Harmonic Butterfly pattern selling and buying examples
Hello!
This is Satori researching FX.
Today we will deliver an article on “Selling and Buying Examples of Harmonic Butterfly Pattern.”
Harmonic patterns are chart patterns created with the aim of buying at the bottom when patterns that match the ratio of up and down movement appear, and selling at the top. They are drawing attention from Western institutional investors.
The figure below shows an example of selling and buying the Harmonic Butterfly pattern on the USD/JPY 1-hour chart.
http://livedoor.blogimg.jp/fxmt4indicator/imgs/5/8/583805b0.gif
In the above figure, although it is acceptable to sell right away on the pink Butterfly sell signal with a pullback up to 61.8%, the best method is to sell using the left-facing red triangle forming an inverted N that does not break the previous high.
Since the daily trend 15 EMA is downward, selling under the influence of the long-term downward trend is the correct result, following the inertia principle.
An indicator that displays the daily EMA on the 1-hour chart is included in the Multi-Time-Frame compatible MA Push-Through-Kun series (RSI, Stochastic, MACD).
In the latter part of the upper figure, the Butterfly buy signal appears, and because two long wicks appear immediately afterward, it seems to be a W bottom on the shorter time frame; buying near 0 is possible, but I think buying in the left-facing inverted-N triangle that does not break the previous low is better.
Buying with an inverted-N left-facing triangle that does not break the previous low, and then closing at a 38.2% retracement would have yielded +34 pips.
Although it is a downtrend, Harmonic patterns are also intended to buy at the bottom, so
if buying here, enter cautiously and do not overextend.
The indicators related to today’s article are as follows.
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