Here’s a potential bullish Butterfly that might be worth keeping an eye on.
I know the PRZ isn’t at tight as TMB might like, but this is a valid Carney set-up, so I’m going to keep a close eye on it. The 1.618 XA is the most important number here, but don’t be surprised to see price test all three numbers.
If the bottom trend line holds, it could get interesting. Although once again, it’s still early days.
Made a slight adjustment to the fib time levels (horizontal lines on the chart). My initial placement was not on my X point, but it is in this chart. This brings the ideal completion time to a point where the fib levels converge along with the upper trend line, thereby adding more resistance at this level.
Again my X point is not at the very extreme, but the small leg leading up to my X point contains a small AB=CD type pattern, and therefore validates my X point.
Argggh, there was an almost “perfect” crab on this one that set up yesterday. The D point retraces 22 pips greater than the 1618XA extension, but I’d still trade it.
In line with your current thoughts, I wouldn’t be surprised to see it head back to the B point at 1.7450s.
Lmao. I did trade it and took a 22 pip loss. Not one of my better trades. Not because of the loss, but because of how I managed the trade. I should have given it a little more room to manoeuvre instead of just setting my levels and going to bed (it [I]was[/I] bedtime…honestly :)).
With a few confluence areas in evidence, it can be a little confusing as to which one will hold and prove itself to be the actual turning point.
While the level price is at now may turn out to be that point, I’ve opted for the next convergence area (the yellow box area). If the yellow box doesn’t hold, I’d likely go in again at the 2.618 CD which converges with the 1.000 of XA.
The dark blue line in the top PRZ is a 0.382 retracement level on the daily chart. This may lend some strength to the first PRZ and I will be trading it if price reaches this level. Should this PRZ fail, the lower PRZ comes into play and should give an opportunity to recoup any loss incurred trading the first PRZ.
My entry order has just been hit. Let’s see how this plays out. I’ll move my stop loss to break-even if price puts me 20 pips in profit.
Hi thanks for the reply and help TMB. I have just one more question. When we are plotting our BC points do we use the first Swing high or low, or do we use ‘major swings’. I have been looking through your charts and it seems that sometimes you use major swings and other times you use the very first swing high/low. Which one do we use ?. Do you indentify a swing high as a candle that has a high that is higher then the high of the candles to its left and right (opposite for swing low) ?
Any help ?
All my ducks lined up for this one as well - still in play and moving nicely, already beyond the 236AD which is a great sign! Just a bummer I only had 1 scale entry on and exited already. A profit’s a profit though right. 
Your GBPUSD setup also had a near perfect bullish butterfly on the 5/15minute which would’ve been a nice timed entry into the larger pattern.
Yep, a profit is a profit. Nice trading Inspira. Unfortunately I missed the EUR/AUD trade, had my entry set just a tad too high 
But can’t complain too much, as I managed to net 128 pips on the run up to the PRZ 
It’s not something I usually do, but the last pattern on this chart completed very early (going by fib time levels) and just meandered for a while. Then when it retested the previous D point and failed, I figured that it might bounce now, as the fib time level had also been met by this stage. It was offering a good RRR, so I took the trade.
As for the GBP/USD situation; thanks for reminding me. Checking out the smaller time frames to time your entry into a larger pattern makes a lot of sense. I know this, yet it’s not something I’ve made a habit of. But I’ll start I’m not in this trade at the moment, as price didn’t hit my entry level. Maybe I’ve set it a tad too low…again! lol. But had I seen the bullish Butterfly on the 15/5 min chart as you say, I would have entered on the completion of that. Still, I’m not going to chase this one. It may come back to me, I’ll just have to wait and see.
Hit 30 pips then reversed. (I didnt trade, just watched)
Nice catch!!
Do you find the fib time levels useful?
I just use the ‘time in = estimated time out’ level and close trades if it ranges sideways. Mixed results for me but too early to tell yet.
I never chase either, it’s a good rule to have! As the saying goes - always better to be out of the market wishing you were in, then in the market wishing you were out. :
Nice find Pagjr, on the AB=CD pattern too!
Max. Favourable Excursion for me was just over 25, you’d have to be extremely lucky to hit it though. But yeah, it’s a double dip now so less probable.
Also an ‘imperfect’ crab on the AUDUSD 15min which has also double dipped. (I’m in despite this)
I only use the fib time levels as a rough guide. Ideally, the time it takes for price to move from point B to point D should equal the time it takes price to move from point X to point B. So if the D point is reached early, often price will meander until time equals X to B before showing any convincing reaction. Also note that according to Carney, if the D point is reached before the 0.382 of the time measurement from B to D, this would invalidate the pattern.
Oh how true
I would favour the first PRZ if price reaches this level. Once again there is a decent second PRZ if the first one is blown out.
I hope you can read the chart.
We are looking at a potential bearish Butterfly or Crab, depending on which X point you use (X1 or X2). Either way, both use the same A, B, and C points, and both project a similar D point.
Add to this the possibility of using the B and C points as X and A points, then you’ll find a projected D point in the same area as the other two patterns (as shown by the dark blue fibs).
The two green lines represent the 0.50 and the 0.618 retracement levels of an extreme X point a little further back.
