The BC price move is then changed by a bullish move called CD, which goes above point B. It is then reversed with a bearish move called BC. It starts with a bullish pattern,Īt point AB initially, where point A is at the bottom and B is the increased price swing. The bearish ABCD pattern is the exact opposite of the bullish ABCD pattern. There is no higher point above C in the C to D move, and no point is lower than D.ĬD price shall always be equal to AB price. In the move from B to C, there can be no lows below B and no highs above C In the A to B move, there are no higher points than A and no lower points than Bįind BC, where C must be a lower point than A. Once the price completes the CD price swing, there is a reversal and an increase in the price once the price touches point D.ĪB is where A is significantly higher and B is significantly lower Then reversed to a bearish move (CD), completing the pattern. The pattern is then followed by a reverse and rise in price, known as BC, which is Zig-zag pattern that starts at A, which extends to the price swing that we call B. The bullish ABCD pattern commences with a price fall or a lower price. Telling the trader the exact moment to either buy or sell the trade, i.e., enter or exit the trade point. Since each pattern has both bearish and bullish versions, they help identify opportunities to buy and sell.īullish patterns help identify more significant opportunities to buy, and bearish patterns help identify higher selling opportunities.Įach turning point in the pattern represents a high or a low on the price chart, There are mainly two types of ABCD patterns - bullish ABCD pattern and bearish ABCD pattern. Similar length to the leg of AB, there is a reverse mechanism that takes place for the CD price swing. The swing finally resumes and continues till it isįinally at a point that has an equal distance to AB, which is seen as DA. It then retraces to a position as A's leg, which we call C. The price then moves further to create a critical swing level B, which is at a higher level than A. Your exact stop-loss location should be beyond the extreme ABCD pattern price.Ī trader can recognize the ABCD pattern through the price behavior when it starts moving in a new direction, known as A. To protect yourself against any unexpected price move. It is important to note that when you enter the Forex market based on the ABCD pattern, you must set up a stop-loss order in order The pattern can predict both bullish and bearish reversals.

It consists of two equivalent price legs and helps the trader identify when the currency price is going to change directions. It has 3 consecutive price trends, looking like a lightning bolt on a price chart which helps determine where and when to exit and enter a trade.

The pattern point (D), making it an important concept for Forex traders to understand.ĪBCD pattern is a graphical representation with three price swings in a rhythmic style, depicting where the market moves. The Forex ABCD pattern gives the highest probability of the trade entry point to the trader at the completion of Rewards before making a trade, and it can even form the basis for other patterns.

It can be used to identify trading opportunities in the Forex market, weighing the risks and One of the most classic chart patterns, the ABCD pattern represents the perfect harmony between price and time.

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