BTS ABC

I was referring in the group about a pattern that is not exactly like the ABC pattern I normally use. This pattern is a classic AB=CD pattern commonly known as a Harmonic pattern. With this type of pattern you have 2 different extension areas to look for. For example if your retracement is 61.8 then the extension is typically to the 1.618. If your retracement is a little deeper to the 78.6 then your extension will take you to the 1.27. There are a few different Harmonic patterns out there but I mostly follow this particular one along with my basic ABC Up and Down patterns. Over time following these simple patterns you will know when the patterns are complete. Most think the "Exact" number has to hit to be complete but thats not the case all of the time. I use TL's and Fib's simply as guides not the "Line in the sand" when trading. One last observation as with either the AB=CD or ABC pattern its best to observe how price will act when it comes back to the B point. This can give a clue as to where price may want to go.

PS Side note I will work on getting better pictures of the charts even if I have to post back on photobucket and comment here. There is a link toward the bottom of the Home page.