The Gartley pattern

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What is the Gartley pattern?

The Gartley pattern is a harmonic pattern used to predict price movements by using fibonacci percentages to measure retracements and extensions. It is formed with 4 “legs” and when the forth leg is complete a reversal is highly probable.

The bullish Gartley

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Bullish Gartley pattern

The first movement is a strong bullish move which is known as X to A. After this initial move, there should be a retracement of .618 of X to A which creates the second leg known as A to B. The third leg is a retracement of A to B which can be between .382 and .886 and is marked B to C. Then the final leg is marked C to D which is a fibonacci extension of B to C which can be between 1.272 to 1.618.

The bearish Gartley

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Bearish Gartley pattern

The first movement is a strong bearish move which is known as X to A. After this initial move, there should be a retracement of .618 of X to A which creates the second leg known as A to B. The third leg is a retracement of A to B which can be between .382 and .886 and is marked B to C. Then the final leg is marked C to D which is a fibonacci extension of B to C which can be between 1.272 to 1.618.

How to trade the Gartley pattern

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Trading the Gartley pattern

To trade the gartley pattern it is best to wait for the pattern to complete its C to D leg, at this point there is a high probability for a reversal, so when C to D is formed on a bearish Gartley pattern a sell is probable, and in a bullish gartley pattern it is a good place to buy.  It is also a good idea to wait for further confirmation e.g. a reversal candlestick patter or if D falls on a key level. To exit the trade targets are usually set at .618 of C to D or set at C.

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