The Gartley chart pattern is a variation of Fibonacci retracement used by many traders to determine entry and exit levels in trading. Although less popular compared to other chart patterns, the Gartley pattern still attracts the attention of technicians (chartists) due to its ability to indicate bullish or bearish price movements. This article will explain the concept of the Gartley pattern, how to identify it, and the entry and exit strategies that can be used.
Concept of Gartley Chart Patterns:
The Gartley chart pattern was formulated by a trader named Gartley in 1935 and described in his book 'Profit in the Stock Market'. This pattern depicts a sharp price movement followed by retracement, consisting of two waves of almost equal length. The Gartley pattern can be utilized by traders across various timeframes, ranging from long-term to scalpers.
Bullish and Bearish Gartley Patterns:
The bullish Gartley pattern occurs when prices form a pattern indicating potential upward movement, while the bearish Gartley pattern suggests potential downward movement. Both patterns share similar characteristics, with the length of AB approximately 61.8% of XA, the length of BC between 61.8% and 78.6% of AB, and the length of CD between 127.2% and 161.8% of BC.
Entry and Exit Strategies:
To confirm the reversal point at point D, traders can observe candlestick bar formations or price action setups at that point. After identifying the Gartley pattern, traders can set entry and exit levels according to their risk tolerance and target profit.
Although less popular, the Gartley chart pattern remains a useful technical analysis tool for traders. With a good understanding of the concept of the Gartley pattern and the use of Fibonacci retracement, traders can enhance their ability to identify potential price movements and make better trading decisions.
.jpg)
.png)
.jpg)
.png)
