The Harmonic Pattern (XABCD Pattern) drawing tool allows analysts to draw various five-point chart patterns highlighted by Harold McKinley Gartley. Users can manually draw and maneuver (XABCD) five individual points. The XABCD points create four individual legs that combine to form the chart pattern. The four legs are called XA, AB, BC and CD. Each 5-point (XABCD) represents a significant high or low on the price chart.
Therefore, the four previously mentioned legs (BC XA, AB, CD) represent different trends or price movements moving in opposite directions. Since there are four main XABCD chart patterns the most common. These patterns can be bullish or bearish. The four main modes include: Gartley, Butterfly, Crab and Bat. Gartley Pattern The Gartley pattern occurs when price action has continued an uptrend (or downtrend), but has begun to show signs of a pullback. The pattern is bullish or bearish by the ABCD pattern, but before point (X), beyond point d the Gartley pattern "perfectly" has the following characteristics: The AB move should be the 61.8% retracement of XA. The BC AB movement should be the 38.2% or 88.6% retracement level. If BC is 38.2% retracement, CD must be 127.2% of BC. Therefore, if BC is 88.6%, BC CD should increase by 161.8%. CD movement should be the 78.6% retracement of XA.
Butterfly Pattern Butterfly Pattern by Bryce Gilmore, the perfect pattern is defined as the 78.6% Fibonacci retracement level AB of XA. Butterfly contains special characteristics: the length of AB should be the 78.6% retracement of XA. The length of BC can be from the AB 38.2% or 88.6% retracement level. If BC AB moves to the 38.2% retracement, CD is 161.8% of BC. If BC from AB is 88.6%, then CD BC should be expanded to 261.8%. CD must have an XA of 127% or 161.8%.
