What it looks like
Five swing points X, A, B, C, D. AB pulls back 78.6% of XA. BC moves back towards A. CD then pushes past X, so D completes at 127 to 162% of XA measured from A. Bullish: XA rises and D is a new low below X. Bearish: XA falls and D is a new high above X.
What it means
The swings have reached the point where the Butterfly says the move should end, known as point D. It is a forecast made from proportions, not a sign that price has turned. Harmonic traders believe moves often stall at these Fibonacci proportions because many orders and profit targets gather there. Point D gives a precise place to act and a tight place to be proved wrong, which is the appeal of the pattern.
Bullish and bearish versions
How to trade it
- 1
Label X, A, B, C and D and check the ratios fit the Butterfly.
- 2
Confirmation (optional but common): a candle that turns at D, such as a close back up from D for the bullish version.
- 3
Entry: buy near D for the bullish version, sell near D for the bearish.
- 4
Stop: just beyond D. Example on gold (bullish): X 4,000, A 4,100, B 4,021 (78.6%), C 4,070, D 3,973 (127%). Buy near 3,974 with a stop at 3,965, a 9 point risk. The last leg is 97 points, so targets are about 4,010 (38%) and 4,033 (62%).
- 5
Targets: 38% and then 62% of the last leg (C to D), measured back from D.
A close beyond D: below D for the bullish version, above D for the bearish version.
Where it works best
On 1 hour to daily charts at the end of a stretched move, where D lands near a known support or resistance level.
WickSpeak finds bullish and bearish Butterfly patterns automatically, measures the ratios for you and names the pattern on the candles that made it. The note says what it is, how to trade it near D and that a close beyond D proves it wrong. In Playbook you can use it as a condition in a play, alone or alongside other patterns and indicators (any of the 146 patterns can be a condition), and backtest it on past candles with your own costs.
Common mistakes
- Treating the break below X as a reason to sell, when for a Butterfly that is where D is expected.
- Ignoring the range: D can land anywhere from 127% to 162%, so there is a zone rather than a single price.
- Entering without a turning candle when price is still accelerating through the zone.
Related patterns
Questions traders ask
What are the Butterfly pattern ratios?
B retraces 78.6% of XA, and D extends beyond X to 127 to 162% of XA.
How is a Butterfly different from a Gartley?
In a Gartley D stays inside X at 78.6%. In a Butterfly D goes past X, to 127 to 162% of the first leg.
Where is the stop on a Butterfly?
Just beyond D. A close beyond D proves the pattern wrong.
Are harmonic patterns reliable?
A harmonic pattern is a forecast made from proportions, not a sign that price has turned. That is why many traders wait for a candle to turn at D before entering. We do not quote win rates; backtest the pattern on your own market first.