Discussing the article: "Automating Trading Strategies in MQL5 (Part 30): Creating a Price Action AB-CD Harmonic Pattern with Visual Feedback"
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Check out the new article: Automating Trading Strategies in MQL5 (Part 30): Creating a Price Action AB-CD Harmonic Pattern with Visual Feedback.
In this article, we develop an AB=CD Pattern EA in MQL5 that identifies bullish and bearish AB=CD harmonic patterns using pivot points and Fibonacci ratios, executing trades with precise entry, stop loss, and take-profit levels. We enhance trader insight with visual feedback through chart objects.
The AB=CD pattern is a harmonic trading formation that identifies potential reversal zones through four key swing points—A, B, C, and D—existing in bullish and bearish forms, leveraging Fibonacci ratios to pinpoint high-probability trade setups. In a bullish AB=CD, the structure forms a high-low-high-low sequence where A is a swing high, B a swing low, C a swing high, and D a swing low (below B), with the AB and CD legs being equal in length or related by Fibonacci retracement and extension ratios; a bearish AB=CD follows a low-high-low-high sequence, with D above B. Here is a visualization of the patterns:
Bearish Harmonic AB=CD pattern:
Bullish Harmonic AB=CD pattern:
Our approach involves detecting these swing pivots within a specified bar range, validating the pattern by ensuring the BC leg retraces 0.382 to 0.886 of AB and the CD leg extends 1.13 to 2.618 of BC, visualizing the pattern with chart objects like triangles and trendlines for clarity, and executing trades at the D point with calculated stop loss and multiple take-profit levels based on Fibonacci retracements to capitalize on anticipated reversals. Let’s proceed to the implementation!
Author: Allan Munene Mutiiria