Butterfly Harmonic Pattern Harmonic Detector

The Butterfly Harmonic Pattern indicator is a sophisticated technical analysis tool that automatically detects and visualizes high-precision reversal structures based on specific Fibonacci ratios.

Usage

The Butterfly pattern is used to identify potential market turning points at the end of established trends. Unlike retracement-heavy patterns like the Gartley, the Butterfly is an extension pattern where the final "D" point typically extends beyond the initial "X" point.

• Bullish Butterfly: Look for this "M" shaped formation at the end of a downtrend. A reversal is anticipated once the price hits the specified extension levels at point D.
• Bearish Butterfly: Look for this "W" shaped formation at the end of an uptrend. This suggests a potential shift from buying pressure to selling pressure.

Traders often use this tool to set precise entry orders at point D and define stop-loss levels just beyond the harmonic structure.

Details

The Butterfly pattern, originally discovered by Bryce Gilmore, relies on precise geometric configurations. This implementation uses a ZigZag-based logic to track price swings and validate them against standard Fibonacci requirements:

• B point retracement of XA: ~78.6%
• D point extension of XA: 127% to 161.8%
• BC projection: 161.8% to 224%

The indicator includes a "Valid Format" filter to ensure only the most accurate geometric structures are displayed, minimizing noise from market fluctuations.

Settings

Logical Setting

• ZigZag Pivot Period: Adjusts the sensitivity of the swing detection. Larger values find long-term patterns, while smaller values find short-term ones.
• Show Valid Format: When enabled, filters the output to only show patterns that strictly adhere to classical ratios without noise.
• Show Formation Last Pivot Confirm: If enabled, the pattern only appears after the final pivot point is fully confirmed by subsequent price action.
• Period of Formation Last Pivot: Sets the confirmation window for the final point of the pattern.

Display Setting

• Show Bullish/Bearish Pattern: Toggles the visibility of specific pattern types.
• Color Settings: Customizes the visual appearance of bullish and bearish formations.
• Width Line: Adjusts the thickness of the lines forming the harmonic structure.
• Label size: Controls the size of the XABCD labels on the chart.
• Switching Colors Theme Mode: Provides presets for Light or Dark chart themes.

Alert

• Alert: Toggles the alert system on or off.
• Message Frequency: Determines if alerts trigger every time, once per bar, or only on bar close.
• Show Alert time by Time Zone: Adjusts the timestamp in alert messages to your preferred UTC offset.

FAQ

How do I access the Butterfly Harmonic Pattern?

You can get access on the LuxAlgo Library for charting platforms like TradingView, MetaTrader (MT4/MT5), and NinjaTrader for free.

What is the difference between a Butterfly and a Gartley pattern?

The main difference is the location of point D. In a Gartley, point D is a retracement within the XA leg, whereas in a Butterfly, point D extends beyond the X point.

Why did a pattern disappear from my chart?

Harmonic patterns are based on pivots. If "Show Formation Last Pivot Confirm" is off, a pattern may appear speculatively and then disappear if the price breaks the required Fibonacci ratios before the pivot is confirmed.