Bullish AB=CD
BullishReversalIntermediateTwo equal drops in a row. The second often ends where the measuring says.
Verdict: UseBitcoin 4H: 13 trades, won 69%, avg trade −0.1% vs random day +0.3% (too few trades to judge). Backtest
Price drops from A to B. Measure that drop: it's the ruler for the whole pattern.
step 1/7
Trade rules
| Direction | Long (buy) |
|---|---|
| Entry | C retraces 38.2-88.6% of AB; CD equals AB in price (±5%) and takes 0.5-2x AB's time. Once price bounces 2% off D (2.5% on stocks), a candle CLOSES above the high of the D candle within 5 candles. |
| Cancelled if | Price trades below D before that close. No pattern if price climbs back above C before D, or the second drop runs more than 5% longer than AB. |
| Target | 61.8% of A to D, projected from the breakout |
3 common mistakes
- Buying the moment CD equals AB, before price shows any turn.
- Eyeballing the legs: a CD 20% longer than AB is not an AB=CD.
- Ignoring time: a fast AB and a slow, grinding CD aren't the same move.
Backtest
same rules every time · equal size · no fees · method| Market | Trades | Won | Avg trade | Random day |
|---|---|---|---|---|
| Bitcoin · 4H · 2017-2026 · too few trades to judge | 13 | 69% | −0.05% | +0.31% |
| US large caps (50) · 1D · 2016-2026 | 138 | 68% | +0.94% | +0.55% |
Verdict: UseMade money and beat a random entry on US large caps. Bitcoin had too few signals to judge.
pattern +130%random +76%