The Gartley Pattern , is a harmonic pattern discovered by H M Gartley and outlined in his book 'Profits in the Stock market', published in 1935.
The pattern was further defined using specific Fibonacci levels by Scott Carney which he outlined in his book 'The Harmonic Trader', published in 1998.
The pattern incorporates the 78.6% retracement of XA, as the defining element in the Potential Reversal Zone (PRZ).
The B point must be at the 61.8% retracement of XA. The Gartley utilizes a minimum 127.2% projection of BC .
In addition, the pattern should possess a distinct AB=CD pattern that converges in the same area as the 78.6% retracement of XA and the BC projection.
This is the first of two potential Harmonic patterns on the Daily time frame signalling the continuation of the current bearish retracement on EUR/USD.
ENTRY = 1.18163 STOP = 1.18719 TP1 = 1.17383
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TP2 = 1.16901
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To be valid, all Harmonic patterns I use must contain an ABCD structure.
I do not trade the ABCD pattern but use it simply as confluence for the overall Harmonic structure.
The type of ABCD pattern varies for each Harmonic structure, it can be identified by measuring the AB leg (which must retrace at least 38.2% to form point C) then extending this measurement from point C to identify point D.
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Although the ABCD structure will often align with several of the structural points of the overall Harmonic pattern, it should be treated independently and not confused with the AB and CD legs of the Overall pattern ...
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As price broke above entry before completing the symmetrical ABCD we can assume the ABCD1.27 is the correct structure. As mentioned before I do not trade and would not advise trading these ABCD structures, they are used purely as confluence/validation for the overall Harmonic pattern ...
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The Bearish ABCD1.27 Pattern has completed after hitting both TP1 (38.2% of AD) and TP2 (61.8% of AD) I would now expect the continuation upwards towards the entry of the Bearish Gartley Pattern.
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TP1 hit, 50% of position closed.
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TP2 Hit, 50% of remaining Short position closed.
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Due to the development of the following Bearish Shark pattern, I will be closing the remaining 25% of the Short position for this Gartley at the Shark patterns' initial target ...