colors are fashioned after traffic lights
Green= largest and 1st swing (buy setup)
Yellow =medium 2nd swing (buy setup)
Red = where the potential "bounce" higher should begin to lose momentum (profit taking window of time - red vertical line labelled #2 along the bottom of the chart) -
this is a 5 min pattern remember but good for 20-40 pips
I have noticed a lot of incorrectly drawn gartleys in posts ... point "C" must ALWAYS be BELOW point "A"
Point "D" must ALWAYS be above point "X" ... if not then it becomes a .
from point "x" to point "D" , you ideally wish to see an upward slope to indicate trend. A perfect ratio is of course .618
this then supports a calculated pullback (reverse is true for short)
point "B" to point "D" should also try to be a ratio relative to point "X" to point "D" (2.24)
the deeper the pullback ratio (point "C" to point "D") the weaker the setup
horizontal yellow line should be logical area of support - yellow circle should be the window in price and time to consider a long entry
finally, given the steep angle from point "C" to point "D" , I expect there to be a choppy "bottoming" to establish support before the bounce higher (should it happen) - The IDEAL swing from point "C" to point "D" is at about a 45 degree angle