Abcd pattern2/23/2023 ![]() ![]() Then wait to see if the price makes a support level higher than point A, and if it does, call this new support level C.Īt this point, wait and watch as the price consolidates. To identify a potential short entry point with the bearish formation, watch your scanner as the stock rises from A and hits a new high of day (B). While there are many various ways to implement stock entry and exit strategies, there are a number of things that traders ought to consider when using the ABCD pattern. As you can see from the diagram above, an ascending ABCD pattern is bearish, while a descending ABCD pattern is considered bullish.įor both versions, the lines AB and CD are called the legs while BC is known as the retracement or correction. The convergence of several ABCD patterns (across multiple timeframes or within the same timeframe) provides a powerful trade signalĮach ABCD trading pattern has both a bullish and bearish version.It offers an excellent risk-reward and a high winning percentage. ![]() It can be used to weigh the risks versus rewards before making a trade. ![]()
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