What it looks like
Four points. Bullish: A to B is a drop, B to C is a bounce of about two thirds of AB (roughly 61.8%), and C to D is a second drop the same size as AB. Bearish: A to B is a rise, B to C a dip of about two thirds, and C to D a second rise equal to AB. D is where the second leg completes.
What it means
Moves often come in equal pairs: a push, a pause, and a second push of similar size. When the second leg matches the first, the pattern says that move is complete. Like other harmonics it is a forecast from proportions, not a sign that price has already turned, so many traders want a turning candle at D.
Bullish and bearish versions
How to trade it
- 1
Label A, B and C and project D so that CD equals AB.
- 2
Confirmation (optional): a candle that turns at D.
- 3
Entry: buy near D for the bullish version, sell near D for the bearish.
- 4
Stop: just beyond D. Example on US30 (bearish): A 46,800, B 47,100 (300 points), C 46,900, D 47,200. Sell near 47,195 with a stop at 47,230, a 35 point risk.
- 5
Targets: 38% then 62% of the CD leg, about 47,086 and 47,014.
A close beyond the end of the second leg: below D for the bullish version, above D for the bearish.
Where it works best
In orderly, rhythmic markets on 15 minute to 4 hour charts, where swings tend to repeat in size.
WickSpeak finds bullish and bearish ABCD patterns automatically, measures the legs and names the pattern on the candles that made it. The note says what it is, how to trade it near D and that a close beyond the end of the leg proves it wrong. In Playbook you can use it as a condition in a play, alone or alongside other patterns and indicators (any of the 146 patterns can be a condition), and backtest it on past candles with your own costs.
Common mistakes
- Entering before the second leg has reached the same size as the first.
- Accepting a BC pullback far from two thirds, which changes the shape.
- Fading a strong trend where the second leg simply keeps going.
Related patterns
Questions traders ask
What is the ABCD pattern?
A pattern of two equal legs with a pullback of about two thirds between them. It suggests the move is complete once the second leg equals the first.
What are the ABCD ratios?
BC retraces about two thirds of AB (roughly 61.8%), and CD equals AB in length.
Where is the stop on an ABCD?
Just beyond D, the end of the second leg. A close beyond D proves it wrong.
Are harmonic patterns reliable?
A harmonic pattern is a forecast made from proportions, not a sign that price has turned. That is why many traders wait for a candle to turn at D before entering. We do not quote win rates; backtest the pattern on your own market first.