Forex glossary
Butterfly Pattern
Butterfly is an XABCD harmonic formation with B at a 78.6% XA retracement and D beyond X. Carney's ideal version centers on a 1.27 XA projection plus compatible remaining legs. D identifies a potential reaction area rather than proven trend exhaustion.
Illustrative example
How does it work in practice?
Assume a bullish candidate with X at 100 and A at 110. B is 102.14, while a 1.27 XA projection places D at 97.30; the other leg relationships still require validation.
A case to work through
Beyond the move's origin
Hypothetically, X=80 and A=100; the ideal Butterfly projection is 1.27 XA.
- XA spans 20, so the projection from A is 25.4.
- D=100−25.4=74.6, or 5.4 below X; check B at 84.28 separately.
What follows? Record both levels as part of the geometry check.
Example boundary: The remaining relationships must also fit; D does not compel a reversal.
A useful distinction
Butterfly Pattern / Crab Pattern
An ideal Butterfly places D at 1.27 XA; Crab uses a characteristic 1.618 XA and a different B.
Check your understanding
Locate D in an ideal Butterfly with a specified XA leg.
Show the answer and explanation
37.3
50−1.27×10=37.3, beyond X.
Anchors, ratios and rules
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Read the fuller explanation
Related terms
Sources and documentation
- Harmonic Trader – Butterfly
The ideal B=0.786 XA and D=1.27 XA criteria in the author's convention.
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