The ABCD and the Three-Drive PatternsWith the Fibonacci retracement..

The ABCD and the Three-Drive Patterns

With the Fibonacci retracement tool, making pips can literally be as easy as A-B-C-D. These patterns are the bread and butter of harmonic trading—simple yet powerful tools for spotting reversals and capitalizing on price moves.

Let’s start with the ABCD Pattern:

• This one’s all about symmetry. Price moves in two equal legs: AB and CD, connected by a retracement (BC).
• The magic happens at the D point, where Fibonacci levels (like 0.618 or 0.786) line up, signaling a potential reversal.
• Traders love this pattern because it’s easy to spot and works well in both trending and ranging markets.

Now, the Three-Drive Pattern takes things up a notch:

• Think of it as the ABCD’s more sophisticated cousin. It consists of three price swings (or “drives”), each completing at Fibonacci extension levels like 1.27 or 1.618.
• The final drive often marks a strong reversal zone, giving you a clear entry or exit point.
• It’s less common than ABCD but incredibly reliable when it shows up—like a rare gem in the market.

Both patterns are perfect for traders who crave structure and precision. They’re simple enough for beginners to grasp but powerful enough to give seasoned pros an edge.

Pro tip: Combine these patterns with additional tools like RSI or trendlines for even better results. And, as always, patience pays off—wait for the pattern to fully complete before pulling the trigger.