Now, the Australian stock index is down on Monday, reminding me that the pattern may be formed. Now I will give you an analysis of how to look at this pattern and how to trade with it.
*The butterfly has X A B and C D five points, enter the trade when these five points meet the fio ratio.The essence is form pattern recognition. Butterfly's B requires a 78.6% correction near the previous XA , and the B point in the figure is near 6028, which fits this ratio 78.6%. The point C cannot exceed AB, so the range is actually larger.The potential D points is determined by the ratio of the XA and BC.D is 1.272 or 1.618 times of XA, (in this case 1.618 times), while D point is between 1.618 and 2.618 times BC, now D is 2.24 times BC.
*It can be said that BC's 2.24 times and XA's 1.618 times forms the potential reverse zone , which is near 6151
*In this area, the confirmation of a candle signal is the icing on the cake and can be released.The usual signals are shooting stars, hanging necklines and so on
*After short it , the target position of the short position is located near 38.2% of a-d, and 6064 of the figure
Im very curious and would like to ask one question. How did you decide that the ratio xA 1.618 & BC 2.24 was the right combination to use in this situation? How do you decide whether to use the xA 127% or 162%.
i am relatively new to harmonics and would very thankful for any insight you may be able to share with me.
yitiancai
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@DME2, Well, different pattern has different XA AND BC ratio. I use xA 1.618 & BC 2.24, because they are close to each other
Firstly great call! well done.
Im very curious and would like to ask one question. How did you decide that the ratio xA 1.618 & BC 2.24 was the right combination to use in this situation? How do you decide whether to use the xA 127% or 162%.
i am relatively new to harmonics and would very thankful for any insight you may be able to share with me.