Bearish butterfly

TVC:USOIL   CFDs on WTI Crude Oil
Hi pros!

2 Trade:

first one to 618fib with r:r 12
and the second to 1 fib with r:r 22

Trading plan:
-2 or 3% MM
-move sl to breakeven when 1:1 or 1:2

The Harmonic Pattern Butterfly is closely related to the Gartley 222 pattern with the main difference being that the Butterfly pattern’s CD extends beyond the XA leg. The Gartley Butterfly pattern is also identified by the classic ‘M’ and ‘W’ patterns. (see more about other forex patterns)

The Butterfly pattern was one of the many harmonic patterns developed by H.M Gartley which were then fine tunes with the introduction of the Fib rations by Scott Carney and Larry Pesavento. Visually, the Butterfly pattern looks similar to the Gartley 222 pattern, especially the Fib ratios between the pivot points .

Butterfly Rules

AB can retrace up to 78.6% of the XA leg
BC can retrace between 38.2% – 88.6% of AB
CD can be an extension of 1.618% – 2.618% of AB
CD can also be an extension of up to 1.272% – 1.618% of XA leg
The point D is known as the PRZ or Potential Reversal Zone
From Point D, a trade can be entered with stops at or above (below) the price point at D.

Butterfly Target Levels

Once a position is entered at D, profits can be booked at 61.8% of CD with the second target at 127.2%. Despite the above rules, in real time such text book patterns that qualify every point of the swing legs do not form as expected, so traders should be a bit flexible while identifying the butterfly patterns.

Oct 06
Comment: It is our choices that show who we are, more than our capabilities.

Joanne K.Rowling
François Mauriac
Oct 11
Comment: Take all at 70.70 but move sl in profit to 71.20
Bon appétit!
Oct 11
Trade closed: target reached
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