4.57 The Gartley Pattern and It's Variations

 

H.M. Gartley introduced Gartley patterns in his book "Profits in Stock Markets". This pattern is also called Gartley 222 patterns as it was described on the page # 222 of the mentioned book.

 

Gartley pattern is basically an ABCD pattern appearing during a bullish or bearish trend and it indicates the possibilities that the correction of the ongoing trend may be over and the initial trend may resume.

 

In simple words the Gartley patterns can be summarized as follows:

 

  • Bullish Gartley pattern = Bullish leg during a bullish trend + Variation of Bullish ABCD patterns.

 

  • Bearish Gartley pattern = Bearish leg during a bullish trend + Variation of Bearish ABCD patterns.

 

A standard ABCD pattern has 0.618 Fibonacci retracement followed by a 1.272 extension, while the harmonic pattern in the Gartley patterns consists of a retracement of either 0.382 or 0.886 followed by an extension of either 1.272 or 1.618 levels. Also the harmonic pattern ends at a retracement of 0.786 from the point where the overall pattern begins.

 

Let's check the visual representation of the above:

 

Bullish and bearish Gartley price patterns.

Summary

  • Move AB = 0.618 (61.8%) retracement of the bullish or bearish leg OA.

 

  • Move BC = Either 0.382 (38.2%) or 0.886 (88.6%) retracement of move AB.

 

  • Move CD = 1.272 (127.2%) extension of move BC, if BC was 38.2% retracement of AB.

But..

  • Move CD = 1.618 (161.8%) extension of move BC, if BC was 88.6% retracement of AB.

And..

  • Move CD = 0.786 (78.6%) retracement of move OA.

 

Variations of Gartley's patterns

 

No pattern works 100% of times. When it does not wok people tend to see what is working at that time. Well, such phenomenon always give birth to some variations because at times when something is not working, something else may be working.

 

These variations differ from Gartley patterns in the percentages of retracements and extensions.

 

Three main variations of Gartley's patterns are recognized by traders. You may go ahead and read about those if you promise not to curse us to make your life complicated . In our opinion, it's always better to keep the trading simple without going into such complications. So here you go: 

 

 Pattern 

 Move AB against OA

(Retracement)

 Move BC Against AB

(Retracement)

 Move CD against BC

(Extension)

 Move CD against OA

(Retracement or Extension)

Gartley Pattern

 

61.8%

 

38.2% or 88.6% 127.2% or 161.8% 78.6% Retracement
Butterfly pattern

 

78.6%

 

38.2% or 88.6% 161.8% or 261.8% 127% or 161.8% Extension

Bat pattern

 

38.2% or 50%

 

38.2% or 88.6% 161.8% or 261.8% 88.6% Retracement
Crab pattern

 

38.2% or 61.8%

 

38.2% or 88.6% 224% or 361.8% 161.8% Extension

 

   

 

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