Harmonic AB=CD Pattern Guide for TradingView

The Harmonic AB=CD pattern is a powerful technical analysis tool used to predict price reversals in financial markets. Based on Fibonacci ratios, it helps traders identify high-probability entry and exit points. This concise guide is designed for TradingView users to apply the pattern effectively.
Pattern Overview
- Structure: Four points (A, B, C, D). AB and CD legs are equal in length or follow Fibonacci ratios.
- Fibonacci Ratios:
- BC retraces 61.8%-78.6% of AB.
- CD equals AB (1:1) or extends 1.272/1.618 of BC.
- Types:
- Bullish: Signals a buy at point D (price rises).
- Bearish: Signals a sell at point D (price falls).
How to Identify and Trade
1. Spot AB: Find a clear price swing from A to B.
2. Measure BC: Use TradingView’s Fibonacci Retracement tool to confirm BC retraces 61.8%-78.6% of AB.
3. Project CD: Use Fibonacci Extension to project CD, matching AB’s length or extending 1.272/1.618 of BC.
4. Confirm D: Check for confluence with support/resistance, candlestick patterns (e.g., doji), or indicators (e.g., RSI divergence).
5. Trade Execution:
- Bullish: Buy at D, set stop-loss below D, target point C or A.
- Bearish: Sell at D, set stop-loss above D, target point C or A.
Tips for TradingView
- Use TradingView’s Fib tools for precision.
- Confirm signals with additional indicators (e.g., MACD, volume).
- Avoid choppy markets; focus on trending or range-bound charts.
The AB=CD pattern is a reliable method for spotting reversals when used with proper confirmation. By mastering Fibonacci tools on TradingView and combining the pattern with other signals, traders can enhance their decision-making and improve trade outcomes. Practice on historical charts to build confidence.