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.

Bullish 0ABCD Pattern Rules

1. Find AB
1. Point A is a significant high
2. Point B is a significant low
3. In the move from A to B there can be no highs above point A, and no lows below B


2. If 0A, then find BC
1. Point C must be lower than point A
2. In the move from B up to C there can be no lows below point B, and no highs above point C
3. Point C will ideally be 61.8% or 78.6% of AB
1. In strongly trending markets, BC may only be 38.2% or 50% of 0A


3. If BC, then draw CD
1. Point D must be lower than point B (market successfully achieves a new low)
2. In the move from C down to D there can be no highs above point C, and no lows below point D
3. Determine where D may complete (price)
4. Determine when point D may complete (time) for additional confirmation