AB = CD Pattern and ‘Reversal Zone’ are easy ways to profit

AB = CD & Reversal Zone:

Step 1: start with a swing high or low

Step 2: wait for the next swing high/low and then use your fib retracement tool

This will now give you the ‘‘reversal-zone’ for the ‘C’ point on this move.

– You could use a ‘slingshot pattern’ to buy at ‘B’ knowing that ‘C’ is your short term target.

– If the ‘C’ point is at the XXX level, this is a perfect ABCD Pattern setting up.

Step 3: measure the distance (range) from A to B and use that same range to go from C to D

– This creates the first level of my ‘reversal-zone’

– You can now sell from C to D with a wave pattern (short in this example)

Step 4: calculate the extension of XXX from B to C

– The A to B and the XXX Extension create the highs and the lows of the ‘reversal-zone’.

– We now use this ‘reversal-zone’ to give us clues.

Best Timeframe for this:

– Slower timeframes (21range, 5 minute chart, 377 tick)

– Market Replay is a great way to practice this.