Alternate AB=CD Pattern™
“Alternate Projections of the AB = CD Pattern Although the AB=CD pattern is a great set-up when each leg equals the other exactly, there are many situations where alternative Fibonacci calculations are required to clearly define the Potential Reversal Zone. Although there might be a clear pattern developing, it is not uncommon for the AB=CD to be unequal. These alternate projections should merely complement an area that possesses other harmonic numbers. As I will discuss in the section on patterns, these alternate projections are effective in defining potential reversals. 1.27 or 1.618 AB = CD When the equivalent AB=CD completion point is blown out, the 1.27 or 1.618 can be used to determine other potential reversal points. These alternate calculations are not difficult to calculate. Depending upon which number is used, multiply the AB leg by either 1.27 or 1.618 and project that distance from point C. This calculation should converge with a Fibonacci projection – usually a 1.618 or 2.24 – of the BC leg.”
The Harmonic Trader Page 139
(Copyright Scott M. Carney 1998 HarmonicTrader Press)
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 complementing 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).
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