How to Identify Gartley Pattern?
As mentioned in the introduction section, the Gartley pattern has very specific ratios within which its price retracements must fall. Whether it’s a bullish or a bearish Gartley Pattern, it does not matter. This is because both types of the pattern operate in the same identical way.
There are two steps involved in accurately identifying the Gartley Pattern. These are –
Understanding the Gartley Pattern construction rules
Drawing the Gartley Pattern on the price chart for easy visualization
Both these steps will be covered in detail, in the following sections of this article.
Generally speaking, the ratios prescribed by the Gartley Pattern Rules must be met, and the closer they are, the more predictive power the pattern has.
That being said, you can make trading decisions based on the Gartley Pattern even if these ratios are not an exact match. However, with each standard deviation away from the prescribed Fibonacci levels, the Gartley model loses some of its predictive power. Therefore, the results that you get when trading a Gartley Pattern, constructed with minor deviations from the prescribed Fibonacci ratios, might not be as impressive.
As mentioned in the introduction section, the Gartley pattern has very specific ratios within which its price retracements must fall. Whether it’s a bullish or a bearish Gartley Pattern, it does not matter. This is because both types of the pattern operate in the same identical way.
There are two steps involved in accurately identifying the Gartley Pattern. These are –
Understanding the Gartley Pattern construction rules
Drawing the Gartley Pattern on the price chart for easy visualization
Both these steps will be covered in detail, in the following sections of this article.
Generally speaking, the ratios prescribed by the Gartley Pattern Rules must be met, and the closer they are, the more predictive power the pattern has.
That being said, you can make trading decisions based on the Gartley Pattern even if these ratios are not an exact match. However, with each standard deviation away from the prescribed Fibonacci levels, the Gartley model loses some of its predictive power. Therefore, the results that you get when trading a Gartley Pattern, constructed with minor deviations from the prescribed Fibonacci ratios, might not be as impressive.
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