Butterfly Pattern Indicator is a forex trading indicator. It is a very simple trading indicator. It works like fractals. The Butterfly pattern indicatorspots the reversal on the chart and helps you trade accordingly. This indicator can be used in many ways. It depends on what kind of trader you are. You can use it for scalping purpose as well as for other kinds of trading. However, the fact is that you will not be a successful trader with help of this single trading indicator like this. You need to combine Butterfly patter indicator with other indicators to get best out of it.
When you install Butterfly pattern indicator in your trading platform, your chart should look like this:
- Butterfly Pattern Indicator
Butterfly pattern indicator consists of green and red arrows that appear in the main chart window. The green arrow indicates buying and the red arrow indicate the selling signal. The first thing you need is you need to see the direction of the market and you should trade only in the direction of the market. By doing so, you will have higher chances of winning.
Buying Conditions Using Butterfly Pattern Indicator.
- Market should be up trending.
- You should see a green arrow below the market.
- Place your long position as soon as above conditions are met.
- Place your stop loss just below the recent swing low.
- Take your profit when you see a red arrow above the market.
Selling Conditions Using Butterfly Pattern indicator.
- Market should be down trending.
- You should see a red arrow above the market.
- Place your short position as soon as above conditions are met.
- Place your stop loss just above the recent swing high.
- Take your profit when you see a green arrow below the market.