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  • Tools

    • Fibonacci tool Retracement: Primary used at 61.8%
    • Fibonacci tool Extensions: Primary used at 127.2% & 161.8%.
  • Time Frame

    • The Fibonacci ABCD Pattern was designed as a day/ H4 swing trading strategy
  • Strategy

    • The strategy for the ABCD pattern is very similar to the other well known
      Advanced Pattern. We want to identify 3 market moves and 2 major
      Fibonacci region. A combination of these moves makes 4 points
      (A, B, C, D) that complete the pattern.
  • Rules of Trading- Criteria no 1 

    • The ABCD Pattern begins with a market movement / impulse leg that establish
      our A and B points.
      Once the A and B points have been identified, we then look for our first criteria
  • Criterion 1: Market completes at least 61.8% (C) point
    retracement of the AB.
    Note: BC The move remains valid as long as it is at least 61.8%.
    A candle is not closed beyond 78.6% retracement of AB.

Note: C can extend beyond the endpoint (candlewick)
61.8% retracement of AB until the candle is closed
AB’s 78.6% retracement. An example of this is presented below.

 

Rules of Trading: Criteria 2

  • If criterion 1 is met, see criteria 2.
    Criteria 2: The market makes point (D) completion point by fulfilling at least one
    A harmonic speed of AB leg coming at 127.2% extension
    AB for ratios can be a measurement to confirm confluence.
    Should be taken and the expansion should come to around 138.2% a
    161.8%.
    Note: The D point is valid as long as it is  127.2%
    AB’s extension is not a candle beyond 161.8% AB extension.

Note: In a valid CD, there must be at least 127.2%. Failed to
Getting 127.2% invalidates the pattern. An example of this
Presented below.

Trade Management

Simple And Easy Tools

Entry- Place Trade at D Point of  Fibonacci extension 127.2% of AB

Stop Loss- 10 pips +/-161.8% Fibonacci extension of AB

If buy entry, stop loss goes 10 pips below the 161.8% Fibonacci extension of AB.

If sell entry, stop loss goes 10 pips above the 161.8% Fibonacci extension of AB.

Target 1: 38.2% Fibonacci retracement of AD move. When reached, move stops loss to
breakeven.
Target 2: 61.8% Fibonacci retracement of AD move. When reached, place trail stop to
+/- 10 pips.
Here is an example of an ABCD Fibonacci Pattern with entry, stops loss, & targets:

Aggressively buys/sells

Entry: If the value closes between 61.8% and 78.6% Fibonacci of point C, take a
A long or short position in the market towards order flow.
Note: Entry against order flow is less likely and
It exposes you to greater risk. Value cannot be closer to 78.6% or more
This setup below 61.8% invalidates.

 

Trade Management

Stop Loss: 10 pips +/- of A Point.
If buy entry, stop loss goes 10 pips below A point.
If sell entry, stop loss goes 10 pips above A point.
First target: 38.2% Fibonacci retracement of BC points move. When reached, move stops loss to
breakeven.
Second target: This is the pattern completion point D or the Fibonacci extension 127.2%. When
reached, close trade immediately and look for reversal or trail stop loss to structure +/-
10 pips.
Here is an example of the C  point buy/sell with entry, stop loss, & target: