FOREX PRO Weekly April 02-06, 2012

[cheater]

Ill pop in with all due respect.

Why is it butterfly sell? cheater, You've drawned a "W" allright? Made of four segments. XA- AB -BC- CD from left to right when watchin in the screen. So the last three segments form a Bullish ABCD pattern, WICH...if will expand over 100% from XA (fib ratio 1)
it has chances of doing a complete reversal (market moving below point A after completition at D). On this forum all views are accepted since it's an educational review of the forex market, but normally we look forward to act upon 127% or 168% extension of that ABCD move (even if on the book "trade what you see", where butterfly is explained in detail and with graphics, youll find that 200% and 268% extensions are also taken into account).
Your butterfly has a bullish ABCD move...and the "butterfly" being a reversal pattern, we look forward to SELL so...its a butterfly sell.
If u got the truly butterfly pattern on daily time frame that its going to work then you should expect a move that targets 127% from D to A. This means target is to the downside on this particular example wich stands below A point of the "W" you've drawned in blue. good luck.

ah thanks for the detailed explanation Damian! Great to have another lesson learned in FPA!

 

[seedof]

Thanks Sive for your advice but please i've one more question to clarify my fibo is from the 4200 area down to 2600 area but i see someone on this thread take his from 4500area to the same 2600area is there any rule of the thumb for pickin where to start from. thanks

 

[Sive Morten]

Thanks Sive for your advice but please i've one more question to clarify my fibo is from the 4200 area down to 2600 area but i see someone on this thread take his from 4500area to the same 2600area is there any rule of the thumb for pickin where to start from. thanks

There are three points, that could be used for Fib drawing. First point is max and min - bar, that has from the left and from the right max/min lower/higher that itself. Seconds is max, min of thrusting bars and third is a gaps.
For details it will be better to read about this in DiNapoli book, or may be in some others books, because DiNapoi is not a single existed one.