The ABCD harmonic is one of the simplest, yet most fundamental and profitable patterns to trade (says Scott Carney).
Carney’s criteria are freely available on various internet sources and on YouTube. Importantly, finding the pattern and ensuring it is accurate is only the first phase of any potential trade setup. There are several other steps to follow after the pattern is identified for deciding if to enter and pre-programming exit points. This is not a tutorial on ABCD patterns – as this site has already declared that it doesn’t do tutorials. Readers should keep in mind our FAQ.
The diagrams below identify the criteria and show an algorithm for working through them. Keep in mind this is only the pattern identification stage. The accuracy of the following is not guaranteed. Readers are advised to double check all criteria before making decisions and keep in mind our SYP.
Individual traders have made variations on Carney’s criteria to suit their knowledge and experience. It’s important though for new traders to learn these first and experiment with them in risk free environments. New traders must be comfortable with Fibonacci ratios and drawings to grasp what’s going on.