1/29/2019 YouFOREX Brasil - BUTTERFLY

HOME Tech Harmonic CYPHER SHARK GARTLEY BUTTERFLY CRAB BAT PSICOLOGIA AT

BUTTERFLY 
 
The butter y market strategy like any other harmonic pattern is a four-leg reversal pattern. The gartley butter y
needs to follow some speci c Fibonacci ratios. A proper harmonic Butter y needs to ful ll the following three
Fibonacci rules:
 
AB= an ideal target of 0.786 or 78.6% of XA leg;
BC= minimum 38.2% and maximum 88.6% Fibonacci retracement of AB leg;
CD= Poses a target between 1.618% – 2.618 Fibonacci extension of AB leg between 1.272– 1.618 of XA leg.
This is almost similar to the Bat Harmonic Pattern.
 
The B point of the Butter y harmonic pattern is important. The wave B retracement needs to be shallow.  The B
point will help us calculate the other Fibonacci measurements within the gartley butter y. The other retracement
point will assist us to de ne new trading opportunities.
 
So, the ideal target for the B point must possess precise 78.6% retracement of the XA swing. Other rules that
rede ne the structure further include the BC projection that must be at least 1.618 measurements.
 
The Butter y pattern must include an equivalent AB=CD leg. This is the minimum requirement, however, the
alternate 1.27AB=CD is more common for this structure which is quite different than the Cypher chart pattern.
The 1.27XA projection is the most critical number in the potential reversal zones. And, nally, the C point must be
within the range of 0.382-0.886 retracement.
This, essentially, just ensures that this “M” or “W” type extension structure possesses the correct structure
alignment to de ne the trading opportunity.

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