AB=CD

And a not so perfect Gartley..

The last leg should have a D at the end. I did this chart a little while ago. The spot is probably D at this point. Idea is to get in at a possible bottom and ride it back up..

Retests of the spot this ends (D) are common so maybe place a safe stop

Any pattern can fail..

Not a recommendation

Comment:

If you think you spot an AB=CD pattern, you can use the magnet and move the AB leg to C and get a ballpark estimate of where D, or the point of completion zone will be. As a rule, expect volatility at the PCZ. The pattern consists of three legs, with two equal legs labelled AB and CD, together they form a zig-zag shape.

At point B the price switches direction and retraces down sharply to form the B-C leg.

The retracement (from B to C) can be between 38.2% to 78.6% of the A-B leg, however, an ideal pattern has a retracement of 61.8% to 78.6%.

The ideal AB=CD pattern is equal in time and price.

One way of deciding where to take profits is by drawing a new Fibonacci retracement from point A to D of the pattern. Note that you can only do this once the D point has already been reached and the original pattern has completed.

You can place your take profit order at the 38.2%, 50.0% and 61.8% levels and always keep an eye on market conditions and overbought levels a long the way. If these levels are surpassed and bullish momentum is still with the security, price can go higher than these levels.

There is both a bullish and a bearish AB=CD. It would be very difficult to recognize this pattern until the pull back at the BC leg and I do not usually recognize it until it hits C and is on it's way down to D. Even then, I wait to go long, to be sure price halts at the PCZ, or that the CD leg is equal to the AB leg, as there are often retests of D. If the CD leg is longer or shorter than the AB leg, then it is not an AB=CD pattern (being a bit flexible but not too much). I do not go short in a bull market, but if I did, I could short at C down to D.

I guess we are still in a bull market for now and we have not been in a bear market for long since I started trading so shorting has not been something I am comfortable with.

Comment:

Correction PCZ is technically called PRZ Potential Reversal Zone..(o: