The pattern was further defined using specific Fibonacci levels by Scott Carney which he outlined in his book 'The Trader', published in 1998.
The pattern incorporates the of XA, as the defining element in the Potential Reversal Zone (PRZ).
The B point must be at the of XA. The utilizes a minimum 127.2% projection of BC .
In addition, the pattern should possess a distinct pattern that converges in the same area as the of XA and the BC projection.
This is the first of two potential on the Daily time frame signalling the continuation of the current retracement on EUR/USD .
ENTRY = 1.18163
STOP = 1.18719
TP1 = 1.17383
I do not trade the ABCD pattern but use it simply as confluence for the overall Harmonic structure.
The type of ABCD pattern varies for each Harmonic structure, it can be identified by measuring the AB leg (which must retrace at least 38.2% to form point C) then extending this measurement from point C to identify point D.