The Butterfly pattern is a reversal pattern composed of four legs, marked X-A, A-B, B-C and C-D.
It helps you identify when a current price move is likely approaching its end. This means you can enter the market as the price reverses direction.
The above chart is a bearish version of the pattern, where you would be look to sell AMZN after the pattern has completed.
X-A In its bearish version, the first leg forms when the price falls sharply from point X to point A.
A-B The A-B leg then sees the price change direction and retrace 78.6% of the distance covered by the X-A leg.
The Butterfly is similar to the Gartley and Bat patterns but the final C-D leg makes a 127% extension of the initial X-A leg, rather than a retracement of it.
B-C In the B-C leg, the price changes direction again and moves back down, retracing 38.2% to 88.6% of the distance covered by the A-B leg.
C-D The C-D leg is the final and most important part of the pattern. As with the Gartley and Bat pattern you should also have an AB=CD structure to complete the pattern, however the C-D leg very often extends forming a 127% or 161.8% extension of the A-B leg. As a trader you would be looking to enter at point D of the pattern.
How to trade a bearish Butterfly To trade a bearish Butterfly pattern, place your sell order at point D (the 127% Fibonacci extension of the X-A leg), position your stop loss just above the 161.8% extension of the X-A leg and place your profit target at either point A (aggressive) or point B (conservative).
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A bearish butterfly pattern started at 143 and We can expect that bearish trend continues to reach the golden level of Butterfly pattern at 113-116 $.
At this region. angry buyers are ready
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STRONG BULLISH CRAB PATTERN WILL START
Trade closed: target reached
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bullish crab started at 118 as i expected
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Possible Trend of Buyers Crab in the last month of the year 2023
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BEARISH CRAB STARTED AT ABOUT 156-157 AS I EXPETED
Trade closed: target reached
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AMAZON Butterfly is expected to rise after a small correction and retesting the golden level at 0.618. It is likely to move towards the next golden level at 1.618.