A Gartley forms when the price was movement was in uptrend (or downtrend) but has started to show signs of a correction.
Gartley is using in conjunction with Fibonacci retracement and Fibonacci extension levels. Garley Pattern is difficult to be spotted but after some practice you’ll be find it without any difficult. Our hint is look for “M” or “W’ price movements.
The pattern contains a bullish or bearish AB=CD pattern, but is preceded by a point (X) that is beyond point D.
One perfect Gartley pattern must has the following characteristics:
- AB leg should be the 0.618 retracement of move XA.
- Correction wave BC should be either .382 or .886 retracement of AB leg.
- If the retracement of move BC is 0.382 of move AB, then CD is 1.272 of move BC. If move BC is .886 of move AB, then CD should extend 1.618 of move BC.
- Move CD should be no more than 0.786 retracement of move XA