I recently gave a webinar on the Powerful Butterfly Pattern. As many of you know this is a reversal pattern and a true contrarian trading pattern. When they perform as a reversal pattern you will see them at major tops and bottoms. They will form in all time frames and in all markets.

Did you also know that sometimes you will see them forming within a range? The example shown below is from a 400 tick SP 500 Emini chart. You can see the Fibonacci retracements of the previous swing from high to low on the chart. In this particular instance, the market had a small gap up open and the .618 retracement area was just above the gap close providing good support.

The Butterfly Pattern formed as the leg down to the .618 and gap close area. Study the chart below and see if you can spot some intraday, intra-range Butterfly Patterns!

Best Wishes for Successful Trading!

This entry was posted on Tuesday, August 18th, 2009 at 9:27 pm and is filed under Trading Live Online Trading Tips. You can follow any responses to this entry through the RSS 2.0 feed. You can skip to the end and leave a response. Pinging is currently not allowed.