What is a Gartley Pattern? A Complete Guide to This Powerful Harmonic Trading Strategy

What is a Gartley Pattern?

The Gartley pattern is one of the most iconic and foundational harmonic patterns in technical analysis. First introduced by H.M. Gartley in his 1935 book “Profits in the Stock Market” and later refined with Fibonacci ratios by Scott Carney, this pattern is known for its high probability reversal setups and well-defined risk-reward opportunities.

What is the Gartley Pattern?

The Gartley pattern is a five-point harmonic structure that helps traders identify potential reversal zones. It resembles the letter “M” for bullish setups and “W” for bearish ones and follows a strict Fibonacci sequence across its legs, labeled X-A-B-C-D.

The Gartley is a retracement pattern, meaning the final leg (D) does not exceed the origin point (X), making it different from extension patterns like the Butterfly or Crab.

Fibonacci Ratios of the Gartley Pattern

  • AB = 61.8% retracement of XA
  • BC = 38.2% to 88.6% retracement of AB
  • CD = 127.2% to 161.8% extension of BC
  • D = 78.6% retracement of XA

🐂 Bullish vs. 🐻 Bearish Gartley Pattern

Bullish Gartley: Forms in a corrective downtrend. Traders expect an upward move from point D.
Bearish Gartley: Forms in a corrective uptrend. Traders anticipate a downward move from point D.

How to Trade the Gartley Pattern

  1. Identify the XABCD Structure: Use harmonic pattern tools or manually draw and verify all five points and their ratios.
  2. Confirm the PRZ: Ensure point D aligns with 78.6% XA and that CD fits the proper extension of BC.
  3. Look for Entry Triggers: Reversal candles near D, divergence on RSI or MACD, volume spikes.
  4. Set Orders:
    • Entry: At or just after point D
    • Stop-Loss: Below X (bullish) or above X (bearish)
    • Take-Profit: 38.2% and 61.8% retracements of CD; or B point

Example

A bullish Gartley might look like this:

  • Price rallies from X to A
  • Pulls back to B (61.8% of XA)
  • Moves up to C (38.2–88.6% of AB)
  • D completes at 78.6% retracement of XA
  • A bullish reversal follows

Pro Tips

  • Use Fibonacci confluence zones for high-probability entries.
  • Don’t force the pattern. Stick to valid ratios.
  • Use indicators like RSI and MACD for confirmation.
  • Always protect your trade with stop-loss and TP targets.

Why It Works

Its alignment with natural Fibonacci levels makes the Gartley pattern effective in identifying reversal zones respected by institutions and algos.

Final Thoughts

The Gartley Pattern delivers powerful insight into market structure and trade setups. Mastering it is a big step forward for any technical trader. Explore more strategies on GartleyHub.com.