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Thread: The ideal and tradeable Gartley pattern

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    The ideal and tradeable Gartley pattern

    Ideal Gartley pattern characteristic
    Mr. Gartley draw the pattern and it’s market context/location. In the late 1980 In the book Profitable Patterns for Stock Trading Larry Pesavento assigned certain ratios to define the pattern precisely. He measured each price swing from peak to trough as a certain percentatge of the proceding price swing. Pesavento required these percentages to be Fibonacci ratios: 61.8, 78.6 100, 1.27, 1.618.






    Tradeable Gartley pattern characteristic
    Problem is that it’s quite rare to see the Gartley pattern with exact precise Pesavento’s Fibonacci ratios. Some % delta or Fibo ranges must be used to expand the acceptable price swings ratios and produce more patterns, more trading opportunities. For example to allow XD retracement to be 57.7 till 88.6 rather than exactly 78.6.


    What important is that AB=CD (later on you will read about my definition of the equality here).







    The importance and understanding of AB=CD in Gartley pattern









    For more info about the Gartley pattern and the confirmation methods see -> Gartley pattern - table of content
    Last edited by kor4x; 09-02-2012 at 09:22 PM.
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    another example that it's not about price only. It's price x time that counts in harmonics.
    The ideal and tradeable Gartley pattern-harmonic-trading-gartley-bullish-eurgbp-m5-2012-04-04_1322.jpg The ideal and tradeable Gartley pattern-harmonic-trading-ab-cd-gartley-bullish-eurgbp-m5-2012-04-04_1322.jpg
    Last edited by kor4x; 04-10-2012 at 10:08 AM.
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  3. #3
    yhf
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    Kor, based on the examples abovementioned by you i see point d can fall within the fibo by time and price. Are we then looking for fibo clusters using price or time or both.

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    This is very very interesting that most people's definition of the ideal Gartley is the 61.8 to 78.6 retracement but you add the 88.6 retracement to the pattern. Is there anything specific that indicates that the completion point will make it to the 88.6 and past the standard 78.6 limit?

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    In my trading, the overall shape of the pattern is more important that exact Fibonacci ratios.
    If you put your Gartley B point of 61.8% retracement, play with location of point C and D. You will see scenarios where pattern is very harmonic and D point is around 88.6 retracement level.
    I hope it makes sense to you.
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    In my trading, the overall shape of the pattern is more important that exact Fibonacci ratios.
    If you put your Gartley B point of 61.8% retracement, play with location of point C and D. You will see scenarios where pattern is very harmonic and D point is around 88.6 retracement level.
    I hope it makes sense to you.

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    Is this because if the C leg retracement Is shallow it can cause D point to finish past the 78.6 towards the 88.6 level?

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    yes, that is right. I think I attached couple of examples of such scenarios on the Forum.

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    Hi kor4x and other readers

    1. can you tell me how do you build your time zone ?

    2. the gartley is the only pattern that you defined time conditions (61.8 to 1.618). what about the other classic patterns (crab, bat, bfly) ? are they same conditions.
    I'm talking about AD. About AB =CD i suppose that it depends of the price conditions. if price cd = 1.27 ab so time either am i wrong ?

    thx

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    @winner: my approach to it is to study 100s of Gartleys (or any other harmonic animal ;-) ) and define the time rules by myself. I learnt from experience HT trader how he did his journal. He had screenshots with price relations and time bars for each swing. What you will find working for you, can be wrong for another person. I like to see the nice looking patterns (for my eyes), and for pattern to look nice for me it must have the swings proportional, CD swing in bars cannot be too small, cannot be too big. Analyse also it's internal structure, sub swings proportions. This will also help to time the entry. Gann, cycles and other methods that combine price and time may help. But my best was to study with pen and pencil over historical charts.

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