Beginning with a precise 0.786 B point retracement, the Butterfly
encompasses a minimum AB=CD pattern with the 1.27 XA and the 1.618 BC projections as
mandatory requirements to define the Potential Reversal Zone (PRZ).

• Precise 78.6% B point retracement of XA leg.
• BC projection must be at least a 1.618.
• Equivalent AB=CD pattern is minimum requirement, but the Alternate 1.27 AB=CDis the most common.
• 1.27 XA projection most critical number in the Potential Reversal Zone (PRZ).
• No 1.618 XA projection.
• C point within range of 0.382–0. 886 retracement .
Harmonic Patterns

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