ABCD Harmonic Pattern Entries with Fibonacci Ratios and Exits

Summary

This strategy identifies a four-swing ABCD harmonic pattern using confirmed pivot highs and lows. It compares the retracement and extension between successive swing prices with Fibonacci-based ratio ranges, then looks for a close between nearby swing levels before entering. A signal identifier prevents repeated entries from the same pattern.

For long trades, the script places a stop below the latest pivot low by one true-range unit and sets a profit target at 1.5 times the risk, capped at the prior high. Short trades use the corresponding stop above the latest pivot high and target below, limited by the prior low. The description says ABCD patterns are uncommon, so the author uses tolerance ranges to admit more setups. The document provides the rules and source code, but no performance statistics or market-specific validation; pivot confirmation also means signals depend on later bars.

Key ideas

• The strategy tracks pivot highs and lows to assemble four successive swing points.
• Fibonacci ratio bands determine whether the swings qualify as a long or short ABCD setup.
• A close within specified swing boundaries triggers entry, while a signal identifier blocks repeat entries for the same pattern.
• Stops use one true-range unit beyond the latest pivot, and targets seek 1.5 times risk subject to a prior swing limit.
• The author notes that the pattern is rare and uses wider tolerance ranges to find more candidates.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.