Core terms
ABCD pattern
Trader usage for a price sequence of a low (A), a rise to a high (B), a pullback to a higher low (C) and a second leg to a projected point D, often D = C + (B − A). The labels are easiest to apply after the sequence has finished.
The projection D = C + (B − A) is the measured-move claim: the second leg matches the first. With A at $2.40, B at $2.90 and C at $2.62, D projects to $3.12 (Illustrative). Many versions use Fibonacci ratios instead, such as C near 61.8% of AB or CD at 1.272 or 1.618 times AB; these ratios are often traced to H. M. Gartley's 1935 book and later harmonic-pattern writers.
Labelling is subjective. Reviewers can place A at a local low or at the low of day, B at the highest high or the highest close, and C under different retracement rules, and each choice moves D. Sequences that reached D tend to be remembered as ABCDs, while those that broke below C are often not labelled at all, which inflates any count built from finished charts.
A countable version writes the labelling rules down, labels with later bars hidden and counts every confirmed C, including those that failed.
What traders should verify
Label at the decision time with later bars hidden, and label the same charts twice (or with a second person) to measure agreement before measuring outcomes.
Do not conflate
Trader usage; there is no official definition. D is arithmetic on past points, not a destination; with several ratios and no stated tolerance, one ratio usually lands near wherever price stopped.
Primary source
Trader usage: there is no official definition, and platforms and tools may calculate it differently.