StocksToTrade offers the Alpha Indicator tool, a scanner algorithm based on the ABCD trading pattern.

You can find this tool within the indicator drop-down menu. 

How it Works

The algorithm will first identify three points, A, B, and C, to validate a D point or point of expected price reversal. 

The potential for trading occurs between the C and D points, where you will find a price protection zone (PPZ) or area where one may profit before the expected price reversal. 

The blue area indicates these trading levels, established after detecting the C point, where one may take profits on the uptick of the pattern. 

The green area highlights the expected price reversal zone (PRZ) or the D point. This is where a trader would enter a short position to take a profit on the downside of this pattern.

If the price never reaches this level, we consider the pattern to have failed. 

The yellow/orange area and subsequent line levels indicate another PPZ where a trader who entered a position at the price reversal zone, or D point, would consider exiting the position to take profits. 

The white area above the PRZ also represents a Stop Loss Zone level. If a trader wishes to follow the pattern identified by the algorithm, they should exit at this level.