Above Is an illustration of a complete and the rules and ratios needed to trade this pattern.
First things first, grab your Fibonacci tool and draw from the X to A leg of the initial move or impulse leg.
The Fibonacci ratio's you are looking for are the 0.618% and the 0.786%, price MUST at least touch or spike through the 0.618% but not touch or exceed the 0.786%.
The price reversal zone is shown in the white box.
Now you have the B leg we are looking for the C leg which is a retracement of the A to B move.
Once again grab your Fibonacci tool and draw from the A leg to the B leg, you are looking for a minimum of the 0.618% retracement.
On the C leg the price reversal zone is a little wider, price MUST hit the 0.618% but not exceed the A leg, which is once again shown in the illustration above.
Once you have the X A B and C legs you are looking for the final piece of the jigsaw which is the D leg completion and the area you are looking to buy.
there are a couple of different ways to get the D leg however they both end up at the same price, for me personally I use the tool.
To get the D leg take your Fibonacci tool and draw from the B to A leg which will give you a 1.272%.
Once price falls to the 1.272% all criteria's are met, at which point you would buy in anticipation that price will rise.
When looking to take targets on this pattern the first step is to once again use your Fibonacci tool.
Take your Fibonacci tool and draw from the C to D leg, you are looking for the 0.382% and 0.618%.
If this is the method you are looking to use for targets you would have your broker take off half of your position at the 0.382% and the other half at the 0.618%
To protect the profits you have accumulated it is advised to move stop loss to breakeven once the 0.382% target 1 has been attained, thus giving you a risk free trade and money in the bank.
When looking to place your stops there are again many ways this can be done, but should always be placed below the X leg.
Your risk reward should be a minimum of 1:1 on every trade to the 0.382%, if this can not be achieved then I would not personally take the trade.
This pattern like any other and is more profitable with certain currency pairs, you should do your own back testing on this before trading the pattern.
I hope this is a more in-depth insight to advanced patterns in particular the .
I am available via private message for any questions you may have.
Please note I am only providing my own trading information for your benefit and insight to my trading techniques, you should do your own due diligence and not take this information as a trade signal.
at point C, you refer to the "extension" of the A to B move.
The direction of the A to B move is downward, and the word "extension" would imply a farther move in the same direction downward.
The move from B to C is a "retracement" (reverse direction) of the A to B move, and an "extension" of that retracement reverse move. It extended beyond the point of origin.
I couldn't agree more, I think too many traders want to trade 20 currency pairs and trade anything, just because you have a good plan doesn't mean capital should be at risk on every setup, sometimes cherry picking the best is key.
I hope the information has helped some traders grasp the basics.
I will update above on the comments section my rules for the Bat & Gartley which is updated.
Keep working hard adapting your rules to suit your lifestyle.