Butterfly Harmonic Pattern Indicator on TradingView - Free - [TradingFinder]

This pattern consists offive key points: A, B, C, X, and D. Indicator highlights the D Point as the most critical part of this pattern as it typically has the highest potential for price reversal (PRZ).

Specification Table for the Butterfly Pattern Indicator

The specifications of the indicator are briefly outlined in the table below:

Overview of the Indicator

Each point in the Butterfly Harmonic Pattern plays a specific role in analyzing its structure. Point X serves as the starting point of the pattern and acts as the base for Fibonacci ratio calculations. The movement from X to A represents an initial price move, usually identifiable as a trend. Point B reflects a partial correction of the XA move, typically falling within the 0.618 Fibonacci range.

Following this, Point C illustrates the continuation of the price movement. Finally, Point D stands out as the most critical point of the pattern, marking the Potential Reversal Zone (PRZ).

Indicators in Bullish Trends

In Bitcoin's (BTC) 3-hour chart, the bullish Butterfly Harmonic Pattern completes when the price reaches Point D in the Potential Reversal Zone (PRZ).

The price enters an uptrend at this point, forming consecutivehigher highs and higher lows. The indicator also issues a buy signal.

Indicators in Bearish Trends

In the EUR/USD pair's downtrend, the key points X, A, B, C, and D are identified. After the price reaches Point D, recognized as the Potential Reversal Zone (PRZ), Point BC corrects approximately 0.647 of the AB move.

The price enters a downtrend upon forming Point D, consistently creating lower and lower highs. At this stage, the indicator displays a sell signal.

Indicator Settings

Logical Setting

• ZigZag Pivot Period: Default value is 3
• Show Valid Format: Display only valid patterns
• Show Formation Last Pivot Confirm: Show confirmation for the last pivot
• Period of Formation Pivot: Default value is 2

Display Setting

• Show Bullish Pattern: Display bullish patterns
• Show Bearish Pattern: Display bearish patterns
• Color Bullish Pattern: The default color is blue
• Color Bearish Pattern: The default color is blue
• Width Line: Default line thickness is 1
• Label Size: Adjustable label text size
• Switching Colors Theme Mode: Adjust the chart background theme

Alert

• Alert: Notifications when a pattern is detected
• Alert Name: Customizable alert name
• Message Frequency: Content of the alert message
• Show Alert Time by Time Zone: Displays alert time based on the selected time zone

Conclusion

With the formation of Point D as the Potential Reversal Zone (PRZ), the price enters a new trend, which can continue either upward or downward.