Bearish Butterfly at 1.13 RSI BAMM Confirmation Point

One of the most common patterns associated with a 1.13 RSI BAMM Confirmation Point extension is a Bearish Butterfly (see Figure 6.67). Typically, the RSI BAMM Trigger Bar will indicate a 1.13 extension, while the price action forms a distinct Bearish Butterfly, indicating that the potential reversal will occur at the 1.27 extension.

Figure 6.67.

Although this may create some confusion, it is important to remember that the pattern completion point represents the most critical price level in this area. This underscores the importance of the PRZ within the RSI BAMM limits (1.13–1.618) as the most critical price area for the ultimate execution of the trade.