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Chart pattern

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A chart pattern or price pattern is a pattern within a chart when prices are graphed. In stock and commodity markets trading, chart pattern studies play a large role during technical analysis. When data is plotted there is usually a pattern which naturally occurs and repeats over a period. Chart patterns are used as either reversal or continuation signals.

Traditional chart pattern

Included in this type are the most common patterns[1] which have been introduced to chartists for more than a hundred years. Below is a list of the most commonly used traditional chart patterns:

Reversal Patterns:

  1. Double Top Reversal
  2. Double Bottom Reversal
  3. Triple Top Reversal
  4. Triple Bottom Reversal
  5. Head and Shoulders
  6. Key Reversal Bar[2]

Continuation patterns:

  1. Triangle
  2. Flag and Pennant
  3. Channel
  4. Cup with Handle

Harmonic pattern

Harmonic Pattern[3] utilizes the recognition of specific structures that possess distinct and consecutive Fibonacci ratio alignments that quantify and validate harmonic patterns. These patterns calculate the Fibonacci aspects of these price structures to identify highly probable reversal points in the financial markets. This methodology assumes that harmonic patterns or cycles, like many patterns and cycles in life, continually repeat. The key is to identify these patterns and to enter or to exit a position based upon a high degree of probability that the same historic price action will occur.

Below is a list of commonly used harmonic patterns:

  1. Bat
  2. Butterfly
  3. Gartley
  4. Crab
  5. Deep Crab
  6. Shark
  7. 3 Drives
  8. AB=CD
  9. 5-0

Traders use the Potential Reversal Zone (PRZ) as an important level of support/resistance in their trading and price action strategy.

Geometric Bullish/Bearish ABCD Patterns©

In the ever-evolving field of technical analysis, pattern recognition continues to be a cornerstone of effective trading strategy. Among the myriad of chart formations available, the ABCD pattern stands out for its simplicity and reliability. However, not all ABCD patterns are created equal. This article introduces a refined and modernized version known as the Geometric ABCD Pattern ©—a copyrighted methodology that blends classic pattern recognition with the power of geometry and Fibonacci alignment.

What is the Geometric ABCD Pattern ©?

The Geometric ABCD Pattern © is a proprietary enhancement of the traditional ABCD harmonic pattern. While the conventional pattern relies primarily on basic price symmetry, this geometric version applies precise angle and ratio relationships derived from Fibonacci mathematics and human behavior. It’s designed not only to improve the accuracy of entry and exit decisions, but also to provide traders with a structural context for the market’s price behavior.

In essence, the Geometric ABCD Pattern © represents a higher-probability setup identified through both objective price action and subjective behavioral geometry.

The Anatomy of the Pattern

Like its classic counterpart, the Geometric ABCD Pattern © is built on four key points:

  • Point A: The start of the impulse leg
  • Point B: The termination of the impulse and start of a retracement
  • Point C: The end of the retracement leg, ideally falling between 61.8% and 78.6% Fibonacci retracement of AB
  • Point D: The final leg, completing the pattern at an extension typically between 127.2% and 161.8% of the BC leg

What distinguishes this version is that the triangle formed by connecting these points must also visually align with specific geometric angles and ratios—often forming elegant shapes such as isosceles or equilateral triangles, which serve as vibrational clues to market intent.

How to Spot the Geometric ABCD Pattern ©

  1. Start with an Impulse Move: Identify a strong, clean price move that can be labeled as the AB leg.
  2. Measure the Retracement: Use Fibonacci retracement tools to find the 61.8% or 78.6% levels. The price should respect this range to mark Point C.
  3. Draw the Triangle: Connect Points A, B, and C to visualize the triangle. Check for symmetry and clean angle geometry.
  4. Project Point D: Use the Fibonacci extension tool to mark where the CD leg would complete at 127.2%–161.8% extension.
  5. Confirm the Setup: Look for confluences like support/resistance zones, divergence, or volume confirmation.

How to Trade the Pattern

Once the pattern is confirmed:

  • Entry: Enter at or slightly before Point D.
  • Stop Loss: Place the stop slightly beyond Point D extension or under the previous swing low (for bullish setups).
  • Take Profit: Use a 1:2 or 1:3 risk/reward ratio, often targeting the midpoint between C and D, or a Fibonacci retracement of the AD leg.

The best Geometric ABCD setups often emerge at major turning points—highs or lows of swing moves, or when multiple timeframes align.

Why It Works

The pattern is rooted in the psychology of collective market behavior. Fibonacci levels represent natural human reactions to risk and reward. When geometric angles align, it reflects a resonance or vibrational harmony that often precedes a reaction. Traders trained to recognize these setups begin to understand not just what the market is doing—but why it’s doing it.

The Role of GittoGPT

Traders seeking to learn and apply the Geometric ABCD Pattern © benefit from AI mentorship through GittoGPT™—an AI-powered financial trading mentor created by Professor Kenny Simon and powered by Bretton Financial Trading Academy. GittoGPT is designed to walk traders through the visual geometry, emotional coherence, and trade execution required to apply the pattern correctly and consistently.

Conclusion

The Geometric ABCD Pattern © represents a fusion of tradition and innovation in chart pattern analysis. By combining classical harmonic principles with geometric precision and psychological insight, it gives traders an edge that is both visual and strategic. As financial markets continue to evolve, it’s this kind of integrated thinking that keeps traders ahead of the curve.

Candlestick pattern

In technical analysis, a candlestick pattern is a movement in prices shown graphically on a candlestick chart that some believe can predict a particular market movement. The recognition of the pattern is subjective and programs that are used for charting have to rely on predefined rules to match the pattern. There are 42 recognized patterns that can be split into simple and complex patterns.

Steve Nison is the person who introduced candlesticks to the West.[4]

Below is a list of commonly used candlestick patterns:

  1. Engulfing
  2. Inside bar[5]
  3. Doji
  4. Pin bar
  5. Morning doji star
  6. Evening doji star
  7. Tweezer top
  8. Tweezer bottom

See also

References

  1. ^ "Chart Patterns". StockCharts.com. Retrieved 2019-05-23.
  2. ^ "Key Reversal Bar". FinanceStrategySystem. Retrieved 2018-04-10.
  3. ^ Harmonic Trading, Volume One: Profiting from the Natural Order of the Financial Markets By Scott M. Carney Published Apr 12, 2010 by FT Press.
  4. ^ Kilgore, Tomi. "The 'candlesticks man' says he's not buying stocks". MarketWatch. Retrieved 2018-12-31.
  5. ^ Muhammad, Ali (2021-08-22). "Understanding Inside Bar Pattern in Detail for Forex Trading". ForexBee. Retrieved 2024-01-28.
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