Price Patterns: "Alternate AB=CD"
The Alternate AB=CD Pattern™, Since the AB=CD pattern™ is the basic framework of all harmonic patterns™, it is an essential consideration in defining any Potential Reversal Zone (PRZ).
Although the equivalent AB=CD pattern™ has been utilized by technicians for quite some time, the idea of an alternate calculation to define other Harmonic patterns™ was originally outlined in “The Harmonic Trader”.
Alternate patterns provide an effective means of complimenting other significant Fibonacci calculations, especially when the equivalent AB=CD is not relevant for a particular set-up. The alternate AB=CD pattern™ differentiates patterns, as well. For example, the AB=CD in a Gartley™ is usually equivalent, while the Bat pattern™utilizes an alternate 1.27AB=CD pattern.
These two similar patterns require completely different AB=CD conditions to validate their respective structures.
This degree of differentiation increases the validity of pattern identification techniques and reduces the overall risk by defining the most precise Potential Reversal Zones (PRZ).