling from peak after complete an Ending Diagonal from the last extended impulsive wave to a potential target at local demand in hourly timeframe in a possible 78,6% retrace as shown on AB=CD pattern, below volume POC and after reject Anchored VWAP from May '22 bottom. Consolidating in a parallel channel as shown within a modified Schiff Pitchfork. Potential swing-downward in a corrective wave target to Dec '22 low re-test. Monthly Inside Bar zone.
Short
by firmestudio
1
LINKUSDT Potential Bullish Gartley to turns Bearish / FlatPotential reversal price action in a potential ending diagonal Elliot pattern corrective, plus potential bullish Gartley and AB=CD projections aiming demand zones. The price is ranging @ upper region of a monthly Inside Bar candlestick pattern. I'm expecting the breaking of Aug '22 low to lowers lows newer targets. The price action above this level tends to ranging in zig-zags. Anchored VWAP from the Aug '22 low is a important intraday support. Price is ranging between the upper bands 0.618-1.00 from this VWAP. Bearish divergences on RSI and Chaikin Money Flow oscillators. Similar pattern linked below.
Short
by firmestudio
A Cautious Trend Continuation Idea Bullish Indications • As per DOW’s theory Price action is registering Higher Highs and Higher Lows. • Candle Stick pattern show Inverted Hammer is followed by Bullish Engulfing candle which indicates Bulls are in control. • Support zone is at 1.23386 which can help price bounce up to continue bullish trend. • Linear Regression Channel with standard deviation 2 is used as trend line Support and Resistance. It is evident Price has respected median line and moved back up. • Support Zone confluences with Fib Level 78.6% and price has respected it. • Formation of Bullish Pennant , which indicates continuation of current trend. • As per Seasonal Analysis, BXY remain Bullish until closing of 2nd week of January 2023 with an increment of 2.35% from December 2022. It is safe to say it can sustain to close bullish for January Month. • On the other hand, as per last 10 years seasonal BXY remain slightly bearish in January month. • Macro Analysis on 1 Day Time-Frame trend is Bullish. • Micro analysis on 15 Minutes Time-Frame Trend remains Bullish. • Hidden Bullish Divergence spotted on RSI oscillator. • Average Directional Index , which measures the trend direction strength and its value is at 31.96 which indicates trend is strong. Bearish Indications • Price action is approaching Resistance zone at 1.24103 which can bounce back. • DXY index analysis shows it to be testing a major support area which can provide a cushion for a bounce back which can result in trend reversal upon confirmation. • AB=CD Harmonic Pattern indicates a reversal in trend is possible in area of 1.24526. But we can be only sure of reversal of trend if DOW’s theory is valid for the trend. • 10 years Seasonal analysis of DXY show it remain Bullish in January. • BXY index analysis shows it to be approaching a major resistance zone which can bounce back the trend. Analysis Takeaways: As per facts available to us and projections we can assume that it is quite possible that trend will continue to be bullish with a short-term bounce back from resistance area and again will continue as biased. However, we can’t reject the possibility of trend reversal into a bearish trend as per market sentiments so we need to be cautious and safely take what we can until that happens. Bias : Long Plan (Long) Entry Long: 1.23677 (Fib Lvl 88.6%) TP: 1.24543 (Fib Lvl 100%) TP2 : 1.25936 (Fib Lvl 1.27%) Stop Loss: 123.066 (Fib level of 78.6%) Risk/Reward: 1:3.94 Manage your Risk Accordingly and Remember Stop Loss is your friend. If this post was useful to you, do not forget to like and comment.
Long
by adnanmagsi
3
🔠 The ABCD PatternThe ABCD is a basic harmonic pattern. All other patterns derive from it. The pattern consists of 3 price swings. The lines AB and CD are called “legs”, while the line BC is referred to as a correction or a retracement. AB and CD tend to have approximately the same size. A bullish ABCD pattern follows a downtrend and means that a reversal to the upside is likely. A bearish ABCD pattern is formed after an uptrend and signals a potential bearish reversal at a certain level. The rules for trading bullish and bearish ABCD patterns are the same, you will just need to take into account the direction of the pattern you trade and the movement of the market it predicts. 🔷Classic ABCD The point C should be at 61.8%-78.6% of AB. The point D, in its turn, should be at the 127.2%-161.8% Fibonacci expansion of BC. Notice that a 61.8% retracement at the point C tends to result in the 161.8% projection of BC, while a 78.6% retracement at the C point will lead to the 127% projection. 🔷AB = CD Here CD has exactly the same length as AB. In addition, it takes the market the equal time to travel from A to B as from C to D. As a Result, AB and CD have the same angle. This type of ABCD pattern is seen quite often and is popular among traders. 🔷ABCD Extension ABCD extension refers to when CD is the 127.2%-161.8% extension of AB. CD can be even 2 times (or more) bigger than AB. There actually are some signs that can hint that CD will be much longer than AB. They are a gap after point C or big candlesticks near point C. 📊Trading with ABCD pattern The key thing you should remember is that you can enter the trade only after the price reached the point D. Study the chart looking at the price’s highs and lows. It may be helpful to use ZigZag indicator (Insert – Indicators – Custom – ZigZag) that marks the chart’s swings. Watch the price as it forms AB and BC. In a bullish ABCD, C must be lower than A and should be the intermediate high after the low at B. Point D must be a new low below B. When the market arrives at a point, where D may be situated, don’t rush into a trade. Use some techniques to make sure that the price reversed up (or down if it’s a bearish ABCD). The best scenario is a reversal candlestick pattern. A buy order may be set at or above the high of the candle at point D. 👤 @AlgoBuddy 📅 Daily Ideas about market update, psychology & indicators ❤️ If you appreciate our work, please like, comment and follow ❤️
Education
by QuantVue
2
USDJPY: A Bullish reversal ideaBearish Indications • As per Dow’s theory trend is bearish. • Key resistance is at 129.570 • 4H Time-Frame overall trend is bearish. • Seasonal Analysis of USDJPY remain Bearish in January. • However Seasonal Analysis of JXY for past 10 years January remain bearish. Bullish Indications • 4H Time-Frame Higher Low is formed and confirmation of Bullish trend can be ascertaining once Higher High is established. • On 15M Time-Frame a bullish trend of Higher Highs and Higher Lows is clearly evident. • Bullish Engulfing/ Three White Soldiers candles are visible. • Next Support is at 126.459 • Formation of AB=CD indicates a reversal is possible in area of 128.096 and signs of bullish candles put weight to this theory. • Seasonal analysis of DXY for past 10 years indicates it to remain bullish in January. • No Divergence is Spotted on RSI Oscillator. Biased: Long Plan A (Long) Entry Long: 1.06255 (Fib Lvl 61.8%) TP: 130.089 (Fib Lvl 38.2%) TP2 : 131.937 (Fib Lvl 61.8%) Stop Loss: 127.826 (Point D of ABCD Pattern) Risk/Reward: 1:1.18 Manage your Risk Accordingly. If this post was useful to you, do not forget to like and comment.
Long
by adnanmagsi
7