Cypher, Shark and AB=CD Pattern Models
Lesson 10 of 12. Compare alternative harmonic conventions without mixing incompatible ratio definitions.
1. Cypher overview
A widely used Cypher specification has B retracing 38.2–61.8% of XA, C extending XA to about 127.2–141.4%, and D retracing about 78.6% of the XC leg. D is measured from X to C, not XA.
2. Cypher numeric example
If X=100 and A=120, a bullish C at 127.2% of XA from X is 125.44. A 78.6% retracement of XC from C yields D≈105.44. This arithmetic must be checked against the actual directional sequence.
3. Shark conventions
Shark patterns are often labeled O-X-A-B-C rather than X-A-B-C-D. Common completion references include 88.6–113% of OX and a 161.8–224% BC projection. Because authors vary, state the exact variant used.
4. AB=CD foundation
AB=CD is an equality-of-legs model: |AB|≈|CD|, often paired with BC retracement and CD projection. It is a component of several patterns and can also be studied independently.
5. AB=CD example
If A=1.1000, B=1.1100 and C=1.1060, a bullish continuation AB=CD target from C is 1.1160. This is a projection, not a reversal guarantee.
6. Do not mix templates
Applying a Cypher D formula to a Shark or measuring a Shark using standard Gartley XABCD labels produces invalid comparisons. Keep separate checklists.
7. Execution considerations
Use projected completion as a watch zone and wait for confirmation. Record chart timeframe, spread, exact ratio tolerance and whether a pivot was observable at the time.
8. Research task
Build a comparison table with pattern, pivot labels, B condition, D formula and invalidation rule. Reject any chart where the selected convention cannot be applied consistently.
Knowledge check
- Which swing points must be identified before labeling a Cypher or Shark candidate?
- How would you check an AB=CD projection against the actual pivot distances?
- Why must each pattern use its own ratio definition rather than one generic XABCD template?
Answer using the worked example above. Record your calculations and one reason the setup could fail before revealing any chart outcome.
Worked numerical example: Illustrative AB=CD symmetry
AB spans 10 points downward from A = 120 to B = 110. CD spans 10 points downward from C = 118 to D = 108. Thus |AB| = |CD|. This alone does not establish a Cypher or Shark: those patterns have different pivot conventions and extension requirements.
Practice and answer
Show worked answer
The 50% B retracement shown here is a generic swing calculation. Do not apply Bat rules to Cypher, Shark, or AB=CD setups: each has a different leg sequence and completion criterion. Label the pattern first, then test its own ratios.
Independent worked analysis: Different families cannot share one checklist
Hypothetical worked example: An AB=CD construction compares the length of AB with CD. If AB is 85 pips, a 1:1 CD projection is also 85 pips from C in the relevant direction; that equality alone does not define a Cypher or Shark.
Calculation and decision exercise: Draw three separate sketches and list the defining pivot and ratio constraints for AB=CD, Cypher and Shark. Record one rule that would disqualify each candidate.
What this example cannot establish: Naming a pattern after it completes can hide rejected candidates. Save all pre-identified setups, including ones that never reach D.
Evidence checklist for this specific lesson
- Write down the precise inputs used in the different families cannot share one checklist example, including their units and observation dates.
- Distinguish what can be computed directly from what must be inferred about future prices or policy.
- Test the opposite interpretation using a clearly stated alternative assumption, not a revised chart drawn after the outcome.
- Document transaction costs and the maximum hypothetical loss before treating any market view as an executable strategy.
Applied analysis: testing the lesson in context
The following exercise develops the specific decisions involved in cypher, shark and ab=cd pattern models. It is a hypothetical training workflow, not a prediction or an instruction to place a live trade. Keep the market, time zone, instrument, observation window and data source fixed before evaluating the idea. Separate what the chart shows from the interpretation assigned to it; two analysts can label the same sequence differently without either label being a verified market mechanism.
Case step 1: 1. Cypher overview
Start with the lesson's 1. cypher overview component. Source observation: A widely used Cypher specification has B retracing 38.2–61.8% of XA, C extending XA to about 127.2–141.4%, and D retracing about 78.6% of the XC leg. D is measured from X to C, not XA. Record the exact candle or pivot at which this information first became available. If confirmation depends on a later close, mark that later close as the earliest legitimate decision point. A visually compelling retrospective drawing is not sufficient evidence that the setup was identifiable in real time.
Now construct a counterexample for 1. cypher overview: imagine the price initially behaves as the lesson suggests but then fails to follow through. Write the invalidation condition as an observable price or time event, not as a vague change in confidence. Compare two annotated screenshots, one before the proposed confirmation and one after it. Explain what genuinely changed in the available evidence. For a trading-system study, record spread, slippage, position size, and whether the proposed stop could have been filled at the assumed price.
Case step 2: 2. Cypher numeric example
Start with the lesson's 2. cypher numeric example component. Source observation: If X=100 and A=120, a bullish C at 127.2% of XA from X is 125.44. A 78.6% retracement of XC from C yields D≈105.44. Record the exact candle or pivot at which this information first became available. If confirmation depends on a later close, mark that later close as the earliest legitimate decision point. A visually compelling retrospective drawing is not sufficient evidence that the setup was identifiable in real time.
Now construct a counterexample for 2. cypher numeric example: imagine the price initially behaves as the lesson suggests but then fails to follow through. Write the invalidation condition as an observable price or time event, not as a vague change in confidence. Compare two annotated screenshots, one before the proposed confirmation and one after it. Explain what genuinely changed in the available evidence. For a trading-system study, record spread, slippage, position size, and whether the proposed stop could have been filled at the assumed price.
Case step 3: 3. Shark conventions
Start with the lesson's 3. shark conventions component. Source observation: Shark patterns are often labeled O-X-A-B-C rather than X-A-B-C-D. Common completion references include 88.6–113% of OX and a 161.8–224% BC projection. Record the exact candle or pivot at which this information first became available. If confirmation depends on a later close, mark that later close as the earliest legitimate decision point. A visually compelling retrospective drawing is not sufficient evidence that the setup was identifiable in real time.
Now construct a counterexample for 3. shark conventions: imagine the price initially behaves as the lesson suggests but then fails to follow through. Write the invalidation condition as an observable price or time event, not as a vague change in confidence. Compare two annotated screenshots, one before the proposed confirmation and one after it. Explain what genuinely changed in the available evidence. For a trading-system study, record spread, slippage, position size, and whether the proposed stop could have been filled at the assumed price.
Evidence record and independent assessment
Create a small research log specifically labelled “Cypher, Shark and AB=CD Pattern Models”. For each candidate observation, store its date, instrument, session, timeframe, setup definition, entry eligibility, invalidation level, expected costs, and actual subsequent path. Include candidates that never triggered, rather than selecting only attractive examples. Compare at least two market regimes and note whether the interpretation changes when a nearby swing anchor or session boundary is chosen. If it does, classify the result as sensitive to analyst discretion rather than robust evidence.
Finally, write a three-part conclusion about cypher, shark and ab=cd pattern models: (1) which elements can be verified directly from historical prices, (2) which elements are hypotheses about participants or future behavior, and (3) what observation would cause you to reject the hypothesis. The exercise is complete only when a second reader could reproduce your markings using the written rules. Do not infer a profitable edge from a single worked example; that requires a separately designed, cost-aware and out-of-sample evaluation.