Skip to main content
Track Fibonacci projection
2 / 18
Search the archiveLibrary
Library

2001issue C041-2

Constructing butterfly-spreads from a weekly impulse to daily D

A butterfly-spread is assembled in stages: mark XA on a weekly chart, confirm B and C with Fibonacci-retracement bands on a daily chart, then accept or reject D by whether a Fibonacci-projection lands on the assigned legs.

  • Construction starts by marking an experimental XA on a weekly chart, then switches to a daily chart so later Fibonacci-retracement and Fibonacci-projection measurements can be placed more precisely.
  • Point B is monitored as a Fibonacci-retracement of XA near 0.786, and point C is accepted when the Fibonacci-retracement of AB falls between 0.618 and 0.786.
  • Four Fibonacci-projection candidates can be computed for D; the worked sequence discarded a wide AB-equals-CD copy and preferred an XA projection near 1.41.
  • Live prices are not expected to match every ideal ratio, and a setup may still be recorded when measured legs stay near their assigned checkpoints.
Entries in this reading3 entries
Butterfly spread4 readingsCurrent trackFibonacci projection19 readingsFibonacci retracement111 readings

Build the geometry in stages

A butterfly-spread is a four-leg bullish or bearish geometry completed at D beyond the origin of XA. It is used as a structured setup for locating a potential reversal zone.

A bullish butterfly-spread uses the ratio set 0.618, 0.786, 1.27, and 1.618, but assigns those ratios to different legs so completion at D prints below X. Point D is the terminal vertex of the butterfly-spread; in the bullish form it sits below X.

Scout XA on the weekly chart

Construction starts by marking an experimental XA on a weekly chart. XA is the initial impulse marked first on a weekly chart and then refined on a daily chart.

After that first mark, the workflow switches to a daily chart to place later Fibonacci-retracement and Fibonacci-projection measurements more precisely.

Confirm B and C with retracement bands

A Fibonacci-retracement is a measured pullback of a later swing against an earlier swing. It is used here to locate B on XA and C on AB, especially near 0.618 and 0.786.

Point B is monitored as a Fibonacci-retracement of XA near 0.786. A measured AB/XA of 0.742 is treated as close enough to keep the butterfly-spread intact.

Point C is accepted when the Fibonacci-retracement of AB falls between 0.618 and 0.786. The worked BC/AB reading of 0.726 stayed inside that band.

Accept D only when a projection lands

A Fibonacci-projection is an extension of a completed swing, used here to forecast D from XA or from an AB-equals-CD copy, especially near 1.27 and 1.618.

Four Fibonacci-projection candidates can be computed for D. An AB-equals-CD copy at 36.38 was discarded as too wide, and 25 was used to close the diagram and finish ratio checks.

Final-ratio review preferred an XA Fibonacci-projection near 1.41 over a BD reading of 2.23 when deciding which D geometry to keep.

Use the same worksheet for the bearish form

The bearish butterfly-spread is the mirror image of the bullish geometry and is calculated with the same Fibonacci-retracement and Fibonacci-projection worksheet.

Educational research material, not investment advice. Historical source context does not establish present-day performance.
2 of 18 in the Fibonacci projection track
20021-4 pp.Next on Fibonacci projectionProjected Fibonacci targets from breakout levelsAfter a horizontal support or resistance break, four continuation levels are constructed from the ratio set of 23.6 percent, 38.2 percent, 50 percent, and 61.8 percent.
All readings on this track · 18 readings
  1. 2001Constructing a Gartley from wave retracements
  2. 2001Constructing butterfly-spreads from a weekly impulse to daily D
  3. 2002Projected Fibonacci targets from breakout levels
  4. 2004Constructing wave-ratio clusters with Fibonacci and Gann
  5. 2006Third-wave impulse counts wait for a dated cluster
  6. 2006Wave and ratio checkpoints versus a dominant dollar story
  7. 2007A 2007 EUR/JPY news shock as a Fibonacci retest drill
  8. 2008Constructing Fibonacci retracement, projection, and range maps
  9. 2010Swing projection targets and support-backed put sales
  10. 2010Fibonacci clusters as a tight support or resistance decision
  11. 2011Fibonacci projections and money-flow divergence on a Dollar Index downswing
  12. 2011Crude oil wave confluence as a decision map
  13. 2016Box range projections for cup breakout entries
  14. 2018Fibonacci pinball and the 2016 election-week scoring drill
  15. 2019Named line-break rules for a wave count and Fibonacci map
  16. 2019Objective Fibonacci grids for support, retracement, and projection
  17. 2020Gold Super Cycle nested waves and Fibonacci bands
  18. 2020Intra-swing Fibonacci fitting and completion targets
By fieldWaves and ratios107 readingsBy year200180 readings
All 19 readings tagged Fibonacci projection
Also on Fibonacci projection5 readings
2012Sizing a long butterfly for early assignment and a long option for gammaButterfly spread2019Put butterfly versus long put in a volatility spikeButterfly spread2020Scenario-first SPY put hedge: butterfly versus long putButterfly spread2001Constructing a Gartley from wave retracements2002Projected Fibonacci targets from breakout levels