How make money with forex

Selasa, 10 September 2013

Harmonic Trading: AB=CD Pattern

In the last post was the focus on the three drive pattern and harmonic trading. In this post is the focus on the AB=CD pattern.

AB=CD Pattern
In an AB=CD pattern is A-B = C-D; the time duration between A to C is the same as the time duration between B to D.

The same time duration is in this context approximately the same time duration. An example is a 20 week time duration from A to C and 15 weeks time duration from B to D.

AB=CD Pattern and the Fibonacci numbers
The AB=CD pattern is a pattern that indicates a trade opening with the Fibonacci numbers 0,618, 0,789, 1.27 and 1.618.

The calculating in the AB=CD pattern is

AB=CD

AB*1, 27=CD

AB*1, 618=CD

Illustration of the AB=CD pattern
In the image are a bullish and a bearish pattern illustrated

Bullish Pattern

The image illustrates a bullish AB=CD pattern with the Fibonacci numbers 0,618, 0,789 (AB) and the CD numbers 1,27 and 1,618.

A buy opening is likely if the price curve is in the harmonic area 0,618, 0,789, 1,27 and 1,618 at point A, B, C and D; the buy opening is likely as the AB=CD pattern indicate a rise in the price curve.

A stop loss should be a couple of pips below point D; remember that a stop loss is set individually and that the numbers are not exact numbers but numbers in an area; a harmonic area.

Bearish Pattern

The image illustrates a bearish AB=CD pattern with the Fibonacci numbers 0,618, 0,789 (AB) and the CD numbers 1,27 and 1,618.

D is a likely sell point if the price curve is in the harmonic area 0,618, 0,789, 1,27 and 1,618 at point A, B, C and D; the sell is likely as the AB=CD pattern indicate that the price curve decrease.

A stop loss should be a couple of pips above point D; remember that a stop loss is set individually and that the numbers are not exact numbers but numbers in an area; a harmonic area.

Calculating the AB=CD pattern in a spreadsheet
An example of how to calculate an AB=CD pattern in a spreadsheet is illustrated in the images below.

Spreadsheet; bullish AB=CD pattern

Spreadsheet; bearish AB=CD pattern

Conclusion
In this post is illustrated how an AB=CD pattern looks like and how a spreadsheet could look like calculating an AB=CD pattern.

The purpose in this post is illustrative and only the basic in the AB=CD pattern is illustrated as the Fibonacci numbers could be more extreme than the numbers used in this post. The numbers used in this post is the ideal numbers in an AB=CD pattern.

In some AB=CD patterns are the AB=CD pattern also in the main AB=CD pattern.