AB=CD

The Pattern

AB=CD is the simplest harmonic structure and the building block the others are made from. It is four points: a leg from A to B, a partial retracement from B to C, then a final leg from C to D that is equal in length to the A-to-B leg. The B-to-C retracement runs 0.618 to 0.786 of AB, and CD matches AB.

Because it only needs two equal legs around a retracement, it is the most common pattern in the family.

The Idea Behind It

The idea is symmetry. If the market moved a certain distance from A to B, paused, and then resumed, the second leg often travels a similar distance before stalling. D is the point of equality, where the move has covered the same ground twice and is read as complete.

When It Tends To Work

It works as a measured-move target. When the C-to-D leg reaches the length of AB at a level that matters, the equality gives a natural place for the move to pause or reverse. Its frequency means it produces a steady stream of setups.

When It Tends To Fail

The simplicity that makes it common also makes it noisy. Two equal legs happen all the time without marking anything significant, so without context the AB=CD fires on a lot of meaningless structure.

How This Strategy Trades It

On a completed AB=CD, the strategy enters at the close of the confirming bar, targets a 0.618 retracement of the structure, and stops just beyond D. The shared entry, target, and stop logic is on the Harmonic Patterns family page.

What The Backtest Says

AB=CD is the most active pattern in the family, firing several hundred to a thousand times per instrument. Its results lean positive on NQ across both timeframes and on the 15-minute equity-index and gold samples below. As a high-frequency structure with a small positive tilt in places, it is one of the more usable patterns here.