Hi Angeldemarte,
Thanks for the response. What did you mean about the rules of AB=CD? Is it the similarity of bar development (similar time), the angle of the AB and CD lines or any other things? The symetry rule seems very important, yet I may not fully understand.
Well, I strongly suggest you read the book recomended by TMB āTrade What You Seeā by Larry Pesavento. If you did, youāll remember an important rule for gartleys and butterflies patterns: sell the first AB=CD pattern you see after a strong downward move and, viceversa, buy the first AB=CD pattern you see after a strong upward move. Regarding symmetry, we are looking at symmetry in time, angle and length. Of course this is not happening every minute so here is when you use your discretion to determine if the pattern is worth trading.
Also keep in mind that this patterns arenāt exact science, so youāll be looking at areas where price may retract. You can combine basic candlesticks patterns to decide where the D point is landing. For example in the AUD/JPY daily chart I posted before, if I see a candlestick patterns forming near my D point (pin bar, doji, bearish engulfing, etc.) then Iāll decide to take or not the trade.
Hope this helps.
Hereās an example of a trade Iām considering (Note that Iām using the larger timeframes -4h, 1D and sometimes 1W- since I consider in my experience that those charts provide the most powerful setups).
This is a 4H chart for the GBP/JPY (Iām using the NY close for the candles, this is very important to me).
Here we have different scenarios. We have perfect convergence of the C point with XA and AB.
1st. Scenario:
D1 is the pattern AB=CD, but there is no convergence with fibs levels of XA, although there is a strong support at this area (121.05) so we can expect a retracement at this point. Anyways, let say it only takes 4 or 5 bars to the price to hit D1, then I will expect the D point to be a bit lower which takes us to the 2nd. Scenario.
2nd. Scenario:
D2 shows moderate convergence between the 1.272 fib level of CD and the 0.786 of XA and 1.272 of AB, and also have nice support at 120.74, this is where Iāll definitely look for a candle formation indicating a retracement.
3rd. Scenario:
D3 is a mayor support @ 120.28, since is the 1.0 fib level of XA, also have almost perfect convergence of 2.00 of AB, 1.618 of CD and, as mentioned before, 1.00 of XA. For instance, if I see a shallow retracement @ D2, then for me this will be an indication of a strong move upward at D3.
If you have any comments let me know. Iām actually looking to trade this on my live account.
This one looks really nice!
Looks valid to me.
Angeldemarte, i really like your analysis, i still can not make a good analysis of graphs.
How long you work with forex, Angeldemarte?
Thanks! Iāve been demotrading for almost a year.
It looks good. I tried to copy your pattern in the 4H chart and the only fit convergence is at 100%CD and 61.8 XA, price at 121.251.
I would not be comfortable to treat 4H t/f as the sl would be high. If the patern develops near the london session, I would check the 1H chart to get confirmation, then trade on th1 1H pattern.
Iām litle bit confuse in this pair,the price does not follow a direction, iām afraid if it falls.
EUR/CHF M30
What u guys think about asian sesion for this strategy???
Hey Braindamage,
Your eur/chf is not proper, the fact that your C level was hit twice is a big nono i believe. Also, asian session is not good at all because eur/chf would definitely not be traded significantly in that session.
Ive noticed on a few previous charts some people had some things wrong. Such as the point A, it has to be a Highest High after or Lowest Low after point X.
CD must be minimum of 100% AB.
Also, some people are labeling a butterfly wrong. A butterfly is when the projected D point is past the X point (past 100% XA). Note a butterfly has higher success rate than gartley.
This week is not good for trading, not a lot of movement or liquidity. Next week should be good. Here are a couple of patterns that can be seen on NZD. Note the first one is butterfly, see how projected D is past X. There are two good convergence points.
The next image is of a pattern on NZD setting up a buy. It is an extreme low for x point, but not the extremest, so that ādegradesā it as a pattern. None the less it illustrates a buy pattern instead of a sell.
Regards,
Steven
Thank you, Dr. Without pointed out, I had no idea I had made so big mistake about the A point. And Iāll make sure my butterflies and gartleys behave.
This week not many patterns fully developed. An AUD/JPY gartley may come this morning. What do you think?
Hi everyone, it seems a butterfly is forming in the AUD/USD 1H chart. it would converge at 127.2%CD and 127.2AX if completing in an hour.
Just entered the AUD/USD trade at 1.01848 (127.2AX).
My T/P target of 10 pips was triggered. I set the narrow TP because of the low flow of liquidity and the fact it may meet risistance at the X point.
]QUOTE=newbabyfxx;306114]My T/P target of 10 pips was triggered. I set the narrow TP because of the low flow of liquidity and the fact it may meet risistance at the X point.
[/QUOTE]
I am glad I took the 10 pips. It looks like the price is going to form the second butterfly at teh convergence of 161.8%CD and 161.8AX. If it completes, the reversal would be stronger than at the target 1.
Or should I re-enter for the target 1?
I am glad I took the 10 pips. It looks like the price is going to form the second butterfly at teh convergence of 161.8%CD and 161.8AX. If it completes, the reversal would be stronger than at the target 1.
Or should I re-enter for the target 1?[/QUOTE]
It was so close to triger my second target enter at 1.01974). The price topped at 1.01963 and retraced. Wait to see if the price will be up again.
gartley enter of AUDJPY 1H triggered. set TP 50% CD retrace.
butterfly enter (second target) of AUD/USD 1H triggered. set TP 50% CD retrace.
convergence at 161.8%Cd/200AX.4.4 pips difference.
