The ABC Pattern

The ABC Pattern from Wave Trader India on Vimeo.

The basic pattern 'ABC' wave is first described in a book by H.M. Gartley's 'Profits in the Stock Market' (1935). This pattern signals a (T)rend and a (R)etracement and resumption of (T)rend, like a lightning bolt pattern. This pattern is called 'ABC Wave' or '1-2-3 pattern' in technical analysis world.



ABC Waves forecasts market turning points and targets for traders. ABC Waves pinpoint important pivots with highs/lows and key trend zones for correction waves.



The key points in ABC wave are detecting or correctly finding 'A', 'B', 'C' pivot points in a chart. These key Pivots are searched for various Pivot Strength levels and used for its correction waves. Once 'A', 'B', 'C' points are determined, a fiblevels algorithm is applied to determine the confluence level of 'D'. This area is called 'Potential Reversal Zones' (PRZ).



The area where Pivot 'C' is usually measured as Fib Retracement percentage (38.2% to 61.8%) of 'AB' leg. The projection from 'C' is measured also part of fib-ratios of 'AB' and 'BC' legs. Some traders use the confluence of these ratio levels as the key areas for profit taking.