Gartley patterns, like any other advanced harmonic patterns, are formed from retracements and extensions, all Fibonacci based. Trading these kind of setups will require you to do a good number of backtests to be able to quickly identify when such patterns start forming. There exists a set of rules behind the formation of such patterns that should be followed however one can make minor adjustments to make his/her stratedgy perform much better.
First of all we have to recognize that the Gartley is a form of ABCD Harmonic pattern and performance is relative to probability if all trade rules are met and followed.
Procedure:
1. Identify your impulse leg X to A. This is mostly a bullish or bearish rally that takes place over time depending on the timeframe or if price movement was fundamentally driven i.e release of important/crucial news e.g Oil price surge, NFP, Bank Interest rates, CPI release, Housing data e.t.c
2. Using Fibonacci retracement tool, print out and measure the retracement made from the impulse leg X to A. This retracement will form our A to B leg and with a Gartley pattern we should expect a 0.618 or 61.8% retracement on price.
3. Using Fibonacci extension tool, extend and measure out A to B leg to identify and validate your B to C leg. For the case of Gartley patterns our B to C leg will only be valid if our extension completes between 0.382 or 38.2% and 0.886 or 88.6%.
4. For our C to D completion, I look at two ways of looking for bullish and or bearish entry opportunities depending on the prevailing market conditions :
(i)Aggressive Traders : Going long or short anticipating the C to D completion at either a 0.786 retracement of X to A or 1.272 to 1.618 extension of the B to C leg( all Fib based). For newbie traders I reckon them not to try this because they might not possibly find good entry and exit reasons.
(ii)Conservative Traders : Wait for the C to D at the figures I have given in (i) then look for short/long entry opportunities depending whether the completion was bullish or bearish.
Note: Look left at structure and always identify key areas of support and resistance to Identify potential entry and exit points. Respect round even prices. Identify Oversold and Overbought market conditions.
MERRY CHRISTMAS & HAPPY NEW PROFITABLE YEAR 2019
First of all we have to recognize that the Gartley is a form of ABCD Harmonic pattern and performance is relative to probability if all trade rules are met and followed.
Procedure:
1. Identify your impulse leg X to A. This is mostly a bullish or bearish rally that takes place over time depending on the timeframe or if price movement was fundamentally driven i.e release of important/crucial news e.g Oil price surge, NFP, Bank Interest rates, CPI release, Housing data e.t.c
2. Using Fibonacci retracement tool, print out and measure the retracement made from the impulse leg X to A. This retracement will form our A to B leg and with a Gartley pattern we should expect a 0.618 or 61.8% retracement on price.
3. Using Fibonacci extension tool, extend and measure out A to B leg to identify and validate your B to C leg. For the case of Gartley patterns our B to C leg will only be valid if our extension completes between 0.382 or 38.2% and 0.886 or 88.6%.
4. For our C to D completion, I look at two ways of looking for bullish and or bearish entry opportunities depending on the prevailing market conditions :
(i)Aggressive Traders : Going long or short anticipating the C to D completion at either a 0.786 retracement of X to A or 1.272 to 1.618 extension of the B to C leg( all Fib based). For newbie traders I reckon them not to try this because they might not possibly find good entry and exit reasons.
(ii)Conservative Traders : Wait for the C to D at the figures I have given in (i) then look for short/long entry opportunities depending whether the completion was bullish or bearish.
Note: Look left at structure and always identify key areas of support and resistance to Identify potential entry and exit points. Respect round even prices. Identify Oversold and Overbought market conditions.
MERRY CHRISTMAS & HAPPY NEW PROFITABLE YEAR 2019