Spotting and learning chart patterns in an online trading market are one of the most popular hobbies of almost every online day trader. Whether you are a newbie in the online trading world or expert player patterns are your guiding spirits in this domain to make the right move at the right time to maximize your chances of profitability.
Trading patterns are essential aspects to trade online, and traders love these patterns and naturally rely on them to make their decisions whether to invest in a trend or not. If you wish to learn about the patterns in detail, you can always visit reliable online sources such as Global CTB for up to date knowledge on the patterns emerging in the online trading market.
What is an ABCD Pattern in Online Trading
It is a chart pattern that is very easy to identify. An ABCD pattern consists of two different yet equivalent price legs. You can say it is actually a harmonic pattern in the world of online trading that allows traders to predict safely when the stock prices are going to change their direction.
This pattern can even be helpful in predicting either a bearish or bullish reversal, but that will depend on the orientation. You must also note here that it is specifically important that ABCD pattern frequently appears in the stock charts.
Importance of ABCD Pattern
There are numerous reasons why an ABCD pattern is essential for online traders. These include the following:
- As an online trader, you can use the ABCD pattern to identify different trading trends and opportunities in several markets under any conditions and during any timeframe.
- ABCD pattern is the foundation of all other trading patterns.
- You can use it to weigh your risk factor versus how many rewards you can reap before you make a trade.
- It also provides you higher winning percentages and excellent risk rewards.
- By converging several ABCD patterns (within the same or multiple time frames), you can end up receiving powerful trading indicators and signals to make the right move at the right time, earning substantial gains.
Tips for trading the ABCD Pattern
Every ABCD trading pattern has bearish and bullish versions. An ascending pattern is defined as bearish, whereas, a descending one is known as bullish. However, in both versions, there are AB lines and CD lines called legs, while BC represents the correction or retracement.
There are a number of things are trader must consider before using an ABCD trading pattern. These are major aspects that you must be aware of.
- Entry point – this determines your entry point, watch the scanner as the stock prices rise from A to B. now wait and see if the stocks’ prices create a support level that his higher than A if it does, you call this new level of support “C.” Now, wait for the price to consolidate and enter the trade and hope that the stock rise beyond the price point you entered.
- Exit point- in case your prices start to fall below point C, this will be your time to exit the trade to save yourself from massive losses.
- Low Volume Consolidation – Always check the volumes when utilizing the ABCD pattern to confirm a reversal once the pattern has made a prediction.
Online traders are always looking for signs and indicators that can help them make the most of a trading opportunity. You can always learn about the new patterns and trends and gain new tips and tricks about how to identify emerging trends in various markets and trading environments quickly.
There are platforms that can be a useful resource, such as Global CTB ABCD pattern represents a blend of price, time and shape, learn to use it, and you will find yourself in a trader’s heaven in no time