What is the butterfly harmonic pattern?

The Butterfly harmonic pattern is a retracement and continuation chart formation that indicates a potential price reversal. It is a five-point harmonic pattern with the XABCD labeling. Similar to the Gartley pattern, the Butterfly pattern has four waves that are labeled XA, AB, BC, and CD. In this post, we take a detailed look at this pattern.

How to trade a harmonic butterfly?

You can find the Harmonic Pattern Indicator on most popular Forex trading platforms (TradingView and MT4) in the indicator section. Now, let’s move forward, and see how to trade the harmonic butterfly. The butterfly market strategy like any other harmonic pattern is a four-leg reversal pattern.

What is harmonic bat pattern?

The Harmonic Bat pattern is the first extension pattern along with Crab pattern. Extension pattern means the last D point is extending above X point. Butterfly is a harmonic reversal pattern which shows a reversal point where the price will change its direction.

What are harmonic patterns in trading?

Harmonic patterns are becoming more popular in the world of trading. They areinternal or external patterns. Internal patterns include structures such as the Gartley and bat. External patterns are made up of structures like the butterfly and crab. Although there are many harmonic patterns, butterfly patterns remain the most prominent.