Bullish ABCD Harmonic Patterns

The Bullish ABCD Harmonic Patterns indicator automatically detects and draws bullish ABCD harmonic patterns along with price projections to assist in identifying potential market reversals and trend continuations.

Usage

The tool identifies classic ABCD structures consisting of four points (A, B, C, D) and three legs (AB, BC, CD).

• AB Leg: The initial price move.
• BC Leg: A retracement of the AB leg, typically between 61.8% and 78.6%.
• CD Leg: The final leg which should extend between 127.2% and 161.8% of the BC leg.

Traders can use these patterns to anticipate bullish reversals at point D. The indicator also provides price projections based on the ranges of the pattern, visualized as dashed horizontal lines for potential support and resistance targets.

Details

The script utilizes a specific swing high/low logic to identify peaks and troughs:

• Swing High: A green candle followed by a red candle forming a peak.
• Swing Low: A red candle followed by a green candle forming a trough.

The "Harmonic" nature of the pattern is validated using Fibonacci ratios. Because strict Fibonacci levels are rare in live markets, the script incorporates Measurement Tolerances. This allows for a user-defined percentage of deviation from the ideal Fibonacci ratios (61.8%, 78.6%, 127.2%, 161.8%), making the detection more flexible and frequent.

Settings

Tolerances

• BC Lower Tolerance (%): Allows for a lower deviation in the retracement ratio of the BC leg.
• BC Upper Tolerance (%): Allows for a higher deviation in the retracement ratio of the BC leg.
• CD Lower Tolerance (%): Allows for a lower deviation in the extension ratio of the CD leg.
• CD Upper Tolerance (%): Allows for a higher deviation in the extension ratio of the CD leg.

Visuals

• Line/Label Coloring: Customization options for the colors of the patterns and text labels.
• Show Projections: Toggles the visibility of horizontal projection lines derived from the pattern ranges.
• Extend Current Projection Lines: Options to extend the most recent projection lines to the right, left, or both.

FAQ

How do I access Bullish ABCD Harmonic Patterns?

You can get access on the LuxAlgo Library for charting platforms like TradingView, MetaTrader (MT4/MT5), and NinjaTrader for free.

Can I change the sensitivity of the pattern detection?

Yes, by adjusting the Lower and Upper Tolerance settings for the BC and CD legs, you can make the pattern detection more strict or more lenient.

Does this script work on all timeframes?

The script works on any timeframe, but it is recommended for 24-hour markets (like Forex or Crypto) to minimize the impact of price gaps on the swing detection logic.