The basic building block of harmonics: a four-point reversal pattern. A first leg, a correction, and an extension are tied together by Fibonacci ratios, marking the potential reversal zone at D. The crowd's estimate is mirrored in both price and time symmetry.
The ABCD pattern is the simplest harmonic reversal pattern, drawn with four points (A, B, C, D).
Price first moves hard from A to B (the first leg, the AB leg). Then it retraces part of that move from B to C (the correction, the BC leg). Finally it extends once more in the same direction as AB, from C to D (the CD leg).
These three legs are tied together by Fibonacci ratios, and the final point D becomes a potential reversal zone. In a bearish ABCD (an advance into D) you look to sell at D, and in a bullish ABCD (a decline into D) you look to buy.
The key is that this is not a pattern about matching a shape but a measuring method that narrows the reversal point through ratios and symmetry. Complex harmonics like the Gartley and the Butterfly are all built on top of this ABCD. Reading the ABCD accurately is the doorway into harmonics as a whole.
How to Read
OANDA:XAUUSD
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