The Butterfly harmonic pattern is a retracement and continuation chart formation that indicates a potential price reversal. It is a five-point harmonic pattern with the XABCD labelling. Similar to the Gartley pattern, the Butterfly pattern has four waves that are labelled XA, AB, BC, and CD.

The four price swings are the XA wave created by an impulse price move from point X to A, the AB wave created by a corrective move from point A to point B, the BC wave created by a retracement from point B to C, and finally the CD wave created by an impulse price move from point C to D, which extends beyond point X where the formation started from.