AB=CD Harmonic Pattern [Forex & Crypto Trading Strategy]

The AB=CD Harmonic Pattern [Forex & Crypto Trading Strategy] consists of two equivalent price movements, expressed in terms of Fibonacci ratios.

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This is the basic model, it is often included (in different versions) in some of the other harmonious patterns that we have considered with you on this site:

Very often, especially to adherents of the Elliott wave theory, it may seem that this model is nothing more than a correction to the trend movement, which we also considered earlier — an ABC-type correction.

Forex_Trading_the_ABCD

This is partly true, but there are many examples when the AB=CD pattern was a reversal pattern, and not a correction, so it cannot be unambiguously considered according to Elliott.

There are 2 main variants of this pattern, which are presented in Fig. 1 and fig. 2:

On fig. 1 schematically shows the AB=CD pattern with point C retracement equal to 61.8% Fibo. The projection of wave BC in this case is 161.8% Fibonacci.

ab=cd

A variant of the model with «root» Fibonacci values in fig. 2. The retracement of point C here is 78.6% Fibonacci, and the projection of wave BC is 127.2% Fibo.

Forex_Trading_the_ABCD_Pattern

But it is also worth knowing that there are models on the market with proportions that differ from those described above. It is not uncommon to see a pattern with a 78.6% Fibonacci retracement and a 161.8% Fibo Extension projection:

ABCD_

Video with examples:

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