TOOL PROGRESSION IN-DEPTH
The tool starts providing proactive rates as soon as points A & B are entered, and validation starts as soon as point C is entered. The buttons below can help with understanding what the tool does at each phase of the pattern, while the rest of this section will be a demonstration for the actual progression of an AB=CD pattern.
A, B, C
A, B, C, D
When only A and B rates are entered, both rates will be validated for errors only as there are no pattern conditions at this point.
If no errors found, the tool will be in "Proactive C" status, providing proactive ideal rates and acceptable ranges for (38.2%, 50.0%, 61.8%, 78.6%, and 88.6%) AB retracements - from B
When (A, B and C) rates are entered, C will be validated according to the pattern conditions for that point.
If C is found valid, the tool will be in "Proactive PRZ" status, providing proactive ideal rates for the PRZ components of all the 8 patterns, and the acceptable range around each of them.
When (A, B, C and D) rates are entered, D will be validated against all the 8 PRZs for the patterns.
Whether the pattern is found valid or not, it can be saved at this phase.
AB=CD tool progression at AB swing
Defining rates for (A & B) points will initiate the tool, the rates will only be checked for errors since there is no actual validation conditions for this swing.
In any of the 8 AB=CD patterns, point C can be a (38.2%, 50.0%, 61.8%, 78.6%, or 88.6%) AB retracement - from B.
For this point, deviation entered in the path setup will be calculated with respect to AB swing.
Point C can either be in proactive or validation status, both explained below using the example AB=DC pattern.
AB=DC tool progression at proactive point C
When (A, and B) points are defined and didn't return errors in values, point C will be in proactive status.
The ideal rate for each of the 5 possible retracements will be generated, and the acceptable range around each of them with respect to the deviation value entered in the path setup.
AB=DC tool progression at validation of point C
When (A, B and C) points are defined, point C will be in validation status.
Validation will take place with respect to the deviation value entered in the path setup.
Precision of point C is calculated with respect to the nearest ideal rate of AB retracement - from B.
If point C is found valid, pattern progression will continue to the next phase "Proactive PRZ" and the reciprocal Fibonacci relations used for calculating the PRZs are provided(below image), otherwise the pattern will be marked as invalid in the watch window.
AB=DC reciprocal Fibonacci relations
POINT D (PRZ)
In a Harmonic AB=CD pattern, reversal is expected to occure within the potential reversal zone(PRZ), that PRZ consists of two Fibonacci relations:
- 100.0% AB projection - from C
- BC projection - from C (reciprocal of the nearest Fibonacci match for C retracement of AB)
For all the 8 PRZs, deviation entered in the path setup will be calculated with respect to AB for the AB projection, and BC for the BC projection. Acceptable deviation will be added on both ends of the PRZ.
The PRZ can either be in proactive or validation status, both explained below using the example AB=CD pattern.
AB=CD tool progression at proactive PRZ
When (A, B, and C) points are defined and point C is marked valid, D PRZ will be in proactive status.
The ideal rates for each of the 8 AB=CD patterns will be generated, and the acceptable range around the PRZ for each of them as per deviation value entered in the path setup.
AB=CD tool progression at validation of PRZ
When all (A, B, C and D) points are defined, all the 8 AB=CD patterns will be in validation status.
Validation will take place according to the acceptable PRZ range of each pattern, with respect to deviation value specified in the path setup.
Whether a pattern is valid or not, it can be saved or traded at this phase.