Bearish butterfly with PRZ marked in chart.
Trade to be entered only if a strong signal bar is seen AND RSI divergence is seen.
Target = 38% retracement of CD.
** Study only for educational purposes, do your own risk assessment before entering the trade **
For a brief overview about harmonic pattern fundamentals, first go to the Post 1 of this series (link will be soon in the update section).
THE BUTTERFLY PATTERN
The pattern is recognized by the exclusive 78.6% of XA retracement at point B; and the 1.27 XA projection at point D.
X-A: A strong leg which ends at an important Support/Resistance level.
In the above chart, I have showcased a confluence or relationship between Elliott Waves and Harmonic Patterns. Where I have mentioned and pointed out time where they confluence and provide us a successful trading opportunities. Such confluence is simple to understand and provide a great reward over risk by initiating in them.
I have attested below edcuational...