Draw Automatic Butterfly Pattern for Amibroker AFL

Butterfly pattern for amibroker afl by pipschart

BUTTERFLY PATTERN AFL

The Butterfly pattern is a reversal pattern composed of four legs, similar to the Gartley and Bat pattern, marked X-A, A-B, B-C and C-D. It helps you identify when a current price move is likely approaching its end. This means you can enter the market as the price reverses direction. There is a bullish version where you place a buy trade and a bearish version where you would place a sell trade.

What is the Butterfly Pattern?

The Butterfly pattern can be found near key market reversal points, usually at intermediate highs and lows. The appearance of the butterfly pattern indicates reversals when it is validated. The chart below gives an illustration of the Bullish and Bearish butterfly patterns.

Bullish and Bearish butterfly patterns exampleThe main rules of the Bullish and Bearish Butterfly patterns are as follows:

Butterfly Rules

  • AB can retrace up to 78.6% of the XA leg
  • BC can retrace between 38.2% – 88.6% of AB
  • CD can be an extension of 1.618% – 2.618% of AB
  • CD can also be an extension of up to 1.272% – 1.618% of XA leg
  • The point D is known as the PRZ or Potential Reversal Zone

From Point D, a trade can be entered with stops at or above (below) the price point at D.

Butterfly Target Levels

Once a position is entered at D, profits can be booked at 61.8% of CD with the second target at 127.2%. Despite the above rules, in real time such text book patterns that qualify every point of the swing legs do not form as expected, so traders should be a bit flexible while identifying the butterfly patterns.

Here is the Image of AFL [amibroker formula language].

butterfly pattern

HERE IS BUTTERFLY PATTERN FOR AMIBROKER AFL CODE

Click here to download this AFL

How to use Automatic Butterfly Pattern  for Amibroker AFL

  • Download the Automatic Butterfly Pattern for Amibroker AFL.
  • Now copy the afl file and paste it to \Program Files\AmiBroker\Formulas\Custom. [For 32 bit]
  • If You have 64 bit operating system than paste it to  \Program Files(x86)\AmiBroker\Formulas\Custom.
  • Go to formula section of Amibroker and you will get the afl in Custom folder.
Don’t Know How To Set Amibroker? Than Just Watch :

Draw Automatic Butterfly Pattern for Amibroker AFL
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