Our team of analysts uses these popular Fibonacci patterns to identify trend continuations and reversals, as well as find potential market entry and exit points. Click on each image below to read a description of each pattern and to learn how you can use it for discovering new trading opportunities.

You can view two groups of Fibonacci patterns, bearish (down) and bullish (up). Simply click on the name to switch between the two groups.

 

 

The bullish Butterfly Pattern

Download the bullish Butterfly Pattern PDF

What is it?

• Contains an ABCD pattern preceded by a significant low (X)
• Convergence of Fibonacci extension ratios
  • Point D = extension of BC and XA
• Formed by two connecting triangles at B
• Pattern is found only at significant tops (highs) and bottoms (lows)

Why is it important?

• Convergence of Fibonacci extension ratios may provide higher probability for change in market direction
• May provide lower risk with potential for higher reward
• Pattern failure may suggest a strong continuation move

Sounds good... So how do I find it?

Butterfly patterns are similar to Gartley patterns in that they resemble a “M” shape on a price chart. However, a butterfly pattern completes at the convergence of two separate Fibonacci extension levels, whereas the Gartley completes at the convergence of a Fibonacci retracement and extension.

The symmetry between the two connecting triangles at point B is one of the keys to this pattern. As with all geometric patterns, a buy or sell signal occurs as the pattern completes at point D.

Source: GFT

The bullish Butterfly Pattern Rules

1. The swing from A-to-D should be a 127.2% or 161.8% extension of XA
   • Note: D must be below X
   • A valid ABCD must be observed in the extension move (AD)
   • Additional confirmation may be attained when the times of the XAB and BCD triangles are in proportion. Ideally, these two triangles will be nearly equal in time. Otherwise, look for the BCD triangle to complete between 61.8% and 161.8% of XAB
   • A move beyond 161.8% negates the pattern and may suggest a potentially strong bearish continuation is in progress

Example 1: EUR/JPY, 15 min

Source: GFT

Example 2: USD/JPY, 30 min

Source: GFT

TRADE RECOMMENDATIONS

• Trades to Watch
• Trades in Progress

currency		recommendation
NZD/CAD Medium term		Sell at .7320 Stop at 0.7363 Target at 0.7255
GBP/JPY Medium term		Sell at 139.2700 Stop at 140.39 Target at 137.58
GBP/JPY Short term		Sell at 139.1200 Stop at 139.82 Target at 137.51

• view more trades

There are currently no trades in progress. view more trades

• view more trades

FREE RESEARCH & TOOLS

Social bookmarking refers to a method you can use to store, organize and manage bookmarks of web pages that interest you. These could be news articles, movie reviews, places you want to visit — any type of web page. The main advantage is that unlike traditional Internet bookmarks that are specific to one computer, you can use social bookmarking to add and access bookmarks from any computer with an Internet connection.

Another benefit of social bookmarking is the ability to share web pages with friends, family or anyone who has similar interests. Likewise, you can visit the pages that other social bookmarkers share with you.

All pages within our website include links to social bookmarking websites. These websites are free to use and require only a simple registration. This allows you to capture useful information you find on our website and share it with other traders like yourself. Your GFT bookmarks can become a reference if you have a question, want to revisit a concept that you found valuable or would like to tell someone about GFT.

Learn more and get started at Reddit, Digg, Del.icio.us, Google and Yahoo.