ABCD TRADING PATTERN HOW TO

There are two main exit points to look for… And if he gets in far enough under the breakout level, he can get out for safe profits even if it craps. There’s less risk at this point because he’s buying at a higher low with some support under it. That way he’s watched the pattern set up and progress. So he looks to buy in around point C on the bullish pattern. In his words, “If you follow my journey at all, you know that around 99% of my trades are long.” Here are Matt’s insights… Entry Point © Millionaire Media, LLC

ABCD TRADING PATTERN HOW TO

But for that information to be of any use to you, you still have to know how to play it. What to Consider When Trading the ABCD Pattern

Finally, it rockets back down below point A for a breakdown - that’s point D.

Then, there’s a small dip and some consolidation to form point C.

Next, it pulls back up and puts in a local high to form point B.

It begins with a sharp decline, setting a low of the day at point A.

The bearish version of this pattern is like the bullish pattern but flipped upside down. Just like how Matt will sometimes play the ABCD pattern, but I look for panic dip buys. We all have different strengths and weaknesses, so we might not trade the same stocks or setups. I encourage my students to get as much exposure to the stock market as they can. That’s just one example.īut for some traders, like my millionaire student and Trading Challenge mentor Tim Lento, shorting can be a profitable strategy.* (NYSE: GME) short squeeze? Tons of short sellers got their accounts blown up. Short positions can end up losing more than they put in. It’s just too risky, especially when it comes to volatile penny stocks. Then he regained his strength around midday and was able to sprint to new highs.” Bearish ABCD Pattern Matt says to think of the stock like a runner … “He sprinted as far as he could and crashed.

Finally, D is a breakout past the previous high of day (HOD) at point A.

C is a small spike back toward point A, but it ends up consolidating instead of rushing back to the breakout level.

So it’s not the low of the day, but you can tell it’s a dip.

B is a big pullback after the morning spike that sets a local low.

A is a strong morning breakout that sets the day’s high.

The ABCD refers to four main points in price action - A, B, C, and D. This is the strategy for long-biased traders like Matt. But let’s get a quick overview of the bearish and bullish versions of this pattern… Bullish ABCD Pattern And Matt usually uses the ABCD pattern to take long positions. Quick note: Traders can play this pattern long or short. (NASDAQ: OCGN) for $3,751 in profits.* Remember, singles add up! It also helps him spot entry levels.īack in July 2020, Matt used it to trade Ocugen, Inc. Matt says the pattern helps him determine which stocks are capable of spiking. Traders use this pattern to identify entry and exit points for volatile periods. Using patterns like the ABCD can help you do that… What’s the ABCD Pattern? © Millionaire Media, LLC The pumps behind the moves aren’t sustainable. But in the end, they always come crashing back down.

That gives you the opportunity to take the meat of the move. The key is knowing how to ride the volatility wave - you have to get in and out fast. Penny stock land is a sketchy place…īut that means any press release could potentially send them into a volatile spike. Sometimes they’re just shell companies that exist to sell stocks. Why would I play stocks that cost so little? Because they’re volatile.Ī lot of these companies don’t do much. These stocks trade below $5 a share and tend to have a small market capitalization. 3 What to Consider When Trading the ABCD Patternįirst, you have to understand that I trade and teach my students to trade penny stocks.

Abcd trading pattern