ABCD Pattern Entries with Triggered Trailing Stops and Profit Exits

Summary

This strategy detects bullish and bearish ABCD formations from a zigzag sequence of fractal highs and lows. It checks whether the retracement and extension ratios fall within specified ranges, then enters long or short when a new qualifying pattern appears. A switch changes the fractal definition, allowing a regular or Bill Williams style filter.

Risk controls optionally activate trailing stop losses after price moves favorably by a trigger percentage. A separate take-profit trigger starts a trailing profit level, and crossing the relevant stop or profit level closes the position. The script also plots pattern labels and risk levels. The supplied material explains the mechanics but reports no backtest outcomes or robustness checks. Because pivots require subsequent bars for confirmation, signal timing and any lookahead behavior should be examined carefully before interpreting historical entries as tradable; the strategy’s configured costs and position handling also affect results.

Key ideas

• Fractal pivots form a zigzag sequence used to identify candidate ABCD patterns.
• Ratio bounds on the middle retracement and final extension qualify a pattern.
• Bullish patterns create long signals and bearish patterns create short signals.
• Trailing stops and trailing profit exits can be gated by favorable-move triggers.
• No performance evidence is supplied, and pivot confirmation timing merits scrutiny.

Tags

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