The Gartley was one of the first advanced harmonic patterns ever discovered by Scott Carney and continues to be one of the most successful. This bullish Gartley pattern completion is looking very promising, more so than our previous "horizon" Cypher. As you can see, we're walking down the support line from just shy of $640 heading right to our PRZ at +/- $623. Thanks goes to @MagnusTradingGroup for picking this one out of the weeds. I will absolutely be taking this trade but until the market shows that it is ready to recover to the upside, I'll be 50/50 after target 2, waiting for the next opportunity.
Gartley Pattern Requirements:
· Precise 61.8% B point retracement of XA leg. · BC projection must not exceed 1.618. · Equivalent AB=CD pattern is most common. · 0.786 XA retracement. · C point within range of 0.382-0.886 retracement.
Target 1 at 38.2% retrace level of AD Target 2 at 61.8% retrace level of AD
Comments
trader888
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It's a good setup but the PRZ is to small to be usable in my opinion. Looked to work out for you which is great but i think its a good example of what not to do if you trade the prz.
ninjabenja
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Using combination of retracements, projections and extensions (or in the instance of the above chart a combination of those in conjunction with trend-lines) we can build a Fibonacci cluster also referred as Fibonacci confluence, convergence or as identified above, a Potential Reversal Zone. The PRZ is not something that you arbitrarily shrink or enlarge, it is defined for you by technical analysis. The closer and the more lines from different measurements, the stronger the PRZ; ie: the higher the probability it will work as a support or resistance level and will allow you to enter into a low risk/ high probability trade.
Ideally you want a minimum of 2 Fibonacci price relationships converging within a relatively tight range so that when price enters the PRZ we can watch for a trigger (confirmation) that will tell us to enter the market. Hope that helps!