The
AB=CD Pattern
The AB=CD pattern is a
price structure where each price leg is equivalent. The
Fibonacci numbers in the pattern must occur at specific
points. In an ideal AB=CD, the C point must retrace to either
a 0.618 or 0.786. This retracement sets up the BC projection
that should converge at the completion of the AB=CD and be
either a 1.27 or 1.618. It is important to note that a .618
retracement at the C point will result in a 1.618 BC
projection. A .786 retracement at the C point will result in a
1.27 projection. The most important consideration to remember
is that the BC projection should converge closely with the
completion of the AB=CD.
