The ABC pattern: One of the Traders’ Favorites
Trading ABC pattern is one of the most frequently used trading strategies by Forex/financial traders. The chart is a Bearish ABC Pattern.
Once the price makes a breakout, makes a correction, and produces a reversal candle upon finding point C, traders trigger their entry. It is a favorite pattern among all kinds of financial traders. It brings profit at least on 80% occasions. Demonstrate an example of an ABC pattern trading.
The chart shows that the price after being bullish has a double bounce at a level of resistance. It produces a bearish engulfing candle followed by another bearish candle. However, the price starts having consolidation. Since it is double top support, the sellers may keep their eyes on the chart.
The chart produces another bearish candle followed by a long bearish one. The price usually makes a correction after such a move. The sellers are to wait for the price to make a bullish correction and produce a bearish reversal candle to go short in the pair below the last lowest low.
As expected, the price starts having the correction. It produces two bullish candles. The sellers hope that the chart produces a bearish engulfing candle closing below the last lowest low to trigger a short entry. This is what pushes the price with more momentum. Let us find out what happens next.
The chart produces an inside bar. This is not a strong bearish reversal candle. However, the price finds its resistance. This is called the C point. If the price makes a breakout at the last lowest low, the ABC pattern traders trigger a short entry.
The price makes a breakout closing well below the last lowest low. The sellers may trigger a short entry right after the candle closes by setting stop loss above the last support (C point). Take Profit is to be set with 1R. Let us look at the chart and find out how the trade goes.
The price heads towards the South with good bearish momentum. It produces two consecutive bearish candles and hits the target (1R). Here is an important point to remember. The ABC pattern is a widely used trading strategy. Thus, the price often reverses once it hits the target. Thus, the traders are recommended that they close the whole trade and enjoy the profit.
Trailing Stop Loss and partial profit-taking do not work well in this pattern. Do some back testing and get well acquainted with this pattern. It may bring you a handful of pips. Keep retail Forex trading as simple as possible, it is the best way to trade. Risk management always. Have Plan & Trade Plan.
Once the price makes a breakout, makes a correction, and produces a reversal candle upon finding point C, traders trigger their entry. It is a favorite pattern among all kinds of financial traders. It brings profit at least on 80% occasions. Demonstrate an example of an ABC pattern trading.
The chart shows that the price after being bullish has a double bounce at a level of resistance. It produces a bearish engulfing candle followed by another bearish candle. However, the price starts having consolidation. Since it is double top support, the sellers may keep their eyes on the chart.
The chart produces another bearish candle followed by a long bearish one. The price usually makes a correction after such a move. The sellers are to wait for the price to make a bullish correction and produce a bearish reversal candle to go short in the pair below the last lowest low.
As expected, the price starts having the correction. It produces two bullish candles. The sellers hope that the chart produces a bearish engulfing candle closing below the last lowest low to trigger a short entry. This is what pushes the price with more momentum. Let us find out what happens next.
The chart produces an inside bar. This is not a strong bearish reversal candle. However, the price finds its resistance. This is called the C point. If the price makes a breakout at the last lowest low, the ABC pattern traders trigger a short entry.
The price makes a breakout closing well below the last lowest low. The sellers may trigger a short entry right after the candle closes by setting stop loss above the last support (C point). Take Profit is to be set with 1R. Let us look at the chart and find out how the trade goes.
The price heads towards the South with good bearish momentum. It produces two consecutive bearish candles and hits the target (1R). Here is an important point to remember. The ABC pattern is a widely used trading strategy. Thus, the price often reverses once it hits the target. Thus, the traders are recommended that they close the whole trade and enjoy the profit.
Trailing Stop Loss and partial profit-taking do not work well in this pattern. Do some back testing and get well acquainted with this pattern. It may bring you a handful of pips. Keep retail Forex trading as simple as possible, it is the best way to trade. Risk management always. Have Plan & Trade Plan.