Using AB=CD Harmonic Pattern in Transactions in the OTC Market. Enhanced Investment Efficiency in EURUSD Currency Pair Market
DOI:
https://doi.org/10.33119/SIP.2019.173.3Keywords:
AB=CD, Fibonacci retracements, EURUSD, pricing projections, riskAbstract
The AB=CD harmonic pattern discussed in the paper demonstrates that investments made based on it exhibit a very high rate of return provided one can accept the initial risk. In accordance with this idea, a transaction is initiated in the PRZ (potential reversal zone) calculated using the Fibonacci retracements. We need to bear in mind that the PRZ is delineated many hours (days, weeks, months – depending on the selected time interval) ahead of the moment when the actual transaction is concluded. Having done such a projection, an order to “Buy” (or short selling) should be submitted with a price limit and a stop-loss order.
The paper provides calculations that go beyond the PRZ within which the short-term trend usually gets reversed in the course of adjustment. Although this is not a “golden mean” for profit making (as such a mean does not exist), by using the AB=CD projection we may achieve investment profitability which is really impressive and has been empirically proven and confirmed with hypothesis validation test. The AB=CD harmonic pattern is presented in the most liquid EURUSD market.
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