Hello amazing traders!
I wanted to briefly show the bullish butterfly pattern on the daily chart. It also shows up well on the 4 hour chart, but the daily is best to visualize everything. A bullish butterfly is not just a random drawing some guy came up with decades ago. It's an important chart pattern which relies on a confluence of fib lines coming together. To put it simply, think of MULTIPLE supports and resistances coming together into a few important points. The pattern is not valid and should not be traded until point "D", also known as the "PRZ" or potential reversal zone.
Since we can see price action his point "D", we can now set up targets. Target 1 is the 0.382 fib line of the AD Retracement. Target 2 is the 0.618 of the AD Retracement. Now we can see that Target 1 has been reached... but the action might not be over yet!
What a lot of traders who are confident in these patterns like to do is once Target 1 is reached, they will set their stop-loss just below target 1(so ~850s in this case), and aim for Target 2. Many times once Target 1 is hit, it will act as a new support for the path up to 2.
Let's watch and see!
Stay healthy!!!
-Doc