ABCD Harmonic Pattern Entries with Fibonacci Ratios and Price Targets
Summary
This strategy searches for bullish and bearish ABCD harmonic patterns using pivot highs and lows. It measures the spacing and price movement of successive pivots, then applies Fibonacci-style ratios and price-location conditions to qualify long or short entries. A signal identifier prevents more than one entry from being taken for the same pattern. For a long trade, the stop is placed below the latest pivot low by one true-range unit, and the target is limited by either a risk-based projection or the prior high. The short rules mirror this structure around the latest pivot high and prior low.
The author notes that ABCD patterns are uncommon, so ratio tolerances were widened to detect more setups; release notes also mention changes intended to add missed entries and increase signal frequency. The document supplies no backtest performance results, and the pivot-based setup can be difficult to identify. Its entry, stop, and target rules are presented in script form, so practical reliability and execution effects remain unestablished.
Key ideas
- Pivot highs and lows define the four points used to identify a potential ABCD pattern.
- Fibonacci-style ratios and price-location checks qualify bullish and bearish setups.
- A signal identifier is used to avoid repeated entries for the same pattern.
- Stops extend beyond the latest pivot by one true-range unit, with targets constrained by prior pivots.
- The author widened ratio tolerances because qualifying patterns are rare, and reports no performance results.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.