- **Bearish Butterfly Pattern**: - A technical analysis pattern seen in financial markets. - Signals a potential reversal from an uptrend to a downtrend.
- **Structure**: - Consists of four price swings: XA, AB, BC, and CD. - Resembles the shape of a butterfly.
- **Key Characteristics**: - AB leg retraces a portion of XA. - BC leg extends beyond XA. - CD leg retraces a portion of BC.
- **Trading Strategy**: - Consider short positions after the completion of the pattern. - Set stop loss above the pattern's high. - Set profit targets at key support levels or Fibonacci extensions.
- **Caution**: - Analyze other indicators and market context. - Implement risk management strategies.