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Stock Scalpers A-B-C-D Pattern The Pattern The ABCD ...
Stock Scalpers
A-B-C-D Pattern
The Pattern
The ABCD pattern is extremely easy to follow and is great because so many traders still follow it. In this method a trader is simply doing what all the other traders are doing, because trading with the trend increases probability.
The beginning of the pattern starts with a sharp and strong upward price movement. From point A to point B traders are actively and aggressively buying the stock. New daily high after new high. A trader shouldnt enter the trade between A and B, they would be chasing the trade with no accurate method of placing a stop-loss.
At point B the price is already VERY overextended. After the high of point B, traders who bought the stock early begin to sell and the price drops slowly down. It is still not the right time to enter the trade, though. As the selloff of B starts there is no clear indication of a bottom. Only once support is found, at point C, should the trader start planning the trade.
The space between point B and point C is the best range to buy once an uptrend begins. The new support at C can be used to set a stop-loss.
Once the uptrend starts the trader can sell their position at any point D. Point D is generally derived from the first red candle in the 5-minute chart after an uptrend commences. It is normally a sign buyers are running out of gas.
Summery
This chart is from the first time I traded WORX.
1) I missed the initial breakout, and so I was watching the run to point B happen.
2) After the surge from point A to B I waited to see if new support would form ABOVE point A, as in the support formed at point C.
3) Once I saw the support forming I planned my entry and exit strategy. Enter as close to point C as possible and sell at the initial point D or higher.
3) Once I saw the support forming I planned my entry and exit strategy. Enter as close to point C as possible and sell at the initial point D or higher.
4) Using C as support, I set my stop-loss just BELOW the price at point C. If following this method it is important to buy as close to point C as possible to get the most out of the stop-loss.
5) As the price moved higher (from initial entrance at point C) I took partials at the first point D. The second point D I secured the position, using the red candle in the 5-minute chart as my signal.
6) It is imperative to be aware of buyer and seller sentiment following this trading pattern. A trader MUST exit the trade as sellers begin to win the price action and drive the price down. We’ve all seen a supernova fall just as fast as it rose!
7) The stop-loss moves up with the price once in profit.
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70095482 : Nicely written, thank you for that. This has basically been my technique for the last couple weeks. Once I learned how to read candlestick charts and recognize patterns it is just a matter of executing the proper timing. Find the entry point and have an exit strategy.
MTPockets : As somebody learning that was very helpful because of its simplicity , understanding basics and then as time goes on fine tuning your skills. This is how I try and approach anything I try to learn. Thanks
The Stock Scalpers OP : I'm glad you guys found it helpful! I'll throw some more up after close. If you have any specific topics or questions just let me know!
MTPockets : So much more makes sense now , looking at the candlestick chart I can actually understand what’s happening. I took 2
Stocks watched 15min and , let’s just say the days of buyin high & selling low are over for me. Lets see if I can make some
Profits now. Stock Scalpers
The Stock Scalpers OP : Glad it helped! Don't get discouraged and don't make it more complicated than it has to be. At the end of the day, the only things that matter are price and volume. Everything else is just decoration and noise.
MTPockets : Is the slower the sell off from B to C the better the rise from C to D will be?
The Stock Scalpers OP : The speed isn't necessarily the key indicator, but the level of indecision.
Think of it as a signal. Now when you see the ABCD pattern you know how to set up a trade to match.
Very hesitant to give real "rules", because every situation is different.
My goal is just to increase probability.
wolfunstien : Fuck sabby and its hal mints shit head that runs that pos investment firm
Thomas Foss : nice ty
Blaazin1 : this is some good information, so does the XABCD pattern has the same principals?
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