03/07/2026
How to trade ABCD Harmonic PATTERN
A β B (Impulsive Move):
Price makes a strong impulsive move in one direction, forming the AB leg.
B β C (Corrective Move):
Price retraces against the trend. Using the Fibonacci Retracement tool, the BC leg should ideally retrace 61.8% of the AB leg.
C β D (Continuation Move):
Price resumes in the direction of the AB leg, forming the CD leg.
Measure the CD Leg:
The CD leg should be approximately equal in length to the AB leg (AB = CD). Traders also use the Fibonacci Extension tool, where CD commonly reaches the 127.2%β161.8% extension of the BC leg.
Potential Reversal Zone (PRZ):
When the AB = CD projection aligns with the 127.2%β161.8% Fibonacci Extension of BC, it creates a high-probability Potential Reversal Zone (PRZ) around point D.
Trade Entry:
Aggressive traders: Enter near point C after receiving bullish or bearish confirmation.
Conservative traders: Wait for price to reach point D and look for reversal confirmation (such as a candlestick pattern or market structure shift) before entering the trade.