Once upon a time, there was this insanely smart trader dude named Harold McKinley Gartley. He had a stock market advisory service in the mids with a huge following. This service was one of the first to apply scientific and statistical methods to analyze the stock market behavior. According to Gartley, he was finally able to solve two of the biggest problems of traders: Soon enough, traders realized that these patterns could also be applied to other markets.
Since then, various books, trading software, and other patterns discussed below have been made based on the Gartleys. Gartleys book, Profits in the Stock Market. These patterns are used to help traders find good entry points to jump in on the overall trend.
A Gartley forms when the price action has been going on a recent uptrend or downtrend but has started to show signs of a correction. What makes the Gartley such a nice setup when it forms is the reversal points are a Fibonacci retracement and Fibonacci extension level.
This gives a stronger indication that the pair may actually reverse. This pattern can be hard to spot and once you do, it can get confusing when you pop up all those Fibonacci tools. The key to avoiding all the confusion is to take things one step at a time. In any case, the pattern contains a bullish or bearish ABCD pattern , but is preceded by a point X that is beyond point D.
As time went by, the popularity of the Gartley pattern grew and people eventually came up with their own variations. For some odd reason, the discoverers of these variations decided to name them after animals Maybe they were part of PETA?
Without further ado, here comes the animal pack…. This pattern has a high reward-to-risk ratio because you can put a very tight stop loss. The Bat pattern has the following qualities:.
Gartley Pattern Rules And Trade Examples in Forex - Indicator Vault
Then, there is the Butterfly pattern. Created by Bryce Gilmore, the perfect Butterfly pattern is defined by the. The Butterfly contains these specific characteristics:. You may be disappointed if you fail, but you are doomed if you don't try.
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