How to identify the Bullish & Bearish Gartley pattern

Tracing down the harmonic Gartley trading pattern, the Gartley “222”pattern is the page number found in H.M. Gartley’s book” Profits in the Stock Market.” Gartley did not give it a name and hence for some time it had been called the 222 pattern after the page number of the book.

Gartley pattern is in form of a bullish W or bearish M. It is mainly a continuation pattern that appears when a trend pauses before continuing in its trend direction. It starts with strong uptrend or downtrend which draws zigzag like corrective movements

It looks like A-B-C-D pattern except that it has an extra leg of X-A.  Let’s look at the typical characterristics

Take a look at the illustration below;

  • X should exceed D.
  • Move AB should be 61.8% retracement of XA.
  • Move BC must be 38.2% or 88.6% retracement of AB.
  • If  BC is 38.2% of AB, then the CD must move 127.2% extension of BC.
  • If BC is 88.6%, then the CD should be 161.8% of BC.
  • CD should be 78.6% retracement of XA

How to trade a Gartley pattern on a market chart

Let’s start with an example below with a Bearish Gartley pattern

From our example above, Sell trigger entry is at D. The stop loss is placed few pips above the farthest possible D level. The safe target lies within 38.2-61.8% of AD move. The most important point to ensure is to have a favorable risk reward ratio.

Now, take a look at the chart below with a Bullish Gartley pattern

From our example above, the Buy entry signal is at D. The stop loss is placed few pips below the farthest possible D level. The safe target lies within 38.2-61.8% of AD move. The most important point to ensure is to have a favorable risk reward ratio.

Now that we know how a Gartley pattern looks like, let’s take a look at the Animals as named by Scott Carney in the next lesson.

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