The Bearish Gartley pattern is a harmonic trading pattern that typically signals a reversal in the price of a financial asset. It's named after H.M. Gartley, who first described it in his book "Profits in the Stock Market" in 1935.
The Bearish Gartley pattern is formed by a series of price swings and Fibonacci retracement levels. It looks like an "M" shape on the chart. The key elements of the pattern include:
1. **Initial Impulse Wave (X to A)**: This is the first leg of the pattern, where the price initially moves in the direction of the prevailing trend.
2. **Correction Wave (A to B)**: After the initial impulse, the price retraces, forming wave A to B. This retracement usually constitutes a 61.8% retracement of the initial impulse wave.
3. **Impulse Wave (B to C)**: Following the correction, the price resumes its downward movement, forming wave B to C.
4. **Correction Wave (C to D)**: This wave represents another retracement, typically around 78.6% of the B to C move.
5. **Completion Point (D)**: This is where the pattern completes. It's usually at the confluence of Fibonacci extensions of XA and BC moves.
When the price reaches the completion point D, traders may anticipate a reversal to the downside. They often look for confirmation signals like bearish candlestick patterns or divergences in momentum indicators before taking a short position or exiting long positions.
Remember, like any technical analysis tool, the Bearish Gartley pattern is not foolproof and should be used in conjunction with other analysis methods and risk management strategies.
The Bearish Gartley pattern is formed by a series of price swings and Fibonacci retracement levels. It looks like an "M" shape on the chart. The key elements of the pattern include:
1. **Initial Impulse Wave (X to A)**: This is the first leg of the pattern, where the price initially moves in the direction of the prevailing trend.
2. **Correction Wave (A to B)**: After the initial impulse, the price retraces, forming wave A to B. This retracement usually constitutes a 61.8% retracement of the initial impulse wave.
3. **Impulse Wave (B to C)**: Following the correction, the price resumes its downward movement, forming wave B to C.
4. **Correction Wave (C to D)**: This wave represents another retracement, typically around 78.6% of the B to C move.
5. **Completion Point (D)**: This is where the pattern completes. It's usually at the confluence of Fibonacci extensions of XA and BC moves.
When the price reaches the completion point D, traders may anticipate a reversal to the downside. They often look for confirmation signals like bearish candlestick patterns or divergences in momentum indicators before taking a short position or exiting long positions.
Remember, like any technical analysis tool, the Bearish Gartley pattern is not foolproof and should be used in conjunction with other analysis methods and risk management strategies.