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Chapter 17, Part III - Gartley's Patterns. Page 12

Discussion in 'Complete Trading Education- Forex Military School' started by Sive Morten, Dec 21, 2013.

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  1. Sive Morten

    Sive Morten Special Consultant to the FPA

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    Pipruit: And can we appoint some ultimate target of a Butterfly pattern?​

    Commander in Pips: Sure. Look at the picture – here is a perfect example of Butterfly “Sell” pattern at 4-hour USD/CHF. We’ve traded it in real time by the way on the FPA forum.

    Initially we see strong upside bars close to 1.272 reversal Butterfly’s point, but then all has turned as it had to be. Take a look how sharply the market has touched 1.27 target of whole Butterfly first and shown shallow retracement and then accelerated to the 1.618 target and even further.

    How do you think – had we to hold position at 1.272 target or not?

    Pipruit: Well, all that I see is strong black candles near the 1.272 target. From that point of view, we could count on continuation…​

    Commander in Pips: You’re absolutely right. Besides right the top we see strong acceleration to the downside – this is an early confirmation that Butterfly probably will work. But we could even imagine that it will reach 2.5 target of AD swing! Still this level is not very typical for Butterflies. Although this could happen, better to found your position on 1.272 or 1.618 targets as maximum. But in most cases target will be much smaller – some retracement level from the AD swing.


    Chart #4 | USD/CHF 4-hour Butterfly has reached ultimate targets
    [​IMG]
    Ok, now let’s take a look at schematic Crab pattern, and turn to trading process of these patterns.


    [​IMG]

    See – they quite the same, Crab just assumes 1.618 target, at minimum and extreme extension of CD leg, compares to AB. This is just a version of Butterfly.


    Here is how it looks like on real market:


    Chart #5 | EUR/USD 4-hour Crab… But looks like it will fail…

    [​IMG]
     
    #1 Sive Morten, Dec 21, 2013
    Lasted edited by : Apr 12, 2016
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