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ABCD Pattern

ABCD Pattern

AdvancedHarmonic PatternsNeutralReliability 62%

Pattern Formation

16 / 16 candles
1,1511,1161,0821,0471,01397801/0101/0301/0501/0701/0901/1101/1301/15
Speed

Statistics

Target Hit Rate
60%
Average Move
14%
Failure Rate
18%
Avg Formation Days
30 days
Volume Confirmation Boost
+10%

Reference values based on Bulkowski's "Encyclopedia of Chart Patterns". Data is primarily from U.S. markets and may differ for other markets.

The most basic harmonic pattern based on Fibonacci ratios. Composed of four points (A-B-C-D) with two equal-distance impulse legs (AB = CD). Ideally, BC is a 0.618 retracement of AB. Point D represents the expected reversal zone.

Formation Conditions

  • The A-B impulse leg (up or down) must be clearly defined
  • The B-C retracement must be 0.382-0.886 of AB (0.618 is ideal)
  • The C-D impulse leg must be approximately equal in distance to AB
  • The time ratio of AB and CD should be approximately equal (symmetry)
  • Point D must align with Fibonacci ratios

Entry Condition

Enter when point D is reached and reversal signs (candlestick patterns or oscillator reversal) are confirmed. Short at point D for a bullish ABCD, long for a bearish ABCD.

Target Calculation

After reversal from point D, the C level is the first target. The A level is the second target. Fibonacci extensions (1.272-1.618 times CD) are also referenced.

Stop Loss Rule

Place a stop-loss beyond point D. Use the level where ABCD symmetry breaks (where CD exceeds 1.27 times AB) as a reference.

Volume Profile

Volume increase at point D's reversal enhances reliability. Ideally, volume gradually decreases during pattern formation and surges at point D.

False Signal Detection

  • If AB and CD distances differ significantly, pattern reliability is low
  • A very shallow BC retracement (under 0.382) suggests strong trend continuation
  • Patterns against the higher timeframe trend are more likely to fail
  • Entering without reversal confirmation at point D carries high risk
  • If pattern formation takes too long, market conditions may have changed

Related Indicators

Fibonacci retracementRSIMACDVolume

Related Patterns

Gartley PatternButterfly PatternBat Pattern

Learn More

View in Cheatsheet →View Glossary →